(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)
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