The U.S. insurance brokerage sector remains financially solid despite ongoing economic challenges, according to an Industry Scorecard report by New York-based Moody's Investors Service.

“While the economic downturn and lower pricing resulted in marginal or even negative organic growth for some insurance brokers in 2009, overall the industry was able to maintain profitability," Moody's said in the Monday report. “A valuable service offering, a high proportion of variable costs, and lack of underwriting or investment risk helped the industry remain profitable, though revenues declined from 2008 levels,” the rating agency said.

Insurance brokers have dealt with market challenges in several ways, including cutting costs, getting out of noncore operations and “generally slowing the pace of acquisitions,” Moody's said.

The report noted that the February end of a New York state ban on the largest brokers' ability to accept contingent commissions could positively affect those brokers, although Moody's also noted that Willis Group Holdings P.L.C. has said it will not accept contingents. Moody's said it expects Willis “will negotiate other forms of compensation, mainly higher upfront commissions” as an alternative.

Copies of the report, “Insurance Brokerage Industry Scorecard,” are free for Moody's subscribers. Nonsubscribers can get ordering information at www.moodys.com.