BGC Insurance Group, a division of global brokerage and financial technology firm BGC Partners Inc., has posted a 42.8% increase in revenue during the first quarter of 2020.
Revenues totalled $44.8 million in the last quarter, compared to $31.4 million for the same period in the previous year.
BGC Insurance, whose subsidiaries include London brokers Ed and Besso, attributed the increase to organic growth across its businesses, as well as the acquisition of Ed.
Overall, BGC Partners posted total revenues of $603.2 billion in Q1 2020, representing a 10.7% increase over the $544.8 million that it reported in Q1 2019.
The company noted that its energy and commodities, credit and equities businesses experienced strong double-digit growth, offset by a decline in foreign exchange revenues and the relative strengthening of the US dollar.
Additionally, BGC is expecting even greater demand for certain types of policies it brokers during the COVID-19 pandemic.
It explained that the brokerage industry has generally performed well during past economic downturns, and expects business to remain strong despite some clients facing financial hardship or dislocation due to the pandemic.
“As we have said in the past, during periods of market turbulence, our clients often value the insight our brokers provide,” said Howard W. Lutnick, Chairman and Chief Executive Officer of BGC. “As a result, voice brokers added more liquidity and market share over these past several months in many areas where clients had access to our liquidity equally via voice or electronics.”
“This dynamic caused what we believe was a temporary shift by traders toward voice execution in many markets. This was due to both the extreme levels of volatility across many asset classes, as well as the disruptive physical dislocations faced by our brokers, clients, and the customers of our clients,” Lutnick continued.
“However, our clients have indicated that, looking forward, the dislocations caused by COVID-19 have resulted in an even greater desire on the part of market participants to integrate our electronic execution, because of the best-in-class market liquidity only integrated global firms like BGC can provide. We expect this trend to improve our electronic brokerage revenues and profitability over time.”
