Willis Group reports Q3 profit plunge

by David Masters

Story link: Willis Group reports Q3 profit plunge

US-based insurer Willis Group Holdings has reported its results for the third quarter with profits down 46% on year.

The company was hit hard by an increase in operating expenses.

Net income for the three months ending 30th September dropped to $36 million, or $0.25 per share, compared to $67 million, or $0.46 per share in the same period last year.

This fall in profit occurred despite a small increase in revenue from $574 million a year ago to $579 million.

Commissions and fees increased 2.6% to $556 million, whilst investment income fell 12% to $22 million.

However, operating expenses increased 7% to $513 million, a reflection of higher salaries and benefits as well as other costs increasing.

The results also included $10 million in costs accrued during the acquisition of insurance brokerage Hilb, Rogal & Hobbs Co.

When these acquisition costs are excluded, adjusted profit equates to $0.32 per share.

Willis also pointed out that foreign exchange rates reduced profits by $0.09 per share.

For the first nine months of 2008 Willis’ net income was $241 million, or $1.70 per share, down from $314 million or $2.12 per share in the first nine months of 2007.

Total revenues for the first nine months increased on year, from $1.94 billion a year ago to $2.04 billion.

Shareholders will receive a quarterly cash dividend of $0.26 per share, payable on 16th January 2009.