February 8, 2007 by Canadian Underwriter
Global insurance broker Willis Group Holdings Limited (NYSE: WSH) has reported a 2006 Q4 net income of US$148 million, compared with a 2005 Q4 net income of US$55 million.
Throughout all of 2006, Willis reported a net income of US$449 million, compared with a reported net income of US$281 million in 2005 Q4.
“The results for the year ended Dec. 31, 2006 were significantly affected by the gain on the sale of the company’s London headquarters, spending on Shaping Our Future initiatives and, for the year ended Dec. 31, 2005, by regulatory settlements and related expenses, severance costs, other provisions and net gain on the disposal of operations,” the company reported in a press release.
Commenting on the results, Willis chairman and CEO Joe Plumeri said: “Our results for 2006 were just what we said they would be: our organic revenue growth was strong, our operating margin expanded and our salaries and benefits to revenues decreased.”
In 2006 Q4, the company recognized US$17 million of Shaping Our Future initiative expenses, which primarily related to severance costs. For the second half of 2006, the company recognized US$101 million relating to these initiatives.
“The current estimated annualized benefit of these initiatives is approximately US$65 million pre-tax by 2009, a US$5 million increase over the previous estimate, the majority of which will be direct cost savings,” the company announced. “These initiatives have created efficiencies that led to the identification and elimination of nearly 500 positions – up from the 400 positions previously announced in [2006 Q3]We remain committed to executing the Shaping Our Future strategy because this focus has already served us well.”