{"schemaVersion":1,"research":true,"symbol":"bro","name":"Brown & Brown","topic":"moat","path":"/stock/bro/moat","status":"stale","version":9,"updatedAt":"2026-10-19T20:54:03.659Z","locked":false,"publicFairValue":false,"fairValue":null,"moat":{"verdict":"uncertain","summary":"Brown & Brown has established renewal relationships, specialist distribution and delegated underwriting capabilities. The supplied passages do not establish how durably these differentiate it from other brokers. Actual customer losses following employee departures demonstrate relationship portability, while organic growth slowed sharply and became slightly negative in first-half 2026. Negotiated fees and delegated insurance pricing provide bounded flexibility, but realized pricing power over brokerage remuneration remains unestablished. These limitations do not establish a broadly weak competitive position.","advantages":[{"mechanism":"switching_costs","claim":"Customer records and knowledge needed for renewals support relationship continuity and potential switching friction. Actual customer losses show that relationships can follow employees; a durable switching-cost advantage is not established.","durability":"Repeat demand is supported indirectly by continuing renewal business. Accounting estimates of customer-account lives are expectations, not demonstrated retention periods.","risks":"Employee departures, customer portability and limited protection from nonsolicitation agreements can erode relationship value.","invalidation":"Persistent customer-account losses after producer departures, sustained deterioration in renewal business, or evidence that customers transfer their programs with little disruption would invalidate the proposed switching-friction mechanism.","competitors":[],"evidenceIds":["e1","e2"],"counterEvidenceIds":["e3","e4","e5","e6"]},{"mechanism":"intangible_assets","claim":"Specialist programs, carrier access and delegated underwriting authority are current operating capabilities. Their exclusivity and durable superiority over competing brokers are unestablished.","durability":"Relationships with over 100 supporting carriers and established distribution channels support continuity, but the passages do not disclose exclusive rights or durable contractual protection. Future AI benefits remain potential.","risks":"Competing brokers possess specialist capabilities; carrier capacity, employee mobility and direct distribution can weaken differentiation.","invalidation":"Material loss of delegated mandates or carrier capacity, declining specialist renewal demand, or demonstrated equivalent placement outcomes from alternatives at lower remuneration would invalidate the proposed differentiation.","competitors":["Aon plc","Marsh & McLennan Companies, Inc."],"evidenceIds":["e7","e8","e9","e10","e11"],"counterEvidenceIds":["e5","e12","e13","e14","e15"]}],"evidence":[{"id":"e1","sourceId":"filing-1","location":"Critical accounting policies: purchased customer accounts and renewal records","excerpt":"Purchased customer accounts include the right to represent insureds or claimants supported by the physical records and files obtained from acquired businesses that contain information about insurance policies, customers and other matters essential to policy renewals and delivery of services."},{"id":"e2","sourceId":"filing-1","location":"Critical accounting policies: estimated amortization lives of customer accounts","excerpt":"Purchased customer accounts are amortized on a straight-line basis over the related estimated lives which generally average approximately 15 years."},{"id":"e3","sourceId":"filing-1","location":"Risk factors: realized customer losses following employee departures","excerpt":"Also, if any of our key employees were to join a competitor or form a competing company, some of our customers could choose to use the services of that competitor instead of our services, which has occurred in the past and may occur again."},{"id":"e4","sourceId":"filing-1","location":"Risk factors: employee nonsolicitation restrictions and ability to compete","excerpt":"While our key employees are generally prohibited by contract from soliciting our employees and customers for a two-year period following separation from employment with us, they are not prohibited from competing with us."},{"id":"e5","sourceId":"filing-2","location":"First-half 2026 results: acquisition contribution, litigation impact and organic revenue decline","excerpt":"Core commissions and fees revenue for the six months ended June 30, 2026 increased $806 million or 31.7%, composed of: (i) $829 million from acquisitions that had no comparable revenues in the same period of 2025; (ii) an increase from the impact of Foreign Currency Translation of $20 million and an offsetting decrease from (iii) $8 million related to commissions and fees revenue from businesses or books of business divested in the preceding twelve months; (iv) $28 million related to the Litigation-Related Impact and (v) $7 million of net new and renewal business, which combined reflected an overall Organic Revenue growth decrease of 0.3%."},{"id":"e6","sourceId":"filing-8","location":"Non-GAAP definitions: lost customer accounts and litigation-related impact","excerpt":"•\n“Litigation-Related Impact” means the core commissions and fees attributable to (i) the loss of specifically identified customer accounts and (ii) new business generated in the prior year by certain former employees, in each case in connection with the conduct of a competitor that is the subject of pending litigation in multiple jurisdictions."},{"id":"e7","sourceId":"filing-2","location":"Specialty Distribution: programs supported by over 100 carriers","excerpt":"Arrowhead Programs manages a diverse portfolio of professional liability, personal lines, commercial lines, public entity and specialty programs supported by over 100 well-capitalized insurance carriers."},{"id":"e8","sourceId":"filing-2","location":"Specialty Distribution: delegated underwriting and claims authority","excerpt":"In most cases, the insurance carriers that support these programs have delegated underwriting and, in many instances, claims-handling authority."},{"id":"e9","sourceId":"filing-2","location":"Specialty Distribution: independent distribution channels and targeted programs","excerpt":"These programs are generally distributed through a global network of independent agents and brokers, including Brown & Brown retail agents, and offer targeted products and services designed for businesses, individuals, specific industries, trade groups, professions, public entities, municipalities, and niche markets."},{"id":"e10","sourceId":"filing-7","location":"Investor presentation: delegated program pricing and underwriting capabilities","excerpt":"Builds niche, risk-specific products Prices & underwrites with delegated authority Distributes via multiple channels and manages performance Wholesale brokerage division that connects retail agents to carriers for complex or hard‑to‑place risks."},{"id":"e11","sourceId":"filing-7","location":"Investor presentation: named insurance brokerage peers","excerpt":"Gallagher & Co, Aon plc, Marsh & McLennan Companies, Inc."},{"id":"e12","sourceId":"filing-1","location":"Risk factors: competing firms' carrier relationships and niche presence","excerpt":"The insurance intermediary business is highly competitive and we actively compete with numerous firms for customers and insurance companies, many of which have relationships with insurance companies or have a significant presence in niche insurance markets that may give them an advantage over us."},{"id":"e13","sourceId":"filing-1","location":"Risk factors: potential AI-enabled disintermediation","excerpt":"In addition, emerging AI-enabled platforms may enable insurers or third parties to quote, market, or sell insurance products directly to customers, potentially bypassing traditional intermediaries and reducing demand for our services."},{"id":"e14","sourceId":"filing-13","location":"Aon competitor disclosure: its specialized data-center insurance program","excerpt":"Additionally, in 2025 Aon launched its proprietary Data Center Lifecycle Insurance Program designed to support data center projects from construction through ongoing operations by bringing together traditionally fragmented risk classes into a single coordinated insurance solution."},{"id":"e15","sourceId":"filing-14","location":"Marsh competitor disclosure: its analytics, administration and underwriting services","excerpt":"Marsh Risk also receives other compensation from insurance companies, which includes payments for consulting and analytics services; compensation for administrative and other services (including fees for underwriting services and services related to the administration and management of quota shares, panels and other facilities); payments for participation in sponsorship programs; and contingent commissions, based on factors such as volume or profitability of Marsh Risk's placements, primarily driven by MMA and parts of Marsh Risk's international operations."},{"id":"e16","sourceId":"filing-1","location":"Company overview: commission revenue linked to premiums and exposure units","excerpt":"Commission revenues generally represent a percentage of the premium paid by an insured and are affected by fluctuations in both premium rate levels charged by insurance companies and the insureds’ underlying “insurable exposure units,” which are units that insurance companies use to measure or express insurance exposed to risk (such as property values, sales or payroll levels) to determine what premium to charge the insured."},{"id":"e17","sourceId":"filing-1","location":"Company overview: insurer control over underlying premium rates","excerpt":"Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which we control."},{"id":"e18","sourceId":"filing-1","location":"Company overview: fees negotiated in lieu of commissions","excerpt":"Fee revenues primarily relate to services other than securing coverage for our customers, and for fees negotiated in lieu of commissions."},{"id":"e19","sourceId":"filing-1","location":"Company overview: fee share of commissions and fees","excerpt":"Fee revenues as a percentage of our total commissions and fees, represented 22.2% in 2025 and 21.1% in 2024."},{"id":"e20","sourceId":"filing-1","location":"Consolidated statements of income: 2023–2025 results","excerpt":"CONSOLIDATED STATEMENTS OF INCOME For the Year Ended December 31, (in millions, except per share data) 2025 2024 2023 REVENUES Commissions and fees $ 5,763 $ 4,705 $ 4,199 Investment and other income 139 100 58 Total revenues 5,902 4,805 4,257 EXPENSES Employee compensation and benefits 2,935 2,406 2,187 Other operating expenses 959 710 650 Loss/(gain) on disposal 2 (31 ) (143 ) Amortization 312 178 166 Depreciation 55 44 40 Interest 297 193 190 Change in estimated acquisition earn-out payables 25 2 21 Mark-to-market of escrow liability (54 ) — — Total expenses 4,531 3,502 3,111 Income before income taxes 1,371 1,303 1,146 Income taxes 304 301 275 Net income before non-controlling interests 1,067 1,002 871 Less: Net income attributable to non-controlling interests 13 9 — Net income attributable to the Company $ 1,054 $ 993 $ 871 Net income per share: Basic $ 3.37 $ 3.48 $ 3.07 Diluted $ 3.16 $ 3.46 $ 3.05 See accompanying notes to Consolidated Financial Statements."},{"id":"e21","sourceId":"filing-8","location":"Consolidated statements of income: second-quarter and first-half 2026 results","excerpt":"Commissions and fees\n \n $\n 1,654\n \n \n $\n 1,249\n \n \n $\n 3,534\n \n \n $\n 2,634\n \n Investment and other income\n \n \n 22\n \n \n \n 36\n \n \n \n 43\n \n \n \n 55\n \n Total revenues\n \n \n 1,676\n \n \n \n 1,285\n \n \n \n 3,577\n \n \n \n 2,689\n \n EXPENSES\n \n \n \n \n \n \n \n \n \n \n \n \n Employee compensation and benefits\n \n \n 838\n \n \n \n 640\n \n \n \n 1,745\n \n \n \n 1,323\n \n Other operating expenses\n \n \n 271\n \n \n \n 211\n \n \n \n 560\n \n \n \n 398\n \n (Gain)/loss on disposal\n \n \n 1\n \n \n \n —\n \n \n \n —\n \n \n \n 1\n \n Amortization\n \n \n 110\n \n \n \n 50\n \n \n \n 226\n \n \n \n 103\n \n Depreciation\n \n \n 18\n \n \n \n 11\n \n \n \n 35\n \n \n \n 23\n \n Interest\n \n \n 100\n \n \n \n 51\n \n \n \n 199\n \n \n \n 96\n \n Change in estimated acquisition earn-out payables\n \n \n (40\n )\n \n \n 11\n \n \n \n (34\n )\n \n \n 7\n \n Mark-to-market of escrow liability\n \n \n (5\n )\n \n \n —\n \n \n \n (69\n )\n \n \n —\n \n Total expenses\n \n \n 1,293\n \n \n \n 974\n \n \n \n 2,662\n \n \n \n 1,951\n \n Income before income taxes\n \n \n 383\n \n \n \n 311\n \n \n \n 915\n \n \n \n 738\n \n Income taxes\n \n \n 94\n \n \n \n 77\n \n \n \n 199\n \n \n \n 169\n \n Net income before non-controlling interests\n \n \n 289\n \n \n \n 234\n \n \n \n 716\n \n \n \n 569\n \n Less: Net income attributable to non-controlling interests\n \n \n 1\n \n \n \n 3\n \n \n \n 2\n \n \n \n 6\n \n Net income attributable to the Company\n \n $\n 288\n \n \n $\n 231\n \n \n $\n 714\n \n \n $\n 563\n \n Net income per share:\n \n \n \n \n \n \n \n \n \n \n \n \n Basic\n \n $\n 0.86\n \n \n $\n 0.79\n \n \n $\n 2.14\n \n \n $\n 1.94\n \n Diluted\n \n $\n 0.84\n \n \n $\n 0.78\n \n \n $\n 1.90\n \n \n $\n 1.93\n \n Weighted average number of shares outstanding:"},{"id":"e22","sourceId":"filing-2","location":"Second-quarter results: management attribution of pretax earnings growth and realized synergies","excerpt":"26 Income before income taxes for the three months ended June 30, 2026 increased from the second quarter of 2025 by $72 million or 23.2%, driven by increased Contingents, leveraging our expense base, synergies realized from the acquisition of Accession, acquisitions completed in the past twelve months and the change in estimated acquisition earn-out payables."},{"id":"e23","sourceId":"filing-2","location":"Retail results: management attribution of adjusted margin improvement","excerpt":"The change in EBITDAC Margin - Adjusted was primarily driven by: (i) increased Contingents; (ii) leveraging our expense base; and (iii) lower compensation as a result of employee departures associated with the Litigation-Related Impact."},{"id":"e24","sourceId":"filing-2","location":"First-half 2026 cash flows: operating cash, investments, earn-outs and shareholder distributions","excerpt":"8 BROWN & BROWN, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six months ended June 30, (in millions) 2026 2025 Cash flows from operating activities: Net income before non-controlling interests $ 716 $ 569 Adjustments to reconcile net income before non-controlling interests to net cash provided by operating activities: Amortization 226 103 Depreciation 35 23 Non-cash stock-based compensation 49 52 Change in estimated acquisition earn-out payables (34 ) 7 Mark-to-market of escrow liability (69 ) — Deferred income taxes 128 (2 ) Net loss on sales/disposals of investments, businesses, fixed assets and customer accounts — 2 Payments on acquisition earn-outs in excess of original estimated payables (40 ) (1 ) Other 8 2 Changes in operating assets and liabilities, net of effect from acquisitions and divestitures: Commissions, fees and other receivables (increase) decrease (143 ) (139 ) Reinsurance recoverable (increase) decrease 56 1,142 Prepaid reinsurance premiums (increase) decrease 130 (9 ) Other assets (increase) decrease (112 ) (11 ) Losses and loss adjustment reserve increase (decrease) (59 ) (1,143 ) Unearned premiums increase (decrease) (100 ) 55 Accounts payable increase (decrease) (11 ) 5 Accrued expenses and other liabilities increase (decrease) (194 ) (132 ) Other liabilities increase (decrease) 22 15 Net cash provided by operating activities 608 538 Cash flows from investing activities: Additions to fixed assets (38 ) (32 ) Payments for businesses acquired, net of cash acquired (30 ) (161 ) Proceeds from sales of businesses, fixed assets and customer accounts 3 10 Other investing activities (6 ) (4 ) Net cash used in investing activities (71 ) (187 ) Cash flows from financing activities: Fiduciary receivables and liabilities, net 157 119 Payments on acquisition earn-outs (184 ) (45 ) Proceeds from long-term debt — 4,192 Payments on long-term debt (31 ) (188 ) Deferred debt issuance costs (3 ) (36 ) Borrowings on revolving credit facility 225 150 Payments on revolving credit facility (50 ) (400 ) Proceeds from issuance of common stock, net of expenses — 4,315 Repurchase shares to fund tax withholdings for non-cash stock-based compensation (27 ) (41 ) Purchase of treasury stock (500 ) — Cash dividends paid (112 ) (86 ) Other financing activities (1 ) 1 Net cash (used in) provided by financing activities (526 ) 7,981 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash inclusive of fiduciary cash (27 ) 85 Net (decrease) increase in cash, cash equivalents and restricted cash inclusive of fiduciary cash (16 ) 8,417 Cash, cash equivalents and restricted cash inclusive of fiduciary cash at beginning of period 3,815 2,502 Cash, cash equivalents and restricted cash inclusive of fiduciary cash at end of period $ 3,799 $ 10,919 See accompanying Notes to Condensed Consolidated Financial Statements."},{"id":"e25","sourceId":"filing-1","location":"Liquidity and capital resources: 2025 debt increase","excerpt":"Total debt at December 31, 2025 was $7,613 million net of unamortized discount and debt issuance costs, which was an increase of $3,789 million compared to December 31, 2024."},{"id":"e26","sourceId":"filing-1","location":"Equity financing: offering proceeds used for acquisition consideration and expenses","excerpt":"The Company used the net proceeds of the offerings of the shares of Common Stock and the Notes, together with cash on hand, to fund the cash consideration payable under the Merger Agreement and to pay fees and expenses associated with the foregoing."},{"id":"e27","sourceId":"filing-2","location":"Liquidity and capital resources: borrowing connected to share repurchases","excerpt":"During the first quarter, the Company drew $225 million on the Revolving Credit Facility in connection with a share repurchase program."},{"id":"e28","sourceId":"filing-1","location":"Company overview: historical net-income growth","excerpt":"In the same 32-year period, we increased net income from $8.1 million to over $1.0 billion in 2025, a 16.9% compound annual growth rate."},{"id":"e29","sourceId":"filing-2","location":"Operating cash flows: acquisition contribution to cash-flow growth","excerpt":"The growth in cash from operations is primarily due to recent acquisitions."},{"id":"e30","sourceId":"filing-12","location":"Compensatory arrangements: approved March 2026 performance stock grants","excerpt":"On March 3, 2026, the Compensation Committee authorized and approved grants of shares of performance-based restricted stock under the 2019 Stock Incentive Plan to, among others, certain of the Company's named executive officers."},{"id":"e31","sourceId":"filing-12","location":"Compensatory arrangements: five-year share-price and adjusted earnings conditions","excerpt":"The vesting of fifty percent (50%) of these restricted shares (the “PSA Shares”) is tied to (1) specified compound annual growth rate targets of the Company’s cumulative share price and (2) the relative total share price return of the Company as compared to the median total share price return of the S&P 500 index, and the vesting of the other fifty percent (50%) of the PSA Shares is tied to (1) specified compound annual growth rate targets of the Company’s cumulative earnings per share, excluding the after-tax impact of the change in estimated acquisition earn-out payables, (gain)/loss on disposal, and amortization, and (2) the relative total share price return of the Company as compared to the median total share price return of the S&P 500 index, in each case measured over a five-year period beginning January 1, 2026."},{"id":"e32","sourceId":"filing-12","location":"Compensatory arrangements: performance stock award payout range","excerpt":"The PSA Shares contemplate a minimum payout of 0% and a maximum payout of 805% based upon the level of performance of each performance condition during the five-year measurement period."},{"id":"e33","sourceId":"filing-12","location":"Compensatory arrangements: service requirements and accelerated vesting exceptions","excerpt":"The PSA Shares will vest in equal increments on March 3, 2032, March 3, 2033, and March 3, 2034, assuming continuous employment through such vesting dates, provided that vesting will accelerate in the event of termination as a result of death or disability, or termination (including constructive termination) without cause within 12 months following a change in control of the Company."},{"id":"e34","sourceId":"filing-11","location":"May 2026 voting results: shareholder approval of incentive-plan amendment","excerpt":"The shareholders approved the amendment to the SIP to increase the aggregate number of shares available for issuance under the SIP by 6,900,000 shares and extend the term of the SIP."},{"id":"e35","sourceId":"filing-3","location":"Governance highlights: elections, independence, ownership guidelines and safeguards","excerpt":"Savio ● ● ● ● ● ● ● ● Independent Corporate Governance Highlights Director Nominees SHAREHOLDER RIGHTS • Annual election of directors • Majority voting for directors, with director resignation policy BOARD INDEPENDENCE • Strong role for Lead Independent Director • Periodic rotation of committee members, committee chairs and Lead Independent Director • Executive sessions at every in-person Board meeting and virtually, when necessary GOOD GOVERNANCE • Strong anti-hedging and anti-pledging provisions • Annual Board and committee self-evaluations • Strong executive and director stock ownership guidelines • Robust clawback policy • Committee meetings generally open to, and attended by, all directors 86% of Our Directors Are Independent 13 Average Tenure of Our Directors in Years 14% of Our Directors Are Ethnically/ Racially Diverse 21% of Our Directors Are Female 2 | BROWN & BROWN, INC."},{"id":"e36","sourceId":"filing-3","location":"Board committees: independent audit committee","excerpt":"Savio Meetings Held in 2025: 6 The Audit Committee is composed of independent directors as defined in the NYSE listed company manual and includes two audit committee financial experts, James S."},{"id":"e37","sourceId":"filing-3","location":"Board committees: independent compensation committee","excerpt":"Masojada Kathleen A. Savio Meetings Held in 2025: 6 Each member of the Compensation Committee is independent as defined in the NYSE listed company manual."},{"id":"e38","sourceId":"filing-3","location":"Related-party transactions: aircraft lease payment","excerpt":"In 2025, the Company paid Zambezi $100,368 under the Agreement to lease the Aircraft."},{"id":"e39","sourceId":"filing-3","location":"Executive compensation: legacy excise-tax gross-up provisions","excerpt":"The excise tax gross-up provision is a legacy provision that applies only to awards that were granted under the PSP prior to its suspension in 2010 and does not apply to awards under the 2010 SIP or the 2019 SIP."},{"id":"e40","sourceId":"filing-4","location":"Company overview: 2024 organic revenue growth","excerpt":"For the year ended December 31, 2024, our commissions and fees growth rate was 12.1% and our consolidated Organic Revenue growth rate was 10.4%."},{"id":"e41","sourceId":"filing-1","location":"Company overview: 2025 organic revenue growth","excerpt":"For the year ended December 31, 2025, our commissions and fees growth rate was 22.5% and our consolidated Organic Revenue growth rate was 2.8%."},{"id":"e42","sourceId":"filing-2","location":"Non-GAAP definitions: organic revenue excludes litigation-related impact","excerpt":"Non-GAAP Revenue Measures • Organic Revenue is our core commissions and fees less: (i) the core commissions and fees earned for the first twelve months by newly acquired operations; (ii) divested business (core commissions and fees generated from offices, books of business or niches sold or terminated during the comparable period); (iii) Foreign Currency Translation (as defined below) and (iv) the Litigation-Related Impact."}],"changes":["The uncertain moat verdict is unchanged after re-examining the current catalog.","The May 7, 2026 filing establishes shareholder approval of the 6,900,000-share incentive-plan amendment; it is no longer treated solely as a proposal.","The March 4, 2026 grant disclosure adds an explicit maximum performance-stock payout of 805%, tempering the alignment assessment without negating its long performance and service conditions.","Named brokerage peers and bounded Aon and Marsh service comparisons are now supported. They do not establish Brown & Brown's relative customer outcomes or pricing power."],"limitations":["Evidence consists of issuer disclosures. Verified operating results and actual contractual mechanisms support numerical assessments, but promotional differentiation and synergy explanations remain management claims.","The passages do not isolate realized brokerage fee changes, commission-rate changes, customer retention rates, exclusive carrier arrangements or switching costs.","Aon plc and Marsh & McLennan Companies, Inc. are named peers. Competitor disclosures establish only their own overlapping capabilities; competitive coverage across Brown & Brown's individual niches remains incomplete. No named competitor is linked to the disclosed customer losses.","Customer-account amortization lives are accounting estimates. Organic revenue combines pricing, exposure changes and new and lost business, and its 2026 definition excludes the litigation-related impact.","Actual individual executive ownership and compliance with ownership guidelines are not quantified in the cited passages. Incentive terms establish mechanisms, not future vesting or exceptional alignment outcomes.","All cited source dates retain dateKind filed. The proxy's future-dated amendment appendix is not treated as proof of March approval; the subsequent May voting-results filing supplies that evidence."],"qualityAssessments":[{"category":"moat","checks":[{"criterion":"structural_advantage","grade":null,"rationale":"Specialist distribution and delegated mandates are established capabilities, but durable superiority or exclusivity is unproven. Overlapping competitor services prevent inferring differentiation from breadth alone.","evidenceIds":["e7","e8","e9","e12","e14","e15"]},{"criterion":"durability","grade":null,"rationale":"Renewal records support relationship continuity, but estimated asset lives do not demonstrate protected economics over that period. Realized customer portability leaves moat duration unresolved.","evidenceIds":["e1","e2","e3","e4"]},{"criterion":"customer_dependency","grade":null,"rationale":"Renewal information and specialist placement services may create dependency, but customers' costs of switching are not established and actual account losses demonstrate portability.","evidenceIds":["e1","e3","e6","e9"]},{"criterion":"erosion_resilience","grade":null,"rationale":"Recent organic deterioration and account losses raise erosion concerns, while ongoing operations establish continuing demand. The catalog cannot establish whether a structural advantage withstands these pressures.","evidenceIds":["e5","e6","e12","e40","e41"]}]},{"category":"pricing_power","checks":[{"criterion":"realized_pricing","grade":null,"rationale":"Revenue and organic growth combine premium rates, exposure changes and customer flows. Negotiated fees and delegated program pricing establish mechanisms, but no observed brokerage price or commission-rate outcome is isolated.","evidenceIds":["e10","e16","e17","e18","e5"]},{"criterion":"retention","grade":2,"rationale":"Renewal records and continuing comparable business provide indirect evidence of repeat demand. Organic growth slowed from 10.4% in 2024 to 2.8% in 2025 and negative 0.3% in first-half 2026, excluding the litigation-related impact. Actual account losses temper continuity; no retention rate is inferred.","evidenceIds":["e1","e3","e5","e6","e40","e41","e42"]},{"criterion":"margin_resilience","grade":2,"rationale":"Profits remained substantial, but pretax earnings grew more slowly than revenue in 2025 and first-half 2026. Management attributes improvements partly to synergies and expense leverage, alongside contingents, earn-out changes and lower compensation after departures. Protection attributable to pricing remains unproven.","evidenceIds":["e20","e21","e22","e23"]},{"criterion":"contractual_freedom","grade":2,"rationale":"Negotiated fees and delegated program pricing demonstrate bounded flexibility. Fees represented 22.2% of commissions and fees in 2025, while commission revenue depends on premiums whose rates insurers control. Delegated insurance pricing does not establish unrestricted brokerage repricing rights; broader contract terms are absent.","evidenceIds":["e10","e16","e17","e18","e19"]}]},{"category":"strong_management","checks":[{"criterion":"capital_discipline","grade":2,"rationale":"Operating cash generation supports investment capacity, but acquisition financing increased debt materially and used equity proceeds. First-half 2026 operating cash of $608 million accompanied $500 million of repurchases, $112 million of dividends and further investment and earn-out payments. Borrowing was explicitly connected to repurchases. Acquisition returns remain insufficiently demonstrated for a stronger grade.","evidenceIds":["e24","e25","e26","e27"]},{"criterion":"incentive_alignment","grade":3,"rationale":"Approved March grants link awards to five-year share-price and adjusted earnings conditions, with service requirements extending to 2034. These are actual alignment mechanisms, not demonstrated vesting. The 805% maximum payout, earnings exclusions and acceleration exceptions temper the assessment. Shareholders subsequently approved the separate share-pool amendment in May.","evidenceIds":["e30","e31","e32","e33","e34"]},{"criterion":"execution","grade":2,"rationale":"Long-term earnings growth, continuing profits and cash generation demonstrate execution through operating outcomes. Recent growth depended heavily on acquisitions, organic revenue declined, and diluted EPS fell in 2025 and first-half 2026. Management reports realized synergies, but standalone acquisition returns are unestablished.","evidenceIds":["e5","e20","e21","e22","e24","e28","e29"]},{"criterion":"governance","grade":3,"rationale":"Annual elections, majority voting, a lead independent director, independent audit and compensation committees, and compensation safeguards support strong formal governance. Long average director tenure, related-party transactions and legacy tax gross-ups temper the grade. 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