Lowering Brown's Moat Rating

We have lowered our moat rating on Brown & Brown BRO, and as a consequence we have lowered our fair value estimate slightly. Although we continue to believe Brown has a strong business capable of generating returns in excess of its cost of capital, we've concluded that the firm's competitive advantages have weakened somewhat. Historically, Brown has led its peers in terms of organic growth, a sign that it was able to consistently provide differentiated service for its clients. More recently, the tides seem to be turning as Brown has been lagging its peers on this score. Furthermore, though we like Brown's operating structure and motivating culture, we don't feel this factor makes for as strong a competitive advantage as in the past.