Brown & Brown To Buy Assets From Morstan General Agency

A subsidiary of Brown & Brown (NYSE:BRO) , Brown & Brown Wholesale, has entered into an agreement to purchase all operating assets of Morstan General Agency.

Founded in 1964, Morstan is a wholesale MGA/NGU which offers various products in commercial lines, personal lines, employee benefits and life insurance products. The company is headquartered in Manhasset, NY and has offices in New York City, New Jersey, and Florida. The company reported total revenue of approximately $34 million in 2015. Post acquisition, the new profit center will retain the Morstan name and operate from its headquarters in Manhasset.

Morstan has been instrumental in enhancing value for its strategic partners through innovative insurance solutions, while maintaining a strong relationship with carriers and retain agents. This has been a key driver of the company’s successful performance. This deal will give Morstan the opportunity to function from a much larger platform given Brown & Brown’s position as the sixth largest independent insurance intermediary in the U.S.

Brown & Brown, along with its subsidiaries, has been making numerous strategic acquisitions to boost inorganic growth. This Feburary, The Advocator Group, LLC, a subsidiary of Brown & Brown, acquired almost all equity interests of Social Security Advocates for the Disabled. This is the fourth acquisition by the company in 2016 and first one in the second quarter. Its strategic buyouts are well supported by a strong liquidity position.

Companies in the insurance sector have been actively pursuing acquisitions for inorganic growth. Recently Arthur J. Gallagher (NYSE:AJG) acquired Hogan Insurance Services, Inc. to boost its Western Region brokerage operations.

Currently the insurance broker carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry are Swiss Reinsurance Company Ltd. (OTC:SSREY) and FBL Financial Group (NYSE:FFG) . Both these stocks hold a Zacks Rank #2 (Buy).