Brown & Brown (BRO) 10-K risk factor changes: FY2021 vs FY2020

[removed: Risks] [added: Risks] Related to the COVID-19 [removed: Pandemic][added: Pandemic]

THE [removed: COVID-19 PANDEMIC] [added: EFFECTIVENESS] AND [added: ACCESSIBILITY TO VACCINES,] THE [removed: RESULTING GOVERNMENTAL] [added: PACE] AND [removed: SOCIETAL RESPONSES, THE SEVERITY] [added: RATE AT WHICH VACCINES ARE ADMINISTERED, ACTIONS TAKEN BY GOVERNMENTAL AUTHORITIES IN RESPONSE TO COVID-19,] AND [removed: DURATION OF] THE [removed: PANDEMIC,] [added: DIRECT] AND [removed: THE RESULTING] [added: INDIRECT] IMPACT [added: OF COVID-19] ON THE U.S. ECONOMY AND THE GLOBAL ECONOMY, MAY MATERIALLY AND ADVERSELY AFFECT THE COMPANY’S BUSINESS, LIQUIDITY, CUSTOMERS, INSURANCE CARRIERS AND THIRD [removed: PARTIES.][added: PARTIES.]

The extent to which COVID-19 impacts our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the ultimate geographic spread and severity of COVID-19; the duration of the pandemic; the effectiveness and roll-out of vaccinations against COVID-19; [added: society's willingness to receive the vaccinations;] business closures, travel restrictions, social distancing and other actions taken to contain and treat COVID-19; the effectiveness of actions taken to contain and treat the virus; the impact of the pandemic on economic activity; the timing and effectiveness of government stimulus programs; the extent and duration of the effect on customer demand and buying patterns; and any impairment in value of our tangible or intangible assets which could be recorded as a result of weaker economic conditions.

[removed: | | • |] our customers choosing to limit purchases of insurance and services due to declining business conditions, our customers ceasing their business operations on a temporary or permanent basis, and a reduction in our customers’ insurable exposure units, all of which would impact our ability to generate commission revenue and other revenue; [removed: |]

[removed: | | • |] a delay in cash payments to us from customers or carrier partners due to COVID-19, which could negatively impact our financial condition; [removed: |]

[removed: | | • |] travel restrictions and quarantines leading to a lack of in-person meetings, which would hinder our ability to establish relationships or originate new business; [removed: |]

[removed: | | • |] alternative working arrangements, including [removed: teammates] [added: employees] working remotely, which could negatively impact our business should such arrangements remain for an extended period of time; and [removed: |]

[removed: | | • |] failure of third parties upon which we rely to meet their obligations to us, or significant disruptions in their ability to meet those obligations in a timely manner, which may be caused by their own financial or operational difficulties. [removed: |]

We cannot predict the impact that COVID-19 will have on our customers, insurance carriers, [removed: suppliers,] [added: suppliers] and other third-party contractors, and each of their financial conditions; however, any material effect on these parties could adversely impact us.

[removed: Further,] [added: Additionally,] should any key employees become ill from the coronavirus and unable to work, the attention of the management team could be diverted.

[removed: Risks] [added: Risks] Related to Our [removed: Business][added: Business]

[removed: OUR] [added: OUR] INABILITY TO RETAIN OR HIRE QUALIFIED EMPLOYEES, AS WELL AS THE LOSS OF ANY OF OUR EXECUTIVE OFFICERS OR OTHER KEY EMPLOYEES, COULD NEGATIVELY IMPACT OUR ABILITY TO RETAIN EXISTING BUSINESS AND GENERATE NEW [removed: BUSINESS.][added: BUSINESS.]

Also, if any of our key [removed: personnel] [added: employees] were to join an existing competitor or form a competing company, some of our customers could choose to use the services of that competitor instead of our services.

While our key [removed: personnel] [added: 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.

The loss of our senior leaders or other key [removed: personnel,] [added: employees,] or our inability to continue to identify, recruit and retain such personnel, could materially and adversely affect our business, results of operations and financial condition.

[removed: OUR] [added: OUR] GROWTH STRATEGY DEPENDS, IN PART, ON THE ACQUISITION OF OTHER INSURANCE INTERMEDIARIES, WHICH MAY NOT BE AVAILABLE ON ACCEPTABLE TERMS IN THE FUTURE OR WHICH, IF CONSUMMATED, MAY NOT BE ADVANTAGEOUS TO [removed: US.][added: US.]

Acquisitions also involve a number of risks, such as diversion of management’s attention; difficulties in the integration of acquired operations and retention of [removed: personnel;] [added: employees;] increase in expenses and working capital requirements, which could reduce our return on invested capital; entry into unfamiliar markets or lines of business; unanticipated problems or legal liabilities; estimation of the acquisition earn-out payables; and tax and accounting issues, some or all of which could have a material adverse effect on our results of operations, financial condition and cash flows.

[removed: RAPID] [added: RAPID] TECHNOLOGICAL CHANGE MAY REQUIRE ADDITIONAL RESOURCES AND TIME TO ADEQUATELY RESPOND TO DYNAMICS, WHICH MAY ADVERSELY AFFECT OUR BUSINESS AND OPERATING [removed: RESULTS.][added: RESULTS.]

[removed: WE] [added: WE] DERIVE A SIGNIFICANT PORTION OF OUR COMMISSION REVENUES FROM A LIMITED NUMBER OF INSURANCE COMPANIES, THE LOSS OF WHICH COULD RESULT IN ADDITIONAL EXPENSE AND LOSS OF MARKET [removed: SHARE.][added: SHARE OR A MATERIAL DECREASE IN OUR PROFIT-SHARING CONTINGENT COMMISSIONS, GUARANTEED SUPPLEMENTAL COMMISSIONS OR INCENTIVE COMMISSIONS.]

For the year ended December 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018,] [added: 2019,] no more than 5.0% of our total core commissions was derived from insurance policies underwritten by one insurance company.

[removed: BECAUSE A] [added: BECAUSE A] SIGNIFICANT PORTION [removed: OF OUR BUSINESSES ARE CONCENTRATED IN] [added: OF OUR BUSINESSES ARE CONCENTRATED IN] FLORIDA, CALIFORNIA, MASSACHUSETTS, GEORGIA, NEW YORK, AND MICHIGAN, ADVERSE ECONOMIC CONDITIONS, NATURAL DISASTERS, OR REGULATORY CHANGES IN THESE STATES COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.

A significant portion of our businesses are concentrated in Florida, California, Massachusetts, Georgia, New York, and Michigan, where for the year ended December 31, [removed: 2020,] [added: 2021,] we derived approximately [removed: 19%,] [added: 18%,] 11%, 8%, [removed: 8%,] 7%, [added: 7%,] and 6% of our annual revenue, respectively.

The insurance business [added: in the U.S.] is primarily a state-regulated industry, and therefore, state legislatures may enact laws that adversely affect the insurance industry.

We are susceptible to losses and interruptions caused by hurricanes (particularly in Florida, where we have [removed: 55] [added: 52] offices and our headquarters, as well as in Texas, where we have [removed: 24] [added: 25] offices), earthquakes (including in California, where we have [removed: 33] [added: 31] offices), power shortages, telecommunications failures, water shortages, floods, fire, extreme weather conditions, geopolitical events such as terrorist acts and other natural or [removed: man-made] [added: human-made] disasters.

[removed: OUR] [added: OUR] CORPORATE CULTURE HAS CONTRIBUTED TO OUR SUCCESS, AND IF WE CANNOT MAINTAIN THIS CULTURE, OR IF WE EXPERIENCE A CHANGE IN MANAGEMENT, MANAGEMENT PHILOSOPHY, OR BUSINESS STRATEGY, OUR BUSINESS MAY BE [removed: HARMED.][added: HARMED.]

We believe that a significant contributor to our success has been our corporate culture as a lean, [removed: decentralized,] highly competitive, [added: decentralized growth and] profit-oriented sales and service organization.

We may face pressure to change our culture as we grow, particularly if we experience difficulties in attracting competent [removed: personnel] [added: employees] who are willing to embrace our culture.

In addition, as our organization grows and we are required to implement more complex organizational structures, or if we experience a change in management, management [removed: philosophy,] [added: philosophy] or business strategy, we may find it increasingly difficult to maintain the beneficial aspects of our corporate culture, such as our decentralized sales and service operating model, which could negatively impact our future success.

[removed: We] [added: We] face a variety of risks in our services segment, including our third-party claims administration operations, that are distinct from those we face in our insurance intermediary [removed: operations.][added: operations.]

[removed: | | • |] The favorable trend among both insurance companies and self-insured entities toward outsourcing various types of claims administration and risk management services may reverse or slow, causing our revenues or revenue growth to decline; [removed: |]

[removed: | | • |] Concentration of large amounts of revenue with certain customers may result in greater exposure to the potential negative effects of lost business due to changes in management of such customers or for other reasons; [removed: |]

[removed: | | • |] Contracting terms will become less favorable or the margins on our services may decrease due to increased competition, regulatory [removed: constraints,] [added: constraints] or other developments; [removed: |]

[removed: | | • |] Our revenue is impacted by claims volumes, which are dependent upon a number of factors and difficult to forecast accurately; [removed: |]

[removed: | | • |] Economic weakness or a [removed: slow-down] [added: slowdown] in economic activity could lead to a reduction in the number of claims we process; [removed: |]

[removed: | | • |] The U.S. Federal government modifies, discontinues, or otherwise limits our ability to derive revenues from the Social Security disability benefits program, Medicare, or any other program or type of coverage from which our business derives revenue; [removed: |]

[removed: | | • |] We may be unable to develop further efficiencies in our claims-handling business and may be unable to obtain or retain certain customers if we fail to make adequate improvements in technology or operations; and [removed: |]

[removed: | | • |] Insurance companies or certain large self-insured entities may create in-house servicing capabilities that compete with our services. [removed: |]

DUE TO INHERENT LIMITATIONS, OUR SYSTEM OF DISCLOSURE AND INTERNAL CONTROLS AND [removed: PROCEDURES MAY NOT BE] [added: PROCEDURES MAY NOT BE] SUCCESSFUL IN PREVENTING ALL ERRORS OR FRAUD, OR IN INFORMING MANAGEMENT OF ALL MATERIAL INFORMATION IN A TIMELY MANNER.

[removed: CERTAIN] [added: CERTAIN] OF OUR EXISTING SHAREHOLDERS HAVE SIGNIFICANT CONTROL OF THE [removed: COMPANY.][added: COMPANY.]

At December 31, [removed: 2020,] [added: 2021,] our executive officers, directors and certain of their family members collectively beneficially owned approximately [removed: 16.9%] [added: 16.6%] of our outstanding common stock, of which J.

THE COVID-19 PANDEMIC AND THE RESULTING GOVERNMENTAL AND SOCIETAL RESPONSES, THE SEVERITY AND DURATION OF COVID-19 (INCLUDING THROUGH ANY NEW VARIANT STRAINS OF THE UNDERLYING VIRUS).

SIGNIFICANT INFLATION COULD ADVERSELY AFFECT OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

Inflation can adversely affect us by increasing our costs, including salary costs.

Significant inflation is often accompanied by higher

interest rates.

Any significant increases in inflation and interest rates could have material adverse effect on our business, results of operations and financial condition.

The GDPR became

Additionally, a judgement by the Court of Justice of the European Union on Schrems II has made cross border data transfers to organizations outside of the European Economic Area more onerous and uncertain.

Some states provide right of action for data breaches or for collection of certain categories of personal information without consent, which may result in increased litigation.

On March 5, 2021, the ICE Benchmark Administration, which administers LIBOR, and the FCA announced that all LIBOR settings will either cease to be provided by any administrator, or no longer be representative immediately after December 31, 2021, for all non-U.S. dollar LIBOR settings and one-week and two-month U.S. dollar LIBOR settings, and immediately after June 30, 2023 for the remaining U.S. dollar LIBOR settings.

Currently, it is anticipated that the new benchmark for our USD borrowings will be SOFR.

The shift to SOFR from LIBOR is complex and may adversely affect our business, financial condition, results of operations, liquidity and cash flows.

There have been no impairments recorded to either goodwill or amortizable intangibles for the years ended December 31, 2021, 2020 and 2019.

| --- | --- | --- |

Additionally, COVID-19 could negatively affect our internal controls over financial reporting as a portion of our workforce is required to work from home and therefore new processes, procedures, and controls could be required to respond to changes in our business environment.

Our management is focused on mitigating the effects of COVID-19, which has required and will continue to require a large investment of time and resources across our business.

To mitigate the economic impact caused by COVID-19, certain governmental entities have declared or proposed a “grace period” on the collection of insurance premiums.

It is unclear the impact this would have on our commission revenues, typically calculated as a percentage of premium.

It is possible that such grace periods could delay our receipt of revenues as we continue to incur compensation and operating expenses related to serving our clients.

In addition, certain governmental entities have proposed requiring underwriting enterprises to pay business interruption and workers’ compensation claims for COVID-19 losses despite applicable policy exclusions.

Retroactively expanding business interruption or other coverages could materially negatively affect underwriting enterprises, reduce the availability of insurance coverage, and negatively affect our ability to generate commission revenues from such policies as well as supplemental and contingent commissions from underwriting enterprises.

Other legislation would require underwriting enterprises to return premiums to clients on certain lines of coverage.

While it is unclear the impact such legislation would have on us, it is possible we could be asked to disgorge commission revenues related to such premiums.

Over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

| | • | Any adverse developments arising out of the exit of the United Kingdom from the European Union, including any related economic downturn in the United Kingdom, any sustained weakness in the British pound’s exchange rate against the U.S. dollar resulting from such exit, or our ability to place insurance coverage with British insurance carriers for companies located outside of the United Kingdom; |

Management will continue to actively assess the related opportunities and risks associated with the transition and monitor related proposals and guidance published by ARRC and other alternative-rate initiatives, with an expectation the we will be prepared to for a termination of LIBOR benchmarks after 2021.

[removed: General][added: General]

[removed: Company Overview][added: Company Overview]

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, [removed: or] sales [removed: and] [added: or] payroll levels) to determine what premium to charge the insured.

We have increased revenues every year from 1993 to [removed: 2020,] [added: 2021,] with the exception of 2009, when our revenues declined 1.0%.

Our revenues grew from $95.6 million in 1993 to [removed: $2.6] [added: $3.1] billion in [removed: 2020,] [added: 2021,] reflecting a compound annual growth rate of [removed: 13.0%.][added: 13.2%.]

In the same [removed: 27-year] [added: 28-year] period, we increased net income from $8.1 million to [removed: $480.5] [added: $587.1] million in [removed: 2020,] [added: 2021,] a compound annual growth rate of [removed: 16.3%.][added: 16.5%.]

Historically, [removed: our revenues] [added: we] have [removed: typically] grown [added: our revenues] as a result of our focus on net new business [removed: growth] and acquisitions.

The term “Organic Revenue,” a non-GAAP measure, is our core commissions and fees less: (i) the core commissions and fees earned for the first 12 months by newly-acquired operations; [removed: and] (ii) divested business (core commissions and fees generated from offices, books of business or niches sold or terminated during the comparable [removed: period).][added: period); and (iii) the period over period impact of foreign currency translation, which is calculated by applying current year foreign exchange rates to the same period in the prior year.]

Organic Revenue is reported in “Results of Operations” and in “Results of Operations [removed: –] [added: -] Segment Information” of this Annual Report on Form 10-K.

GSCs are accrued throughout the year based [removed: upon] [added: on] actual premiums written.

Combined, our profit-sharing contingent commissions and GSCs for the year ended December 31, [removed: 2020] [added: 2021] increased by [removed: $4.9] [added: $14.1] million over [removed: 2019.][added: 2020.]

[removed: Fee revenues have historically been generated primarily by: (1) our Services Segment, which provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare] benefits advocacy services, and claims adjusting services; [removed: (2)] [added: (ii)] our National Programs and Wholesale Brokerage [removed: Segments,] [added: segments,] which earn fees primarily for the issuance of insurance policies on behalf of insurance companies; and [removed: to a lesser extent (3)] [added: (iii)] our Retail [removed: Segment] [added: segment] in our large-account customer base, where we primarily earn fees for securing insurance for our customers, and in our automobile dealer services (“F&I”) businesses where we primarily earn fees for assisting our customers with creating and selling warranty and service risk management programs.

Fee revenues as a percentage of our total commissions and fees, represented [removed: 26.1%] [added: 27.4%] in [removed: 2020] [added: 2021] and [removed: 27.1%] [added: 26.1%] in [removed: 2019.][added: 2020.]

For the years ended December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] our commissions and fees growth rate was [removed: 9.3%] [added: 16.9%] and [removed: 18.7%,] [added: 9.3%,] respectively, and our consolidated Organic Revenue growth rate was [removed: 3.8%] [added: 10.4%] and [removed: 3.6%,] [added: 3.8%,] respectively.

[removed: Historically, investment] [added: Investment] income [removed: has consisted] [added: consists] primarily of interest earnings on operating cash, and where permitted, on premiums and advance premiums collected and held in a fiduciary capacity before being remitted to insurance companies.

Other income primarily reflects legal settlements and other miscellaneous [removed: income.][added: revenues.]

Income before income taxes for the year ended December 31, [removed: 2020] [added: 2021] increased [removed: over 2019] by [removed: $98.2 million, primarily] [added: $138.7 million over 2020,] as a result of net new business, acquisitions we completed since [removed: 2019,] [added: 2020,] and management of our expense [removed: base.][added: base, partially offset by an increase in the change in estimated acquisition earn-out payables.]

[removed: Information] [added: Information] Regarding Non-GAAP [removed: Measures][added: Measures]

We [removed: also] use Organic Revenue growth [removed: and EBITDAC Margin for] [added: in determining] incentive [added: cash] compensation [removed: determinations] [added: and as a performance measure in our equity incentive grants] for [added: our] executive officers and other key [removed: employees.]

We view EBITDAC and EBITDAC Margin as important indicators of operating performance, because they allow us to determine more comparable, but non-GAAP, measurements of our operating margins in a meaningful and consistent manner by removing the significant non-cash items of depreciation, [removed: amortization] [added: amortization,] and the change in estimated acquisition earn-out payables, [removed: and also] [added: as well as] interest expense and taxes, which are reflective of investment and financing activities, not operating performance.

[removed: Acquisitions][added: Acquisitions]

From 1993 through the fourth quarter of [removed: 2020,] [added: 2021,] we acquired [removed: 561] [added: 580] insurance intermediary operations.

[removed: Critical] [added: Critical] Accounting [removed: Policies][added: Policies]

Our Consolidated Financial Statements are prepared in accordance with [removed: U.S.] GAAP.

We continually evaluate our estimates, which are based upon [added: a combination of] historical experience and [removed: on] assumptions that we believe to be reasonable under the circumstances.

[removed: Revenue Recognition][added: Revenue Recognition]

In some arrangements, where we are compensated through commissions, we also perform other services for our customer beyond [removed: the] binding of coverage.

In those arrangements we apportion the commission between [removed: the] binding of coverage and other services based on their relative fair value and recognize the associated revenue as those performance obligations are satisfied.

[removed: Business] [added: Business] Combinations and Purchase Price [removed: Allocations][added: Allocations]

In connection with [removed: these] acquisitions, we record the estimated value of the net tangible assets purchased and the value of the identifiable intangible assets purchased, which typically consist of purchased customer accounts and non-compete agreements.

Purchased customer accounts include the [added: 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 of delivery of services.

[removed: However, they] [added: Their value] primarily [removed: represent] [added: represents] the present value of the underlying cash flows expected to be received over the estimated future [removed: renewal periods] [added: duration] of the [removed: insurance policies comprising those purchased] [added: acquired] customer [removed: accounts.][added: relationships.]

Purchased customer accounts and non-compete agreements are amortized on a straight-line basis over the related estimated lives and contract periods, which [added: typically] range from 3 to 15 years.

Subsequent changes in the fair value of earn-out obligations are recorded in the Consolidated Statement of Income [removed: when changes to] [added: as a result of updated expectations for] the [removed: expected] performance of the associated [removed: business are realized.][added: business.]

These estimates are then discounted to a present value using a risk-adjusted rate that takes into consideration the likelihood that the [removed: forecasted] [added: forecast] earn-out payments will be made.

[removed: Intangible] [added: Intangible] Assets [removed: Impairment][added: Impairment]

Goodwill is subject to at least an annual assessment for [removed: impairment] [added: impairment,] measured by a fair-value-based test.

[removed: Fair value] [added: EBITDAC] is [removed: estimated based upon multiples of earnings] [added: defined as income] before interest, income taxes, depreciation, [removed: amortization] [added: amortization,] and [added: the] change in estimated acquisition earn-out payables [removed: (“EBITDAC”), or on a discounted cash flow basis.][added: ("EBITDAC").]

We completed our most recent evaluation of impairment for goodwill as of November 30, [removed: 2020] [added: 2021] and determined that the fair value of goodwill exceeded the carrying value of such assets.

Additionally, there have been no impairments recorded for amortizable intangible assets for the years ended December 31, [removed: 2020] [added: 2021] and [removed: 2019.][added: 2020.]

We also operate a capitalized captive insurance facility (the "Captive") for the purpose of having additional capacity to sell property insurance for earthquake and wind exposed properties.

The Captive buys reinsurance, limiting, but not eliminating the Company's exposure to underwriting losses and revenues are recognized as net retained earned premiums over the associated policy periods.

We foster a strong, decentralized sales and service culture which enables responsiveness to changing business conditions and drives accountability for results.

In connection with the Captive, we will recognize revenue starting in 2022 on a net retained earned premiums basis in a manner consistent with core commissions and fees.

Beginning in 2022 we will no longer exclude guaranteed supplemental commissions from core commissions and fees and therefore they will be a component of Organic Revenue.

We anticipate presenting certain prior periods accordingly so that the calculation of Organic Revenue compares both periods on the same basis.

Guaranteed supplemental commissions are a small and increasingly more stable source of revenue that are highly correlated to core commissions, so excluding them provides no meaningful incremental value in evaluating our revenue performance.

Over the last three years, GSCs have averaged less than 1.0% of commissions and fees revenue.

This increase was the result of recent acquisitions and qualifying for certain profit-sharing contingent commissions and GSCs in

2021 that we did not qualify for in the prior year.

Fee revenues are generated by: (i) our Services segment, which provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare

EBITDAC Margin is defined as EBITDAC divided by total revenues.

employees.

We use EBITDAC Margin for incentive cash compensation determinations for our executive officers.

To a much lesser extent, the Company will earn revenues starting in 2022 in the form of net retained earned premiums in connection with the Captive, in which the majority of underwriting risk is reinsured and a small portion is retained by the Company.

These premiums are reported net of the ceded premiums for reinsurance and recognized evenly over the associated policy periods.

The Company may elect to first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired.

If the Company does not perform a qualitative assessment, or if it is determined that it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, the Company will calculate the fair value of the reporting unit.

Fair value is estimated based upon multiples of EBITDAC, or on a discounted cash flow basis.

| | | | | | | | | | | | | |

| (in thousands, except percentages) | | 2021 | | | | % Change | | | | 2020 | | |

| Amortization | | | 119,593 | | | | 10.2 | % | | | 108,523 | |

| Depreciation | | | 33,309 | | | | 26.8 | % | | | 26,276 | |

| Interest | | | 64,981 | | | | 10.2 | % | | | 58,973 | |

| EBITDAC (2) | | $ | 1,021,151 | | | | 25.5 | % | | $ | 813,413 | |

(1)

(2)

This increase was the result of recent acquisitions and qualifying for certain profit-sharing contingent commissions and GSCs in 2021 that we did not qualify for in the prior year.

Amortization expense for 2021 increased $11.1 million to $119.6 million, or 10.2% over 2020.

Depreciation expense for 2021 increased $7.0 million to $33.3 million, or 26.8% over 2020.

Interest expense for 2021 increased $6.0 million to $65.0 million, or 10.2%, from 2020.

| | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Commissions and fees | | $ | 1,764,922 | | | $ | 1,470,093 | | | $ | 701,108 | | | $ | 609,842 | | | $ | 402,635 | | | $ | 352,161 | | | $ | 178,857 | | | $ | 174,012 | | | $ | 3,047,522 | | | $ | 2,606,108 | |

| Total change | | $ | 294,829 | | | | | | | $ | 91,266 | | | | | | | $ | 50,474 | | | | | | | $ | 4,845 | | | | | | | $ | 441,414 | | | | | |

| Total growth % | | | 20.1 | % | | | | | | | 15.0 | % | | | | | | | 14.3 | % | | | | | | | 2.8 | % | | | | | | | 16.9 | % | | | | |

| Profit-sharing contingent commissions | | | (38,895 | ) | | | (35,785 | ) | | | (35,259 | ) | | | (27,278 | ) | | | (8,072 | ) | | | (7,871 | ) | | | — | | | | — | | | | (82,226 | ) | | | (70,934 | ) |

| GSCs | | | (16,452 | ) | | | (15,128 | ) | | | (1,619 | ) | | | 238 | | | | (934 | ) | | | (1,304 | ) | | | — | | | | — | | | | (19,005 | ) | | | (16,194 | ) |

| Core commissions and fees | | $ | 1,709,575 | | | $ | 1,419,180 | | | $ | 664,230 | | | $ | 582,802 | | | $ | 393,629 | | | $ | 342,986 | | | $ | 178,857 | | | $ | 174,012 | | | $ | 2,946,291 | | | $ | 2,518,980 | |

| Acquisitions | | | (138,968 | ) | | | — | | | | (8,151 | ) | | | — | | | | (22,998 | ) | | | — | | | | — | | | | — | | | | (170,117 | ) | | | — | |

Impact of COVID-19

The coronavirus pandemic (“COVID-19”) and the resulting economic disruption are impacting and will likely continue to impact business activity across many industries worldwide.

COVID-19 remains dynamic, with uncertainty around its duration and broader impact.

We are monitoring and assessing the situation and will continue to adapt our business practices over the coming quarters to serve our customers and protect our employees.

The pandemic has reduced, and is expected to continue to negatively impact, the volume of business from new customers and insurable exposure units for existing customers.

We foster a strong, decentralized sales and service culture with the goal of consistent, sustained growth over the long-term.

For the year ended December 31, 2020, we had earned $16.2 million of GSCs, of which $11.9 million remained accrued at December 31, 2020 and most of this will be collected over the first and second quarters of 2021.

For the years ended December 31, 2020 and 2019, we earned $16.2 million and $23.1 million, respectively, from GSCs.

The net increase of $4.9 million was mainly driven by: (i) cash received for profit-sharing contingent commissions in the first and second quarters of 2020 being somewhat higher than the amount accrued as of December 31, 2019 for the estimate of contingents earned in 2019; (ii) growth associated with acquisitions completed over the last twelve months; and (iii) partially offset by a GSC of approximately $9 million recorded in the second quarter of 2019 for the National Programs Segment that will not recur in the future as the associated multi-year contract has ended.

Our business combinations are accounted for using the acquisition method.

Acquisition purchase prices are typically based upon a multiple of average EBITDA, annual operating profit and/or core revenue earned over a one to three-year period within a minimum and maximum price range.

| Total commissions and fees | | | 2,606,108 | | | | 9.3 | % | | | 2,384,737 | |

| Amortization | | | 108,523 | | | | 3.1 | % | | | 105,298 | |

| Depreciation | | | 26,276 | | | | 12.2 | % | | | 23,417 | |

| Interest | | | 58,973 | | | | (7.4 | )% | | | 63,660 | |

| EBITDAC (2) | | $ | 813,413 | | | | 13.5 | % | | $ | 716,938 | |

| --- | --- |

The net increase of $4.9 million was mainly driven by: (i) cash received for profit-sharing contingent commissions in the first and second quarters of 2020 being somewhat higher than the amount accrued as of December 31, 2019 for the estimate of contingents earned in 2019; (ii) growth associated with acquisitions completed over the last twelve months; and (iii) partially offset by a GSC of approximately $9 million recorded in the second quarter of 2019 for the National Programs Segment that will not recur in the future as the associated multi-year contract ended in 2019.

Employee compensation and benefits expense increased 9.8%, or $128.2 million, in 2020 compared to 2019.

Amortization expense for 2020 increased $3.2 million to $108.5 million, or 3.1% over 2019.

Depreciation expense for 2020 increased $2.9 million to $26.3 million, or 12.2% over 2019.

Interest expense for 2020 decreased $4.7 million to $59.0 million, or 7.4%, from 2019.

The reduction in the effective tax rate in 2020 as compared to 2019 was primarily driven the tax benefit associated with additional vesting of stock awards in 2020 as compared to 2019.

| (in thousands, except percentages) | | 2019 | | | | 2018 | | | | 2019 | | | | 2018 | | | | 2019 | | | | 2018 | | | | 2019 | | | | 2018 | | | | 2019 | | | | 2018 | | |

| Commissions and fees | | $ | 1,364,755 | | | $ | 1,040,574 | | | $ | 516,915 | | | $ | 493,878 | | | $ | 309,426 | | | $ | 286,364 | | | $ | 193,641 | | | $ | 189,041 | | | $ | 2,384,737 | | | $ | 2,009,857 | |

| Total change | | $ | 324,181 | | | | | | | $ | 23,037 | | | | | | | $ | 23,062 | | | | | | | $ | 4,600 | | | | | | | $ | 374,880 | | | | | |

| Total growth % | | | 31.2 | % | | | | | | | 4.7 | % | | | | | | | 8.1 | % | | | | | | | 2.4 | % | | | | | | | 18.7 | % | | | | |

| Profit-sharing contingent commissions | | | (34,150 | ) | | | (24,517 | ) | | | (17,517 | ) | | | (23,896 | ) | | | (7,499 | ) | | | (7,462 | ) | | | — | | | | — | | | | (59,166 | ) | | | (55,875 | ) |

| GSCs | | | (11,056 | ) | | | (8,535 | ) | | | (10,566 | ) | | | (76 | ) | | | (1,443 | ) | | | (1,350 | ) | | | — | | | | — | | | | (23,065 | ) | | | (9,961 | ) |

| Core commissions and fees | | $ | 1,319,549 | | | $ | 1,007,522 | | | $ | 488,832 | | | $ | 469,906 | | | $ | 300,484 | | | $ | 277,552 | | | $ | 193,641 | | | $ | 189,041 | | | $ | 2,302,506 | | | $ | 1,944,021 | |

| Acquisitions | | | (272,383 | ) | | | — | | | | (5,721 | ) | | | — | | | | (3,628 | ) | | | — | | | | (16,541 | ) | | | — | | | | (298,273 | ) | | | — | |

| Dispositions | | | — | | | | (7,743 | ) | | | — | | | | (790 | ) | | | — | | | | (1,268 | ) | | | — | | | | — | | | | — | | | | (9,801 | ) |

| Organic Revenue(2) | | $ | 1,047,166 | | | $ | 999,779 | | | $ | 483,111 | | | $ | 469,116 | | | $ | 296,856 | | | $ | 276,284 | | | $ | 177,100 | | | $ | 189,041 | | | $ | 2,004,233 | | | $ | 1,934,220 | |

| Organic Revenue growth(2) | | $ | 47,387 | | | | | | | $ | 13,995 | | | | | | | $ | 20,572 | | | | | | | $ | (11,941 | ) | | | | | | $ | 70,013 | | | | | |

| Income before income taxes | | $ | 222,875 | | | $ | 143,737 | | | $ | 82,739 | | | $ | 40,337 | | | $ | 36,241 | | | $ | 525,929 | |

| Income Before Income Taxes Margin | | | 16.3 | % | | | 27.7 | % | | | 26.7 | % | | | 20.8 | % | | NMF | | | | | 22.0 | % |

| Amortization | | | 63,146 | | | | 25,482 | | | | 11,191 | | | | 5,479 | | | | — | | | | 105,298 | |

| Depreciation | | | 7,390 | | | | 6,791 | | | | 1,674 | | | | 1,229 | | | | 6,333 | | | | 23,417 | |

| Interest | | | 87,295 | | | | 16,690 | | | | 4,756 | | | | 4,404 | | | | (49,485 | ) | | | 63,660 | |

| EBITDAC | | $ | 388,710 | | | $ | 191,949 | | | $ | 100,356 | | | $ | 42,834 | | | $ | (6,911 | ) | | $ | 716,938 | |

The fair values of our invested assets at December 31, [removed: 2020] [added: 2021] and December 31, [removed: 2019,] [added: 2020,] approximated their respective carrying values due to their short-term duration and therefore, such market risk is not considered to be material.

As of December 31, [removed: 2020,] [added: 2021,] we had [removed: $560.0] [added: $486.9] million of borrowings outstanding under our various credit agreements, all of which bear interest on a floating basis tied to London [removed: Interbank Overnight] [added: Inter-bank Offered] Rate (“LIBOR”) and is therefore subject to changes in the associated interest expense.

Management will continue to actively assess the related opportunities and risks associated with the transition [removed: and] [added: as well as] monitor related [removed: proposals and] [added: proposals,] guidance [removed: published by ARRC] and other alternative-rate initiatives, with an expectation that [removed: we] [added: the Company] will be prepared [removed: to] for a termination of LIBOR benchmarks [removed: after 2021.][added: prior to June 30, 2023 when typical rate settings will no longer be available.]

We are subject to [added: operational] exchange rate risk primarily in our U.K.-based wholesale brokerage business that has a cost base principally denominated in British pounds and a revenue base in several other currencies, but principally in U.S. dollars, and in our Canadian MGA business that has substantially all of its revenues and cost base denominated in Canadian [removed: Dollars.][added: dollars.]

As of January 14, 2021, the Company announced the completion of the acquisition of O’Leary Insurances, an Ireland based retail brokerage business which has substantially all of its revenue and cost base in [removed: Euro Dollars.][added: euros.]

Based upon our foreign currency rate exposure as of December 31, [removed: 2020,] [added: 2021,] an immediate 10% hypothetical [removed: changes] [added: change] of foreign currency exchange rates would not have a material effect on our Consolidated Financial Statements.

On March 5, 2021 the ICE Benchmark Administration, which administrators LIBOR, and the FCA announced that all LIBOR settings will either cease to be provided by any administrator or no longer be represented immediately after December 31, 2021 for all non-U.S. dollar LIBOR settings and one-week and two-month U.S. dollar LIBOR settings and immediately after June 30, 2023 for the remaining U.S. dollar LIBOR settings.

On October 27, 2021 the Company entered into the Second Amended and Restated Credit Agreement.

The Second Amended and Restated Credit Agreement includes provisions regarding transition from LIBOR to SOFR in preparation of the LIBOR cessation.

However, on November 30, 2020, the ICE Benchmark Administration Limited (“IBA”), announced that it would consult in early December 2020 on its intention to cease the publication of the one-week and two-month U.S. dollar LIBOR settings immediately following the LIBOR publication on December 31, 2021, and the remaining U.S. dollar LIBOR settings (overnight and one, three, six and 12 months) immediately following the LIBOR publication on June 30, 2023.

The consultation was open for feedback until January 25, 2021 and IBA “intends to share the results of the consultation with the FCA and to publish a feedback statement summarizing responses from the consultation shortly thereafter.” In connection to the released statement from the IBA, on December 4, 2020, the FCA released a similar statement in support of the continuation of the LIBOR rate beyond 2021.

The Company is currently evaluating the transition from LIBOR as an interest rate benchmark to other potential alternative reference rates, including but not limited to the SOFR interest rate.

[removed: General][added: General]

[removed: Within Wright,] [added: An exception is the activity in The Wright Insurance Group, LLC (“Wright”), in which] we operate a write-your-own flood insurance carrier, Wright National Flood Insurance Company (“WNFIC”).

WNFIC’s underwriting business consists [removed: entirely] of policies written pursuant to the National Flood Insurance Program (“NFIP”), the program administered by the Federal Emergency Management Agency (“FEMA”), [removed: and] excess flood [added: and private flood] policies which are fully reinsured, thereby substantially eliminating WNFIC’s exposure to underwriting risk, as these policies are backed by either FEMA or a reinsurance carrier with an AM Best Company rating of “A” or better.

In some limited cases, we share commissions with other agents or brokers who have acted jointly with us in a [removed: transaction.][added: transaction and we recognize commissions net of any commissions paid to other intermediaries.]

We may also receive from an insurance company a “profit-sharing contingent commission,” which is a profit-sharing commission based primarily on underwriting [removed: results, but may also contain considerations for volume, growth and/or retention.][added: results.]

Fee revenues are generated [removed: primarily] by: [removed: (1)] [added: (i)] our Services [removed: Segment,] [added: segment,] which provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare benefits advocacy services, and other claims adjusting services, [removed: (2)] [added: (ii)] our National Programs and Wholesale Brokerage [removed: Segments,] [added: segments,] which earn fees primarily for the issuing of insurance policies on behalf of insurance carriers, and [removed: (3)] [added: (iii)] our Retail [removed: Segment] [added: segment] for fees received in lieu of commissions.

As of December 31, [removed: 2020,] [added: 2021,] our activities were conducted in [removed: 332] [added: 331] domestic locations in [removed: 43] [added: 44] states, and [removed: 9] [added: 20] international locations in Canada, [removed: England, Bermuda,] [added: Ireland, the United Kingdom, Bermuda] and the Cayman Islands.

[removed: Segment Information][added: Segment Information]

Our business is divided into four reportable segments: [removed: (1)] [added: (i)] the Retail [removed: Segment, (2)] [added: segment, (ii)] the National Programs [removed: Segment, (3)] [added: segment, (iii)] the Wholesale Brokerage [removed: Segment] [added: segment] and [removed: (4)] [added: (iv)] the Services [removed: Segment.][added: segment.]

The following table summarizes [removed: (1)] [added: (i)] the commissions and fees generated by each of our reportable operating segments for [added: 2021,] 2020, [removed: 2019] and [removed: 2018,] [added: 2019] and [removed: (2)] [added: (ii)] the percentage of our total commissions and fees represented by each segment for each such period:

| [removed: (in] [added: (in] thousands, except [removed: percentages)] [added: percentages)] | | [removed: 2020] [added: 2021] | | | | [removed: %] [added: %] | | | | [removed: 2019] [added: 2020] | | | | [removed: %] [added: %] | | | | [removed: 2018] [added: 2019] | | | | [removed: %] [added: %] | | |

| Retail [removed: Segment] [added: segment] | | $ | [removed: 1,471,352] [added: 1,766,667] | | | | [removed: 56.5] [added: 58.0] | % | | $ | [removed: 1,366,016] [added: 1,471,352] | | | | [removed: 57.3] [added: 56.5] | % | | $ | [removed: 1,041,691] [added: 1,366,016] | | | | [removed: 51.8] [added: 57.3] | % |

| National Programs [removed: Segment] [added: segment] | | | [removed: 609,842] [added: 701,108] | | | | [removed: 23.4] [added: 23.0] | % | | | [removed: 516,915] [added: 609,842] | | | | [removed: 21.7] [added: 23.4] | % | | | [removed: 493,878] [added: 516,915] | | | | [removed: 24.6] [added: 21.7] | % |

| Wholesale Brokerage [removed: Segment] [added: segment] | | | [removed: 352,161] [added: 402,635] | | | | [removed: 13.5] [added: 13.2] | % | | | [removed: 309,426] [added: 352,161] | | | | [removed: 13.0] [added: 13.5] | % | | | [removed: 286,364] [added: 309,426] | | | | [removed: 14.2] [added: 13.0] | % |

| Services [removed: Segment] [added: segment] | | | [removed: 174,012] [added: 178,857] | | | | [removed: 6.7] [added: 5.9] | % | | | [removed: 193,641] [added: 174,012] | | | | [removed: 8.1] [added: 6.7] | % | | | [removed: 189,041] [added: 193,641] | | | | [removed: 9.4] [added: 8.1] | % |

| Other | | | [removed: (1,259] [added: (1,745] | ) | | | (0.1 | )% | | | [removed: (1,261] [added: (1,259] | ) | | | (0.1 | )% | | | [removed: (1,117] [added: (1,261] | ) | | | [removed: (0.0] [added: (0.1] | )% |

| Total | | $ | [removed: 2,606,108] [added: 3,047,522] | | | | 100.0 | % | | $ | [removed: 2,384,737] [added: 2,606,108] | | | | 100.0 | % | | $ | [removed: 2,009,857] [added: 2,384,737] | | | | 100.0 | % |

These operations generated [removed: $35.1] [added: $78.0] million, [removed: $17.7] [added: $35.1] million and [removed: $15.2] [added: $17.7] million of revenues for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018,] [added: 2019,] respectively.

See Note [removed: 17] [added: 16] to the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional segment financial data relating to our business.

[removed: Retail Segment][added: Retail segment]

During [removed: 2020,] [added: 2021,] commissions and fees from our largest single Retail [removed: Segment] [added: segment] customer represented [removed: four tenths of one percent (0.4%)] [added: 0.5%] of the Retail [removed: Segment’s] [added: segment’s] total commissions and fees.

As of December 31, [removed: 2020,] [added: 2021,] our Retail [removed: Segment] [added: segment] employed [removed: 5,764] [added: 6,301] employees.

Our Retail [removed: Segment] [added: segment] has physical locations in [removed: 39] [added: 42] states and [added: Ireland,] Bermuda and [removed: is licensed to do business in all 50 states.][added: the Cayman Islands.]

In connection with [removed: the] selling and marketing of insurance coverages, we provide a broad range of related services to our customers, such as risk management strategies, loss control surveys and analysis, consultation in connection with placing insurance coverages and claims processing.

[removed: National] [added: National] Programs [removed: Segment][added: segment]

As of December 31, [removed: 2020,] [added: 2021,] our National Programs [removed: Segment] [added: segment] employed [removed: 2,508] [added: 2,842] employees.

We offer program management expertise for insurance carrier partners across numerous lines of business, which can be grouped into five broad [removed: categories: (1) Professional Programs, (2) Personal Lines Programs, (3) Commercial Programs, (4) Public Entity-Related Programs, and (5) Specialty Lines Program:][added: categories as detailed below:]

[added: Professional programs.] Professional liability and related package insurance products are tailored to the needs of professionals in the following areas: dentistry, legal, eyecare, insurance, financial, [removed: physicians,] [added: physicians] and real estate title professionals.

Professional liability programs also offer supplementary insurance-related products to include weddings, events, medical [removed: facilities,] [added: facilities] and cyber liability.

[added: Personal Lines programs.] Personal lines programs offer a variety of insurance products to personal lines consumers including homeowners and personal property policies; residential earthquake; as well as private passenger automobile and motorcycle coverage.

Specific industries and market niches are served by our specialty programs including automotive aftermarket, professional and amateur sports, [removed: motorsports,] [added: motor sports,] special [removed: events,] [added: events] and the entertainment industry; commercial transportation and trucking; forestry; manufactured housing; and workers’ compensation.

[added: Public Entity programs.] Public entity programs range from providing fully insured programs to establishing risk retention insurance pools, and excess and facultative specific coverages, including administration of various insurance trusts for cities, counties, municipalities, school boards, special taxing [removed: districts,] [added: districts] and quasi-governmental agencies.

[added: Specialty programs.] Specialty programs include flood insurance, commercial difference-in-conditions (earthquake), all-risk commercial property, [added: collateralized risk,] coastal property programs including wind, lender-placed solutions, sovereign [removed: Indian nations,] [added: native-American nations] and parcel insurance.

[removed: Wholesale] [added: Wholesale] Brokerage [removed: Segment][added: segment]

As of December 31, [removed: 2020,] [added: 2021,] our Wholesale Brokerage [removed: Segment] [added: segment] employed [removed: 1,578] [added: 1,594] employees.

The Wholesale Brokerage [removed: Segment offices] [added: segment] represent various U.S. and U.K. surplus lines insurance companies.

During [removed: 2020,] [added: 2021,] commissions and fees from our largest Wholesale Brokerage [removed: Segment] [added: segment] customer represented approximately [removed: 1.3%] [added: 1.4%] of the Wholesale Brokerage [removed: Segment’s] [added: segment’s] total commissions and fees.

[removed: Services Segment][added: Services segment]

As of December 31, [removed: 2020,] [added: 2021,] our Services [removed: Segment] [added: segment] employed [removed: 936] [added: 974] employees and provided a wide range of insurance-related services.

[added: Social Security Advocacy.] Social Security [removed: Advocacy -] [added: advocacy] assists individuals throughout the United States who are seeking to establish eligibility for coverage under the federal Social Security Disability program and provides health plan selection and enrollment assistance for Medicare beneficiaries.

We primarily operate as an agent or broker and therefore do not assume underwriting risks.

We also operate a capitalized captive insurance facility (the "Captive") for the purpose of having additional capacity on a quota sharing basis, currently focused on property insurance for earthquake and wind exposed properties underwritten by certain managing general agents.

The Captive buys reinsurance, limiting, but not eliminating the Company's exposure to underwriting losses.

| | | | | | | | | | | | | | | | | | | | | | | | | |

The majority of our operations are in the United States.

In addition, we operate retail operations based in Ireland, Bermuda and the Cayman Islands, a wholesale brokerage operation based in England and a managing general agent operation in Canada.

| Property & Casualty | Employee Benefits | Personal Insurance |

| Property | Benefit Design & Delivery | Homeowners |

| Casualty | Financial Strategy & Analytics | Automobile |

| Workers' Compensation | Regulatory & Legislative Strategy | Personal Excess Liability |

| Surety | Technology Services | Flood and Excess Liability |

| Aviation | Population Health & Well-Being | Flood and Excess Flood |

| Private Equity/Mergers & Acquisitions | Strategic Non-Medical Solutions | Specialized Coverages |

| Executive Liability | Voluntary Benefits | Group Excess |

| Cyber Risk | Pharmacy Benefits | |

| Multinational | Private Equity/Mergers & Acquisitions | Specialties |

| Analytics & Modeling | International Benefits | Dealer Services |

| Risk Services | Employer Stop Loss | Specialty Risk Solutions |

| Alternative Risk/Captives | | Tribal Nations |

| Specialty Risk Solutions | | Total Rewards & Compensation |

| Trade Credit | | |

Our largest National Programs segment customer represented approximately 7.6% of the segment’s total commissions and fees.

The cornerstones of our organization's guiding principles are people, performance, service and innovation.

We believe in doing what is best for our customers, communities, teammates, carrier partners and shareholders—always.

We are an equal opportunity employer built on meritocracy, meaning our people have the opportunity to rise according to their merits and individual initiative.

At Brown & Brown, we have a culture built on integrity, innovation, superior capabilities, discipline and meritocracy.

We are committed to doing what is best for our customers, which drives our sales results and is a crucial component in our Company's strategy.

As a lean, highly competitive, decentralized growth and profit-oriented sales and service organization, we think of ourselves as a team, so we have teammates—not employees—and leaders—not managers.

Our teammates are our greatest resource, and by challenging, empowering and rewarding them, our teams are driven to achieve extraordinary results.

Our Team

At Brown & Brown, our goal is to provide our teammates with careers, not just jobs, which is why a vast majority of our teammates are full-time teammates.

Our Company focuses on recruiting and developing the most capable teammates with diverse backgrounds and experiences.

Leveraging our strong relationships with several key colleges and universities, we are committed to recruiting and developing talent through our college intern program.

In addition to individual recruitment, we focus on building our team by completing high-quality acquisitions.

In 2021, we grew our team by approximately 635 new teammates through the acquisition of 19 companies that we believe fit culturally and make sense financially.

We believe that supporting and encouraging continued education will help to ensure that we remain at the forefront of developing trends in an ever-changing industry.

We are committed to investing heavily in our teammate education and development through Brown & Brown University ("BBU"), the Brown & Brown Education Assistance Program and our Peer Partnership Program.

Brown & Brown University: BBU is one of the pillars of our educational program and helps set us apart from our competitors.

Through a rigorous internal training program, BBU offers comprehensive sales, technical, academic and leadership skill-building courses for new producers, office leaders and teammates throughout our organization.

In 2021, the Company was proud to award 10 students with $5,000 annual scholarships for four years.

As an agent and broker, we do not assume underwriting risks with the exception of the activity in The Wright Insurance Group, LLC (“Wright”).

Industry Overview

Premium pricing within the property and casualty insurance underwriting (risk-bearing) industry has historically been cyclical in nature and has varied widely based upon market conditions with a “hard” market in which premium rates are increasing or a “soft” market, characterized by stable or declining premium rates in many lines and geographic areas.

Premium pricing is influenced by many factors including loss experience, interest rates and the availability of capital being deployed into the insurance market in search of returns.

We conduct all of our operations within the United States of America, except for one Wholesale Brokerage operation based in England, one National Programs operation in Canada and Retail operations based in Bermuda and The Cayman Islands.

| --- | --- | --- |

| Builders Risk | Group Medical & Pharmaceutical | Property |

| Commercial Auto | Homeowners | Reinsurance |

| Crop & Hail | Inland Marine | Retirement Benefit |

| Cyber | Long Term Disability | Risk Mitigating Warranty Products |

| Directors & Officers | Management Liability | Short Term Disability |

| Errors & Omissions | Medical Stop Loss | Term Life |

| Excess Liability | Personal Auto | Umbrella |

| General Liability | Prescription Drug | Workers Compensation |

| Group Dental | | |

Professional Programs.

Personal Lines Programs.

Public Entity Programs.

Specialty Programs.

Put simply, Brown & Brown is a Meritocracy®—our people rise according to their merits.

We pride ourselves on creating an open, diverse, performance-driven, and transparent culture that celebrates and recognizes teammates at all levels.

Our unique culture drives our results and is a key component of the Company’s strategy.

Brown & Brown is a lean, decentralized, highly competitive, profit-oriented sales and service organization composed of people of the highest integrity and quality, bound together by clearly defined goals and prideful relationships.

We consider ourselves teammates, not “employees,” and our success is guided by leaders, not managers.

Our Company believes our teammates are far more than ordinary, and we know they achieve extraordinary results because they are challenged, empowered, and rewarded for doing so.

Soliciting Feedback.

We regularly solicit anonymous feedback from our teammates, and we are proud that 94% of our teammates say Brown & Brown is a Great Place to Work®.

As an organization, we value, encourage, and support these priorities, and by doing so, we cultivate a productive and highly engaged team that drives our Company to thrive and succeed.

Human Capital Credentials

This ownership mindset also influences how we operate, including how we invest in our business, and the work we do for our customers.

In addition to being a Great Place to Work® certified company, Brown & Brown, Inc. was recognized as a Best Workplace for Women and Millennials in 2020.

Our Workforce.

The vast majority of our teammates are regular full-time employees.

Our goal is to provide our teammates with careers, not jobs.

The following chart illustrates the categorical breakdown of our teammate population, which includes all persons who receive wages or salaries through the Company’s payroll:


A critical part of the Company’s strategy revolves around the recruitment and development of our teammates; to drive our growth by offering innovative risk management solutions to our customers, we often think of ourselves as being in the people recruiting and enhancing business.

We also recruit and develop talent through our college internship program, which leverages our strong relationships with a number of key colleges and universities.

We also build our team by completing high-quality acquisitions that fit culturally and make sense financially.

In 2020, we added approximately 796 new teammates through 25 strategic acquisitions.

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: FORM 10-K]

[removed: ☒ANNUAL] [added: ☒ ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

[removed: For] [added: For] the fiscal year [removed: ended December 31, 2020][added: ended December 31, 2021]

[removed: ☐TRANSITION] [added: ☐ TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

[removed: For] [added: For] the transition period [removed: from to][added: from to]

[removed: Commission] [added: Commission] file [removed: number 001-13619][added: number 001-13619]

[removed: BROWN] [added: BROWN] & BROWN, [removed: INC.][added: INC.]

[removed: (Exact] [added: (Exact] name of registrant as specified in its [removed: charter)][added: charter)]

| [removed: Florida] [added: Florida] | | [removed: ] [added: ] | | [removed: 59-0864469] [added: 59-0864469] |

| [removed: (State] [added: (State] or other jurisdiction [removed: of incorporation] [added: of incorporation] or [removed: organization)] [added: organization)] | | | | [removed: (I.R.S. Employer Identification Number)] [added: (I.R.S. Employer Identification Number)] |

| [removed: 300] [added: 300] North Beach [removed: Street, Daytona Beach, FL] [added: Street, Daytona Beach, FL] | | | | [removed: 32114] [added: 32114] |

| [removed: (Address] [added: (Address] of principal executive [removed: offices)] [added: offices)] | | | | [removed: (Zip Code)] [added: (Zip Code)] |

[removed: Registrant’s] [added: Registrant’s] telephone number, including area code: [removed: (386) 252-9601][added: (386) 252-9601]

[removed: Registrant’s] [added: Registrant’s] Website: [removed: www.bbinsurance.com][added: www.bbinsurance.com]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of each [removed: class] [added: class] | [removed: Trading Symbol(s)] [added: Trading Symbol(s)] | [removed: Name] [added: Name] of each exchange on which [removed: registered] [added: registered] |

| [removed: COMMON] [added: COMMON] STOCK, $0.10 PAR [removed: VALUE] [added: VALUE] | [removed: BRO] [added: BRO] | [removed: New] [added: New] york stock [removed: exchange] [added: exchange] |

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the [removed: Act:][added: Act:]

[removed: None][added: None]

The aggregate market value of the voting common stock held by non-affiliates of the registrant, computed by reference to the price at which the stock was last sold on June 30, [removed: 2020] [added: 2021] (the last business day of the registrant’s most recently completed second fiscal quarter) was [removed: $9,600,807,597.][added: $12,475,231,637.]

The number of shares of the Registrant’s common stock, $0.10 par value, outstanding as of February [removed: 22, 2021] [added: 18, 2022] was [removed: 282,089,166.][added: 282,215,614.]

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Portions of Brown & Brown, Inc.’s Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareholders are incorporated by reference into Part III of this Report.

[removed: ANNUAL] [added: ANNUAL] REPORT ON FORM [removed: 10-K][added: 10-K]

| | | [removed: PAGE NO.] [added: PAGE NO.] |

| [removed: [Part I](#PART_I)] [added: [Part I](#part_i)] | | 5 |

| Item 1A. | [Risk [removed: Factors](#ITEM_1A_RISK_FACTORS)] [added: Factors](#item_1a_risk_factors)] | [removed: 12] [added: 14] |

| Item 1B. | [Unresolved Staff [removed: Comments](#ITEM_2_PROPERTIES)] [added: Comments](#item_2_properties)] | [removed: 21] [added: 23] |

| Item 2. | [removed: [Properties](#ITEM_2_PROPERTIES)] [added: [Properties](#item_2_properties)] | [removed: 21] [added: 23] |

| Item 3. | [Legal [removed: Proceedings](#ITEM_3_LEGAL_PROCEEDINGS)] [added: Proceedings](#item_3_legal_proceedings)] | [removed: 21] [added: 23] |

| Item 4. | [Mine Safety [removed: Disclosures](#ITEM_4_MINE_SAFETY_DISCLOSURES)] [added: Disclosures](#item_4_mine_safety_disclosures)] | [removed: 21] [added: 23] |

| [removed: [Part II](#PART_II)] [added: [Part II](#part_ii)] | | [removed: 22] [added: 24] |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#ITEM_5_MARKET_FOR_REGISTRANTS_COMMON_EQU)] [added: Securities](#item_5_market_for_registrants_common_equ)] | [removed: 22] [added: 24] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ITEM_7_MANAGEMENTS_DISCUSSION_ANALYSIS_F)] [added: Operations](#item_7_managements_discussion_analysis_f)] | [removed: 25] [added: 27] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#ITEM_7A_QUANTITATIVE_QUALITATIVE_DISCLOS)] [added: Risk](#item_7a_quantitative_qualitative_disclos)] | [removed: 39] [added: 42] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#ITEM_8_FINANCIAL_STATEMENTS_SUPPLEMENTAR)] [added: Data](#item_8_financial_statements_supplementar)] | [removed: 40] [added: 43] |

| Item 9. | [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#ITEM_9_CHANGES_IN_DISAGREEMENTS_WITH_ACC)] [added: Disclosure](#item_9_changes_in_disagreements_with_acc)] | [removed: 80] [added: 85] |

or

| | | | | |

| | | | | | | |

| Auditor Firm ID: 34 | Auditor Name: Deloitte & Touche LLP | Auditor Location: Tampa, Florida, United States of America |

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021

INDEX

| Item 6. | Reserved | 26 |

| Item 9C. | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#item_9b_or_information) | 85 |

| | | |

| | | |

| | | |

The effects of inflation;

Other factors that the Company may not have currently identified or quantified.

All forward-looking statements made herein are made only as of the date of this filing, the Company does not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which the Company hereafter becomes aware.

PART I

or

| --- | --- | --- |

INDEX

| Item 6. | [Selected Financial Data](#ITEM_6_SELECTED_FINANCIAL_DATA) | 24 |

Further, statements about the effects of COVID-19 on our business, operations, financial performance and prospects may constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of COVID-19, actions taken by governmental authorities in response to COVID-19, and the direct and indirect impact of COVID-19 on our customers, insurance carriers, third parties and us.

We assume no obligation to update any of the forward-looking statements.

PART I

We own our executive offices, which are located at 300 North Beach Street, Daytona Beach, Florida 32114, [removed: and are situated on several contiguous parcels of land totaling over thirteen acres.][added: as well as certain other office buildings in the Daytona Beach area.]

We lease offices at each of our other [removed: 341] [added: 351] locations.

PART II

PART II

On February [removed: 22, 2021,] [added: 18, 2022,] there were [removed: 282,089,166] [added: 282,215,614] shares of our common stock outstanding, held by approximately [removed: 1,489] [added: 1,512] shareholders of record.

[removed: Sales] [added: Sales] of Unregistered [removed: Securities][added: Securities]

In connection with certain acquisitions, the Company issued [removed: 274,348 shares of Company common stock on May 1, 2020; 68,568 shares of Company common stock on September 10, 2020; 44,978] [added: 106,586] shares of Company common stock on [removed: September 11, 2020;] [added: February 2, 2021] and [removed: 335,045] [added: 78,176] shares of Company common stock on [removed: October 9, 2020,] [added: December 1, 2021,] to the owners of the businesses acquired.

The issuances were made in reliance upon the following exemptions or exclusions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”): Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities [removed: Act.][added: Act and the recipients of the shares represented that they were accredited investors and/or sophisticated investors.]

[removed: Issuer] [added: Issuer] Purchases of Equity [removed: Securities][added: Securities]

At December 31, [removed: 2020,] [added: 2021,] the remaining amount authorized by our [removed: Board] [added: board] of [removed: Directors] [added: directors] for share repurchases was [removed: $406.2] [added: $323.6] million.

Under the authorized repurchase programs, the Company has repurchased [removed: a total of] approximately [removed: 16.7] [added: 18.5] million shares for an aggregate cost of approximately [removed: $591.3] [added: $673.9] million between 2014 and [removed: 2020.][added: 2021.]

The following table presents information with respect to our purchases of our common stock during the three months ended December 31, [removed: 2020.][added: 2021.]

| [removed: Period] [added: Period] | | [removed: Total] [added: Total] number of shares [removed: purchased(1)] [added: purchased(1)] | | | | [removed: Average] [added: Average] price paid per [removed: share] [added: share] | | | | [removed: Total] [added: Total] number of shares purchased as part of publicly announced plans or [removed: programs] [added: programs] | | | | [removed: Approximate] [added: Approximate] dollar value of shares that may yet be purchased under the plans or [removed: programs] [added: programs] | | |

[removed: | (1) |] Of the shares reported in this column, [removed: 1,059,486] [added: no] shares were purchased in open market [removed: transactions. All other] [added: transactions and all] shares reported in this column are attributable to shares withheld for taxes in connection with the vesting of restricted shares awarded under our Performance Stock Plan and 2010 Stock Incentive Plan. [removed: |]

The returns of each company have been weighted according to such companies’ respective stock market capitalizations as of December 31, [removed: 2015] [added: 2016] for the purposes of arriving at a peer group average.

The total return calculations are based upon an assumed $100 investment on December 31, [removed: 2015,] [added: 2016,] with all dividends reinvested.

[removed: ][added: ]

During 2021, the Company repurchased 1,811,853 shares at an average price of $45.57 for a total cost of $82.6 million under the current share repurchase authorization.

| | | | | | | | | | | | | | | | | |

| October 1, 2021 to October 31, 2021 | | | 2,722 | | | $ | 60.92 | | | | — | | | $ | 323,622,993 | |

| November 1, 2021 to November 30, 2021 | | | — | | | | — | | | | — | | | | 323,622,993 | |

| December 1, 2021 to December 31, 2021 | | | 339 | | | | 68.03 | | | | — | | | | 323,622,993 | |

| Total | | | 3,061 | | | $ | 61.70 | | | | — | | | $ | 323,622,993 | |

(1)

| | | | | | | | | | | | | | | | | | | | | | | | | |

| | | 12/16 | | | | 12/17 | | | | 12/18 | | | | 12/19 | | | | 12/20 | | | | 12/21 | | |

| Brown & Brown, Inc. | | | 100.00 | | | | 116.15 | | | | 125.78 | | | | 181.96 | | | | 220.27 | | | | 328.87 | |

| NYSE Composite | | | 100.00 | | | | 118.90 | | | | 108.45 | | | | 136.38 | | | | 146.05 | | | | 176.45 | |

| Peer Group | | | 100.00 | | | | 123.56 | | | | 133.21 | | | | 184.04 | | | | 206.45 | | | | 283.30 | |

During 2020, the Company repurchased 1,234,417 shares at an average price per share of $44.63 for a total cost of $55.1 million.

| October 1, 2020 to October 31, 2020 | | | 650 | | | $ | 46.12 | | | | — | | | $ | 453,969,269 | |

| November 1, 2020 to November 30, 2020 | | | 23,055 | | | | 45.80 | | | | 20,542 | | | | 453,030,046 | |

| December 1, 2020 to December 31, 2020 | | | 1,040,010 | | | | 45.09 | | | | 1,038,944 | | | | 406,186,901 | |

| Total | | | 1,063,715 | | | $ | 45.10 | | | | 1,059,486 | | | $ | 406,186,901 | |

| --- | --- |

| | | 12/15 | | | | 12/16 | | | | 12/17 | | | | 12/18 | | | | 12/19 | | | | 12/20 | | |

| Brown & Brown, Inc. | | | 100.00 | | | | 141.79 | | | | 164.69 | | | | 178.34 | | | | 257.99 | | | | 312.32 | |

| NYSE Composite | | | 100.00 | | | | 112.08 | | | | 133.26 | | | | 121.54 | | | | 152.85 | | | | 163.66 | |

| Peer Group | | | 100.00 | | | | 118.67 | | | | 146.56 | | | | 158.69 | | | | 219.34 | | | | 247.57 | |

The following selected Consolidated Financial Data for each of the five fiscal years in the period ended December 31, have been derived from our Consolidated Financial Statements.

Such data should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of Part II of this Annual Report and with our Consolidated Financial Statements and related Notes thereto in Item 8 of Part II of this Annual Report.

| | | Year Ended December 31, | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (in thousands, except per share data, number of employees and percentages) | | 2020 | | | | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | |

| REVENUES | | | | | | | | | | | | | | | | | | | | |

| Commissions and fees | | $ | 2,606,108 | | | $ | 2,384,737 | | | $ | 2,009,857 | | | $ | 1,857,270 | | | $ | 1,762,787 | |

| Investment income | | | 2,811 | | | | 5,780 | | | | 2,746 | | | | 1,626 | | | | 1,456 | |

| Other income, net | | | 4,456 | | | | 1,654 | | | | 1,643 | | | | 22,451 | | | | 2,386 | |

| Total revenues(1) | | | 2,613,375 | | | | 2,392,171 | | | | 2,014,246 | | | | 1,881,347 | | | | 1,766,629 | |

| EXPENSES | | | | | | | | | | | | | | | | | | | | |

| Employee compensation and benefits | | | 1,436,377 | | | | 1,308,165 | | | | 1,068,914 | | | | 994,652 | | | | 925,217 | |

| Other operating expenses | | | 365,973 | | | | 377,089 | | | | 332,118 | | | | 283,470 | | | | 262,872 | |

| (Gain)/loss on disposal | | | (2,388 | ) | | | (10,021 | ) | | | (2,175 | ) | | | (2,157 | ) | | | (1,291 | ) |

| Amortization | | | 108,523 | | | | 105,298 | | | | 86,544 | | | | 85,446 | | | | 86,663 | |

| Depreciation | | | 26,276 | | | | 23,417 | | | | 22,834 | | | | 22,698 | | | | 21,003 | |

| Interest | | | 58,973 | | | | 63,660 | | | | 40,580 | | | | 38,316 | | | | 39,481 | |

| Change in estimated acquisition earn-out payables | | | (4,458 | ) | | | (1,366 | ) | | | 2,969 | | | | 9,200 | | | | 9,185 | |

| Total expenses | | | 1,989,276 | | | | 1,866,242 | | | | 1,551,784 | | | | 1,431,625 | | | | 1,343,130 | |

| Income before income taxes | | | 624,099 | | | | 525,929 | | | | 462,462 | | | | 449,722 | | | | 423,499 | |

| Income taxes(2) | | | 143,616 | | | | 127,415 | | | | 118,207 | | | | 50,092 | | | | 166,008 | |

| Net income | | $ | 480,483 | | | $ | 398,514 | | | $ | 344,255 | | | $ | 399,630 | | | $ | 257,491 | |

| EARNINGS PER SHARE INFORMATION | | | | | | | | | | | | | | | | | | | | |

| Net income per share - diluted(3) | | $ | 1.69 | | | $ | 1.40 | | | $ | 1.22 | | | $ | 1.40 | | | $ | 0.91 | |

| Weighted average number of shares outstanding - diluted(3) | | | 275,867 | | | | 274,616 | | | | 275,521 | | | | 277,586 | | | | 275,608 | |

| Dividends declared per share(3) | | $ | 0.35 | | | $ | 0.33 | | | $ | 0.31 | | | $ | 0.28 | | | $ | 0.25 | |

| YEAR-END FINANCIAL POSITION | | | | | | | | | | | | | | | | | | | | |

| Total assets(4) | | $ | 8,966,492 | | | $ | 7,622,821 | | | $ | 6,688,668 | | | $ | 5,747,550 | | | $ | 5,262,734 | |

| Long-term debt(5) | | $ | 2,025,906 | | | $ | 1,500,343 | | | $ | 1,456,990 | | | $ | 856,141 | | | $ | 1,018,372 | |

| Total shareholders’ equity | | $ | 3,754,223 | | | $ | 3,350,279 | | | $ | 3,000,568 | | | $ | 2,582,699 | | | $ | 2,360,211 | |

| Total shares outstanding at year end(3) | | | 283,004 | | | | 281,655 | | | | 279,583 | | | | 276,210 | | | | 280,208 | |

| OTHER INFORMATION | | | | | | | | | | | | | | | | | | | | |

| Number of full-time equivalent employees at year end | | | 10,843 | | | | 10,083 | | | | 9,590 | | | | 8,491 | | | | 8,297 | |

| Total revenues per average number of employees(6) | | $ | 249,773 | | | $ | 243,193 | | | $ | 222,809 | | | $ | 224,130 | | | $ | 219,403 | |

| Stock price at year-end(3) | | $ | 47.41 | | | $ | 39.48 | | | $ | 27.56 | | | $ | 25.73 | | | $ | 22.43 | |

| Stock price earnings multiple at year-end(7) | | | 28.1 | | | | 28.2 | | | | 22.6 | | | | 18.3 | | | | 24.6 | |

| Return on beginning shareholders’ equity(8) | | | 14 | % | | | 13 | % | | | 13 | % | | | 17 | % | | | 12 | % |

| (1) | Years 2017 and 2016 do not reflect the adoption of “Revenue from Contracts with Customers (Topic 606)” (“Topic 606”), ASC Topic 340 - Other Assets and Deferred Cost (“ASC 340”) and ASU 2016-08, “Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net)”, which was adopted under the modified retrospective method. |

| --- | --- |

| (2) | Years 2017 and 2016 do not reflect the adoption of ASU 2016-09, “Improvements to Employee Share Based Payment Accounting” (“ASU 2016-09”), which was adopted using the prospective method. |

[removed: Index] [added: Index] to [removed: Consolidated Financial Statements][added: Consolidated Financial Statements]

| | [removed: Page No.] [added: Page No.] |

| [Consolidated Statements of Income for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#CONSOLIDATED_STATEMENTS_INCOME)] [added: 2019](#consolidated_statements_income)] | [removed: 41] [added: 44] |

| [Consolidated Balance Sheets as of December 31, [removed: 2020] [added: 2021] and [removed: 2019](#CONSOLIDATED_BALANCE_SHEETS)] [added: 2020](#consolidated_balance_sheets)] | [removed: 42] [added: 46] |

| [Consolidated Statements of Shareholders’ Equity for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#CONSOLIDATED_STATEMENTS_SHAREHOLDERS_EQU)] [added: 2019](#consolidated_statements_shareholders_equ)] | [removed: 43] [added: 47] |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#CONSOLIDATED_STATEMENTS_CASH_FLOWS)] [added: 2019](#consolidated_statements_cash_flows)] | [removed: 44] [added: 49] |

| [Notes to Consolidated Financial Statements for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMEN)] [added: 2019](#notes_to_consolidated_financial_statemen)] | [removed: 45] [added: 50] |

| [Note 1: Summary of Significant Accounting [removed: Policies](#NOTE_1_SUMMARY_SIGNIFICANT_ACCOUNTING_PO)] [added: Policies](#note_1_summary_significant_accounting_po)] | [removed: 45] [added: 50] |

| [Note 2: [removed: Revenues](#NOTE_2_REVENUES)] [added: Revenues](#note_2_revenues)] | [removed: 50] [added: 55] |

| [Note 3: Business [removed: Combinations](#NOTE_3_BUSINESS_COMBINATIONS)] [added: Combinations](#note_3_business_combinations)] | [removed: 51] [added: 57] |

| [Note 4: [removed: Goodwill](#NOTE_4_GOODWILL)] [added: Goodwill](#note_4_goodwill)] | [removed: 59] [added: 65] |

| [Note 5: Amortizable Intangible [removed: Assets](#NOTE_5_AMORTIZABLE_INTANGIBLE_ASSETS)] [added: Assets](#note_5_amortizable_intangible_assets)] | [removed: 59] [added: 65] |

| [Note 6: [removed: Investments](#NOTE_6_INVESTMENTS)] [added: Investments](#note_6_investments)] | [removed: 60] [added: 65] |

| [Note 7: Fixed [removed: Assets](#NOTE_7_FIXED_ASSETS)] [added: Assets](#note_7_fixed_assets)] | [removed: 62] [added: 68] |

| [Note 8: Accrued Expenses and Other [removed: Liabilities](#NOTE_8_ACCRUED_EXPENSES_OR_CURRENT_LIABI)] [added: Liabilities](#note_8_accrued_expenses_or_current_liabi)] | [removed: 62] [added: 68] |

| [Note 9: Long-Term [removed: Debt](#NOTE_9_LONGTERM_DEBT)] [added: Debt](#note_9_longterm_debt)] | [removed: 63] [added: 69] |

| [Note 10: Income [removed: Taxes](#NOTE_10_INCOME_TAXES)] [added: Taxes](#note_10_income_taxes)] | [removed: 64] [added: 71] |

| [Note 11: Employee Savings [removed: Plan](#NOTE_11_EMPLOYEE_SAVINGS_PLAN)] [added: Plan](#note_11_employee_savings_plan)] | [removed: 67] [added: 73] |

| [Note 12: Stock-Based [removed: Compensation](#NOTE_12_STOCKBASED_COMPENSATION)] [added: Compensation](#note_12_stockbased_compensation)] | [removed: 67] [added: 73] |

| [Note 13: Supplemental Disclosures of Cash Flow [removed: Information](#NOTE_13_SUPPLEMENTAL_DISCLOSURES_CASH_F)] [added: Information and Non-Cash Financing and Investing Activities](#note_13_supplemental_disclosures_cash_f)] | [removed: 70] [added: 76] |

| [Note 14: Commitments and [removed: Contingencies](#NOTE_14_COMMITMENTS_CONTINGENCIES)] [added: Contingencies](#note_14_commitments_contingencies)] | [removed: 70] [added: 77] |

| [Note 15: [removed: Leases](#NOTE_15_LEASES)] [added: Leases](#note_15_leases)] | [removed: 71] [added: 77] |

| [Note [removed: 17:] [added: 16:] Segment [removed: Information](#NOTE_16_SEGMENT_INFORMATION)] [added: Information](#note_16_segment_information)] | [removed: 73] [added: 79] |

| [Note [removed: 18:] [added: 17:] Insurance Company [removed: WNFIC](#NOTE_17_REINSURANCE)] [added: WNFIC](#note_17_reinsurance)] | [removed: 74] [added: 80] |

| [Note [removed: 19:] [added: 18:] Shareholders’ [removed: Equity](#NOTE_20_SHAREHOLDERS_EQUITY)] [added: Equity](#note_20_shareholders_equity)] | [removed: 75] [added: 80] |

[removed: | [Report of Independent Registered Public Accounting Firm](#REPORT_OF_INDEPENDENT_REGISTERED) | 76 |][added: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM]

[removed: BROWN] [added: BROWN] & BROWN, [removed: INC.][added: INC.]

[removed: CONSOLIDATED] [added: CONSOLIDATED] STATEMENTS OF [removed: INCOME][added: COMPREHENSIVE INCOME]

| | | [removed: For] [added: For] the Year Ended December [removed: 31,] [added: 31,] | | | | | | | | | | |

| [removed: (in] [added: (in] thousands, except per share [removed: data) | | 2020 | |] [added: data)] | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | |

| [removed: REVENUES] [added: REVENUES] | | | | | | | | | | | | |

| Commissions and fees | | $ | [removed: 2,606,108] [added: 3,047,522] | | | $ | [removed: 2,384,737] [added: 2,606,108] | | | $ | [removed: 2,009,857] [added: 2,384,737] | |

| Investment income | | | [removed: 2,811] [added: 1,099] | | | | [removed: 5,780] [added: 2,811] | | | | [removed: 2,746] [added: 5,780] | |

| Other income, net | | | [removed: 4,456] [added: 2,777] | | | | [removed: 1,654] [added: 4,456] | | | | [removed: 1,643] [added: 1,654] | |

| Total revenues | | | [removed: 2,613,375] [added: 3,051,398] | | | | [removed: 2,392,171] [added: 2,613,375] | | | | [removed: 2,014,246] [added: 2,392,171] | |

| [removed: EXPENSES] [added: EXPENSES] | | | | | | | | | | | | |

| Employee compensation and benefits | | | [removed: 1,436,377] [added: 1,636,911] | | | | [removed: 1,308,165] [added: 1,436,377] | | | | [removed: 1,068,914] [added: 1,308,165] | |

| Other operating expenses | | | [removed: 365,973] [added: 402,941] | | | | [removed: 377,089] [added: 365,973] | | | | [removed: 332,118] [added: 377,089] | |

| (Gain)/loss on disposal | | | [removed: (2,388] [added: (9,605] | ) | | | [removed: (10,021] [added: (2,388] | ) | | | [removed: (2,175] [added: (10,021] | ) |

| Amortization | | | [removed: 108,523] [added: 119,593] | | | | [removed: 105,298] [added: 108,523] | | | | [removed: 86,544] [added: 105,298] | |

| | |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019](#consolidated_statements_of_comp_income) | 45 |

| [Report of Independent Registered Public Accounting Firm](#report_of_independant_registered_public) | 81 |

CONSOLIDATED STATEMENTS OF INCOME

| | | | | | | | | | | | | |

BROWN & BROWN, INC.

| | | | | | | | | | | | | |

| Net income | | $ | 587,104 | | | $ | 480,483 | | | $ | 398,514 | |

| Foreign currency translation | | | (9,287 | ) | | | — | | | | — | |

| Unrealized loss on available-for-sale debt securities, net of tax | | | (122 | ) | | | — | | | | — | |

| Comprehensive income | | $ | 577,695 | | | $ | 480,483 | | | $ | 398,514 | |

BROWN & BROWN, INC.

| | | | | | | | | |

| (in thousands, except per share data) | | December 31, 2021 | | | | December 31, 2020 | | |

| Accumulated other comprehensive loss | | | (9,409 | ) | | | — | |

BROWN & BROWN, INC.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Shares issued - employee stock compensation plans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Employee stock purchase plan | | | 976 | | | | 98 | | | | 30,453 | | | | | | | | | | | | | | | | 30,551 | |

| Stock incentive plans | | | 2,519 | | | | 252 | | | | 40,311 | | | | | | | | | | | | | | | | 40,563 | |

| Agency acquisition | | | 569 | | | | 57 | | | | 19,943 | | | | | | | | | | | | | | | | 20,000 | |

| Repurchase shares to fund tax withholdings for non-cash stock-based compensation | | | (366 | ) | | | (37 | ) | | | (10,897 | ) | | | | | | | | | | | | | | | (10,934 | ) |

| Shares issued - employee stock compensation plans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Employee stock purchase plan | | | 962 | | | | 96 | | | | 38,047 | | | | | | | | | | | | | | | | 38,143 | |

| Stock incentive plans | | | 1,895 | | | | 189 | | | | 50,934 | | | | | | | | | | | | | | | | 51,123 | |

| Repurchase shares to fund tax withholdings for non-cash stock-based compensation | | | (1,013 | ) | | | (101 | ) | | | (41,220 | ) | | | | | | | | | | | | | | | (41,321 | ) |

| Net Income | | | | | | | | | | | | | | | | | | | | | | | 587,104 | | | | 587,104 | |

| Foreign currency translation | | | | | | | | | | | | | | | | | | | (9,287 | ) | | | 123 | | | | (9,164 | ) |

| Shares issued - employee stock compensation plans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Employee stock purchase plan | | | 851 | | | | 85 | | | | 42,800 | | | | | | | | | | | | | | | | 42,885 | |

| Stock incentive plans | | | 1,313 | | | | 131 | | | | 51,129 | | | | | | | | | | | | | | | | 51,260 | |

| Agency acquisition | | | 184 | | | | 19 | | | | 9,873 | | | | | | | | | | | | | | | | 9,892 | |

| Directors | | | 17 | | | | 2 | | | | 897 | | | | | | | | | | | | | | | | 899 | |

| Repurchase shares to fund tax withholdings for non-cash stock-based compensation | | | (1,061 | ) | | | (107 | ) | | | (49,676 | ) | | | | | | | | | | | | | | | (49,783 | ) |

| Purchase of treasury stock | | | (1,812 | ) | | | | | | | | | | | (82,564 | ) | | | | | | | | | | | (82,564 | ) |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance at December 31, 2021 | | | 282,496 | | | $ | 30,099 | | | $ | 849,424 | | | $ | (673,902 | ) | | $ | (9,409 | ) | | $ | 4,000,681 | | | $ | 4,196,893 | |

BROWN & BROWN, INC.

| | | | | | | | | | | | | |

| Net income | | $ | 587,104 | | | $ | 480,483 | | | $ | 398,514 | |

| --- | --- |

| [Note 16: Quarterly Operating Results (Unaudited)](#NOTE_16_QUARTERLY_OPERATING_RESULTS) | 73 |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at January 1, 2018 | | | 286,895 | | | $ | 28,689 | | | $ | 483,733 | | | $ | (386,322 | ) | | $ | 2,456,599 | | | $ | 2,582,699 | |

| Adoption of Topic 606 at January 1, 2018 | | | | | | | | | | | | | | | | | | | 117,515 | | | | 117,515 | |

| Beginning balance after adoption of Topic 606 | | | 286,895 | | | | 28,689 | | | | 483,733 | | | | (386,322 | ) | | | 2,574,114 | | | | 2,700,214 | |

| Net income | | | | | | | | | | | | | | | | | | | 344,255 | | | | 344,255 | |

| Common stock issued for agency acquisitions | | | 3,376 | | | | 338 | | | | 99,662 | | | | | | | | | | | | 100,000 | |

| Common stock issued to directors | | | 13 | | | | 1 | | | | 699 | | | | | | | | | | | | 700 | |

| Common stock issued for employee stock benefit plans | | | 3,129 | | | | 313 | | | | 59,867 | | | | | | | | | | | | 60,180 | |

| Common stock issued for employee stock benefit plans | | | 1,844 | | | | 184 | | | | 47,761 | | | | | | | | | | | | 47,945 | |

| Issuances of common stock for employee stock benefit plans | | | 30,104 | | | | 24,999 | | | | 19,432 | |

| Purchase of treasury stock | | | (55,095 | ) | | | (58,671 | ) | | | (91,250 | ) |

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”.

The standard takes effect for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

Segment results for prior periods have been recast, where appropriate, to reflect the current year segmental structure.

Certain reclassifications have been made to the prior year amounts reported in this Annual Report on Form 10-K in order to conform to the current year presentation.

Included in cash and cash equivalents are unrestricted premium from insureds before it is remitted to the appropriate insurance company or companies, net of any commissions we are due.

The Company grants non-vested stock awards to its employees and officers and fully vested stock awards to directors.

The Company uses the modified-prospective method to account for share-based payments.

Under the modified-prospective method, compensation cost is recognized for all share-based payments granted on or after January 1, 2006 and for all awards granted to employees prior to January 1, 2006 that remained unvested on that date.

The Company uses the alternative-transition method to account for the income tax effects of payments made related to stock-based compensation.

| Base commissions(1) | | $ | 994,170 | | | $ | 338,058 | | | $ | 242,380 | | | $ | — | | | $ | (128 | ) | | $ | 1,574,480 | |

| Fees(2) | | | 246,135 | | | | 151,298 | | | | 56,852 | | | | 193,641 | | | | (1,160 | ) | | | 646,766 | |

| Incentive commissions(3) | | | 80,505 | | | | (524 | ) | | | 1,252 | | | | — | | | | 27 | | | | 81,260 | |

| Profit-sharing contingent commissions(4) | | | 34,150 | | | | 17,517 | | | | 7,499 | | | | — | | | | — | | | | 59,166 | |

| Guaranteed supplemental commissions(5) | | | 11,056 | | | | 10,566 | | | | 1,443 | | | | — | | | | — | | | | 23,065 | |

| Investment income(6) | | | 149 | | | | 1,397 | | | | 178 | | | | 139 | | | | 3,917 | | | | 5,780 | |

| Other income, net(7) | | | 1,096 | | | | 72 | | | | 483 | | | | 1 | | | | 2 | | | | 1,654 | |

| Total Revenues | | $ | 1,367,261 | | | $ | 518,384 | | | $ | 310,087 | | | $ | 193,781 | | | $ | 2,658 | | | $ | 2,392,171 | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Acquisitions in 2018

| Opus Advisory Group, LLC (Opus) | | Retail | | February 1, 2018 | | $ | 20,400 | | | $ | — | | | $ | 200 | | | $ | 2,384 | | | $ | 22,984 | | | $ | 3,600 | |

| Kerxton Insurance Agency, Inc. (Kerxton) | | Retail | | March 1, 2018 | | | 13,176 | | | | — | | | | 1,490 | | | | 2,080 | | | | 16,746 | | | | 2,920 | |

| Automotive Development Group, LLC (ADG) | | Retail | | May 1, 2018 | | | 29,471 | | | | — | | | | 559 | | | | 17,545 | | | | 47,575 | | | | 20,000 | |

| Servco Pacific, Inc. (Servco) | | Retail | | June 1, 2018 | | | 76,245 | | | | — | | | | — | | | | 934 | | | | 77,179 | | | | 7,000 | |

| Tower Hill Prime Insurance Company (Tower Hill) | | National Programs | | July 1, 2018 | | | 20,300 | | | | — | | | | — | | | | 1,188 | | | | 21,488 | | | | 7,700 | |

| Health Special Risk, Inc. (HSR) | | National Programs | | July 1, 2018 | | | 20,132 | | | | — | | | | — | | | | 1,991 | | | | 22,123 | | | | 9,000 | |

| Professional Disability Associates, LLC (PDA) | | Services | | July 1, 2018 | | | 15,025 | | | | — | | | | — | | | | 9,818 | | | | 24,843 | | | | 17,975 | |

There were no changes in or disagreements with accountants on accounting and financial disclosure in [removed: 2020.][added: 2021.]

[removed: Evaluation] [added: Evaluation] of Disclosure Controls and [removed: Procedures][added: Procedures]

We carried out an evaluation (the “Evaluation”) required by Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), under the supervision and with the participation of our [removed: Chief Executive Officer] [added: chief executive officer] (“CEO”) and [removed: Chief Financial Officer] [added: chief financial officer] (“CFO”), of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15 and 15d-15 under the Exchange Act (“Disclosure Controls”) as of December 31, [removed: 2020.][added: 2021.]

[removed: Changes] [added: Changes] in Internal [removed: Controls][added: Controls]

There has not been any change in our internal control over financial reporting identified in connection with the Evaluation that occurred during the quarter ended December 31, [removed: 2020,] [added: 2021] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

[removed: Inherent] [added: Inherent] Limitations of Internal Control Over Financial [removed: Reporting][added: Reporting]

[removed: CEO] [added: CEO] and CFO [removed: Certifications][added: Certifications]

PART III

Not applicable

PART III

The additional information required by this item regarding directors and executive officers is incorporated herein by reference to our definitive Proxy Statement to be filed with the SEC in connection with the Annual Meeting of Shareholders to be held in [removed: 2021] [added: 2022] (the [removed: “2021] [added: “2022] Proxy Statement”) under the headings “Board and Corporate Governance Matters” and “Other Important Information.” We have adopted a code of ethics that applies to our principal executive officer, principal financial [removed: officer,] [added: officer] and controller.

A copy of our Code of Ethics for our [removed: Chief Executive Officer] [added: chief executive officer] and our [removed: Senior Financial Officers] [added: senior financial officers] and a copy of our Code of Business Conduct and Ethics applicable to all employees are posted on our [removed: Internet] [added: internet] website, at www.bbinsurance.com, and are also available [added: without charge,] upon written request directed to [removed: Corporate Secretary,] [added: corporate secretary,] Brown & Brown, Inc., 300 North Beach Street, Daytona Beach, Florida 32114, or by telephone to (386) 252-9601.

Certain information regarding our executive officers is included in Part I of this Report under the heading "Information About Our Executive Officers" in accordance with General Instruction G(3) of Form 10-K.

Set forth below is certain information concerning our executive officers as of February 23, 2021.

All officers hold office for one-year terms or until their successors are elected and qualified.

| J. Hyatt Brown | Chairman | 83 |

| --- | --- | --- |

| J. Powell Brown | President and Chief Executive Officer | 53 |

| P. Barrett Brown | Executive Vice President; President – Retail Segment | 48 |

| Stephen M. Boyd | Executive Vice President; President - Wholesale Brokerage Segment | 47 |

| Robert W. Lloyd | Executive Vice President; Secretary and General Counsel | 56 |

| J. Scott Penny | Executive Vice President; Chief Acquisitions Officer | 54 |

| Anthony T. Strianese | Executive Vice President; Chairman - Wholesale Brokerage Segment | 59 |

| Chris L. Walker | Executive Vice President; President - National Programs Segment | 63 |

| R. Andrew Watts | Executive Vice President; Chief Financial Officer and Treasurer | 52 |

J.

Hyatt Brown.

Mr. Brown was our Chief Executive Officer from 1993 to 2009 and our President from 1993 to December 2002, and served as President and Chief Executive Officer of our predecessor corporation from 1961 to 1993.

He was a member of the Florida House of Representatives from 1972 to 1980, and Speaker of the House from 1978 to 1980.

Mr. Brown served on the Board of Directors of International Speedway Corporation, a publicly held company, until 2019.

Mr. Brown is a member of the Board of Trustees of Stetson University, of which he is a past Chairman, and the Florida Council of 100.

Mr. Hyatt Brown’s sons, J.

Powell Brown and P.

Barrett Brown, are employed by us as President and Chief Executive Officer, and as Executive Vice President and President – Retail Segment, respectively.

His son, J.

Powell Brown, has served as a director since October 2007.

Powell Brown.

Mr. Brown was named Chief Executive Officer in July 2009.

He has been our President since January 2007 and was appointed to be a director in October 2007.

Prior to 2007, he served as one of our Regional Executive Vice Presidents since 2002.

Mr. Brown was previously responsible for overseeing certain or all parts of all of our segments over the years, and worked in various capacities throughout the Company since joining us in 1995.

Mr. Brown has served on the Board of Directors of WestRock Company (formerly RockTenn Company), a publicly held company, since January 2010.

He is the son of our Chairman, J.

Hyatt Brown, and brother of our Executive Vice President and President – Retail Segment, P.

Barrett Brown.

P.

Mr. Brown was appointed as an Executive Vice President and the President of our Retail Segment in January 2020.

He previously served as a Senior Vice President from 2014 until January 2020 and as a Regional President in the Retail Segment from September 2015 until January 2020.

Mr. Brown joined the Company in 2000 and has served in various roles, including as the profit center leader and an account executive in our Tampa, Florida retail office, as the profit center leader and an account executive in our Orange, California retail office, and as an account executive in our Phoenix, Arizona retail office.

He has also overseen certain aspects of  “Brown & Brown University,” a training program offering technical and sales courses for new producers, office leaders, and other groups within the organization.

Hyatt Brown, and brother of our President and Chief Executive Officer, J.

Stephen M.

Boyd.

The information required by this item is incorporated herein by reference to the [removed: 2021] [added: 2022] Proxy Statement under the heading “Compensation Matters.”

[removed: Equity] [added: Equity] Compensation Plan [removed: Information][added: Information]

The following table sets forth information as of December 31, [removed: 2020,] [added: 2021,] with respect to compensation plans under which the Company’s equity securities are authorized for issuance:

| [removed: Plan Category] [added: Plan Category] | | [removed: Number] [added: Number] of securities remaining available for future issuance under equity compensation [removed: plans(1)] [added: plans(1)] | | | |

| Brown & Brown, Inc. 2019 Stock Incentive Plan | | | [removed: 8,624,668] [added: 7,569,607] | | (2) |

| Brown & Brown, Inc. 1990 Employee Stock Purchase Plan | | | [removed: 5,378,467] [added: 4,527,511] | | |

[removed: | (1) |] All of the shares available for future issuance under the Brown & Brown, Inc. 2019 Stock Incentive Plan may be issued in connection with options, warrants, rights, restricted stock, [added: restricted stock units] or other stock-based awards. [removed: |]

The other information required by this item is incorporated herein by reference to the [removed: 2021] [added: 2022] Proxy Statement under the heading “Security Ownership of Management and Certain Beneficial Owners.”

| | | | | | |

| | | A | | | |

| Total | | | 12,097,118 | | |

(1)

(2)

The number of securities remaining available of 7,569,607 has been reduced by 1,338,798 to reflect the maximum shares potentially distributed subject to the level of performance obtained for outstanding performance-based grants which may be increased up to 200% of the target or decreased to zero.

| | | A | | | |

| Total | | | 14,003,135 | | |

| --- | --- |

| (2) | The payout for 1,414,417 shares of our outstanding performance-based restricted stock grants may be increased up to 200% of the target or decreased to zero, subject to the level of performance attained. The amount reflected in the table is calculated assuming the maximum payout for all restricted stock grants. |

The information required by this item is incorporated herein by reference to the [removed: 2021] [added: 2022] Proxy Statement under the headings “Director Independence,” “Related Party Transactions Policy” and “Relationships and Transactions with Affiliated Parties.”

The information required by this item is incorporated herein by reference to the [removed: 2021] [added: 2022] Proxy Statement under the heading “Fees Paid to Deloitte & Touche LLP.”

[removed: PART IV][added: PART IV]

| 3.1 | | [Articles of Amendment to the Articles of Incorporation (adopted February 26, 2018) (incorporated by reference to Exhibit 3.1 to Form 8-K filed March 29, [removed: 2018](http://www.sec.gov/Archives/edgar/data/79282/000007928218000011/exhibit31032817.htm)] [added: 2018](https://www.sec.gov/Archives/edgar/data/79282/000007928218000011/exhibit31032817.htm)] and [Articles of Amendment to Articles of Incorporation (adopted April 24, 2003) (incorporated by reference to Exhibit 3a to Form 10-Q for the quarter ended March 31, [removed: 2003](http://www.sec.gov/Archives/edgar/data/79282/000007928203000031/exhibit3.htm)),] [added: 2003](https://www.sec.gov/Archives/edgar/data/79282/000007928203000031/exhibit3.htm)),] and [Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3a to Form 10-Q for the quarter ended March 31, [removed: 1999).](http://www.sec.gov/Archives/edgar/data/79282/0000079282-99-000010.txt)] [added: 1999).](https://www.sec.gov/Archives/edgar/data/79282/0000079282-99-000010.txt)] |

| 3.2 | | [Bylaws (incorporated by reference to Exhibit 3.2 to Form 8-K filed on October 12, [removed: 2016).](http://www.sec.gov/Archives/edgar/data/79282/000007928216000059/exhibit32-amendedandrestat.htm)] [added: 2016).](https://www.sec.gov/Archives/edgar/data/79282/000007928216000059/exhibit32-amendedandrestat.htm)] |

| 4.1 | | [Description of the Registrant’s capital stock (incorporated by reference to Exhibit 4.1 to Form 10-K filed February 24, [removed: 2020)](http://www.sec.gov/Archives/edgar/data/79282/000156459020006075/bro-ex41_204.htm).] [added: 2020)](https://www.sec.gov/Archives/edgar/data/79282/000156459020006075/bro-ex41_204.htm).] |

| 4.2 | | [First Supplemental Indenture, dated as of September 18, 2014, between the Registrant and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to Form 8-K filed on September 18, [removed: 2014).](http://www.sec.gov/Archives/edgar/data/79282/000119312514345625/d791510dex42.htm)] [added: 2014).](https://www.sec.gov/Archives/edgar/data/79282/000119312514345625/d791510dex42.htm)] |

| 4.3 | | [Form of the Registrant’s 4.200% Notes due 2024 (incorporated by reference to Exhibit 4.3 to Form 8-K filed on September 18, [removed: 2014).](http://www.sec.gov/Archives/edgar/data/79282/000119312514345625/d791510dex43.htm)] [added: 2014).](https://www.sec.gov/Archives/edgar/data/79282/000119312514345625/d791510dex43.htm)] |

| 4.4 | | [Second Supplemental Indenture, dated as of March 11, 2019, between the Registrant and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to Form 8-K filed on March 12, [removed: 2019).](http://www.sec.gov/Archives/edgar/data/79282/000120677419000775/brown3559321-ex42.htm)] [added: 2019).](https://www.sec.gov/Archives/edgar/data/79282/000120677419000775/brown3559321-ex42.htm)] |

| 4.5 | | [Form of Registrant’s 4.500% Notes due 2029 (incorporated by reference to Exhibit 4.3 to Form 8-K filed on March 12, [removed: 2019).](http://www.sec.gov/Archives/edgar/data/79282/000120677419000775/brown3559321-ex43.htm)] [added: 2019).](https://www.sec.gov/Archives/edgar/data/79282/000120677419000775/brown3559321-ex43.htm)] |

| 4.6 | | [Third Supplemental Indenture, dated as of September 24, 2020, between Brown & Brown, Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to Form 8-K filed September 24, [removed: 2020).](http://www.sec.gov/Archives/edgar/data/79282/000156459020044547/bro-ex42_7.htm)] [added: 2020).](https://www.sec.gov/Archives/edgar/data/79282/000156459020044547/bro-ex42_7.htm)] |

| 4.7 | | [Form of Brown & Brown, Inc.’s 2.375% Notes due 2031 (incorporated by reference to Exhibit 4.3 to Form 8-K filed September 24, [removed: 2020).](http://www.sec.gov/Archives/edgar/data/79282/000156459020044547/bro-ex43_8.htm)] [added: 2020).](https://www.sec.gov/Archives/edgar/data/79282/000156459020044547/bro-ex43_8.htm)] |

| 10.1(a)* | | [Employment Agreement, dated and effective as of July 1, 2009 between the Registrant and J. Hyatt Brown (incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended June 30, [removed: 2009).](http://www.sec.gov/Archives/edgar/data/79282/000118811209001779/ex10-1.htm)] [added: 2009).](https://www.sec.gov/Archives/edgar/data/79282/000118811209001779/ex10-1.htm)] |

| 10.1(b)* | | [Executive Employment Agreement, effective as of February 17, 2014, between the Registrant and R. Andrew Watts (incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarter ended March 31, [removed: 2014).](http://www.sec.gov/Archives/edgar/data/79282/000119312514195014/d700826dex102.htm)] [added: 2014).](https://www.sec.gov/Archives/edgar/data/79282/000119312514195014/d700826dex102.htm)] |

| 10.1(c)* | | [Form of Employment Agreement (incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarter ended September 30, [removed: 2014).](http://www.sec.gov/Archives/edgar/data/79282/000119312514401278/d772435dex102.htm)] [added: 2014).](https://www.sec.gov/Archives/edgar/data/79282/000119312514401278/d772435dex102.htm)] |

| 10.1(d)* | | [Employment Agreement, dated as of January 9, 2012, between the Registrant and Chris L. Walker (incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended March 31, [removed: 2013).](http://www.sec.gov/Archives/edgar/data/79282/000119312513210708/d511426dex101.htm)] [added: 2013).](https://www.sec.gov/Archives/edgar/data/79282/000119312513210708/d511426dex101.htm)] |

| 10.1(e)* | | [Employment Agreement, dated as of November 16, 2018, between the Registrant and James C. Hays (incorporated by reference to Exhibit 10.1(e) to Form 10-K for the year ended December 31, [removed: 2019).](http://www.sec.gov/Archives/edgar/data/79282/000007928219000006/exhibit101eq42018.htm)] [added: 2019).](https://www.sec.gov/Archives/edgar/data/79282/000007928219000006/exhibit101eq42018.htm)] |

| 10.2(a)* | | [Registrant’s Stock Performance Plan (incorporated by reference to Exhibit 4 to Registration Statement No. 333-14925 on Form S-8 filed on October 28, [removed: 1996).](http://www.sec.gov/Archives/edgar/data/79282/0000079282-96-000015.txt)] [added: 1996).](https://www.sec.gov/Archives/edgar/data/79282/0000079282-96-000015.txt)] |

| 10.2(b)* | | [Registrant’s Stock Performance Plan as amended, effective January 23, 2008 (incorporated by reference to Exhibit 10.6(b) to Form 10-K for the year ended December 31, [removed: 2007).](http://www.sec.gov/Archives/edgar/data/79282/000118811208000632/d22761_ex10-6b.htm)] [added: 2007).](https://www.sec.gov/Archives/edgar/data/79282/000118811208000632/d22761_ex10-6b.htm)] |

| 10.2(c)* | | [Registrant’s Performance Stock Plan as amended, effective July 21, 2009 (incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarter ended September 30, [removed: 2009).](http://www.sec.gov/Archives/edgar/data/79282/000118811209002316/ex10-2.htm)] [added: 2009).](https://www.sec.gov/Archives/edgar/data/79282/000118811209002316/ex10-2.htm)] |

| 10.3(a)* | | [Registrant’s 2010 Stock Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 to Form 8-K filed on May 5, [removed: 2017).](http://www.sec.gov/Archives/edgar/data/79282/000007928217000018/exhibit101050517.htm)] [added: 2017).](https://www.sec.gov/Archives/edgar/data/79282/000007928217000018/exhibit101050517.htm)] |

| 10.3(b)* | | [Registrant’s 2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed on May 3, [removed: 2019).](http://www.sec.gov/Archives/edgar/data/79282/000007928219000013/exhibit101-sip.htm)] [added: 2019).](https://www.sec.gov/Archives/edgar/data/79282/000007928219000013/exhibit101-sip.htm)] |

| 10.4(a)* | | [Form of Performance-Based Stock Grant Agreement under 2010 Stock Incentive Plan (incorporated by reference to Exhibit 10.16 to Form 10-K for the year ended December 31, [removed: 2010).](http://www.sec.gov/Archives/edgar/data/79282/000119312511051929/dex1016.htm)] [added: 2010).](https://www.sec.gov/Archives/edgar/data/79282/000119312511051929/dex1016.htm)] |

| 10.4(b)* | | [Form of Performance-Triggered Stock Grant Agreement under 2010 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed on July 8, [removed: 2013).](http://www.sec.gov/Archives/edgar/data/79282/000007928213000015/exh101.htm)] [added: 2013).](https://www.sec.gov/Archives/edgar/data/79282/000007928213000015/exh101.htm)] |

| 10.4(c)* | | [Form of Performance Stock Award Agreement under the 2010 Stock Incentive Plan (incorporated by reference to Exhibit 10.5(c) to Form 10-K filed on February 28, [removed: 2018).](http://www.sec.gov/Archives/edgar/data/79282/000007928218000006/exhibit105cq42017.htm)] [added: 2018).](https://www.sec.gov/Archives/edgar/data/79282/000007928218000006/exhibit105cq42017.htm)] |

| 10.4(d)* | | [Form of Restricted Stock Award Agreement under the 2010 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to Form 8-K filed on March 23, [removed: 2016).](http://www.sec.gov/Archives/edgar/data/79282/000162828016012925/exhibit102-formofrsaagreem.htm)] [added: 2016).](https://www.sec.gov/Archives/edgar/data/79282/000162828016012925/exhibit102-formofrsaagreem.htm)] |

| 10.4(e)* | | [Form of Director Stock Grant Agreement (incorporated by reference to Exhibit 10.8(e) to Form 10-K filed for the year ended December 31, [removed: 2016).](http://www.sec.gov/Archives/edgar/data/79282/000007928217000006/exhibit108e.htm)] [added: 2016).](https://www.sec.gov/Archives/edgar/data/79282/000007928217000006/exhibit108e.htm)] |

| 10.4(f)* | | [Form of Performance Stock Award Agreement under the 2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed on February 25, [removed: 2020).](http://www.sec.gov/Archives/edgar/data/79282/000156459020006078/bro-ex101_6.htm)] [added: 2020).](https://www.sec.gov/Archives/edgar/data/79282/000156459020006078/bro-ex101_6.htm)] |

| 10.4(g)* | | [Form of Restricted Stock Award Agreement under the 2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to Form 8-K filed on February 25, [removed: 2020).](http://www.sec.gov/Archives/edgar/data/79282/000156459020006078/bro-ex102_7.htm)] [added: 2020).](https://www.sec.gov/Archives/edgar/data/79282/000156459020006078/bro-ex102_7.htm)] |

| [removed: 10.5] [added: 10.5] | | [removed: [Amended] [added: [Second Amended] and Restated Credit Agreement dated [removed: as of June 28, 2017,] [added: October 27, 2021,] among the [removed: Registrant,] [added: Registrant] JPMorgan Chase Bank, N.A., Bank of America, N.A., [removed: Royal] [added: Truist] Bank [removed: of Canada] and [removed: SunTrust] [added: BMO Harris] Bank [removed: (incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2017).](http://www.sec.gov/Archives/edgar/data/79282/000007928217000032/exhibit101q22017.htm)] [added: N.A.](https://www.sec.gov/Archives/edgar/data/79282/000095017022001654/bro-ex10_5.htm)] |

| [removed: 10.7*] [added: 10.6*] | | [Asset Purchase Agreement, dated as of October 22, 2018, by and among Brown & Brown, Inc., BBHG, Inc., The Hays Group, Inc., The Hays Group Of Wisconsin LLC, The Hays Benefits Group, LLC, PlanIT, LLC, The Hays Benefits Group of Wisconsin, LLC, and The Hays Group of Illinois, LLC, and Claims Management of Missouri, LLC (incorporated by reference to Exhibit 10.9 to Form 10-K for the year ended December 31, [removed: 2019).](http://www.sec.gov/Archives/edgar/data/79282/000007928219000006/exhibit109q42018.htm)] [added: 2019).](https://www.sec.gov/Archives/edgar/data/79282/000007928219000006/exhibit109q42018.htm)] |

| [removed: 10.8*] [added: 10.7*] | | [Amendment to the Asset Purchase Agreement, dated July 27, 2020, by and among Brown & Brown, Inc., BBHG, Inc., The Hays Group, Inc., The Hays Group Of Wisconsin LLC, The Hays Benefits Group, LLC, PlanIT, LLC, The Hays Benefits Group of Wisconsin, LLC, The Hays Group of Illinois, LLC and Claims Management of Missouri, LLC (incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarter ended September 30, [removed: 2020).](http://www.sec.gov/Archives/edgar/data/79282/000156459020048034/bro-ex102_49.htm)] [added: 2020).](https://www.sec.gov/Archives/edgar/data/79282/000156459020048034/bro-ex102_49.htm)] |

| [removed: 10.9] [added: 10.8] | | [Term Loan Credit Agreement, dated December 21, 2018, by and among the Company, Wells Fargo Bank, National Association, as administrative agent, Bank of America, N.A., BMO Harris Bank N.A. and SunTrust Bank as co-syndication agents, and Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, BMO Capital Markets Corp. and SunTrust Robinson Humphrey, Inc. as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.10 to Form 10-K for the year ended December 31, [removed: 2019).](http://www.sec.gov/Archives/edgar/data/79282/000007928219000006/exhibit1010q42018.htm)] [added: 2019).](https://www.sec.gov/Archives/edgar/data/79282/000007928219000006/exhibit1010q42018.htm)] |

| 21 | | [Subsidiaries of the [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/79282/000156459021007624/bro-ex21_6.htm)] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/79282/000095017022001654/bro-ex21.htm)] |

| 23 | | [Consent of Deloitte & Touche [removed: LLP.](https://www.sec.gov/Archives/edgar/data/79282/000156459021007624/bro-ex23_13.htm)] [added: LLP.](https://www.sec.gov/Archives/edgar/data/79282/000095017022001654/bro-ex23.htm)] |

| 24 | | [Powers of [removed: Attorney.](https://www.sec.gov/Archives/edgar/data/79282/000156459021007624/bro-ex24_9.htm)] [added: Attorney.](https://www.sec.gov/Archives/edgar/data/79282/000095017022001654/bro-ex24.htm)] |

| 31.1 | | [Rule 13a-14(a)/15d-14(a) Certification by the Chief Executive Officer of the [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/79282/000156459021007624/bro-ex311_8.htm)] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/79282/000095017022001654/bro-ex31_1.htm)] |

| 31.2 | | [Rule 13a-14(a)/15d-14(a) Certification by the Chief Financial Officer of the [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/79282/000156459021007624/bro-ex312_12.htm)] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/79282/000095017022001654/bro-ex31_2.htm)] |

| 32.1 | | [Section 1350 Certification by the Chief Executive Officer of the [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/79282/000156459021007624/bro-ex321_11.htm)] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/79282/000095017022001654/bro-ex32_1.htm)] |

| 32.2 | | [Section 1350 Certification by the Chief Financial Officer of the [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/79282/000156459021007624/bro-ex322_7.htm)] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/79282/000095017022001654/bro-ex32_2.htm)] |

| 101 | | The following financial statements from the Company’s Annual Report on Form 10-K for the period ended December 31, [removed: 2020,] [added: 2021,] formatted in inline XBRL, include: (i) Consolidated Statements of Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Shareholders’ Equity, (iv) Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements. |

| 104 | | Cover Page Interactive Data File for the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2020,] [added: 2021,] formatted Inline XBRL (included as Exhibit 101). |

| 10.4(h)* | | [Form of Restricted Stock Award Agreement under the 2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed on December 17, 2021).](https://www.sec.gov/Archives/edgar/data/79282/000095017021005260/bro-ex10_1.htm) |

| 10.4(i)* | | [Form of Restricted Stock Unit Award Agreement under the 2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to Form 8-K filed on December 17, 2021).](https://www.sec.gov/Archives/edgar/data/79282/000095017021005260/bro-ex10_2.htm) |

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| 10.6 | | [Settlement Agreement, dated March 1, 2017, by and among the Registrant, AssuredPartners, Inc. and certain of its employees and former employees (incorporated by reference to Exhibit 10.1 to the form 10-Q for the quarter ended March 31, 2017).](http://www.sec.gov/Archives/edgar/data/79282/000007928217000019/exhibit101q12017.htm) |

| Date: February [removed: 23, 2021] [added: 22, 2022] | | By: | /s/ J. Powell Brown | |

| | | | [removed: President] [added: *President] and [removed: Chief Executive Officer] [added: chief executive officer*] | |

| [removed: Signature] [added: Signature] | | [removed: Title] [added: Title] | | [removed: Date] [added: Date] |

| /s/ J. Powell Brown | | Director; [removed: President] [added: president] and [removed: Chief Executive Officer (Principal Executive Officer)] [added: chief executive officer (principal executive officer)] | | February [removed: 23, 2021] [added: 22, 2022] |

| /s/ R. Andrew Watts | | Executive [removed: Vice President, Chief Financial Officer] [added: vice president, chief financial officer] and [removed: Treasurer (Principal Financial] [added: treasurer (principal financial] and [removed: Accounting Officer)] [added: accounting officer)] | | February [removed: 23, 2021] [added: 22, 2022] |

| * | | Chairman of the [removed: Board] [added: board] | | February [removed: 23, 2021] [added: 22, 2022] |

| * | | Director | | February [removed: 23, 2021] [added: 22, 2022] |

SIGNATURE

| * | | Director | | February 22, 2022 |

| * | | Director | | February 22, 2022 |

| * | | Director | | February 22, 2022 |

| * | | Director | | February 22, 2022 |

| * | | Director | | February 22, 2022 |

| * | | Director | | February 22, 2022 |

| * | | Director | | February 22, 2022 |

| * | | Director | | February 22, 2022 |

| * | | Director | | February 22, 2022 |

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SIGNATURE