(Reuters) – Insurance brokerage Brown & Brown’s second-quarter profit increased about 35% on Monday as the company earned higher commissions and fees along with robust returns on its investments.
Hopes of a soft landing for the economy coupled with rising wages have prompted businesses to revive spending on insurance policies, boosting business for brokerages that earn commissions tied to premiums paid to insurers.
Commissions and fees for the brokerage rose to $1.15 billion in the second quarter ended June 30, from $1.04 billion a year earlier.
The Daytona Beach, Florida-based company markets and sells insurance products and services primarily in the property, casualty and employee benefits areas.
Brown & Brown, like its peers, also invests partly in short-term money-market funds and fixed income investment securities.
Higher interest rates have boosted the returns from such investments.
The company’s income from investments more than doubled to $22 million in the quarter from $10 million a year earlier.
Its total revenue jumped 12.5% to $1.18 billion in the quarter, compared with last year.
Net income rose to $257 million, or 90 cents per share, in the quarter, compared with $190 million, or 67 cents per share, a year ago.
Shares of the company have gained 31% so far this year, compared with a 15.4% jump in the benchmark S&P 500 index.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Mohammed Safi Shamsi)
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