Insurance broker WTW posts higher Q2 profit on robust product demand

(Reuters) – Insurance broker WTW posted a 20% rise in its second-quarter profit on Thursday, helped by a strong performance in its risk and brokerage business.

The company also raised the lower end of its forecast range for annual profit. It expects 2024 adjusted earnings per share between $16 and $17 compared with the prior view of $15.40 to $17.

Hopes of a soft landing for the economy have prompted businesses to spend more on insurance products despite higher prices, boosting WTW’s income in its risk and brokerage unit.

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 9% to $979 million.

Rising medical costs can also bolster demand for the advice offered by firms like Willis, which helps businesses manage healthcare insurance for employees.

Revenue from health, wealth, and career – the company’s largest segment – rose to $1.26 billion from $1.22 billion a year ago.

Total revenue in the quarter jumped 5% to $2.27 billion.

The company posted adjusted net income of $263 million, or $2.55 per share, for the three months ended June 30, compared with $219 million, or $2.05 per share, a year earlier. (This story has been refiled to correct the spelling of ‘robust’ in the headline)