GR digests the key points of brokers’ financials
With the 2015 half-year results season well underway, GR has pulled out and condensed some of the key figures from the main (re)insurance broker results.
Aon Benfield has yet to report its results, but these will be included when published.
Guy Carpenter saw revenues fall 2% in Q2 2015 to $275m, down from $295m in the second quarter of 2014.
Parent firm Marsh & McLennan Companies’ (MMC) consolidated revenue in the second quarter of 2015 was $3.2bn, down 2% from $3.3bn in the second quarter of 2014.
MMC chief executive Dan Glaser said: “Given the macro headwinds we are facing, I am pleased with our performance in the first half of the year. For the first six months of 2015, adjusted EPS rose 6 percent. In the second quarter, adjusted EPS of $.80 was a slight increase from the prior year.
“Underlying revenue was up 3 percent, reflecting growth of 2 percent in risk and insurance services and 4 percent in consulting. Looking forward, we’re on track to deliver underlying revenue growth, margin expansion and strong growth in earnings per share in the second half of the year.”
Willis Group suffered a 14% drop in profit before tax to $347m (£222.7m) in the first half of 2015 from $404m in the first half of 2014.
Commissions and fees fell 1% to $2.0bn from $2.02bn and organic commissions and fees growth was 2.6%, down from 4.3% in the first half of 2014.
In the second quarter of 2015 alone, Willis’s profit before tax fell 15.4% to $93m (Q2 2014: $110m).
Commissions and fees fell 1% to $917m (Q2 2014: $933m) and organic growth was 1.6%, down from 4.5% in the second quarter of 2014.
Willis chief executive Dominic Casserley said: “We are pleased with our underlying performance, with underlying net income up 21% compared with last year. We are also pleased with our organic performance, having achieved 200 basis points of positive spread. We have achieved this despite the well anticipated headwinds we faced in this quarter from timing issues and uneven market conditions.”
ARTHUR J GALLAGHER
Arthur J Gallagher’s broking division made a profit before tax of $217.6m in the first half of 2015, up 16.7% on the $186.5m it made in the same period last year.
Earnings before interest, tax, depreciation, amortisation and change in acquisition earn-out payables (EBITDAC) was up 25% to $372.5m (H1 2014: $297.5m).
The broking segment’s total revenues increased by 25.7% to $1.64bn (H1 2014: $1.30bn) and organic growth was 4.2%, putting Gallagher ahead of the large global brokers that have reported results so far.
The acquisitive company also revealed that integrating acquisitions cost it $43.2m in the first half of 2015, almost double the $22.5m cost in the first half of 2015.
In the second quarter alone, Gallagher’s broking division boosted profit before tax by 15% to $156.6m (Q2 2014: $136.2m).
EBITDAC increased 19.4% to $234m (Q2 2014: $195.9m).
Revenue was up 20% to $885.6m (Q2 2014: $737.9m) and organic growth was 4%.
In the second quarter of 2015, Gallagher spent $22.4m on integrating acquisitions, up 40% on the $16m it paid out to integrate acquisitions in the second quarter of 2015. It made 11 new acquisitions during the quarter.
Gallagher chief executive Patrick Gallagher said: “Our brokerage segment had an outstanding quarter.”
Commenting on market conditions, he added: “We believe the current rate and exposure environment is rational and still healthy.
“In aggregate across our global book, renewal rates appear to be flat to slightly down in most lines, yet we are seeing modestly increasing exposures.”
Jardine Lloyd Thompson Group’s underlying profit before tax fell to £96.3m ($150.6m) in the first half of 2015, down 10% on £107.3m for this period last year.
Likewise, its profit margin decreased by 2.4 percentage points, to 17.3%, from 19.7% in 2014.
JLT say that the falls are a result of the cost of its US investment, which has shown a revenue growth of 203% from last year, 93% being organic.
JLT chief executive Dominic Burke said: “We are pleased with the strong progress we are making in building 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.”