NU Online News Service, Oct. 27, 3:46 p.m. EDT
Willis Group Holdings reported third-quarter net income increased 113 percent on the strength of new business and its acquisition of insurance broker Hilb, Rogal and Hobbs.
The London-headquartered insurance brokerage firm said today that third-quarter net income rose $43 million from $38 million last year to $81 million. That translated into earnings per share of 47 cents compared to 25 cents a year ago. Revenues in the quarter grew 25 percent, or $146 million, to $725 million.
"It's been a busy and productive third quarter that we all can be very proud of," said Joe Plumeri, Willis' chairman and chief executive officer, during a conference call with analysts.
For the first nine months of the year, net income rose 47 percent, or $119 million, to $373 million, or $2.14 a share. Revenues increased 20 percent, or $404 million, to $2.44 billion.
The firm reported organic growth of 2 percent overall, with the global business segment growing by 4 percent and international growing by 3 percent. North America organic growth declined by 3 percent–an improvement from the second quarter's decline of 8 percent.
Willis said that organic growth reflected net new business won of 5 percent, offset by a negative 3 percent impact from declining premium rates.
During the conference call, Mr. Plumeri said the integration of its acquisition of HRH is just about complete, signified by the change in name from Willis HRH to Willis North America. With the completion of the integration process, Willis expects to once again begin growing the business.
"We feel very good about the direction we are going toward," declared Mr. Plumeri.
Regarding the firm's interest in French insurance broker Gras Savoye, Mr. Plumeri said Willis remains in negotiations with the private equity firm Astorg Partners, but a definitive agreement is expected in the next few months. Willis expects to receive net proceeds of between $100 million and $150 million that will be used to pay down debt. The firm also expects to retain a 33 percent interest in Gras Savoye and repurchase majority interest in the firm in 2015.
"I call this a win-win across the board," said Mr. Plumeri.
Willis said it will pay a regular cash dividend of 26 cents a share, or an annual rate of $1.04 a share on Jan. 15, 2010 to shareholders of record as of Dec. 30.
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