No Let-up In Broker Demand for Healthcare Guidance

By Mark E. Ruquet

Brown & Brown CEO
J. Powell Brown

Brown & Brown’s President and Chief Executive Officer J. Powell Brown continues to be bullish about the opportunities healthcare reform offers insurance brokers, saying that clients need their services as the Patient Protection and Affordable Care Act takes hold over the nation.

The public exchanges continue to be difficult to access and offer less to clients in terms of the number of doctors participating in those insurance plans in return for lower cost, said Brown. However, the system is still evolving and the bottom line for business owners is they want to take of their workers.

“Our clients are very interested in providing quality healthcare to their employees,” said Brown. “We continue to deliver that across the board.”

The options in the marketplace are growing, ranging from defined contribution plans where employers give a fixed amount to employees and the employee allocates the dollars, to the traditional plans where the employer chooses a program for employees and pays a portion of the premium.

Brown said there continues to be interest in private exchanges and Brown & Brown has 13 clients in a private exchange representing 1,300 lives. Company sizes range from 27 to 400 employees, he said.

Whatever the direction an employer takes, brokers will remain indispensable, noted Chief Financial Officer Cory Walker, saying, “At the grass roots, it is talking one-on-one.”   

The only certitude around health insurance, Brown said, is “it is expensive, utilized and confusing and we think it is an opportunity.”

During today’s conference call discussing the broker’s results, Walker said the firm’s earnings miss occurred because of acquisition costs related to a major target they did not win. Brown and Walker explained that the acquisition expense was a one-time, non-recurring expenditure that was unique because it involved attorneys and other parties not normally involved in its traditional acquisition targets. Brown said there is a non-disclosure agreement preventing release of additional details.

The acquisition of Beecher Carlson also had an impact on earnings because of "transition issues" that affected the company's writing new business. They wrote "a lot of new business," but the production was slow by their standards, said Walker.