NU Online News Service, Feb. 4, 2:33 p.m. EST

Willis Group Holdings plc reported fourth quarter net income last year grew 27 percent as the firm completed its integration of Hilb, Rogal & Hobbs Co.

The global insurance broker reported fourth-quarter net income increased $17 million to $79 million, or 47 cents a share. Revenue in the quarter rose 4 percent, $32 million, to $824 million.

For all of 2009, net income rose 45 percent to $2.59 a share, increasing by $135 million to $438 million. Revenues were up 15 percent, or $436 million, to $3.26 billion.

"The best thing I can say is that 2009 was an amazing year as we tackled a number of external and internal challenges," said Joe Plumeri, chairman and chief executive officer of Willis, during a conference call with financial analysts. "In the middle of a soft market environment and a global recession, we delivered."

Willis reported 2 percent organic growth in commissions and fees for both the quarter and year. The growth reflected new business for the firm but was offset by soft market pressures.

Mr. Plumeri said the integration of HRH into Willis was almost complete and that the expected benefits of the acquisition have "exceeded our synergy targets."

Don Bailey, CEO of Willis North America, said the integration has led to $60 million in savings in the fourth quarter and $205 million for all of last year, double the original targets. More savings are expected in the coming year.

Producer and client retentions remain high, he said, with only 3 percent "of producer revenue tied to producers leaving." Client retention for Willis North America is at 91 percent, he continued, consistent with years past "and in the midst of an integration, not easily achieved."

He said all office and staff relocations are complete with 5,400 associates "impacted by real estate moves."

On the issue of contingent commissions, over 90 percent of HRH contingents have been converted to higher upfront commissions, he said.

Under an agreement reached in 2005 with New York's Attorney General's Office, Willis stopped taking contingent commissions, which investigators said had been hidden from clients and served as kickbacks to steer business to insurers involved in a bid-rigging scheme.

For the coming year, Mr. Plumeri said the company plans to pay down debt and buy back stock. He said if there are any acquisitions, they will be small. He added, "I hope we have as good a year in 2010 as we did in 2009."

Willis said it plans to pay a quarterly cash dividend of 26 cents per share on April 16 to shareholders of record as of March 31.

This was the last conference call for Willis' current chief financial officer, Patrick C. Regan, who is leaving the company to become the CFO of Aviva plc.

Yesterday, Willis named Stephen E. Wood interim CFO. The company said Mr. Wood joined Willis in 2006 and has more than 19 years experience in banking, finance and public accounting.

The firm is continuing its search for a permanent CFO, Mr. Plumeri said

Special Reports /

Willis Reports 4Q Net Income Grew 27%

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