26 April 2016 Insurance

JLT makes “good start” to the year, despite challenges

Re/insurance broker JLT is set to announce it made a good start to the year in the overall trading performance of both our insurance and reinsurance businesses at its Annual General Meeting (AGM) that is taking place today (April 26).

JLT said that this positive start to the year has come despite external challenges that contributed to a difficult trading environment, including insurance and reinsurance rating pressure, lacklustre economic growth, and weak energy and commodity prices.

It also said in its Q1 2016 interim management statement that its US specialty build-out continued to gain strength and that the number of professionals employed in the business grew in line with our plans.

JLT also confirmed it continues to see good growth in our international Employee Benefits businesses overall, while the programme to improve UK Employee Benefits’ profitability in 2016 made significant progress.

“Most of the restructuring of the UK business is now complete and will finish in the second half of the year,” it said. “It is anticipated that the restructure will deliver annualised savings of approximately £14 million in 2017, with £9 million of that benefit realised in the second half of 2016, when the substantial portion of annual profits will be delivered.”

The group said it remains well-funded and its financial position, including cash flow, continues to be strong. Although foreign exchange rates are currently favourable to the Group’s overall performance, it is too early to determine the impact for the full year, said JLT.

For 2016, the group now anticipates total exceptional costs of £34 million, reflecting the £22 million litigation provision announced on 8 April and the £12 million restructuring cost for UK Employee Benefits disclosed previously at our 1 March results announcement.

JLT said it believes the Group remains on track to achieve its business and financial objectives in 2016, despite the headwinds which are now anticipated to persist through the year.

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