(Reuters) – Insurance brokerage Brown & Brown beat fourth-quarter profit estimates on Monday, driven by robust growth in investment returns and increased commissions and fees.
Insurance spending has remained resilient despite economic uncertainties, as businesses and individuals prioritize coverage to safeguard against risks such as natural disasters, cyberattacks and health emergencies.
The necessity of protecting assets and ensuring business continuity has kept demand steady, even as inflation and elevated interest rates put pressure on other discretionary spending.
This stability underscores the essential nature of insurance, which often sees consistent or increased demand during periods of heightened economic volatility.
The company’s commissions and fees jumped 15.4% to $1.16 billion in the fourth quarter.
Meanwhile, its investment income increased to $22 million, compared with $18 million in the year-ago period. Insurers typically invest a portion of their capital across asset classes such as fixed-income securities and equities, which tend to generate returns in line with broader market trends.
For 2024, the Nasdaq surged 28.6%, while the bellwether S&P 500 notched a 23.3% gain, marking the index’s best two-year run since 1997-1998.
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 insurance agents, who typically represent a single insurer, brokerages work with multiple insurance providers to offer a broader range of coverage options.
Brown & Brown’s adjusted net income per share came at 86 cents per share in the fourth quarter ended Dec. 31, beating expectations of 77 cents, according to data compiled by LSEG.
Total revenue increased 15.4% to $1.18 billion.
Shares of the company rose nearly 0.6% after the bell. The stock surged roughly 43.5% in 2024, handily outperforming both the Nasdaq and the S&P.
(Reporting by Jaiveer Singh Shekhawat and Manya Saini in Bengalur; Editing by Maju Samuel)
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