Good morning. Welcome to the Brown & Brown Incorporated fourth quarter earnings conference 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 the 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 laws. 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 include the company's determination as it finalizes its financial results for the fourth quarter and its financial results differ from the current preliminary unaudited numbers set forth in the press release issued yesterday. Other factors that the company may have currently identified or quantified are 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 the company's filing with its Securities and Exchange Commission. We disclaim any intentional obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. In addition, there are non-GAAP financial measures used in this conference call. A reconciliation of any non-GAAP financial measure to the most comparable GAAP financial measures can be found in the company's earnings press release or investor presentation for the call on the company's website at www.bbinsurance.com by clicking on the 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, sir. Thank you, Norma. Good morning, everyone, thank you for joining us for our fourth quarter 2022 earnings call. Before we get into the details, I wanted to make a few comments regarding our performance in 2022. The fourth quarter capped off another exceptional year as we delivered strong organic growth while substantially maintaining our margins, even with increased variable operating expenses and the financial impact of Hurricane Ian. 2022 was also a milestone for acquisition activity as we significantly increased our international capabilities with the additions of GRP and BdB in the U.K. Our consistently strong results are only made possible through the hard work and dedication of our nearly 15,000 teammates. Now, let's transition to results for the quarter. I'm on slide number four. We delivered $900 million of revenue, growing 22% in total and 7.8% organically. Our Adjusted EBITDAC margin increased by nearly 300 basis points to 31.4% for the quarter. Adjusted net income per share was $0.50, growing by 28%. We also completed nine acquisitions during the quarter with annual revenues of approximately $17 million. Overall, we're pleased with the results for the quarter. I'm on slide five. We achieved another milestone this year by delivering over $3.5 billion of revenue, growing 17% in total and 8% organically. Excuse me. Our Adjusted EBITDAC margin remained strong for the year at 32.8%. On an adjusted basis, our net income per share increased nearly 7% to $2.28. Lastly, we had a record year for M&A activity, completing 30 acquisitions with approximately $435 million of annual revenue. Our acquisitions, both large and small, are performing well as a result of our disciplined strategy to acquire top-quality businesses that fit culturally and make sense financially. We have a proven track record of being able to successfully acquire, integrate, and grow companies of all sizes that join the Brown & Brown team. Later in the presentation, Andy will discuss our financial results in more detail. I'm on slide six. Let's start with the economy. We continue to see expansion of many businesses that are still hiring, albeit at a slower pace than previous quarters. There's been a general reduction in the number of open positions that companies are looking to fill. While interest rates have increased materially over the past year, we're not seeing broad-based impacts on our customers or the economy yet. From an insurance standpoint, certain markets have been and remain in significant turmoil. Pricing for catastrophe property, both commercial and residential, was under pressure through the third quarter. Ian slammed into Florida. This caused 1-1 reinsurance treaties to be bound at higher attachment points and materially higher rates. As a result, we saw incremental price increases and lower limits being offered for placement in late Q4 of last year and early this year. The placement of catastrophe property in Q4 last year and January of this year was some of the most difficult placements we've experienced in decades, with rates increasing 20%-40% or more. However, properties of lesser construction quality or that have experienced losses could be much higher, and I mean much higher than this range. As a result, we had customers unable to buy or afford full limits and therefore ended up increasing their deductibles or purchasing loss limits in order to manage their cost of insurance. In certain cases, this was not possible as lending institutions or condo associations would not allow lower limits or significantly higher deductibles. Admitted market rate increases were similar to prior quarters and were up 3%-7% across most lines, with the outlier being workers' compensation rates, which remained down 1%-3%. The placement of professional liability and excess liability remained competitive, with rates -5% to +5%, with public company D&O rates -5% to -20% or more. Regarding cyber, the story is similar to the last few quarters, with rates and deductibles continuing to increase, but we did see some slight moderation during the quarter. Late in Q4, there were reforms impacting the legal and regulatory environment for insurance in the state of Florida, which included the elimination of one-way attorney's fees and assignment of benefits, establishment of a reinsurance backstop for certain carriers, and the requirement of arbitration prior to litigation. These changes should be positive for buyers of insurance, but it will take time. From an M&A standpoint, we're pleased with the nine transactions we completed. We continue to acquire companies that fit culturally and make sense financially. Specifically, the integration of GRP is going very well, and we're acquiring a number of businesses, and the financial performance is in line with our expectations. From an overall industry perspective, the number of transactions slowed materially compared to previous quarters. Like last quarter, if a business is considered to be a platform or a must-have, the market is still aggressive on pricing. Now I'm on slide five. Let's transition, I'm sorry, slide seven. Let's transition to and discuss our performance of the four segments. For the quarter, our Retail segment delivered organic growth of 2.7% with good growth experienced in most lines of business. Our organic growth was impacted by the slowdown in specialty lines due to lower auto and RV sales, as well as slower growth in a couple of our employee benefits businesses due to an extremely tough comparable versus the fourth quarter in the prior year. Our Retail segment delivered another strong year of organic revenue growth of 6.5%. We're very pleased with how our business is positioned and the capabilities we have to serve our customers of any size and believe 2023 should be another good year. Once again, our National Programs segment delivered excellent results, growing 22% organically for the quarter. This performance was driven by good new business and retention across most of our programs, as well as exposure unit expansion and rate increases. The National Programs team is performing at a high level by offering a diverse range of products and delivering best-in-class solutions for our customers, driving nearly 16% organic growth for the full year. Our Wholesale Brokerage segment delivered another good quarter, growing 8% organically, driven by rate increases and new business, even with personal lines, which has been a challenge for most of the year. Our Wholesale Brokerage segment grew 7.6% organically for 2022 and is well positioned to continue this, their success into 2023. For the quarter, our Services segment delivered modest organic revenue growth as a result of winning new customers and increased storms claims, with this expansion substantially offset by lower claims for certain businesses. Overall, we feel good about our capabilities and the value we deliver for our customers. Let me turn it over to Andy to discuss our financial performance in more detail. Great. Thank you, Powell. Good morning, everybody. We are over on slide number eight. Like previous quarters, we'll discuss our GAAP results and then certain non-GAAP financial highlights. For the fourth quarter, we delivered 22.1% total revenue growth. Organic revenue growth of 7.8% and our EBITDAC margin increased by 220 basis points. Our net income grew 43% and diluted net income per share increased by 42% to $0.51. Both were impacted by the change in estimated acquisition earnout payables, which was a credit of $5.8 million in 2022 and a charge of $19.8 million in the prior year. The effective tax rate decreased to 25.2% for the fourth quarter of this year as compared to 27.8% in the fourth quarter of last year, primarily driven by lower statutory rates for our international businesses and the impact of deductibility for acquisition earnout payable adjustments. Our weighted average number of shares was substantially flat compared to the prior year, and our dividends per share for the quarter increased to $0.115 or 11.7% compared to the fourth quarter of 2021. We're over on slide number nine. This slide presents our results on an adjusted basis, which excludes the impact of movements in foreign currencies on both revenues and expenses, the net gain or loss on disposals, the one-time acquisition and integration costs associated with GRP, Orchid, and BdB, and the change in earnout payables. We've included on slides 18 through 26 reconciliations to the most comparable GAAP measures. On an adjusted basis, our EBITDAC margin grew by 290 basis points versus the prior year. EBITDAC increased by 34.9%, and income before income taxes increased by 22.6%. This margin expansion was due to another solid quarter of revenue growth, increased contingent incentive commissions, and leveraging our expense base even while having higher year-over-year variable operating cost. The incremental growth rate of Adjusted EBITDAC as compared to adjusted income for income taxes was driven by higher year-over-year interest cost of $29 million and higher amortization of $7 million, with both largely driven by the GRP, Orchid, and BdB acquisitions. Our adjusted net income for the quarter increased by 26.9% and adjusted diluted net income per share was $0.50, increasing 28.2%. We're on slide number 10. Our Retail segment delivered adjusted total revenue growth of 19.8%, driven primarily by acquisition activity and organic revenue growth of 2.7% for the quarter. Adjusted EBITDAC grew 25.1%, with our Adjusted EBITDAC margin increasing by 120 basis points for the quarter, primarily driven by lower year-over-year performance incentives, but was partially offset by higher variable operating cost. We're on slide number 11. Our National Programs segment delivered adjusted total revenue growth of 34.1%, driven by organic revenue growth of 21.9%, acquisition activity and higher contingent commissions. Organic growth was positively impacted by approximately $7 million due to the finalization of a growth bonus for one of our programs, which we do not anticipate recurring in 2023. As it relates to flood claims processing revenues associated with Hurricane Ian, we still expect revenues in the range of $12 million-$15 million. In the fourth quarter, we recognized approximately $8 million. Our contingent commissions were higher due to premium growth and profitable underwriting in our cap programs, as well as the loss development for Hurricane Ian being lower than originally expected. Adjusted EBITDAC grew by 53% over the prior year, and our adjusted margin increased by 540 basis points to 44.1%, primarily due to total revenue growth and leveraging our expense base, as well as higher contingent commissions and the previously mentioned growth bonus. We're on slide number 12. Our Wholesale Brokerage segment delivered adjusted total revenue growth of 17.1%, driven by recent acquisitions, good organic revenue growth of 8.1%, and an increase in contingent commissions. Adjusted EBITDAC increased by 19.9%, with the associated margin growing by 70 basis points, which is primarily impacted by increased contingent commissions and good organic growth, but was partially offset by higher variable operating expenses. We're on slide number 13. Adjusted total revenues and organic revenue growth in our Services segment were substantially in line with the prior year. For the quarter, Adjusted EBITDAC increased $1.6 million, or 23.9%, driven by continued management of our expenses. We're on slide number 14. This slide represents our GAAP results for both years. In 2022, we delivered revenues of over $3.5 billion, growing 17.1%, and earnings per share of $2.37, growing 14.5%. EBITDAC increased by 14% to approximately $1.2 billion. For the year, our share count was substantially flat, and our dividends paid during 2022 increased by 11.3%. We're on slide number 15. This slide presents our results for both years on an adjusted basis. Our income before income taxes grew 6.6%, and net income per share was $2.28, growing by 6.5% as compared to total revenue growth of 17.3%. This difference was driven by higher interest and amortization associated with GRP, Orchid, and BdB. Our Adjusted EBITDAC margin remains strong at 32.8%, but declined slightly by 40 basis points from the prior year due to higher variable cost. Overall, we are very pleased with the results for 2022. We're on slide number 16. As part of evaluating the performance for the year and the fact that our captives are newer, we wanted to provide some additional color. We participate in two catastrophe property captives with the goals to increase capacity, drive additional organic growth, participate in strong underwriting results, like we do with contingent commissions, and deliver good returns on our invested capital. One captive participates on a quota share basis for certain of our wind and quake programs, and the second participates on an excess of loss or reinsurance layer for a personal lines wind program. Overall, we are very pleased with the top and bottom line performance, knowing that certain quarters can have volatility when there are CAT events. It's important to keep in mind that performance cannot be evaluated on one quarter, but is better viewed on a full year basis. In 2022, we recognized approximately $25 million of incremental revenue, with about $5 million driven by the acquisition of Orchid. For 2023, we anticipate revenues of approximately $30 million-$35 million. From a risk standpoint, for both captives, we can have up to $13 million of exposure in any one occurrence and $25 million in the aggregate. As we always do, we've used a disciplined approach to balance upside potential and downside risk versus deployed capital and believe we have structured the programs well to deliver on our objectives. A few comments regarding liquidity and cash conversion. For 2022, we delivered cash flow from operations of $881 million. Our ratio of cash flow from operations as a percentage of total revenues was 24.7% as compared to 26.5% last year. This lower ratio was due to the payment of earnouts as certain acquisitions have overperformed our original expectations, incremental interest expense, and paying higher incentive bonuses to our teammates for their outstanding performance in 2021. Overall, we are in a strong cash generation and capital position, finishing the year with $650 million of available cash. We also repaid the remaining outstanding balance of $150 million on our revolver that was drawn in connection with our acquisition of GRP, BdB, and Orchid. We expect to continue to de-lever over the coming quarters as we have done in the past, post larger deployments of capital. We finished the year in a strong liquidity position. With this capital, the cash we will generate in 2023, as well as capacity on our revolver, we are well-positioned to fund continued investments in our company. We have a few comments regarding outlook for 2023. First, for contingent commissions, we anticipate them to be relatively flat year-over-year, but this will be ultimately driven by loss experience. As it pertains to taxes, we expect our effective tax rate to be in the range of 24%-25%, a slight increase compared to 2022 due to a higher estimated tax rate in the U.K., the lower year-over-year tax benefit from the vesting of stock grants and limitations on the deductibility of certain compensation benefits. We anticipate our interest expense will be in the range of $185 million-$195 million. Regarding interest income, we're seeing some nice improvement and are projecting income of approximately $14 million-$17 million, subject to how the Fed changes interest rates. As it relates to amortization expense, we're projecting approximately $162 million-$166 million. This does not include amortization associated with acquisitions that we may complete during 2023. As it relates to margins, we do not see any major headwinds or tailwinds heading into 2023 that should materially impact our margins. With that, let me turn it back over to Powell for closing comments. Thanks, Andy, for a great report. As we close out 2022 and look forward to 2023, we have a couple observations. First, last year was another very successful year for Brown & Brown. We delivered over $3.5 billion of revenues, growing 17%, had our largest year of acquisitions while expanding our footprint and capabilities in the U.K. market. We invested in technology to help improve the experience for our customers and teammates, grew organically at over 8%, delivered strong margins again, even with higher variable costs and the impacts of Hurricane Ian, as well as generated over $880 million of cash flow from operations. We're also in a strong position from a capital standpoint, and will continue to invest in our capabilities in order to best serve the needs of our customers. Regarding the economic outlook of 2023, while there's a lot of uncertainty regarding inflation and labor shortages, we expect further economic moderation as the impact of higher interest rates take effect. From an insurance standpoint, we're anticipating mid-market rate increases to be relatively consistent with last year. We expect catastrophe property rates to be up 10%-40% or more for at least the first half of the year, as well as capacity to potentially be constrained. It's not potentially, it will be constrained as the market needs to fully digest and impact, the impact of Hurricane Ian, as well as other insured losses. In addition, professional liability rates should continue to moderate downward. Regarding recent acquisitions, they're performing well and we're expecting good profitable growth in the coming year. On an M&A front, we have a good pipeline, we'll continue our disciplined approach to finding great companies that fit culturally and make sense financially. In summary, we feel great about our business, the diversity of our capabilities, and our ability to help customers with risk management solutions that best fit their needs. Our team of almost 15,000 has good momentum, we're looking forward to another strong year. With that, let me turn it back over to Norma for the Q&A session. Thank you. As a reminder, to ask a question, you'll need to press star one one on your telephone. To withdraw your question, please press star one one again. Please wait for your name to be announced. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question comes from Greg Peters with Raymond James. Your line is now open, sir. Great. Good morning, everyone. I know you don't like to forecast organic revenue growth, there are two items that one you called out in your commentary about catastrophe pricing, and secondly, in your Retail segment, you talked about some employee benefit headwinds, or the difficult comparison. When I think about 2023, Powell and Andy, how will those variables, such, you know, like the June 1st, 2023 renewals on property CAT and what's going on in employee benefits, how will that affect your organic results for this year, this upcoming year? Let's start with the second part first. Let's talk about employee benefits. Employee benefits overall performed really well for the year, and we're very pleased with those businesses. As we said in our prepared remarks, that was actually really only in one or two businesses that had a setback. Having said that, I think that EB, you know, will continue to perform well in the system. You know, we don't give organic guidance on that, and we don't break out lines of business. From an employee benefit standpoint, feel really good. As it relates to the CAT property pricing, the variable there, Greg, as you know, is not as much our... I mean, there are certain limitations on ability to present limits in some instances, but it's more of, in my opinion, it's more of an affordability issue. If you think about if you've been giving rate increases, let's just say to yourself, on your own personal lines, homeowners, if you got an increase of, let's say, 10% a year for four or five years in a row, and then all of a sudden we came on the fifth year and gave you a 25% increase, there's a... The buyers are tiring of that. Having said that, availability of capacity in this market is unlike anything I've ever seen. I've only been in the insurance industry for 33 years now, so, you know, there's a lot more to go. I've not ever seen anything like this. We will continue to provide solutions to our customers. Sometimes, you know, the example I think we used last time, and I would use it again, is if you have a, you know, an entity and they're paying $800,000 for their property and the renewal is $1.8 million, and they say, "What can we buy for $1 million? We just can't buy any more insurance. We can't afford it." We're seeing that more and more, Greg. The CAT pricing, is a more of a wild card. The other thing that we're seeing is, in the CAT capacity, in accessing it, in some instances, there's commission pressure downward on some of those placements now. A lot of people just think, well, if the rate goes up X, then, you know, your commission goes up X if you're on commission as opposed to a fee. That is true sometimes, but in this case, they might cut your commission 1 or 2 points. We're seeing that as well. That's a harder one to answer, Greg. Okay. I understand those. It's a moving target, especially in the Southeast. I guess for my second question, just pivot. You know, Andy, in your comments, you talked about, you know, yeah, you gave some guidance, and then on Adjusted EBITDAC margins, you said no tailwinds or headwinds for 2023. Maybe you can provide some context about is that it, you know, in terms of laying out expectations for the street, is it one where we just expect margins to be flat year-over-year? Or maybe, I don't know, give us some color to help us frame what your comments really mean. Sure. Well, I think what we're trying to say on that one, Greg, is we don't see any major headwinds or tailwinds going into the year. You know, we do have, like most everybody else, unknowns around what will happen with inflation and T&E, but we'll, you know, work our way through those pieces. Don't see any major incremental investments that we're making in the business that we need to call out externally. We're always making investments in our business, but we do that each year through everything. We do anticipate that T&E will be up year-over-year, just not to the extent of what we saw 2022 versus 2021 right now, so. That was really why we gave guidance going into 2022, 'cause that was a big variable. Right now, I've not seen anything specific that would impact the margins in 2023 versus 2022. Just a point follow-up on that. When you think about organic, you know, for 2023, you know, is there some sort of rule of thumb? I know some of your peers offer a rule of thumb that if organic's a certain amount, we can expand margins, if organic's not. I mean, do you have any sort of metric that you're thinking about in terms of organic as its impact on margins? No. Fair enough. Thanks for your answers. All right. Thanks, Greg. Thank you. One moment for our next question. Our next question comes from Rob Cox with Goldman Sachs. Your line is now open. Hey, thanks for taking my question. Just with respect to Retail, I was wondering specifically on group benefits if the tough comp was created by a true-up of exposure expectations in the prior year quarter or more so by a deceleration in growth this quarter? No, Rob. I think maybe the way to think about it is we had we had a few businesses last year that just had absolutely outsized performance in the fourth quarter. One of them was a newer business that was starting, it was in growth mode. That's what makes the year-over-year comparison in the fourth quarter difficult. As Powell mentioned in his comments, we feel really good about how our businesses are positioned and how they perform for 2022. We don't read more into that in the fourth quarter. There's no reason to. Got it. Thank you. That's helpful. Maybe just moving on to some of the Florida legislative changes. Yeah, any comments on what you think the impact of those might be for Brown & Brown in the near term and then perhaps longer term? Rob, first of all, we think that, based upon everything we see, they're positive for the operating environment for risk bearers and for insurers in the state of Florida. I'd like to point out that, we anticipate that the trial bar will challenge those. I don't think those go in place easily. I don't know what that means relative to timing and adoption relative to, you know, the marketplace. What our governor and the state of Florida is trying to do fundamentally is create a, one, viable, two, competitive, three, sustainable marketplace. The state of Florida does not really want to be so-called in the insurance business. With this disruption, they will have to be bigger in the insurance business for the next several years. I believe, we believe that this is a multiyear transition to bring the Florida marketplace, specifically, personal lines in Florida back to that kind of environment. It'll probably take three to five years to have some additional participation by the state of Florida, i.e. what they're proposing in this, and it may need more going forward, but it is not the intent of the governor to expand their participation, i.e. as being a state risk bearer. It's hard to tell because you got challenges ahead, you got other things. What we really want and need in the state of Florida is relatively affordable homeowners prices for all size homes, you know, with the Coverage A home of $200,000 versus one that's over $1 million, and everything in between. That's there's a lot of disruption across those, you know, all those sizes. Got it. Thanks. Maybe just lastly, could you quantify the annual growth bonus in National Programs and maybe specifically to programs where you see contingents going in 2023? I think, Rob, there's two pieces inside there. One of the things we talked about on the growth bonus, that was about $7 million. As of right now, we don't see that recurring in 2023. Again, that is inside of the organic calculation, not in contingent commissions. We didn't give guidance on contingents by the individual segments. Our comment was just overall for the company that, at least as of right now, see them relatively flat in 2023. Again, all depends upon loss experience during the year and overall growth and profitability. Thank you. Sure. Thank you. One moment for our next question. Our next question comes from Weston Bloomer with UBS. Your line is now open. Hi. Thanks for taking my questions. First one is just a follow-up on the employee benefits comment. Can you just remind us of the seasonality of that business, and do you expect there to be any material headwinds in the first quarter as well? Hey, good morning, Weston. The EB business does have some seasonality to it, and it's generally If you look across the quarters first, normally it's a little bit more weighted to Q1, and that's just because of the way in which revenue is recognized in that business. Then you normally see it, the fourth quarter is normally one of the lower. That's kind of just naturally how that business participates. From, you know, at least the, some of the headwinds and what we talked about in the fourth quarter, some of those may carry over into to Q1, don't see any, you know, issues on a full year basis, similar to our comments about how we thought about the business for 2022. Got it. Thank you. Then kind of similar type of question within professional lines. I know you highlighted a slowdown in D&O pricing. Is there any seasonality or how should we think about the impact of lower rates in that business both in Retail and then in Wholesale? The way I would just look at it is, if you think about an environment which has had rate pressure up for the last several years, and in some cases dramatically more in the public markets, they're coming down substantially because it's a very competitive environment. One might speculate, Weston, that people that are reducing their catastrophe property exposure would want to write business elsewhere and where might they do it, and they might say in casualty or professional lines. I think it's important to think of that as a headwind, slight, but a headwind on that segment of our businesses because I think it will be, you know, down and in some instances down, you know, a good bit. Great. Thank you. Last one, just on the margin. I know you highlighted no material headwinds or tailwinds, and maybe I'm getting too granular here, but it is the March 2022 M&A that came in at a higher overall margin. Is that business still running higher overall relative to kind of the core Brown & Brown? When you say the March, do you mean? Yeah, the margin guidance that you gave with the March... Oh, for the three, yeah. Yeah. For the three deals combined. Yeah. Yeah, all the businesses are performing in line with our expectations. We talked a little bit about some of the seasonality during the earnings call last quarter, but no, they're all kind of right in line with what we expected. Great. Thanks for taking my questions. Thank you. Thank you. One moment for our next question. Our next question comes from Elyse Greenspan with Wells Fargo. Your line is now open. Hi. Thanks. good morning. my first question, on the contingent commissions, Andy, I know you guys had that, those lender-placed contingents, weren't sure that they would recur next year. Does that assume that they come back, or what are you assuming for the lender-placed program? One of the items that we saw in the third or in the fourth quarter is we did recognize about $3 million or $4 million that we had anticipated we would not recognize in the fourth quarter. If you remember back to the call, we said we had backed out to the third quarter call. We had backed out $15 million year-to-date and said we probably would, therefore not recur in the fourth quarter. Development was not at the extent that we anticipated at that stage, which is, that's positive. We recognize those $3 million-$4 million. As we look to 2023, we would anticipate earnings some in 2023. Not back to kind of normal levels because there is some still carry over in the in the calculation. We've taken that into consideration when we've given guidance at a total level for the company of substantially flat. Okay. The interest income, right? I know in the past you guys had said maybe fiduciary income wouldn't be that big, but it sounds like you're seeing a little bit of a pickup there, right? You guys said $14 million-$17 million. Wouldn't that be accretive to your margins in 2023? Yes. If you look at it, by itself, that would be a true statement. It would be accretive to margins. I guess theoretically, maybe the interest income is a tailwind and that's getting offset by something else because it sounds like you're saying no headwinds, tailwinds, maybe flat margins overall. It does feel like that number in isolation would be a tailwind to the coming year. Yeah. Again, I think isolation, I think that's probably fair, Elyse. There's, you know, within our business, like most businesses, but at least we'll talk to ours specifically, there's always a lot of moving parts, and you've always got things kind of moving back and forth. That was really why we're trying to give guidance about any major tailwinds or headwinds that are out there. One last one. The employee benefits you guys said is concentrated in the first part of the year, but it does sound like what happened in the fourth quarter was maybe just, you know, just a really tough comp with last year. When we think about Retail, and I know you don't like to give guidance, but is there anything that stands out to start the year that would make, you know, the first part of 2023 have tougher comps than the back part of the year? Nothing at a top level. I think to Weston's earlier question is, will there be potentially a little bit of headwind in the first quarter from what we saw in the fourth quarter a little bit. We feel really good about our business and how it's positioned and the capabilities that we have to serve customers of all sizes in that business and feel like we'll perform well during 2023. Okay. Thanks for the color. Great. Thank you. Thanks, Elyse. Thank you. One moment for our next question. Our next question comes from Michael Zaremski with BMO Capital Markets. Your line is now open. Hey, good morning. Maybe focusing back on the dislocation in the parts of the property market. I'm just curious at a high level if your view has changed on whether this is whether the environment is kind of a net benefit or to growth or margins or net neutral or maybe even net negative. You know, there's a lot of moving parts. Clearly, you know, you came out and talked a little bit about some commission pressures, but, you know, rates are moving materially higher. Just kind of curious if you see that all the moving parts net is a wash potentially or if your view has changed. Yeah. No, I would say, Michael, it's probably a net positive but slight net positive. The reason I say I hedge with a slight is because of changes that we can't see in the market yet, i.e., limits for limits being reduced by carriers or some potential for any commission pressures or anything of that nature. Basically also clients just basically raising their hand and saying, "Look, uncle." I know that's tough, but it's true because we're the deliverer of bad news. When it comes like this. It'll be, I think it'll be slightly positive is how I would want you to think about that. Okay. That's helpful. Maybe switching gears to inflationary impacts on the income statement for Brown. I think there was a comment made about some unknowns on inflation and T&E. When I think about the Brown's, you know, commission model, I think of it kind of be somewhat, you know, more insulated from wage pressures due to the kind of how the frontline salespeople are paid. Maybe I'm wrong, and maybe you can just kind of elaborate on what you mean by kind of where like T&E and inflation. Let's talk about your comment around wage pressure. We're not immune to wage pressure. I think that's a very important thing. One of the things that we find, just like anybody else out there in our space, is the war on talent is very competitive, and people are looking for people, not just sales people, but they could be service people or marketing people or administrative, you know, people that administer claims or things like that. It's a very competitive marketplace, so I don't want you to think that we're immune to that because we are far from that. That's number one. Number two, when we say T&E pressure, it's not as though we think there's gonna be so much that much more travel and entertainment. We think that if you do the same, there's just significant pressure on, let's just say, an airplane ticket or a hotel, depending on where you're going. That's where we're seeing that pressure. Our business is not unlike, you know, many of the other businesses that you know or follow or all of the above. It is an inflationary environment. The pressure here, although it is high, is not as high as it is in England and in Ireland. That wage pressure seems to be higher there, but we're working through that as well. That's kind of what we mean by that, Michael. That's helpful. Just maybe sneaking one quick one in. Any impact from the flooding in California to the flood program that you administer that's could be material? No. We haven't seen anything, interestingly enough, in California. You know, as you know, they don't get a lot of rain to begin with. When they do get a lot of rain, they get significant flooding, and there are not a lot of people that buy flood insurance in the state of California. It's no, we don't see that. Mm-hmm. Thank you. Thank you. Thank you. One moment for our next question. Our next question comes from Yaron Kinar with Jefferies. Your line is now open. Hi. Good morning, everybody, and thanks for taking my questions. Morning. I guess my first question, and I think it maybe ties back to a couple of other questions you've already received. As you think about the property CAT rate environment, where do you see maybe which segments do you think would benefit most and which ones would you see maybe facing greater pressure from the various components you talked about, kind of reduced commissions, maybe more difficult difficulty placing business? I wanna make sure I understand that, Yaron. Can you just repeat the question or elaborate a little bit? You're saying, what do you think becomes more difficult and then what becomes easier? Is that what did I hear that correctly? I'm asking of the four segments that you have, or I guess really three, right, Retail, National Programs, and Wholesale, which do you think would benefit more and which would maybe face greater pressure? Okay. First off, I look at it a little differently than benefit more or not, you didn't use this term, or suffer more maybe is the term. You know, I didn't mean for that. Let's look at Retail for a moment. Retail has the good fortune. We deal directly with the customer, so you're gonna have a lot of heavy lifting relative to delivering those particular increases. You may have, as I said, you might have commission reductions in some instances. Rates gonna go up, and I'd say that it's mildly positive relative to organic growth in that business. In Wholesale, it makes their jobs, property brokers, significantly more difficult in trying to fill out lines of business. If you had a $100 million line and it was handled by one or two markets, and then now, that market that took 80% of it is pulling back or cutting their participation, you gotta put six or seven markets in to get your $100 million. That said, there will continue to be pressure there as well, and I think that there's more the most conflict, if you wanna call it that, in placements will be in Retail and Wholesale. In National Programs, it's a matter of CAT capacity availability. As you know, there are a number of carriers out there who have allowed their capacity to be underwritten, by a number of different type of MGAs and MGUs, and a number of those were not profitable, not just last year, but over many years before. There's what we consider a flight to quality. and in the sense of our underwriting facilities, we're very pleased with the results that we've delivered prior to, excuse me, last year and including last year with the losses in Ian and then Nicole. I'd say that in programs, it's a different thing. Their growth potential is limited by availability. It's not the conflict of. In the, in the other two, there's the hand-to-hand combat of getting people to actually put limits up and do it. In the, in the underwriting facilities, we have that authority, and we can do what we can do, but we're limited by the capacity. if in fact, a market or markets decide to cut back on their capacity they give to us, that will impact our ability to grow. Conversely, if they decide to change their commission level, and that would impact our ability to grow. The one thing that I do wanna mention, I think it's important for everybody to think about this. Things are never as good as they seem or as bad as they seem. What I mean by that is, even though the CAT market is very challenged right now, there will be a time in the future where it improves. I'm not foreshadowing something because we don't have a crystal ball. That doesn't mean 12 months from now we're gonna have X or Y or Z. That's not what I'm saying. There are certain markets that are approaching it in a way that, you know, they are looking very opportunistically at it. There are other markets that are looking at it like a long-term partnership. Obviously we would prefer the latter as opposed to the former, but we're out looking for capacity globally. I just want everybody to kinda know that this pressure too will pass at some point. Thank you. That's helpful color. If I could switch gears to M&A for a second. I think you had said that the pipeline remains robust. That said, you are seeing M&A activity slowing. Is that just a function of a bid-ask spread that is too wide, or are there other drivers there? No, no. I think, and when you say the M&A activity is slowing, remember, we're talking about the industry. As you know, private equity has been a very big participant, and the number of private equity announced transactions in Q4 was down substantially over the prior quarters and/or Q4 of the prior year. I think that there is this interesting sort of... We're kind of at this unusual clash point, if you wanna call it that, which is the market with increased interest rates, and buyers would like to see a slight decrease in multiples paid. Yet there are businesses, some of which are owned by private equity, that would like to monetize their businesses at what were historic levels or multiples in anticipation of other opportunities for them. Maybe better said, maybe they think that they think there will be pressure on multiples going forward, so they wanna get out at a higher multiple, if possible, than they might think of in a year from now. I'm just using that as an example. I think we're gonna see a lot of activity, in the next 12 months. The good part about our business is we're focused on the long term, and long term to us is not one year or three years. It's a very long time. So, we're looking for businesses that fit culturally and make sense financially, and we believe there will be those businesses out there. In the interim period, as Andy said, we're aggressively paying down our debt. We're investing in teammates, and focused on growing our business organically. Thank you very much. Thank you. Thank you. One moment for our next question. Our next question comes from Mark Hughes with Truist. Your line is now open. Yeah, thank you. Good morning. Morning. Powell, you had talked a good amount about your quest for capacity. Did you find any restrictions? Have you seen with the harder reinsurance markets any cutback on your programs, here thinking about flood or quake, for instance? Anything that is noteworthy could perhaps impact organic growth? Yeah. Thanks for the question. That is somewhat of a moving target, but at the present time, we think a good outcome is flat in terms of no reduction in capacity. We may have certain entities or businesses where they would maybe be trading some capacity or debt net down on a net basis just slightly. Right now we think it's pretty neutral. From our vantage point, we view that as a win. I'm not aware of something, and you specifically asked about flood or quake, but that could involve our wind facilities as well. The thing that we talked about last year, and we've talked about in prior years, but it's even more magnified this year, our growth opportunities in National Programs will be directly, and not exclusively, but directly linked to the amount of new capacity that we're able to secure. If in fact we're not able to procure any new capacity, that's gonna be a slight limitation on the organic growth. That does not mean that we can't grow organically. It just means that we will grow more organically if we're able to secure more capacity, which we're looking at globally. Understood. On the captives, you mentioned some of the economics there, $30 million-$35 million in revenue, but you've got loss retention of $13 million per event. One would think you would need a pretty high margin on that revenue in order to feel good about generating a return over multiple years if you've got that kind of retention. Am I thinking about that properly? Well, I'm gonna answer your question twofold. Number one, I want you to think about what a captive is. There's really three parts to the captive. There is the loss, the retention amount that you retain on any one loss. That's just losses. There's number two, which is the reinstatement premium, which means you put the program back in place for a subsequent event. The third would be if you had any profits in that period of time in that captive prior to them being distributed. What I would tell you is that we are very mindful of the way we invest our capital, and we are looking for returns that help us grow the business. What I would tell you is if we did not think that those were reasonable long-term investments, we would not make them. In the event that the economics turn against us, meaning cost inputs or things make them not viable, then we just won't do them. Hey, Mark, just a question for you, if you can expand on something. When you said you talked about providing adequate returns, how do you walk us through how you mean that? Because I guess I think we're maybe not seeing it the same way you are, but if you're saying. Yeah. No. We're retaining I think you're pointing. Yeah. Yeah. If you're generating $30 million in revenue and say you have a 50% margin of $15 million, if your retention per event is $13 million and maybe a hurricane hits Florida one out of three years, then that influences the view of the economics. That was the just real simple math that I was thinking about. Okay. All right. Therein probably lies the opportunity to clarify on these some more. Here's the way we want everybody to try to think about these, is what we're doing is we're participating in the underwriting profits on these captives. What do we do on contingent commissions? We participate in the underwriting profits. This is not where they're coming in, and we're paying commissions and everything else on the business. I think that's part of just the piece that maybe you're thinking about. It's traditional, call it operating profit. It's coming through as, excuse me, it's normal operating profit versus underwriting profit in there. We're very, very pleased with the performance this year. To Powell's point, we wouldn't put our capital into these if we didn't think that we could get an appropriate return. The $13 million mark is up to. That doesn't mean it would be $13 million. Exactly. Yep. There's a very important distinction. It can be less than that or substantially less than that. Appreciate the clarity. Thank you. No, thank you. Thank you. One moment for our next question. Our next question comes from Michael Ward with Citi. Your line is now open. Thank you, guys. Good morning. One last one, maybe. I was wondering if you could share any color on the profit commissions in Programs, and if any of that was related to maybe Hurricane Ian true-ups? Hi. Good morning, Michael. Andy here. Is the wouldn't say anything that was related to Hurricane Ian true-ups, right? What we did at the end of the third quarter is we had backed off the $15 million, as we mentioned earlier, and we had also at that point said, based upon what we thought the losses were going to be, we would not record $3 million-$4 million in one of our programs. That development did not come in at the anticipated level, which is again, that's a positive thing. We did go ahead and record that $3 million or $4 million in the fourth quarter. All of the other contingents that we recorded in the fourth quarter, that was all based upon the profitable growth that we delivered for our carrier partners and just we do year-end calculations, and sometimes, you know, you make it, sometimes you don't. That's why we see generally the most volatility in our National Programs. They move back and forth. Super helpful. Thank you. Maybe one last quick one just on the pressure in specialty. I think you called out auto, lower auto and RV sales. Is there anything else there that we should be thinking about? No, I don't think so. I mean, remember, if you think out a little bit, you know, sort of speculate on the outlook on that industry, I think probably inventory levels will probably lift a little in the third quarter and beyond in the year. Also, in light of the economic environment, there will probably be some more incentives. I don't know that, but incentives put in place to move units. If the inventory is there, and I use the most important thing is we can't, you know, fully predict that. We think you're gonna see some uptick in that, but slight. Okay. Thanks very much, guys. We'll take one more question, Norma. That'd be great. Thank you. Our next question comes from the line of Derek Han with KBW. Your line is now open. Good morning. Thank you. Just had a question on the Programs business. Andy, I think you previously talked about your expectation for Programs organic growth to kinda moderate. Even excluding the $7 million that you called out, organic growth was really strong, and it actually accelerated sequentially. Can you just give us some more color on what kind of drove that outperformance relative to your internal expectations? Yes. One of the other items in there we talked about it was, we said we delivered $25 million of revenue from the captives, and about $5 million of that came through, the Orchid acquisition. The, the remainder of that being on the organic side. We're gonna see continued growth in 2023, but not at that same level, Derek. Got it. Okay, that's helpful. Then just one quick one. I know the GRP and BdB integration is going well. Can you just give us some color on European economic outlook and the anticipated impact on the organic growth for those businesses? Sure. Remember, GRP is England and Ireland, both Republic of Ireland, and we have businesses already in the Republic of Ireland and Northern Ireland. BdB, we do business in Italy, meaning we are the largest producer of Italian business into Lloyd's. That's over 50% of that business. Then we do business in France and in Belgium, and we also do business, obviously, in England into the London marketplace. What I would tell you is that in England, it's not dissimilar to here, which you see a lot of, you know, pressure on wages and cost of living, i.e., fuel oil and things like that. But from a customer standpoint, we have not yet seen a significant downdraft on their buying habits. What I would tell you is, we think that, you know, the economy seems to be, you know, moving along in a fine way there. As it relates to our exposure, although it be much smaller in Western Europe, we're not seeing any other unusual trends either. Remember, Lloyd's is a big market globally. I think about 50% of their premium writings are in the United States, but the other 50 are worldwide. We are continuing to have nice growth inside of our Lloyd's brokers, which we have now three. We're very pleased. That's Decus, Lonmar, and BdB. Okay. Thank you. Great. Thank you. I'm showing no further questions. I'd like to hand the conference back to Mr. Powell for any closing remarks. Thanks, Norma. Thank you all very much. We appreciate your time and energy. We thought last year was a really good year, and we're excited about the future. I think my final comment would be this. As it relates to trends, we don't think a trend is one quarter, and we don't measure the outcomes of business over a quarter. We look at years and multiple years. As it relates to each of our three largest segments, we feel good about going into next year. There are some limitations, i.e., because of market constraints and economic constraints, we're gonna work our way through those. We look forward to talking to you next quarter, and have a nice day. Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.