(Reuters) – Insurance brokerage Brown & Brown reported a 13% rise in first-quarter profit on Monday, benefiting from higher income from commissions and fees.
Insurance brokerages, such as Brown & Brown, serve as a bridge between an insurer and customers, helping clients find a policy that best suits their needs. Unlike insurers, they do not directly sell policies.
Economic uncertainty, coupled with increased business risk from cyber attacks and natural disasters, has sustained insurance spending as risk management becomes more critical than ever.
Brokers like Brown & Brown benefit as consumers buy more insurance product, earning revenue on the sale of such products.
The company’s commissions and fees jumped 12% to $1.39 billion in the three months ended March 31.
The company’s investment and other income, however, dropped to $19 million in the reported quarter from $21 million in the year-ago period.
Earlier this month, peer Marsh McLennan’s beat Wall Street estimates for first-quarter profit.
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.
Net profit attributable to Brown & Brown rose to $331 million, or $1.15 per share, in the January-to-March quarter, compared with $293 million, or $1.02 per share, last year.
Brown & Brown, which specializes in risk management, reported an 11.6% jump in total revenue to $1.40 billion.
In February, the company named former Willis Re and Inver Re CEO Steve Hearn as chief operating officer.
Shares of the company rose marginally in trading after the bell. (This story has been refiled to fix a typo, in paragraph 10)
(Reporting by Ateev Bhandari in Bengaluru; Editing by Shailesh Kuber)
