Merger costs dent Willis Towers Watson performance

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Restructuring costs prompted a 54.2% slump in net income for Willis Towers Watson in the second quarter, but first-half profit was up 21.6% and revenue was stable.

The global broker reported a second-quarter profit of $US33 million ($41.45 million), compared with $US72 million ($90.44 million) in the corresponding period of last year, which included pre-tax charges of $US63 million ($79.14 million) for integration expenses and $US27 million ($33.91 million) in restructuring costs.

Revenue for the second quarter was flat at $US1.95 billion ($2.45 billion).

The group says the results reflect a significant number of renewals that occurred in the first quarter but would normally come in the second quarter, and the fact the second quarter is seasonally weaker due to low levels of renewals for some lines of business.

For the first half, total revenue was up 2.2% to $US4.27 billion ($5.36 billion), while net profit was up 21.6% to $US377 million ($473.58 million).

Commissions and fees for the first half were up 2.9% to $US4.23 billion ($5.31 billion).

Second-quarter commissions and fees grew 2% to $US1.93 billion ($2.42 billion).

The human capital and benefits segment reported commissions and fees of $US718 million ($901.95 million) in the second quarter, down 1.7%.

The corporate risk and broking, and the investment, risk and reinsurance segments’ commissions and fees were flat at $US624 million ($783.86 million) and $US383 million ($481.12 million) respectively.

“We continue to build momentum across our portfolio of businesses while work continues on our integration efforts,” CEO John Haley said. “We still have work to do to attain our full potential, but the commitment and excitement I see across the company gives me great confidence in the power of a truly integrated Willis Towers Watson.”

source http://www.insurancenews.com.au/international/merger-costs-dent-willis-towers-watson-performance