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Truist Insurance organic revenue growth edges up by 2.9%


Truist Insurance’s organic revenue growth slowed in the fourth quarter, but was bolstered by a flood of new business into its wholesale broking unit CRC, as organic revenues increased 2.9% over the quarter.

The figure is down from the 5.3% growth in organic reported in the third quarter, which marked a recovery from Q2, when it slipped to 2.1% during a quarter when the results of many companies in the insurance sector were most heavily impacted by the pandemic.

The intermediary attributed the rise in new business to “strong demand” in wholesale broking as more and more business enters the excess and surplus lines market. It also said continued market firming, shrinking carrier capacity, and stable exposure units contributed to the organic result.

Overall, Truist Insurance Holdings revenues increased by 7.1% in Q4 2020 to $545mn, a figure that includes premium finance revenue, as the conglomerate benefited from a surge in new brokerage business and acquired revenues.

Margins expand by 390 bps

On a non-GAAP basis, the brokerage division’s Ebidta margin expanded by 390bps to 27.3%, with total Ebitda generated rising by a 52% to $151mn. The better margin print came from “prudent expense control and lower travel-related expenses”, the company said.

The intermediary made five acquisitions over Q4, deals it expects to boost insurance revenues by an extra $110mn annually.

Net profits grew 67% over the quarter to $99mn, as brokerage income increased $26mn, while expenses fell $30mn, due to lower restructuring charges, marketing and travel expenses.

Truist Insurance was formed out of the merger of the insurance assets of BB&T and SunTrust, two lenders which merged in a deal that completed in December 2019 to form the sixth-largest bank in the US.

John Howard, the insurance division’s CEO, called the merger between SunTrust and BB&T “at least a $250mn revenue opportunity” for its retail broker McGriff in an interview with Inside P&C last month.

Commentary: Speaking about the company’s results overall, and the insurance brokerage unit in particular, Truist CEO Kelly King said in a statement: "We continue to invest in the future with our client-first strategy and the overall growth and diversification of our company.”

He continued: “This includes the acquisition of five insurance brokerages in the fourth quarter, which are expected to boost insurance revenues by $110 million annually. We're also investing selectively in digital and agile capabilities, as well as investment banking, residential mortgage and wealth management talent to meet the evolving needs of our clients.”

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