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Brown & Brown Inc (BRO) Q4 2020 Earnings Call Transcript

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Brown & Brown Inc (NYSE: BRO)
Q4 2020 Earnings Call
Jan 26, 2021, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning and welcome to the Brown & Brown, Inc. Fourth Quarter Earnings Call. Today's call is being recorded.

Please note that certain information discussed during this call, including information contained in the slide presentation posted in connection with this call and including answers given in response to your questions may relate to future results and events, or otherwise be forward-looking in nature. Such statements reflect our current views with respect to future events, including those relating to the Company's anticipated financial results for the fourth quarter and are intended to fall within the Safe Harbor provisions of the securities law. Actual results or events in the future are subject to a number of risks and uncertainties and may differ materially from those currently anticipated or desired or referenced in any forward-looking statements made as a result of a number of factors. Such factors includes the Company's determination as it finalize its financial results for the fourth quarter, that its financial results differ from the current preliminary unaudited numbers set forth in the press release issued yesterday. Other factors that the Company may not have currently identified or quantified and those risks and uncertainties identified from time to time in the Company's reports filed with the Securities and Exchange Commission. Additional discussion of these and other factors affecting the Company's business and prospects, as well as additional information regarding forward-looking statements is contained in the slide presentation posted in connection with this call and in the Company's filings with the Securities and Exchange Commission. We disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

In addition, there are certain non-GAAP financial measures used in this conference call. A reconciliation of any non-GAAP financial measures to the most comparable GAAP financial measure can be found in the Company's earnings press release or in the investor presentation for this call on the Company's website at www.bbinsurance.com by clicking on Investor Relations and then Calendar of Events.

With that said, I will now turn the call over to Powell Brown, President and Chief Executive Officer. You may begin.

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J. Powell Brown -- President and Chief Executive Officer

Thank you, Holly. Good morning, everyone, and thank you for joining us for our fourth quarter 2020 earnings call. I'd like to take a few minutes to make some high-level comments about our business and how we performed last year. We came into 2020 with great momentum and this continued into the first quarter, delivering 5.6% organic growth, then COVID-19 hit the US economy and things changed dramatically. While there was significant uncertainty, we knew we had a great team and resilient responses and innovative with a focus on providing solutions to our customers. In addition, we were able to move -- we were able to quickly transition over 10,000 teammates to a no working environment in less than a week. So they could pivot and effectively serve our customers.

As you may remember, we didn't grow as quickly in the second quarter due to the impact of the pandemic on our new business and the recording of revenue adjustments for general liability policies, but we still expanded our margins. And in the third quarter, we delivered outstanding results with strong organic growth and margin expansion. The results of the fourth quarter were similar to the third quarter as we finished the year strong and with good momentum going into '21.

Based on what we were seeing, if you ask me, if it was likely that we would deliver full-year results with good organic growth and meaningful margin expansion, I would have said it was possible but unlikely that if you would ask me that in, let's say, April. We are very pleased with our results for 2020. We were able to deliver these results through the hard work of our teammates and their dedication to our customers. 2020 was a testament to our laser focus on delivering innovative risk solutions.

We also thought the M&A landscape would cool off for several quarters until there was some sort of economic stability. The slowdown only occurred for about one quarter and the industrywide activity is now rebounded a pre-COVID-19 levels. Even with the uncertainty this year, we're very pleased that completed 25 acquisitions and $197 million of acquired annual revenue.

I'd like to highlight two strategic acquisitions, CoverHound that we completed in the fourth quarter, and O'Leary Insurances that we announced in the fourth quarter and closed on the 14th of January. Regarding CoverHound, this acquisition will help us in many ways. First, it will help us further our investment in technology, drive our innovation agenda and improve our carrier connectivity. Second, it enables us to more effectively and efficiently provide quotes and bond coverage for our National Programs segment. Third, it enables us to better serve smaller customers within our retail segment. Ultimately, these items are focused on enhancing the customer buying experience by delivering curated quotes that best meet the needs of our customers. We believe these new capabilities are unique in the marketplace.

We started 2020 with the acquisition Special Risk in British Columbia and finished the year with our acquisition of O'Leary Insurances in Ireland. O'Leary was the largest independently owned retail brokers serving the Irish marketplace. This acquisition strengthens our European operations, which we look forward to further developing in the years ahead. Our new teammates and capability to deliver many opportunities over the coming years.

We're extremely proud of our results in 2020 in the delivery of total shareholder returns in excess of 20%. I'd like to thank all of our teammates for everything they did to make it a great year. As you've seen in the press release, Tony Strianese is taking on the role of Chairman of our Wholesale segment. And Steve Boyd will become our President of Wholesale. Steve's background in National Programs as an operator and in technology brings critical skills to the leadership team in Wholesale as we continue to grow this important business through innovative solutions. I'm excited that Tony and Steve will be working together to further drive this growth in the future.

Now, let's transition to the results of the quarter and the full-year. I'm on Slide number 3. We delivered strong results again this quarter, total revenue of $642 million, growing 10.9% in total and 4.7% organically. Again into more detail in a few minutes about the performance of our segments. Our EBITDAC margin was 27.1%, which is up 10 basis points from the fourth quarter of 2019. Please remember that the fourth quarter of '19 included a gain on sale of business that benefited the prior year margin by approximately 100 basis points.

Our net income per share for the fourth quarter was $0.34, increasing 25% on an as-reported basis. On an adjusted basis, which excludes the change in estimated acquisition earn-out payables, our net income per share was $0.32, an increase of 14.3% over the prior year. Our team did an outstanding job of continuing to profitably grow our revenue, as well as manage our expenses in response to the dynamics associated with COVID-19. During the quarter, we completed another nine acquisitions with annual revenues of approximately $80 million. We'd like to extend a warm welcome to all of our new teammates that joined during the quarter.

For the year, we grew total revenues of 9.2% and delivered organic revenue growth of 3.8%. This is an outstanding performance given the economic headwinds experienced for most of the year. We improved our EBITDAC margin for -- by 110 basis points to 31.1%, compared to 2019 as we leverage the growth in organic revenue and managed our expenses in response to the pandemic.

Our net income per share for the full-year of '20 increased 20.7% to $1.69 from $1.40 in 2019. On an adjusted basis, which excludes the change in acquisition earn-outs, net income per share increased 19.3%.

Lastly, we had another strong year of M&A activity, as I said earlier, closing 25 acquisitions with approximately $197 million of annual revenue, adding many excellent businesses and teammates. Later in the presentation, Andy will discuss our financial results in more detail now.

Now, on Slide 5. In prior calls, we talked about factors that would impact the economic recovery, which included the elections, the approval of the vaccine and the timing of the rollout, as well as how much additional stimulus will be approved. The timing of the vaccine rollout and the approval of additional stimulus will have the largest impact upon the recovery of the economy will influence business leaders confidence about rehiring and investing in their businesses.

During the fourth quarter, we continue to see companies doing well and other struggling mightily. We've seen improving new business and our retention remains good. However, we continue to believe it will be choppy -- a choppy recovery through at least the end of 2021 and maybe into early 2022. From a rate standpoint, the fourth quarter was very similar to the third quarter, most standard rates were up 3% to 7% with E&S rates up 10% to 25% as compared to the prior year. As we've talked about before, the main driver of rate increases continues to be loss experience. Commercial auto rates remain up 10% or more and workers' compensation rates are not declining as fast as they were in previous quarters, but they are still negative. There has been a lot of talk over the past few quarters that workers' compensation rates are turning positive. However, we're still not seeing it across the board yet.

For an E&S perspective, coastal property, both wind and quake are up 15% to 25%. Professional liability is generally up 10% to 25%, depending on the coverage in the industry. We continue to see outliers to be wanted to coverage. Personal lines in California, Florida and the Gulf Coast states remain under intense pressure as carriers are seeking to reduce their exposure due to fires and tropical activity during 2020. We expect the reduction in personal lines capacity continue throughout '21.

Placing coverage for many lines, certain industries or customers with significant losses continues to be challenging. This includes excess or umbrella coverage, where a carrier or carriers will seek a combination of lower limit and higher premium rates. We don't expect this trend to materially change in '21.

Now, on Slide number 6. Let's discuss the performance of our four segments. Our Retail segment, organic revenue growth grew by 1.5% for the fourth quarter. As we mentioned in our third quarter earnings call, we had about a 100 basis points of timing items that benefited the growth in the third quarter and negatively impacted the growth in the fourth quarter. Our fourth quarter performance was driven by new business, better customer retention and premium rate increases, but was impacted by lower exposure units resulting from the pandemic. We view the performance for the fourth quarter as good, considering we delivered 7% organic growth in the fourth quarter of last year and taking into consideration the timing headwind mentioned earlier. Organic revenue growth for the full-year was 2.4%, which we consider a good performance in light of the tough economic environment.

Our National Programs segment grew 14.1% organically, delivering another stellar quarter. Our growth was driven by strong new business, retention and rate increases. Some of the top performing programs were our lender place, commercial and residential earthquake, wind and personal property, just to name a few. For the full-year, our National Programs segment grew organically, an impressive 12.3%. A huge thanks to Chris Walker and all of the team in National Programs for delivering a great quarter and a great year.

Our Wholesale Brokerage segment grew 5.8% organically for the quarter. We realized strong new business and continued rate increases for most lines of coverage. Brokerage was the fastest-growing again this quarter, while we continue to experience headwinds in our binding authority and personal lines businesses due to the economy and carrier appetite we mentioned previously. For the full-year, our Wholesale Brokerage segment grew 5.5% organically, delivering another good year.

The organic revenue for our Services segment decreased 50 basis points for the fourth quarter, representing good improvement from the last few quarters. The main drivers depressing growth continue to be lower claims volume for our Social Security and Medicare Set-aside advocacy businesses. The decline was substantially offset by revenue generated by processing claims for weather-related events that occurred in the third and fourth quarters. For the full-year, organic revenue decreased by 10.9%, driven by lower claims for our Social Security Advocacy business, certain terminated customer contracts and the impact of the pandemic. While not back in positive territory, we believe the fourth quarter was a turning point, and we anticipate delivering modest organic growth for 2021.

Now, let me turn it over to Andy to discuss our financial performance in more detail.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. Thank you, Powell. Good morning, everyone. I'm moving on to Slide number 7. Like previous quarters, I'm going to discuss our GAAP results, certain non-GAAP financial highlights, as well as our adjusted results, excluding the impact of the change in acquisition earn-out payables. For the fourth quarter, we delivered total revenue growth of 61 -- $63.1 million, or 10.9% and organic revenue growth of 4.7%.

Our EBITDAC increased by 11.3%, growing slightly faster than revenues as we are able to leverage our expense base and further manage our expenses in response to COVID-19. These both offset the headwinds associated with the gain on disposal recorded in the fourth quarter of 2019, an increase in non-cash stock-based compensation.

Our income before income taxes increased by 28.3%, outpacing EBITDAC growth. This is primarily driven by the $15 million year-over-year decrease in the change of estimated acquisition earn-out payables. On the next slide, we'll discuss our results excluding this adjustment.

Our net income increased by $20.8 million or 27.2% and our diluted net income per share increased by 25.9% to $0.34.

Our effective tax rate for the fourth quarter was 25.7%, substantially in line with the 25% we realized in the fourth quarter of 2019.

Our weighted average number of shares increased slightly compared to the prior year and our dividends per share increased to $0.093 or 9.4% compared to the fourth quarter of 2019.

Over on to Slide number 8. This slide presents our results after removing the change in estimated acquisition earn-out payables for both years. We believe this presentation provides a more comparable year-on-year basis. During the fourth quarter of 2020, the change in estimated acquisition earn-out payables was a credit of $9.5 million as compared to a $5.5 million charge in the fourth quarter of 2019. The credit was primarily driven by the reduction in estimated earn-out payables for an acquisition within the National Programs segment.

Excluding the change in acquisition earn-outs in the fourth quarter of both years, our income before income tax grew $13.9 million or 12.9%. Our net income on an adjusted basis increased by $9.7 million or 12% and our adjusted diluted net income per share was $0.32, an increase of 14.3%. Overall, it was a great quarter.

We're moving over to Slide number 9. This slide presents the key components of our revenue performance. For the quarter, our total commissions and fees increased by 10.9% and our contingent commissions and GSCs was slightly down for the quarter. Our organic revenues was exclude the net impact of M&A activity, increased by 4.7% for the fourth quarter.

Over to Slide number 10. Our Retail segment delivered total revenue growth of 7.2%, driven by acquisition activity and organic revenue growth of 1.5%. The timing discussed above negatively impacted organic revenue by 100 basis points for the quarter.

EBITDAC grew 5.3% due to leveraging organic revenue and cost savings achieved in response to the pandemic. This growth was slower than the growth in total revenues, primarily due to a prior year gain on disposal that represented a negative year-over-year impact of approximately 150 basis points.

Our income before income tax margin increased 130 basis points and grew faster than EBITDAC, due primarily to the change in estimated acquisition earn-outs.

Moving on to Slide number 11. Our National Programs segment increased total revenues by $25.3 million or 18.9% and organic revenue by 14.1%. The increase in total revenue was driven by recent acquisitions and strong organic growth across many programs. Due to that growth of 19% was in line with total revenue growth. The leveraging of strong organic revenue in the management of variable cost was offset by higher intercompany IT charges and lower contingent commissions.

Income before income taxes increased by $20.3 million or 54% growing faster than EBITDAC due to decreased acquisition earn-out payables that was partially offset by higher intercompany interest expense.

Over to Slide number 12. Our Wholesale Brokerage segment delivered total revenue growth of 19.2% and organic revenue growth of 5.8%. Total revenues grew faster than organic revenue due to recent acquisitions with contingent commissions substantially flat year-over-year. EBITDAC grew by 17.1% with a margin decline of 40 basis points as compared to the prior year, while we delivered good organic growth and reduced variable expenses in response to COVID-19. These were more than offset due to changes in foreign exchange rates and to a lesser extent higher intercompany IT charges. Our income before income taxes, grew by 6.2%, which was lower than total revenue growth, primarily due to higher intercompany interest expense.

Over to Slide number 13. Total revenues and organic revenues for the Services segment both declined by about 50 basis points, driven by the items Powell mentioned earlier. For the quarter, EBITDAC increased by 9.7% due to increased weather-related claims and was partially offset by higher intercompany IT expenses. Income before income taxes decreased 23.6% due to a credit of $2.5 million in the quarters in the fourth quarter of 2019 for the change in estimated acquisition earn-out payables that did not recur or occurred in 2020.

Over to Slide number 14. This slide presents our GAAP results for the full-year of 2020 and 2019. For 2020, we delivered revenues of $2.6 billion, growing 9.2% and earnings per share of $1.69, growing 20.7%. Our EBITDAC increased by 13.5% and our EBITDAC margin grew by 110 basis points. For the year, our share count increased slightly as compared to the prior year and our dividends paid during 2020 as compared to 2019 increased by 7.1%.

Over to Slide number 15. This slide presents our results excluding the change in estimated acquisition earn-out payables for both years. For the full-year of 2020, on an adjusted basis, our income before income taxes grew 18.1%, which outpaced EBITDAC growth due to lower interest expense and our adjusted net income per share grew by 19.3%.

In addition to the strong income performance metrics, we also had another strong year for cash conversion due to the strength of our operating model and diversity of our businesses. We delivered $721.6 million of cash flow from operations, representing a continued strong conversion rate of 27.6% as a percentage of revenue. We also finished the year in a strong liquidity position, with $817 million of cash and cash equivalents, as well as $800 million of accessible capital on our revolver. With this capital and the cash we will generate in 2021, we are in a good position to fund continued investment in our Company.

We got a few other comments regarding outlook for 2021. During the third quarter, we were asked the question about our potential margins for 2021 in relation to the COVID-19 savings we had in 2020. Now, with the year completed and a bit more visibility in 2021, we expect EBITDAC margins could be flat to up slightly considering our variable cost will more than likely increase as we're able to travel and see customers face-to-face. As we've done in the past, our leaders will be focused on growing profitability. Regarding contingents, we are anticipating them to be relatively flat or maybe down slightly in 2021.

As it pertains to taxes, we expect our effective tax rate for 2021 to be in the range of 23% to 24%. This does not take into consideration any potential changes in the federal tax rates that are being discussed by the new administration. For interest expense, we're anticipating a $7 million to $9 million increase as compared to 2020 driven by the new bonds we issued in September of 2020.

From a capital perspective, we are expecting our capex to decrease in 2021 to approximately $40 million to $45 million as we have substantially completed the development of our new Daytona Beach campus.

With that, let me turn it back over to Powell for closing comments.

J. Powell Brown -- President and Chief Executive Officer

Thanks, Andy, for a good report. In my opening comments, I mentioned there are still a few items that need to be resolved over the coming quarters. We will watch closely the successful rollout of the vaccine and additional stimulus to help those in need. Both of these items will influence the pace of economic recovery over the coming quarters. From a rate perspective, we expect increases for the first six months of '21 to be similar to those seen in '20. Ultimately, the rating -- the rate of increases will be driven by losses sustained in 2020 from the record setting number of tropical storms in the millions of acres that were burned. The question remains for how much longer and at what pace the rates need to achieve the targeted returns. We think the market is getting near an inflection point over the coming year for certain lines and will drive some rate moderation.

The acquisition pace seems to be active as ever and competition between private equity and long-term strategics remains. We continue to believe the aggressive pricing for deals by PE will not abate any time soon. However, we're well positioned with our low leverage and the capital on our balance sheet, as well as access to additional capital to fund our M&A activity. Our pipeline remains good and we will keep our disciplined approach to M&A as it's proven to be very successful. But as you know, we don't count anything until it's closed.

Finally, technology innovation continue to be at the forefront regarding creation of new products and enhancing the experience of our customers. We will continue to digitize our data, automate and prioritize technology investments around the following: optimizing and enhancing our data and analytics program; expanding our digital delivery capabilities around products and services; and engaging in initiatives designed to drive greater efficiency and velocity through our underlying processes. As we deliver on these goals, we will see new opportunities for growth that will serve our customers even better.

We had a great 2020 on many fronts and have good momentum heading into '21. I am extremely proud of how our team has served our customers through extremely challenging times. We have a great team and a highly diversified business, both that performed very well in the past and we expect they will in the future. Ultimately, our financial performance is only possible through the combined efforts of our nearly 11,000 teammates and our commitment to serve our customers.

With that, let me turn it back over to Holly for the Q&A session.

Questions and Answers:

Operator

Thank you. [Operator Instructions] We will now take our first question from Elyse Greenspan from Wells Fargo. Please go ahead. Your line is open.

Elyse Greenspan -- Wells Fargo Securities -- Analyst

Hi. Thanks. Good morning. First I wanted to start on some of the comments you gave on your margins, right. So you said, it's kind of where you see the market today. It sounds like flat, maybe slight -- some slight improvement in margins. Can you just -- is there a way to give us a sense on what kind of range do you assume for organic as we think about whether margins might be flat or improve or like the variables, I guess, that will determine the level of potential margin improvement you see in 2021?

J. Powell Brown -- President and Chief Executive Officer

Good morning, Elyse. Thank you for your question. I know that you've heard us say before that we don't give growth guidance as we know that we've said we think our business is a low- to mid-single-digit organic growth business in a steady-state economy. But we wanted to clarify that because there is a lot of talk out there around variable expenses and how you capture or don't capture or whatever and we -- the -- I think the results this year are a testament to how our system works, which is, at every office, the leader that run those offices, she or he, is responsible for that P&L. And by doing so, they control the expenses that were controllable or variable at the office level. And then as those individuals are able to go back and travel or serve our customers in a different capacity, we will incur those expenses again. And so, it's not as though we're going to be able to give you, you meaning, you, Elyse, or any other analyst a specific number, because that's not the way it works. It works at the very local office level and we didn't have any extra stuff that we were paying before we thought. So, I'm sorry I can't answer your first question because we don't give specifics on organic growth guidance, but I just wanted to give you that kind of feedback on the variable cost.

Elyse Greenspan -- Wells Fargo Securities -- Analyst

Okay. That's helpful. Maybe I'll ask it a little bit of a different way, like, if we look at Retail, like, I saw 1.5% organic in the fourth quarter, right? So that was 1 point of timing, which you guys have told us like it's still 1.5% organic. If we adjust for the gain on sale, right, there was, I think you said like 90 basis points of margin improvement in that segment in the quarter. So, it's kind of that -- was there something one-off in the segment? I mean, maybe it comes back to some of this variable comp, as we just think about retail and potential economic bounce back and what that means to that segment's margin? Was other than just thinking to perhaps lower travel, is there anything else that might have been one-off in that segment in the quarter?

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Hi. Good morning, Elyse. It's Andy. Just for clarity, is your question -- you're -- are you asking, do you expect for it to be higher or it's higher than you anticipated?

Elyse Greenspan -- Wells Fargo Securities -- Analyst

Well, I'm just trying to get a sense as we think about forward, was there anything kind of one-off within those numbers in the quarter other than just perhaps the continuation of just lower travel-related costs?

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Sure. Yeah. No material one-off items other than the pieces that we had called out inside of there. So, I think primarily around the variable cost and then the gain year-over-year. So, we'll continue to manage those as we go into 2021 just as we did during 2020 and we're always focused as an organization is how do we grow our top line and grow the bottom line profitably and balance that. And so, we did really well during 2020 and we had confidence at all of our leaders will be able to do that in 2021.

Elyse Greenspan -- Wells Fargo Securities -- Analyst

Okay, great. And then, Powell, you started off your prepared remarks by talking about some of your recent transactions, O'Leary, right, that you guys just closed this month. And I think you pointed to developing your international presence in years ahead. Your presence obviously is more than specific, right, like the UK area, but can you give us a sense of what is that mean? And, I guess, and sizes, how you think about potential international expansion?

J. Powell Brown -- President and Chief Executive Officer

Sure. So, we are very pleased that the team in Ireland has joined. And I would tell you that O'Leary Insurances is very similar to our organization maybe 20 years ago. It reminds me greatly of us and how they are involved in their community, then they serve their customers and their relationships with their carriers. So, as a general statement, and this is a very general statement, we, number one, obviously, like the Irish marketplace. Two, we like the fact that some place like Ireland or England or Canada has a rule of law. And so, when you think about that and we think about places where people have build and grow good businesses and we will continue to look in those areas.

Now, please don't take that comment out of context, Elyse, that says, we're now on international spending binge. That is not the case. We evaluate every transaction in a very similar way and it starts with cultural fit and does it make sense financially. And if those two things -- if there is a cultural fit, we usually think there's a way to make something work. And so, vetting those and getting the right ones and doing all that, it's just like doing it here in the United States, it's just 7,000 miles away or farther. And so, we will continue to look at businesses in areas like that. We have looked over the years. And for whatever reason, we haven't -- we bought the business at the beginning of the year and Vancouver, Canada. We've looked at businesses in Canada before and for whatever reason it just didn't work in the past and they were good firms. It just didn't work out. And so, I think that is another opportunity for us, but I do not want anybody on this call to think that this is some new flavor of the month or something. It's absolutely not that. And we will continue to look for firms that fit our criteria and continue to sell the Brown & Brown story because we're a forever Company and that's appealing to some people. And so, we're really excited about it.

Elyse Greenspan -- Wells Fargo Securities -- Analyst

Thanks, Powell. I appreciate the color.

J. Powell Brown -- President and Chief Executive Officer

Yeah. [Indecipherable] stay, Elyse.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Thank you.

Operator

We will now move to our next question is from Phil Stefano from Deutsche Bank. Please go ahead. Your line is open.

Philip Stefano -- Deutsche Bank -- Analyst

Yeah. Thanks. Maybe just a follow on to the international brokerage acquisition market. And I know that it's a small part of the story, it feels like at this point. But just given that was Elyse's last question. Is how -- is there anything that changed in those two acquisitions that were not to make a big deal, but you had said that you looked this in the past and for whatever reason they didn't come through, is there anything that changed that kind of it feels you've been able to click off a couple of wins here? If the competition in the US higher and it allows you to maybe look more seriously at the international or anything from that perspective?

J. Powell Brown -- President and Chief Executive Officer

First of all, good morning, Phil. And no, there's nothing that's changed. The competitive landscape is equally as competitive overseas as it is in the United States, be it in North America or in the British Isles, number one. Number two, I think that there are lots of people, Phil, that we talk to over the years that are not ready to do something when we start to get to know them, which we believe is a great time to get to know them because they get to know us and we get to know them. And then over the years they see how we act as the Company and we see how they act as a company. And then there might be a fit down the road. So, I would tell you, we always think that good people attract other good people. People don't work for companies. They work with and for people. And so, having said that, that is absolutely the case in those two acquisitions and we will continue to look in areas that present exciting growth opportunities and expanding our capabilities, and there's all kinds of things that come out of it to the positive. And so -- but there is nothing that like just all of sudden said, we're going to pay more or we're going to -- we were going to -- we're going to accept this already, nothing has changed in that regard.

Philip Stefano -- Deutsche Bank -- Analyst

Okay. Perfect. Thank you. And then as you, Powell, in the initial remarks you had talked about expecting a sharper recovery through 2021, maybe into 2022. I mean, when we think about new business has improved from third quarter to fourth quarter, is the trend line for that choppiness continued improvements? Or is there choppiness just around a flattish trend line in how we think about new business when that comes?

J. Powell Brown -- President and Chief Executive Officer

Yeah. I think it's choppy like up and down, and up and down. Here's the thing that, Phil, we can't fully put your finger on. And so, there are businesses that have, as an example, they have furloughed people. But by furloughing people they're still on their employee benefits plan as an example. And now, let's say, that company has brought back half of the people that were furloughed but they terminated the other half. All of a sudden you actually have a reduction in exposure units in that example. And so, it is not as though we have clear line of sight on what every customer is going to do in that regard.

So, remember, I think of new business as new, new business, a new customer to us and a new line. A new -- just a new customer to us is new business. But you can have an existing customer, or you write the P&C and then pick up the benefits or write the benefits and pick up the P&C. And I don't consider that a new customer, it's a new line. But I think the important thing is, remember, we have always talked about our business is a reflection of the middle and upper middle market economy. And so, if you think about all the customers that we touch and have a good fortune to work with and earn their business every day, some of those customers are looking at their business differently today than they have in the past, that could be positive or negative. They could be adding 15 people or they could be releasing 50. So, the reason we say the choppy part is there's all kinds of variables outstanding.

First question, are people going to mandate that their employees get vaccines and come back to work? Well, based on the studies that I've seen so far, about 75% of the companies out there that I'm aware of has said no to that. Okay? So how does that impact work going forward? What about people that have been hanging on by their fingernails and then all the sudden they say we're just going to be done. We're going to hang it up. And I don't -- we don't see something, Phil, that indicates that, but I can tell you, we are paid the think in advance, around the corner and we're trying to anticipate what could happen in the next three or four quarters.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

And then -- hey, Phil, there is more this -- last year, realistically probably see choppiness in the businesses. Think about through the lens of a business owner and their level of confidence we look at happen over the next quarter or four quarters and then how they invest in their business and that could be anything from kicking off a new capital project for a building, acquiring another organization, making some sort of an expansion, whatever the case may be. Well, depending upon that level of confidence they may decide just to delay that by 90 days and that's just not uncommon. And we saw some of that from the second quarter into the third quarter and the fourth quarter with things just move around back and forth and that's really why we say, it won't surprise us if there is choppiness because we just don't think that there is a consistent level of confidence yet in the marketplace and we just think that's going to take some time to work out during '21.

Philip Stefano -- Deutsche Bank -- Analyst

Okay. I appreciate the color and congrats on the quarter.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Thanks, Phil.

J. Powell Brown -- President and Chief Executive Officer

Okay. Thank you.

Operator

We will now move to our next question from Mike Zaremski from Credit Suisse. Please go ahead. Your line is open.

Michael Zaremski -- Credit Suisse -- Analyst

Good morning. A follow up to the last question from Phil and -- but I appreciate the -- how you explain kind of the dynamics around some of the potential organic growth uncertainty and choppiness. The National Programs segment has been strong for a while now. The dynamics you explained, is that pertain to National Programs as well or we -- should we be thinking there is some more kind of tailwinds that remain strong in that specific segment?

J. Powell Brown -- President and Chief Executive Officer

I think National Programs is a little different than Retail in regards to, they may have a limitation or run into a limitation based on their ability to provide capacity if they -- because the demand outstrips the supply. That is not the case today, but I'm saying that could be a -- that would be a different kind of my term governor for organic growth for them going forward in a wind program or a quake program or something type of program. And so, I'd say that because remember, we are underwriting on the half of the carrier. We've been delegated the underwriting authority. But there is one carrier or, in some instances, multiple carriers. But in the case of Retail, you have -- we have access to the entire marketplace. So virtually every carrier we have access to. So if one carrier, carrier A doesn't want to do it. Carrier B and C still may consider it. So, we are very pleased with the growth of National Programs. We do think that there were and continue to be some interesting dynamics in terms of significant rate increases on CAT-exposed business that would drive some of that growth.

And one of the things that we've said, Mike, is and we haven't seen it yet, but we talk to these people and some of these people that there are other providers of capital that are either coming into the marketplace or are in the marketplace that if, in fact, everything else stayed constant, which probably won't be the case. But if they did and your new capacity that either going to moderate the rate increases or in some instances, it might even reduce the rates just slightly. So I'm just thinking about if you have a condo in Miami and the things gone up 15%, let's just make this up or more for the last three years and then all of the sudden somebody comes in and they give a flat renewal to get or even slightly down maybe, you could see that and you have this very unique time and we think it's obviously it presents a lot of opportunities and challenges all wrap up in the one, but I would just tell you that the growth that National Programs has enjoyed and delivered and in our opinion is number one, spectacular. But two, we don't give growth guidance, as you know, but I would say that the performance was even higher than we anticipated for 2020. So I'd say that, just to kind of give you a sense of it, because it's a growing business and the market will turn one day and that growth rate will slow down some and things like that, but yeah.

Michael Zaremski -- Credit Suisse -- Analyst

Okay. That's helpful. [Speech Overlap] progress.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. Hey, Mike. We talked about this on the third quarter earnings call is, one, we are extremely, extremely pleased with organic in the fourth quarter. Definitely, overall, our expectations. We're able to see National Programs post another 12%, 14%, 15% every quarter in 2021. We don't know if that is realistic. So, we wouldn't want you to set your expectation in the double digits. That will be great if it happens, but there is a lot of different dynamics in the marketplace. So just want to mission kind of moderate to how you think about the growth. And then we're very, very excited about our capabilities in that space and how we can deliver.

Michael Zaremski -- Credit Suisse -- Analyst

That's helpful. Moving to the -- in the past you have two strategic deals recently CoverHound and O'Leary. I'm assuming there is not a major margin impact given in the past it's been very helpful that you broken it out in the depth of supplement.

J. Powell Brown -- President and Chief Executive Officer

Yeah. We -- Mike, we normally break out larger acquisitions that even fall into that category. Both of them do have margins below the average for the organization, but we've taken that into consideration when we gave the guidance of flat to up slightly for 2021.

Michael Zaremski -- Credit Suisse -- Analyst

Okay. Okay. Got it. I guess, lastly, you've done a good job in kind of talking and investing in technology, innovation, digitization. Recently, you're still talking about it. Is that -- I guess, you talked about capex decreasing but capex seems kind of like a old school world, but should we be thinking about kind of the technology, digitization investments being a more material percentage of expenses and that's kind of one of the levers we should be kind of thinking about, which if you do decide to invest more in the coming year? Second kind of be somewhat of a governor on margins, given how the market for organic growth is very healthy and then you take some of that helps you are organic growth invest a little bit more in digitization efforts?

J. Powell Brown -- President and Chief Executive Officer

So, Mike, I'd like to address that. And what I would say is this, we are going to make the right investments in the business and you raised the issue of technology. So we're going to use that, specifically as we see fit going forward now and in the future. I don't want to give you the impression that, OK, if we're growing more then we're going to invest more or if we're growing less, we're going to invest less. That isn't really the way we think about it. The way we think about it is, where do we want to go, how do we want to get there and then what do we need to do by build partner to get there. And then along the journey we're going to reassess and say, was our original hypothesis correct, is it validated or do you need course correct midstream.

And so, once again, I would tell you this. I think that and this is a hard one because I know what you as an analyst are trying to do in terms of margin movement and things like that and we've been very consistent in saying where we thought the margin would be, where the organic growth would be in steady-state economies and even in kind of variable economies, which is what we're in today. But no. Again and I said this, and I think it's important for everybody just to pause and think about it, if you would ask Andy and myself in April, if we would do have delivered 3.8% organic growth and a 110 basis points of improved margin. Andy and I, if we could have said it publicly, we would have said, it's possible, but the probability is very small based on what we were seeing then. So, I would take you back to how you thought in April. And so, it's not about just how we thought, it's how you thought. And some people thought the world was coming to an end. And so, what I would tell you is, we are couldn't be more proud of the way our team responded because it isn't easy as you know. And so, the thing that this -- all this doesn't reflect is the numbers are results of almost 11,000 teammates busting their butts for their customers every day and I know you know that, but I will tell you, there is a lot that goes into it to deliver these numbers.

And so, I couldn't be happier under the circumstances and we're going to continue to invest in technology and I think there are lots of opportunities in some of the things that we're doing already and there will be some that we haven't yet invested.

Andy?

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. Hey, Mike, let me just see if we can just hit this head on. So there's no misconception out there. So if there is a concern that with us talking about innovation in technology that we're going to make big investment and take the margins backwards, you can go ahead and leave that concern. In 2016 in the first quarter, we talked about our investment program where we laid out a very clear path as to what are we going to do with our margins on the way down and on the way up. And I think I hopefully, you've been really, really clear on that. It's also in our investor deck. If we have a situation like that in the future, we will talk to all of our investors and all of our analysts. What we're really saying is, we think we've got appropriate spending side of the business we will balance between, we'll call it, the BAU stuff and innovation through the organization. But we do believe that innovation is very important in how we can serve and engage with our customers and our carrier partners. We will continue to do that as an organization, not all of it will be capex, not all, it's going to be opex, right? There's going to be bounces back into it, because sometimes as part of that leasing or partnering that Powell talked about that's going to flow through opex. Some things will build ourselves.

We can work through all those. And again, we've incorporated that into all the guidance, at least, that we've given for 2021. If other opportunities pop up during '21 that we need to change our view because we think it's something really good for our business long-term and delivers appropriate shareholder values, then we will absolutely talk to everybody about it, but there is no looming big investment out there. So, again, we just want to hit that one head on.

Michael Zaremski -- Credit Suisse -- Analyst

Okay. Yeah. And I wasn't asking just acquiring the context of concern, some companies have talked about probably COVID opening your eyes to being able to do business slightly differently using much digitization. So very helpful response. Thank you.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Okay.

J. Powell Brown -- President and Chief Executive Officer

Thank you.

Operator

We will now move to our next question from Yaron Kinar from Goldman Sachs. Please go ahead. Your line is open.

Yaron Kinar -- Goldman Sachs -- Analyst

Thank you very much. Good morning, everybody. I guess, my first question, Powell, is just a follow-on to Mike's last question. If I look at CoverHound, I think one of the strategic rationales there, the bit you cited was that it does give you another leg up on the technology and innovation side. So, with that in mind, should we also expect to see the independent organic IT spend that we kind of saw throughout 2020 considering '21 or do we -- should we see that may be slowed down a bit, because that is more of that through this acquisition?

J. Powell Brown -- President and Chief Executive Officer

Yaron, first of all, good morning. And this will be a comment for everybody. If you could either make sure you put the microphone closer to your mouth or the speaker, we're getting kind of a muffled kind of thing coming through. So, if I could just ask you to repeat like the last three sentences there, which was I heard about the CoverHound and the investment. But I couldn't get the very end of that, which was really to crust your question, if you could repeat that, please?

Yaron Kinar -- Goldman Sachs -- Analyst

Sure. Hopefully, this is better.

J. Powell Brown -- President and Chief Executive Officer

A little bit better. Yes, go ahead.

Yaron Kinar -- Goldman Sachs -- Analyst

Okay. So, my question was, was the CoverHound acquisition and the strategic value of that -- one of the strategic values being the technology angle and the innovation angle. Should we still expect to see the organic IT spend that we saw in 2020 continuing to '21 or does that lever maybe get dialed back a bit because you now have the inorganic digitalization and data technology coming in through the acquisition?

J. Powell Brown -- President and Chief Executive Officer

Yeah. Thank you very much for the clarification, Yaron. I think that you have to expect the spend to be similar going forward because we are very pleased with the CoverHound acquisition and the team and the technology that comes with that acquisition. And we believe that there are multiple places that we will be able to use that in our different divisions. However, we have contemplated that the tech spend across the other platforms will continue, as stated, until and at which time or I should say, if we determined that the technology in CoverHound is transferable or expandable maybe better into capacity in one of the divisions that we're not aware of just yet. That's how we'd answer that.

Yaron Kinar -- Goldman Sachs -- Analyst

Okay. And does CoverHound gives you an ability to access markets that were not available to you in the past, or is it just a matter of accessing the markets that you've already played in, but in a more efficient way?

J. Powell Brown -- President and Chief Executive Officer

Yeah. The markets that they do business with are markets we already do business with, Yaron. But it's then a conceivably in some areas where we may not have worked with them before.

Yaron Kinar -- Goldman Sachs -- Analyst

Okay. Understood. And then final quick one, free cash flow. I think it grew mid-single digits this year where EPS and earnings growth was well in the double-digit. So was just curious if you could talk about what maybe some of the headwinds or this here specifically.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Hi. Good morning, Yaron. One of the things to keep in mind on the cash flows, we do get movements up and down based upon what happens with the fiduciary assets. And so, as those kind of -- as our fiduciary assets -- again, keep in mind on those, that's the premium that flows through the organization for all the billing. So that can move up and down. If you look at last year, where we grew free cash flow significantly faster than EBITDAC, as well as the earnings per share. So, I think last year we were at on a free cash flow close to about 15%. I think this year we're about at 7.6% [Phonetic]. So you will see some movement up and down inside of there. It's -- the reason why we focus a lot on the cash flow from operations on the conversion ratio, we were just shy of 28% this year. We're just a little over 28% last year. So it's going to kind of hover in that range. But we're really, really pleased with the cash and the way that we were able to convert our revenues, again, in 2020.

Yaron Kinar -- Goldman Sachs -- Analyst

Got it. Thanks so much.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. Thank you.

Operator

And we will now move to our next question from Greg Peters from Raymond James. Please go ahead. Your line is open.

Gregory Peters -- Raymond James -- Analyst

Good morning. Can you guys hear me OK?

J. Powell Brown -- President and Chief Executive Officer

Yeah.

Gregory Peters -- Raymond James -- Analyst

Excellent. Throughout your prepared comments you talked about changes in earn-out payables. It hit three of the four segments and called out, I think, a chunk in the National Programs, but it seem to really affect your reported results in all three segments and for -- on a consolidated basis in a way that maybe hasn't happened before. So, can you give us some color what's going on there? And maybe segment by segment, is there something that you're missing on these payouts that we need to think about going forward?

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. Hi. Good morning, Greg. So, just to go back, we had quite a few movements this year, both up and down. If you remember, back at the end of the first quarter, we had taken down a number of the earn-outs because when we were looking at the potential projections based upon what we all staring down at the end of March on the economy, we say, well, we clearly not going to make those numbers. And so, we reduced those. Then we get to the end of the second quarter and the outlook looks completely different. And then by the third quarter, it looks different, again. We took them all back up. And so, you're going to see unusual swings. On a full-year, actually, we didn't really have a lot of movement. You can't see and that's part of this -- the unknown about this economy because what we have to be able to do is incorporate the best information that we have at the time of doing the calculations as to what we think is going to occur over the remaining earn-out period and that's what we tried to do this year.

Let's say, if you go back and look over time, our actual adjustment on a full-year basis are actually pretty minimal. Considering the size of the earn-outs that we have, as well as the purchase price. So, we think overall we do a pretty good job. This year is probably a little bit of a different one just because the economy that we're in right now.

Gregory Peters -- Raymond James -- Analyst

Yeah. Hey. Can you just -- on the -- as a follow-up to the earn-out, can you give us some updated perspective about how the earn-outs are performing with some of the other larger deals that you've closed in recent years, like The Hays acquisition for example?

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

We would say, they're -- they've all performed pretty well, Greg. And, I guess, maybe they'll look through that is what has been the net charge or credit back into the P&L. And to our earlier comment, it's really not been material over the years as a percentage of the overall. And so, what we tried to do is establish that initial earn-out to a level that we believe is reasonable. But, again, for everything that we know at the time of doing the transactions. Ultimately, we would love to see all of our sellers and our new teammates completely max out their earn-outs. We would love to see that. And the reason why is because that means that the business is performing well. Many of them do. Some of them don't get all the way there. But we're very, very pleased with our success rate on our acquisitions, how well they performed versus the original expectations and ultimately, over the years after they become part of the team.

Gregory Peters -- Raymond James -- Analyst

Great. Got it. In the comments on the Wholesale you called out the personal lines business having headwinds. I'm trying to understand exactly what were the headwinds in the personal lines business considering that it seems like many of the personal lines companies have done, at least on the auto side, done pretty well.

J. Powell Brown -- President and Chief Executive Officer

Yeah. Yeah. So, some of them have done well in certain areas and a lot of them were taking gas. And what I mean by that is, if you write business in California, they've been burning for the last three years, as you know. And if you are -- and some of the coastal areas, there are some losses that occurred, Greg, as you know, here in our fine state, one and two and three years ago that are developing -- further developing with the involvement of public adjusters and things like that. So, I would tell you that, particularly in certain segments of the personal lines market, there -- it's been tough. And so, that's the area that typically would come to the E&S market and then the E&S carriers experience. It could be in our book or it could be in the overall experience leads them to potentially pull back in certain areas or the reinsurance costs have gone up or both. So, this is not something that is unique to Brown & Brown or Brown & Brown Wholesale of kind of unique to the industry across the board.

Gregory Peters -- Raymond James -- Analyst

Got it. And then the final question or two questions around the balance sheet. If I look at the cash and cash equivalents at year-end '20, substantial increase compared to where you were at year-end 2019. That would clearly beg the question around capital allocation certainly seems to be more -- holding more cash at this point than you need. So, at this point in time, is this ASR share repurchase on the table? And then embedded in the balance sheet, I did notice that there was a nice jump up in accounts payable. I assume that flowed through and helped your cash flow. But maybe you can walk us what's going on, if those two items and your view on capital management? That's my last question.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Okay. Perfect. Thank you. Let's tackle cash first. So, Greg, if we go back to our earlier comments, the $700 million issuance over 12.5-year bonds in September, that was the primary driver of the cash going up. And as we talked about during the previous call, the reason why we access the market back at that point, it is, we thought it was a very, very opportune time to go get very low cost of capital as an organization. And as you know well, when you need it expensive, when you don't, it generally isn't. And we thought we were just in a great position as an organization, the markets were extremely, extremely receptive for us to issue bonds at just a little over 2.5% or 2.25%. So we're very, very pleased with that. That doesn't mean that we issue that because we've got big pending acquisition. And so, we're going to do a big buyback as an organization. Not at all. It's there -- we talked about the fact that with that capital, the access what we'll generate, we feel really good about how we can invest in our business. So, we may have "some negative carry on interest," but we think that's definitely worth that potential slight negative carry to have the access to that capital that's out there. So, that's just a thought on that front.

The other piece on the cash and cash equivalents is, keep in mind that not all of that is Brown & Brown cash. So historically, it's generally been about a 50:50 split between our money and the fiduciary funds rolling through. That is much more weighted toward Brown & Brown at the end of the year.

Really, I want to ask about...

Gregory Peters -- Raymond James -- Analyst

Andy, can you just -- I just want to -- I don't want -- I can't pivot you. Just I thought the money that wasn't yours, showed up in the restricted cash and investment category, not in the cash and cash equivalent category.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. So it shows up in two places, Greg. In states or carriers that require that we need to put customer funds in specific accounts, then that money sits inside of the restricted cash and investments. In those states that do not require it or carriers that just sits within Brown & Brown cash and cash equivalents.

Gregory Peters -- Raymond James -- Analyst

So, can I just one follow-up, is there a minimum sort of threshold when you think about cash and cash equivalents that you want the Company to have in any given year basis?

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

So we don't have significant working capital requirements inside the organization, Greg. But we normally say, keeping a 100 -- couple of hundred million dollars of real Brown & Brown cash is sufficient for the organization based upon how much we deliver on a quarterly basis. And we are looking at cash flow projections every month, every quarter for the business. We know what capital allocations that are out there. So we can work our way through all those actually pretty easily. And then if we ever have a situation where we need capital in the quarter, that's why we have a revolver. So that we can draw on that in the past, and then we can pay it back down. But we're very, very in tune with our cash.

Gregory Peters -- Raymond James -- Analyst

Okay. And then the accounts payable questions. Thank you.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. The accounts payable, if you look at that, that's the shift in -- from -- if you look down on our other liabilities, you can see that they actually went up, but one of the items we've been and we've got some earn-outs that are coming due in the next 12 months. That's what shifted up in the accounts payable.

Gregory Peters -- Raymond James -- Analyst

Got it. All right. Thank you for the answers.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

So, this is not a kind of source of working capital in the quarter.

Gregory Peters -- Raymond James -- Analyst

Say it again, Andy?

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

It is not a source of working capital, your question, Greg. It was just a movement, which was other liabilities. Okay?

Gregory Peters -- Raymond James -- Analyst

Perfect. Thank you.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

And then, Holly, why don't -- we were 9/11 [Phonetic], why don't we -- we'll take one more question today and then if anybody else has other follow-ups, they can -- you can always just take after the call.

Operator

Certainly. We'll now take our last question from Mark Hughes from Truist. Please go ahead. Your line is open.

Mark Hughes -- Truist Securities, Inc. -- Analyst

Yeah. Thank you and good morning. Just one quick one. Powell, how much do you think the market may have changed permanently in terms of the way insurance is sold? You think it will go back to the former method, the same spending on T&E or is this going to be more durable? And if so, what impact on margin perhaps?

J. Powell Brown -- President and Chief Executive Officer

Right. Good morning, Mark. And I think that's a really interesting question. And I think it will be dictated significantly by our customers, which is, we will see that and how that works in the future. Here's the way I describe it. If you have a larger customer, as an example, and you typically had three people that went to see that customer and they go to see that customer twice a year, and then there's interaction throughout the year. The scenario that I'd say is, due to three people go back in '21 or does one person go back and two or three or even four people join in via video conference. So we leverage the collective capabilities of everybody. I tend to think toward the latter instead of the former. But that is not my decision. It's ultimately the customer's decision. That's number one.

Number two, I think that buying on the Internet, so that's what I call it, where you see them on the video screen and all that other stuff, that might work for like one year. But particularly in a rising rate environment, customers need to see you because people buy from people they like and they trust. And at the end of the day, you don't get the full impact on a video screen. That's number two.

Now, interestingly enough that would lead me into the third point, which is more about acquisitions. And so, I want to make sure that everybody on the call knows that we meet with people to determine if their culture and our culture is fit. So, we're not buying businesses on the Internet. That means we are not buying businesses from people that we have never met except over a video conference. So, I think all the video conferencing stuff is great. But I'm tired of some of it, because I think it's -- you miss so much.

So, having said that, as it relates to the expenses, remember, I know what you're trying to do and some of the other larger public brokers are talking about amounts that they're going to save and permanently save and capture. I don't know what they are doing before, but we already know that we were efficient before. I think that we are focused on how do we retain the business that we have and quite honestly, write a bunch of new business. So, that may mean that we do some things a little differently in terms of solicitation or prospecting or pre-qualifying using technology, which in turn makes us a little more efficient in closing. That's yet to be determined. But I don't want to give you the impression that the margins are going to go dramatically one way or the other because one of our customers only need to see one of us twice a year as opposed to three of us. I think it's too early to tell.

I would just say this, our teammates are anxious to be able to go back and see their customers. They want to see them and customers want to see us.

Do you have another question, Mark?

Mark Hughes -- Truist Securities, Inc. -- Analyst

I don't. That's very helpful. Thank you. Appreciate it.

J. Powell Brown -- President and Chief Executive Officer

All right. Thank you all very much. Have a wonderful day. And we look forward to talking to you after the first quarter. Goodbye.

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Thank you.

Operator

[Operator Closing Remarks]

Duration: 76 minutes

Call participants:

J. Powell Brown -- President and Chief Executive Officer

R. Andrew Watts -- Executive Vice President, Chief Financial Officer and Treasurer

Elyse Greenspan -- Wells Fargo Securities -- Analyst

Philip Stefano -- Deutsche Bank -- Analyst

Michael Zaremski -- Credit Suisse -- Analyst

Yaron Kinar -- Goldman Sachs -- Analyst

Gregory Peters -- Raymond James -- Analyst

Mark Hughes -- Truist Securities, Inc. -- Analyst

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