JLT Reports $211 Million Net Pretax Profit

February 23, 2004

Jardine Lloyd Thompson, the U.K.’s largest insurance broker, posted £132.7 million ($211.5 million) in pretax earnings before adjustments for goodwill and exceptional items, compared to a restated figure of £102.3 million ($190 million) in 2002.

The figures, according to a report from Reuters, were largely in line with analysts’ forecasts, and were impacted to some extent by the weakness of the U.S. dollar against the pound sterling, which continues to affect business generated in dollars. Reuters quoted JLT CEO Steve McGill as indicating: “Looking ahead, if the U.S. dollar remains at its present levels, this will inevitably have an impact on our reported results over the next two years.”

JLT reported a £157 million ($292 million) deficit in its U.K. pension scheme, which it said would translate into a balance sheet liability of £109.9 million ($204.4 million) after allowance for deferred tax. It announced a special one-off contribution of £50 million ($93 million) into the pension scheme in 2004 to reduce the deficit, and said the group’s UK defined benefit scheme would be closed to new entrants.

JLT also remains optimistic that the insurance market in general will remain firm over the next two years, despite some softening in certain sectors. This indicates that most companies seem to be sticking to their commitments to observe underwriting discipline, rather than trying to achieve greater market share by lowering premiums – a hopeful sign for the industry.

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