View this article online: https://www.insurancejournal.com/news/national/2007/08/02/82237.htm
Willis Group Holdings Limited (NYSE: WSH), the global insurance broker, today reported results for the quarter and six months ended June 30, 2007, including net income of $78 million compared to $72 million a year ago, an increase of 8 percent.
Earnings per diluted share increased 20 percent to $0.54 in the quarter ended June 30, 2007, up from $0.45 a year ago.
Total reported revenues for the quarter ended June 30, 2007 rose 6 percent to $626 million compared to $593 million in the second quarter 2006.
Organic growth in commissions and fees, which excludes market remuneration, was 4 percent in the second quarter 2007. This growth was attributed to net new business won of 5 percent; there was a negative 1 percent impact from declining premium rates tempered by other market factors such as higher commission rates, higher insured values and changes in limits and exposures.
Operating margin was 22.0 percent for the quarter ended June 30, 2007 compared to 20.1 percent for the same period last year, an increase of 190 basis points. The margin improvement continued to be driven by the firm’s “Shaping our Future” initiatives, cost savings from the 2006 charges, good expense control and lower pension expense. This was tempered by the negative effect of foreign currency translation in the second quarter 2007.
Salaries and benefits expenses were $360 million, or 57.5 percent of total revenues, in the second quarter 2007. This ratio compares favorably with $351 million, or 59.2 percent of total revenues in the prior year quarter.
Other operating expenses were $114 million, or 18.2 percent of total revenues, in the second quarter 2007, comparable to $108 million, or 18.2 percent of revenues, in the second quarter 2006.
Practical completion of the new building in London was achieved at the end of the second quarter; additional lease expense of $7 million per quarter will be recognized beginning third quarter 2007.
Six Months 2007 Financial Results
Net income for the six months ended June 30, 2007 was $247 million compared to $212 million a year ago, an increase of 17 percent.
Total reported revenues for the six months ended June 30, 2007 were $1.4 billion, an increase of 8 percent compared to the prior year.
In the second quarter 2007, the company acquired Chicago-based InsuranceNoodle, an Internet distributor of U.S. small business property/casualty insurance with annual revenues of approximately $6 million. The company also purchased an additional 17 percent holding in Coyle Hamilton Willis, the largest insurance and re-insurance broker, pensions, actuarial and risk management consultancy in the Republic of Ireland, raising its total shareholding to 86 percent.
As at June 30, 2007, cash and cash equivalents totaled $142 million, total debt was $1.2 billion and total stockholders’ equity was approximately $1.2 billion.
Outlook
For the full year 2007, Willis said it expects to continue to grow organic revenue and expand adjusted operating margin modestly.
A conference call to discuss second quarter 2007 results will be held August 2, 2007 at 8:00 a.m. Eastern Time.
Source: Willis Group Holdings Limited
www.willis.com.