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Willis reports profit rise

Willis has reported second-quarter net income of $US70 million ($95.97 million), up 49% on the corresponding period last year.

Commissions and fees fell 1.3% to $US917 million ($1.26 billion), hit by $US59 million ($80.89 million) from unfavourable foreign currency movements.

Total expenses gained 3.8% to $US817 million ($1.12 billion), partly due to costs arising from the acquisitions of Miller Insurance Services and Gras Savoye, and the proposed merger with Towers Watson.

Willis International performed well thanks to double-digit growth in Latin America and China, but “weakness in Australia was largely driven by the cancellation of a large infrastructure project”.

For the six months to June 30, net income was down 4.4% to $US280 million ($383.89 million).

Willis Group CEO Dominic Casserley says the outlook for insurance rates across many segments is “not helpful”, but the company is well positioned for growth.

“We continue to believe we will generate mid-single-digit organic growth for the year and, given our solid expense management performance to date, we are now increasing our [full-year] expectations for positive spread between organic commissions and fees and expense growth from 130 basis points to 200 basis points.

“This provides an excellent earnings platform for our proposed merger with Towers Watson.”