JLT Re drives revenue growth in 2014

Re/insurance broker Jardine Lloyd Thompson (JLT) posted a solid set of 2014 results with strong growth in many units but in particular reinsurance, which doubled its revenues thanks to the effect of the Towers Watson acquisition.

JLT’s revenues increased by 13 percent to £1.1 billion in 2014 compared with £979.2 million in 2013.  On constant exchange rates (CRE) revenues grew by 18 percent, comprising of 6 percent organic growth and 12 percent from acquisitions.

Within its risk and insurance division, revenues increased by 13 percent to £820.5 million for 2014, representing a 19 percent increase at CRE and organic revenue growth of 5 percent.

JLT Re delivered a strong performance for the year, which included the first full year contribution from the Towers Watson reinsurance broking business, which was acquired in November 2013. Revenues were £159.6 million, an increase of 108 percent over the previous year and included organic revenue growth of 7 percent.

JLT Latin America also posted strong revenue growth of 9 percent to £60.7 million, an increase of 24 percent at CRE, with organic revenue growth of 22 percent. JLT said that its specialty businesses have continued to benefit from focus and investment in areas such as construction, surety, energy, aviation and property, which are in turn aligned to the more dynamic industry sectors in what remains a high growth region.

The broker said that its US operations had made an encouraging start, resulting in the acceleration of its recruitment plans and the bringing forward of some expenditure into 2014. However, this was partially offset by revenues which, as expected, were minimal for the period. This produced net expenses in the period of £5.2 million.

In 2015 it is anticipated that the business will generate revenues in the region of $50 million and a net trading loss of $35 million. This includes revenues and profits transferred from other parts of the group and the energy business acquired from Alliant in October 2014.

Within JLT’s employee benefits division, total revenue increased by 11 percent to £283.6 million, representing a 14 percent increase at CRE and organic revenue growth of 7 percent.

Overall, JLT’s profit after tax grew to £105.3 million for the year ended December 31, 2014, compared with £102 million in 2013.

Dominic Burke, chief executive, said: "We are pleased to deliver another strong set of results, building on the progress and momentum of recent years. During the year we took a series of actions and strategic decisions, including the establishment of a specialty insurance broking business in the US and the merger of JLT Specialty and Lloyd & Partners, that we believe will prove to be pivotal in terms of shaping our long term growth prospects.

“Despite a challenging insurance rating environment, we are confident in JLT's revenue growth momentum and in our strategy of continuing to invest to deliver sustainable long term earnings growth.”