Willis North America reports 4.7% increase in organic commissions and fees in Q1 2015

Willis Group Holdings plc, the global risk advisory, re/insurance broking and human capital and benefits firm, announced on Tuesday that organic commissions and fees in Willis North America grew 4.7% in the first quarter of 2015 compared with the first quarter of 2014.

For the three months ending March 31, the segment’s underlying commissions and fees grew 0.7%, negatively impacted by the sales of certain non-core offices over the past 12 months, Willis reported in a news release on Tuesday. The increase in organic commissions and fees growth was driven by strong growth from mergers and acquistions, FINEX and real estate/hospitality practices and mid-single digit growth in the human capital practice. The construction practice was up low single digits in the quarter due to project-driven revenue despite a decline in surety revenue compared to the prior year period.

“In market conditions that are best described as uneven, we achieved good underlying commissions and fees growth driven by organic growth across all of our segments and solid contributions from our 2014 acquisitions,” said Dominic Casserley, Willis Group CEO, in the release. “We managed our spread between organic commissions and fees growth and organic expense growth to positive 170 basis points. Overall, we’ve started the year with very good momentum towards our 2015 goal to achieve a positive 130 basis point spread organically.”

Casserley continued, “Momentum from our focused acquisition strategy will be more evident in future quarters, with the expected closing of the Miller transaction in mid-2015 and the recent announcement of our firm offer to acquire the share of Gras Savoye that Willis doesn’t currently own at the end of the year, both subject to regulatory approval.” [click image below to enlarge]

Willis Group reported net income of $210 million in the first quarter of 2015, compared to net income of $246 million in the prior year quarter. First quarter 2015 total reported commissions and fees of $1,081 million were down 0.9% from $1,090 million in the first quarter of 2014, impacted by $69 million from unfavourable foreign currency movements. Total commissions and fees were also impacted by a $25 million period-over-period net increase from acquisitions and disposals completed in the past twelve months, the release said.

Underlying commissions and fees, which exclude the impact of foreign currency movements, grew 5.8%. Organic commissions and fees, which exclude both the impact of foreign currency movements and the net impact of acquisitions and disposals, grew 3.4%, led by solid growth in Willis North America and Willis International, the release said.