Willis reports 2007 Q3 profits down, organic growth up

Willis Group Holdings Limited (NYSE: WSH), a global insurance broker, reported a hit in its 2007 Q3 income based on a tax gain on the sale of its London headquarters and a significant expenditure on 2006 Shaping our Future initiatives.
Shaping Our Future refers to a company strategy, outlined in Willis 2006 annual report, for achieving profitable growth in the future.
The companys reported profit for 2007 Q3 was US$67 million, compared with US$89 million over the same period a year ago.
The results for the quarter ended Sept. 30, 2006 were affected by a [US]$91 million net of tax gain on the sale of the companys London headquarters,” Willis noted in a press release.
At the same time, the company reported its total reported revenues for 2007 Q3 rose to US$574 million, up 6% over its reported revenues of US$543 million in 2006 Q3.
Also, Willis reported, organic growth in commissions and fees, which excludes market remuneration, was 4% in the third quarter 2007. The company attributed the growth to net new business won of 6 percent, minus a negative 2% impact from declining premium rates tempered by other market factors such as higher commission rates, higher insured values and changes in limits and exposures.
For the full year 2007, Willis said it expects to continue to grow organic revenue and expand adjusted operating margin modestly to approximately 24%.
Willis global specialties unit showed double-digit organic revenue growth, which, the company said, was offset by weaker reinsurance organic growth from declining premium rates and significantly higher retentions by primary underwriters.
Overall, Willis chair and CEO Joe Plumeri, said in a press release, our results this quarter once again illustrate the continued execution of our Shaping our Future strategy for profitable growth. We have delivered yet another quarter with strong new business-driven top line growth in a soft rate environment, operating margin expansion and earnings growth.