JLT posts jump in revenues for Q2
Re/insurance broker JLT posted a solid set of results for the first half of 2015, with strong growth across most segments within its risk and insurance division.
Its revenues grew 6 percent to £591.6 million in the first half of 2015, with organic growth of 2 percent in the period.
JLT explained that organic revenue growth was lower than during the same period in recent years as a result of a number of factors.
“Firstly, the anticipated shift in the phasing of revenues and trading profit between the two halves of the year, which impacted organic revenue growth by approximately 2 percent in the first half,” said the broker.
JLT added: “Secondly, the acceleration of the ending of commission payments in our UK employee benefits business which, while only affecting a small part of the Group's business, had a 1 percent impact on our overall organic revenue growth. Thirdly, the insurance and reinsurance rating environment which continued to be challenging.”
JLT’s risk and insurance segment posted revenue growth of 4 percent to £447.4 million, while its employee benefits segment posted revenue growth of 11 percent to £144.2 million.
Growth in JLT’s risk and insurance segment was driven by 203 percent growth at JLT USA and 18 percent growth at JLT Europe, Middle East and Africa.
JLT Specialty generated revenues of £138.8 million in the period while JLT generated revenues of £117.9 million. Both reported revenue growth of 5 percent both with organic growth of 1 percent.
The brokers’ reported profit before tax increased 3 percent to £101.5 million in the first half of 2015, compared with £98.4 million in the same period of the prior year. This was driven by the impact acquisition and integration costs and the restructuring costs associated with the merger of JLT Specialty and Lloyd & Partners.
Profit after tax and non-controlling interests increased 11 percent to £73.9 million in the first half of 2015, compared with £66.6 million in the first half of 2014.
Dominic Burke, chief executive, said: “We are pleased with the group's underlying growth momentum and with the strong progress we are making in building out our US specialty operations, creating a powerful platform for future growth for the whole Group.
“As anticipated, however, the cost of the US expansion is weighing against our short-term profitability. A one-off structural shift away from commissions within the UK employee benefits market is having an impact on our UK Employee Benefits margin and the Group's profit for the year.
“We remain confident that our full year organic revenue growth will be in line with the previous year. As we look forward, the business is well-positioned to deliver sustainable earnings growth.”
