From the February 27, 2012 issue of National Underwriter Property & Casualty • Subscribe!

Willis Q4 Net Income Plummets; Firm to Accept Some Contingent Commissions

A culture clash between Willis Group Holdings and Hilb, Rogal & Hobbs (HRH), acquired in 2008, led to a significant amount of business lost in North America, contributing to a 57 percent drop in net income for Willis’ 2011 fourth quarter.

The global insurance broker reports Q4 2011 net income dropped $59 million vs. the prior year to $44 million. Revenues were down 1 percent, or $8 million, to $825 million.

For the year, net income was down 50 percent, or $235 million. Revenues on the year grew 4 percent, or $121 million, to $3.45 billion.

“We fell short,” Willis Chairman and CEO Joe Plumeri said during the company’s earnings call. “I’m glad 2011 is behind us.”

Plumeri said the poor business results were the product of a combination of HRH producers leaving Willis and taking business with them; poor performance in its mortgage-insurance placement-services company Loan Protector; and European economic conditions negatively impacting earnings.

Plumeri also said that beginning in April, the firm will collect contingent commissions on employee-benefits business.

Willis does not take contingent commissions on its brokerage business, and Plumeri has long been a vocal opponent of taking them because he feels they can have an undue influence on business placements. He said the firm is switching policy because of changes in compensation as a result of health-care reform cutting into commission payments.

The move does not signal a change in the firm’s overall commitment to not accepting contingent commissions, he added.

Comments

Resource Center

View All »

Complimentary White Paper: The Compression of Workplace Time

How brokers and carriers respond to the compression of workplace time will create significant competitive...

The Changing Insurance Consumer: 6 Ways to Create Profitable Relationships

Today’s mobile and web-savvy consumers have new expectations when it comes to interacting with your...

Contractors General Liability Coverage 102

What is a prior work exclusion? Which option is right for my client? Why do...

Sign up today to get a 50% matching credit -...

Insurance marketing sometimes seems like it's a game of swings and misses, but we're here...

Guide: 5 Steps to Selling Cyber

Cyber risk and data security is on the agenda of every business owner and executive....

Citation Correlation

Do rigger and signalperson qualifications correlate with the cause of crane and rigging accidents? ...

Complete Guide to Electronic Signatures in Property & Casualty Insurance...

In property and casualty insurance, closing new business quickly is key. Learn how to leverage...

INSTANT ACCESS: Complimentary Sales Closer Questionnaires

Help property owners or managers compare your commercial residential property insurance coverage vs. the competition....

Determining Vacant Property Perils and Valuations

Are your clients fully covered for Vacant Properties? In this economic climate, your insureds may...

Risk Management for Law Firms

This package of 3 concise risk management articles offers straightforward content and practical suggestions law...

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.