General Insurance Article - Willis reports strong revenue growth

 Willis saw strong revenue growth of 5.1%, and organic commissions and fees growth of 4.5% led by emerging markets and North America. Willis also recorded modest growth in reinsurance despite challenging market conditions.

 Reflecting the underlying cash-generative power of the business, underlying EBITDA was $549m in the first half of 2014. This is essentially flat compared to the first half 2013, notwithstanding more challenging market conditions in certain businesses and increased investments for growth in the second half of 2013 affecting year-on-year expense comparisons.

 Strong revenue growth in the second quarter was more than offset by increased expenses primarily driven by investment in new hires since the end of the second quarter 2013. The resulting business performance reduced second quarter earnings by approximately $0.04 per diluted share compared to the same period last year. The pace of hiring has moderated since the second half of 2013, with global headcount up about 1% year to date in 2014.

 The company’s second quarter 2014 earnings were also reduced by a total of $0.28 per diluted share by non-operating items including adverse foreign currency movements, together with non-cash tax adjustments that caused a higher tax rate, and a small charge related to the Operational Improvement Program.