Insurance broker WTW beats second-quarter profit estimates on robust product demand
Despite rising premium costs, businesses increased spending on insurance products as they prioritized financial protection in response to the growing frequency and severity of extreme weather events.
Insurance brokers' commissions are tied to the premiums insurers charge.
Revenue from its risk and broking unit, which advises clients on risk management and lets them negotiate and place policies with insurers, rose 7% to $1.05 billion.
Rising concerns about a potential trade war have also fueled demand for risk advisory and consulting services, a core area of expertise for WTW.
The company posted adjusted net income of $285 million, or $2.86 per share, for the three months ended June 30, compared with $247 million, or $2.39 per share, a year earlier.
Analysts on average were expecting earnings of $2.60 per share, according to data compiled by LSEG.
However, revenue from its health, wealth and career segment - the company's largest - fell to $1.18 billion from $1.26 billion a year ago, due to the sale of TRANZACT.
Total revenue in the reported quarter remained flat at $2.26 billion.
WTW's shares fell about 3.6% this year, compared to peers such as Aon (AON.N), opens new tab and Marsh & McLennan (MMC.N), opens new tab, which lost 1.1% and 5.6%, respectively.
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