Willis Group reported net income of $117 million, or $0.64 per diluted share, during the third quarter ending Sept. 30, compared to a net loss of $7 million, or $(0.04) per diluted share, in the prior year quarter.
For the first nine months of 2015, net income was $397 million, or $2.18 per diluted share, up 38.9 percent from $286 million, or $1.57 per diluted share, during the same period a year ago.
During the third quarter, commissions and fees were $841 million, up 4.1 percent from $808 million reported during the third quarter of 2014.
For the first nine months, commissions and fees rose 0.4 percent, compared with 3.9 percent during the same period in 2014.
Underlying commissions and fees, which exclude the impact from foreign currency movements, grew 10.5 percent during the third quarter, compared with 2.5 percent for the third quarter in 2014. For the first nine months of 2015, underlying commissions and fees were 7.0 percent, compared with 3.7 percent reported for the nine month period last year.
Organic commissions and fees, which exclude both the impact of foreign currency movements and the net impact of acquisitions and disposals, grew 3.3 percent, which the company said was led by strong growth in Willis International and Willis CWR, partially offset by a modest decline in Willis GB.
3rd Quarter Expenses
On a reported basis, third quarter total expenses increased $41 million, or 5.3 percent, to $819 million, from $778 million in the third quarter of 2014. Expenses include $75 million from net acquisitions and disposals, of which $12 million was amortization of intangibles, $24 million of restructuring costs related to the Operational Improvement Program and $15 million of M&A transaction-related expenses from the acquisition of Gras Savoye and the proposed merger with Towers Watson, partially offset by $52 million from favorable foreign currency movements.
Underlying total expenses, which exclude restructuring costs, foreign currency movements, and M&A transaction-related expenses, grew 10.3 percent, Willis said.
Organic total expense growth, which further excludes the net impact of acquisitions and disposals, grew 1.0 percent, driven primarily by modest increases in salaries, partially offset by reduced pension expense and lower professional fees compared to the prior year period.
Dominic Casserley, Willis Group chief executive officer, commented, “We had another quarter of successful execution and solid performance, generating mid-single digit organic growth and expanding positive spread between organic commissions and fee growth and organic expense growth to 230 basis points. This was the fourth consecutive quarter of year-over-year improvement in operating margin on both an underlying and organic basis, demonstrating that our initiatives, including the operational improvement program, are gaining traction.”
“Despite the continued uncertain global economic and insurance market outlook, our strategy and execution have allowed us to generate consistently positive results. We believe we remain on course to achieve mid-single digit organic growth and stronger underlying revenue growth this year,” Casserley continued.
“Given our continued success in re-engineering costs and improving margins, we remain confident that we will deliver at least 200 basis points of positive spread between organic commission and fees and expense growth. Willis is in very good shape, and we look forward to the successful completion of the Gras Savoye acquisition and proposed Willis Towers Watson merger, which we believe will accelerate our strategy and create further value for all shareholders,” he said.
Source: Willis Group
Topics Profit Loss Willis Towers Watson
Was this article valuable?
Here are more articles you may enjoy.
Allstate Reports $731M in Q1 Pretax Catastrophe Losses 
California Sees Two More Property Insurers Withdraw From Market 
JPMorgan Client Who Lost $50 Million Fortune Faces Court Setback 
Progressive Gains as Drivers Shop Around for Auto Insurance—Again 
