US investment hits JLT results; CEO warns of headwinds

Re/insurance broker Jardine Lloyd Thompson Group (JLT) posted an underlying profit before tax of £170.1 million in 2015, down 7 percent on 2014, which it said was a reflection of big investments it has made growing its fledgling business in the US.

Excluding the US investment, the underlying profit before tax was up 3 percent to £190.6 million, the company said.

Its reported profit before tax was down 3 percent to £155 million and JLT’s underlying profit margin down by 160bp to 16.2 percent.

The firm’s revenues grew by 5 percent last year, however, to £1.16 billion. It said it achieved organic revenue growth of 2 percent.

Organic revenue growth was particularly strong in the firm’s risk and insurance sector, at 5 percent. This was offset by a decline of 6 percent in UK and Ireland employee benefits organic growth, due to specific challenges within the market. International employee benefits organic revenue grew by 7 percent, however.

Last year, JLT Specialty merged with Lloyd & Partners, a deal the company said delivered a 7 percent increase in revenues at constant rates of exchange and a 19 percent increase in trading profit.

JLT Re also successfully integrated with Towers Watson Re’s US platform, generating a 24 percent increase in trading profit.

Furthermore, JLT stressed that it has now completed a first full year in the build-out of its US specialty business, with nearly 180 people in 13 locations now based there. It also said it achieved strong growth in its emerging markets businesses in Asia and Latin America - together delivering 8 percent organic revenue growth.

Dominic Burke, group chief executive, JLT, said: “The group faces a number of external headwinds as we go into 2016. However, our focus remains on those factors that we can control and on maintaining the revenue momentum and cost control established over the last ten years.

“We remain confident in our strategy, our platform and our continued ability to grow.”