Brown & Brown’s profit rises on higher income from fees, investments

By Thomson Reuters Apr 22, 2024 | 4:39 PM

(Reuters) – Brown & Brown posted a rise in first-quarter profit on Monday as the insurance brokerage earned more in commissions and fees, while investment returns also improved.

The insurance industry has cemented its reputation as ‘recession-proof’ as corporate and government spending for policies is typically steady and does not fluctuate due to cutbacks in budgets or amid an economic slowdown.

Insurance brokerages such as Brown & Brown serve as a bridge between an insurer and customers, helping clients find a policy which best suits their needs.

The company’s core commissions and fees increased to $1.19 billion in the three months ended March. 31, from $1.08 billion, a year earlier.

Meanwhile, a higher interest rate environment has also helped investment income at insurers, who invest a chunk of their cash in safe-haven assets. The broader equity capital markets have also rallied this year.

The company’s investment income climbed to $18 million in the reported quarter from $7 million in the year-ago period.

Brown & Brown is one of the largest independent insurance brokerages in the U.S. specializing in risk management. It operates through four business segments – retail, national programs, wholesale brokerage and services.

The company’s total revenue rose 12.7% to $1.26 billion in the quarter. It posted adjusted earnings of $1.14 per share, up from 96 cents a year earlier.

(Reporting by Pritam Biswas and Manya Saini in Bengaluru; Editing by Shailesh Kuber)