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Willis Group Reports Third Quarter 2012 Results

Stocks in this article: WSH

Willis Group Holdings plc (NYSE: WSH), the global insurance broker, today reported results for the quarter and nine months ended September 30, 2012.

Highlights of the quarter ended September 30, 2012 include:

  • Reported earnings per diluted share from continuing operations of $0.15 compared to $0.34 in third quarter of 2011; adjusted earnings per diluted share from continuing operations of $0.22 compared to $0.41 in year ago quarter;
  • Reported commissions and fees decreased 1% compared with the third quarter of 2011;
  • Organic growth in commissions and fees of 2%;
  • Reported operating margin of 9.3% compared to 11.8% in third quarter of 2011; adjusted operating margin of 10.9% compared to 13.8% in year ago quarter;
  • Repurchased 1.16 million shares for approximately $42 million during the quarter; completes $100 million 2012 repurchase program

“Our organic growth this quarter of 2%, which includes strong performances in a number of areas, offers encouraging signs that Willis is moving past a range of issues that have affected our comparable results quarter-over-quarter,” said Joe Plumeri, Chairman and CEO of Willis Group Holdings. “While we aimed to do better, the 5% organic growth for International – aided by an impressive turnaround for our UK business and the flat results for North America – are both well improved from the prior quarter. The organic growth of 3% for Willis Global, while demonstrating excellent performance in many areas, also highlights some of the comparables that dragged on our results broadly across Willis this quarter. These comparables and other events warrant further elaboration,” Plumeri added.

“For example, a year ago, we benefitted from a number of one-off items throughout the group that were unlikely to repeat this year,” Plumeri continued. “Those unusual benefits included $5 million from a reinsurance profitability initiative; $5 million from the release of funds related to potential legal liabilities; $3 million of revenues related to the previously disclosed fraudulent activity in Chicago; and net beneficial tax adjustments that were significantly higher than what was recorded this quarter. In addition, two items outside of our operational control, declines in investment income and our associates line for Gras Savoye, deducted $3 million and $12 million, respectively, from our earnings this quarter against a year ago. Taken together, it’s important to highlight that all of these items had a significant impact on earnings in the third quarter of 2011 and created an uneven comparison from this quarter to the prior year,” Plumeri added.

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