Willis’s success outside UK

Willis has reported a net income of $436m for the year ended 31December, 2009, up from $302m in 2008 on revenues up from $2.8bn to $3.3bn.

Willis said the increase was primarily due to the HRH acquisition, while the effect of foreign currency translation decreased reported revenues by 4%.

Organic growth in commissions and fees was 2% in 2009 compared with 2008. This growth reflected net new business won of 5%, offset by a negative 3% impact from declining premium rates and other market factors.

Reported operating margin was 21.3% for 2009 compared with 17.8% for 2008. The adjusted operating margin was 21.8% for 2009 compared with 21.2% for 2008.

Organic growth

“The improvement in the adjusted operating margin reflected solid organic growth in commissions and fees, expense savings and favourable year on year foreign currency movement, partially offset by lower investment income, higher pension expense and increased intangible amortisation,” Willis said.

“2009 was a momentous year,” said Joe Plumeri, chairman and chief executive officer. “We began in the midst of integrating our transformational HRH acquisition, facing a difficult global economy and soft insurance market.

“We responded with 2% organic growth in commissions and fees, disciplined expense management, successful merger integration, completion of the Gras Savoye transaction and a much stronger balance sheet.”

Q4 figures

Q4 figures showed a 4% growth in commissions and fees compared with fourth quarter of 2008 and a 2% organic growth.

The International business segment recorded 3% organic growth in commissions and fees in the fourth quarter of 2009 compared with the same period of 2008.

This growth came from strong new business and continued traction from Shaping our Future growth initiatives, which more than offset the soft rate environment and weakness in the UK and Ireland retail market.

Non-UK success

Outside of the UK and Ireland, the International business segment organic growth was 7%, primarily driven by strong growth in the Latin America and Asia regions.

Operating margin remained high at 31.3%, although lower than the fourth quarter of 2008 partially due to the impact of foreign exchange and the weakness in the UK and Ireland retail market. For the year ended December 31, 2009, operating margin remained strong at 26.5%.

The Global segment, which comprises the Global Specialties, Faber & Dumas and Reinsurance divisions, recorded 1% organic growth in commissions and fees in the fourth quarter of 2009 compared with the fourth quarter of 2008.

Reinsurance

Growth was primarily driven by the Reinsurance and Global Specialties divisions, led by continued strong performance in North America reinsurance, marine, aerospace and financial and executive risks specialties.

Operating margin was expanded 50 basis points to 12.2% in a seasonally light quarter, compared with the fourth quarter of 2008.

“We are proud of the results we delivered for 2009 and especially proud of our associates around the globe and thank them for their hard work in delivering these results,” said Plumeri.

“We will continue to run the company with discipline and foresight, managing our expense base and strengthening the balance sheet, while investing in areas that will drive current and future growth.”