Brown & Brown—a large insurance, risk management and benefits firm—is facing a situation that may be affecting some of its own benefits clients: High health plan deductibles are changing when the claims come in.
Executives mentioned the topic during a second-quarter earnings call with securities analysts.
Pablo Singzon, an analyst with JPMorgan Chase & Co., asked about the firm’s own health claims after looking at a line in the company’s quarterly report that talked about employee benefits and compensation expenses. The company reported that the sum of stock compensation costs, health plan claims and some other costs was at least $5 million lower in the second quarter of 2026 than in the second quarter of 2025, and at least $22 million lower in the first half of the year than in the first half of 2025.
See also: Employers ‘hungry for ideas’ to hold down health claims without cutting coverage
“Do you expect these other favorable factors to persist in the second half?” Singzon asked.
R. Andrew Watts, the chief financial officer, said he did not.
“I think that, for all companies, there’s always the unknown of healthcare cost,” Watts said. “Like almost all other companies, we’re working diligently to manage our overall healthcare claims. They normally do pick up in the back end of the year, based upon the structure of our plan. So, we’ll see how that progresses.”
The topic came up during a conference call that Brown & Brown held with the analysts. The company streamed the call live and posted a recording online.
What it means: The employer health plan claim-flow fluctuations caused by health plan deductibles and coinsurance amounts may now be big enough to raise questions for the employer’s internal owners or outside investors.
The earnings: The second quarter ended June 30.
Brown & Brown reported $288 million in net income for the second quarter on $1.7 billion in revenue, compared with $231 million in net income on $1.3 billion for the second quarter of 2025.
The company did not break out separate employee benefits or health benefits sales figures.
Market commentary: Brown & Brown executives did talk about the employee benefits pricing environment.
Rates increased 9% to 11%, when compared with rates in the second quarter of 2025, for all benefits products sold, according to a slide deck the company prepared.
Medical insurance costs and pharmacy costs were up 8% to 10%, according to J. Powell Brown, the company’s chief executive officer.
“Those cost pressures continue to create demand for our advisory and consulting capabilities as customers look for strategies to better manage health care and primary costs,” Brown said. “Overall, when we step back and look at both the economy and the insurance market, customers are still operating with discipline, and they’re growing modestly.”
Brown sees employers paying close attention to oil prices, general inflation and geopolitical matters.
“Those issues are influencing sentiment, but, at this point, we’ve not seen a material change in overall activity levels,” Brown said.
Although social media forums are full of employees talking about worries about layoffs, Brown said he sees no evidence of dramatic change at the companies his firm serves.
“Most customers continue to take a fairly neutral position towards hiring and investment,” he said. “We’re seeing a relatively stable labor environment.”
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