Low interest rates hit income, says JLT

Jardine Lloyd Thompson has admitted that low interest rates have reduced the group's investment income.

In an interim management statement for the first three months of 2009, JLT also said it had not seen any 'significant evidence' of rate hardening in the insurance market.

The company described its first quarter performance as "ahead of the same period last year and in line with our expectations."

"Insurance market conditions remain broadly as we described in March when we made the preliminary announcement of our 2008 results," the company said. "There is no significant consistent evidence of hardening insurance premium rates across the market as a whole. Some lines, such as aviation, financial lines and catastrophe affected classes, are seeing rising rates, with in some cases, much reduced capacity. Conditions in property and casualty markets for general corporate risks do, however, remain generally soft around the world. The historic low levels of interest rates are reducing the group's investment income.

"Against this background, and in light of the pervasive impact of the general economic downturn on corporate activity, we continue to regard trading in 2009 to date as positive.

"At the beginning of March we stated that, although the general economic outlook remained difficult, assuming there was no material deterioration, we would expect JLT to make further progress in 2009. Based upon the trading performance in the first quarter of the year, that view remains unchanged."

Dominic Burke, chief executive of JLT added: "During the first quarter the group has seen good rates of business renewal and new business wins. The pipeline of prospects is encouraging. While we remain cautious due to the economic conditions facing the Group internationally, on the basis of our first quarter's trading performance we remain on track to achieve our financial objectives for 2009."