Comparative Analysis of ROIC and WACC in the Insurance Brokerage Industry

Core Insights - Brown & Brown, Inc. operates in the competitive insurance brokerage industry, alongside peers such as Arthur J. Gallagher & Co. and W. R. Berkley Corporation, with a focus on evaluating Return on Invested Capital (ROIC) against Weighted Average Cost of Capital (WACC) [1] Company Performance - Brown & Brown's ROIC is 4.89%, which is lower than its WACC of 7.00%, resulting in a ROIC to WACC ratio of 0.70, indicating insufficient returns above its cost of capital [2][6] - Arthur J. Gallagher & Co. has a ROIC of 5.29% and a WACC of 6.24%, leading to a ROIC to WACC ratio of 0.85, which also suggests challenges in capital utilization [3] - W. R. Berkley Corporation demonstrates a strong ROIC of 55.96% against a WACC of 5.35%, yielding a ROIC to WACC ratio of 10.46, indicating effective capital management [4][6] - RenaissanceRe Holdings Ltd. leads the industry with a ROIC of 131.46% and a WACC of 4.79%, resulting in a remarkable ROIC to WACC ratio of 27.47, showcasing exceptional capital efficiency [5][6]