The Baldwin Insurance Group, Inc.

Greetings, and welcome to the BRP Group, Inc. First Quarter 2023 Earnings Call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bonnie Bishop. Executive Director of Investor Relations. Please go ahead, ma'am.

Thank you, Operator. Welcome to the BRP Group's first quarter of 2023 earnings call. Today's call is being recorded. First quarter financial results, supplemental information, and Form 10-Q were issued earlier this afternoon and are available on the company's website at ir.baldwinriskpartners.com. Please note that remarks made today may include forward-looking statements subject to various assumptions, risks, and uncertainties. The company's actual results may differ materially from those contemplated by such statements. For a more detailed discussion, please refer to the note regarding forward-looking statements in the company's earnings release and to our most recent Form 10-Q, both of which are available on the BRP website. During the call today, the company may also discuss certain non-GAAP financial measures. For more detailed discussion of these non-GAAP financial measures and historical reconciliation to the most closely comparable GAAP measures, please refer to the company's earnings release and supplemental information, both of which have been posted on the company's website at ir.baldwinriskpartners.com. Also, I would like to remind everyone that effective January 1st, 2023, and as reflected in our reporting for the quarter, BRP now operates with three segments versus the four we have reported on historically, as our legacy Medicare segment was merged into Main Street Insurance Solutions. Additionally, our legacy middle market segment has been rebranded to Insurance Advisory Solutions, and our legacy specialty segment has been rebranded to Underwriting Capacity and Technology Solutions. I will now turn the call over to Trevor Baldwin, Chief Executive Officer of BRP Group.

Thanks, Bonnie. Good afternoon, everyone, and thank you for joining our first quarter earnings call. I will start with a few remarks, followed by Brad, who will address select financial and business highlights from the quarter. Then Brad, Chris, and I will answer questions. We had a strong start to the year, highlighted by organic growth of 23%. building on 16% organic growth in the first quarter of 2022 and representing the highest first quarter organic growth since our IPO, driven by outstanding performance across our business. We achieved total revenue growth of 36% year-over-year, showcasing the continued strong client demand for our advice and solutions across the platform. Adjusted EBITDA was $79 million, in line with our expectations. Insurance advisory solutions, formerly middle market, had strong organic growth of 14%, benefiting from robust new business and rate and exposure lift that exceeded expectations. Underwriting capacity and technology solutions, formerly our specialty segment, grew 56%. and our MGA the Future platform, again, performed exceptionally well. Standouts included outstanding growth in our multifamily product suite, continued acceleration in the build-out of our homeowner's business, and outsized growth from our habitational-focused commercial umbrella program that joined MSI via our 2021 partnership with JGS that now fully flows through organic growth. And Main Street Insurance Solutions, we saw organic growth of 20% in the first quarter. Additionally, Westwood, which joined in May of 2022 as the largest acquisition in the history of BRP, continues to perform exceptionally well despite headwinds in the US residential real estate market. Through the end of April, which represents their first full year with BRP, Westwood generated approximately $112 million of annualized gross revenue, up 36% from the $82 million run rate that we underwrote at the time of the closing last year. Year one of the Westwood partnership has been a significant success and is a testament to the strength of the franchise Alan and his team have built. We believe the Westwood team has a very bright future ahead. Over the past three years, We've invested heavily in building capabilities that will power long-term organic growth and free cash flow generation. These investments included the addition of many talented colleagues and a significant technology build-out to position us for a more digital and tech-enabled future. To frame the significance of the scale of these investments, we more than doubled the size of our colleague base over the past two years adding approximately 1,000 net new colleagues per year. As I shared during our call in February, we have concluded this major reinvestment cycle in our business and shortly will have fully absorbed the run rate payroll from prior year headcount growth. While we are just beginning to see the benefits of these investments in our organic growth, we expect to begin seeing these investments earning into our margin and earnings profile this year and believe that the structural advantages these investments have enabled will yield sustainable revenue growth and operational efficiency over the long term. To give you a sense for the more normalized rate of growth and headcount necessary to sustain our top line growth momentum through the first four months of 2023, we added a net total of approximately 40 new colleagues. which represents a rate that we believe is sufficient to support our current top line growth trajectory for the next 18 to 24 months. Additionally, we continue to remain opportunistic with respect to the M&A marketplace, but reaffirm that we do not currently expect to execute any material partnerships in 2023, as we remain committed to deleveraging and continue to expect the market to soften over the balance of 2023, a trend we are starting to see. Price transparency takes time, and it is our current belief that if we are patient, we will see a better environment into which we can put shareholder capital to work. In summary, we once again delivered high organic growth, a direct result of the value our colleagues continued to deliver clients day in and day out. Despite stress in certain areas of the insurance marketplace, our diversified and resilient business model continues to allow us to execute for all our stakeholders. I'd like to thank our clients for their trust and confidence, and our colleagues for tirelessly driving the positive client outcomes that result in our strong performance. With that, Brad will detail our financial results.