Insurance broker Willis Group Holdings Limited reported first-quarter net income increased by $73 million, from $67 million, or 41 cents a share, to $140 million, or 88 cents a share.
Management said it was beginning a new chapter after legal problems over alleged bid-rigging and concealed commissions.
Willis said revenues increased less than 1 percent, or $2 million, from $669 million to $671 million.
The 2005 expenses were impacted by regulatory settlements, primarily an agreement with New York Attorney General Eliot Spitzer over allegations of steering insurance contracts to carriers in return for lucrative volume-based contingent commissions.
Willis said that adjusting net income for the regulatory and other related expenses, net income per share increased 7 cents, from 82 cents a share to 88 cents.
"After coming out of a transition year in 2005, we were very happy, not ecstatic, but happy [with our results]," said Joe Plumeri, chairman and chief executive officer for Willis from New York during an analyst's conference call. "We believe it will get better."
Brian Meredith, an analyst for Bank of America, said in a note that Willis' results were 3 cents more a share than his firm predicted, but a penny less than consensus. He noted that a change in accounting for recording incentive compensation had the effect of spreading out the results more evenly throughout the year. Without the change, he said Bank of America believes the reported results would have been lower.
The broker, headquartered in London, reported organic growth increased 6 percent with reported commissions and fees of $652 million.
Mr. Plumeri said all segments of Willis performed well, but noted there are capacity issues on the reinsurance side of the business.
For United States catastrophe and energy risks, he said, there is a lot of scarcity in capacity and "subsequent price increases have clients reviewing pricing in these areas and restructuring programs accordingly."
Mr. Plumeri said the result has been increased retentions by clients.
He added that the situation appears to be getting worse as capacity shrinks in the face of rating agency pressures, new models which alter the risk profile, and lack of a retrocession market.
Major renewals in the United States are trying to get into the market early, he said, to secure what capacity there is available.
Despite the challenge of soft market conditions that exist elsewhere, Mr. Plumeri said Willis' employees have done an excellent job and "things are going very, very well across the board."
Mr. Plumeri also announced the company plans to hold its first investors day conference on June 8.
Willis said it would pay a quarterly cash dividend of 23 cents a share on July 14 to shareholders of record as of June 30.
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