Willis reports US$62 million Q4 profit

Willis Group Holdings Limited (NYSE: WSH), a global insurance broker, reported a 2008 Q4 profit of US$62 million, compared with $95 million in 2007 Q4.
For the entire year of 2008, Willis had a net income of US$303 million, down from US$409 million a year ago.
The company indicated its results were “significantly affected by the acquisition of Hilb Rogal & Hobbs Company (HRH), foreign currency translation and certain other non-operating items.”
The acquisition of HRH was completed on Oct. 1, 2008.
“The results for the fourth quarter 2008 were impacted by HRH integration costs totaling US$4 million and other non-operating items,” the company reported.
Total reported revenues for the year ended Dec. 31, 2008 were US$2.8 billion compared with $2.5 billion for the same period last year, an increase of 10%, “primarily reflecting the HRH acquisition,” Willis says.
Willis says its 2008 Q4 results were also significantly affected by foreign currency translation, which reduced earnings per diluted share by $0.26 compared with the fourth quarter 2007.
The loss of earnings due to foreign currency translation was “primarily the result of the significant strengthening of the U.S. dollar relative to the British pound,” Willis says. “The majority of the impact of foreign currency translation was the result of the quarterly retranslation of the U.K. pension plan ($0.18 per diluted share).”
Organic growth in commissions and fees was 6% in the fourth quarter 2008 compared with 2007 Q4. “This reflected net new business won of 9% offset by a negative 3% impact from declining premium rates tempered by other market factors, such as higher commission rates, higher insured values and changes in limits and exposures.”
The North America segment reported a 4% decline in organic commissions and fees compared with fourth quarter 2007, “reflecting soft insurance market conditions as well as increased weakness in the U.S. economy,” the company observed.