Challenges remain in JLT’s employee benefits business
JLT said its core broking businesses “delivered a resilient performance” in the period from 1 July to 7 November 2016, but added that challenges remained in its UK employee benefits business.
In an interim management statement published this morning, JLT said that its risk and insurance businesses performed well despite insurance and reinsurance pricing pressures in several markets and headwinds caused by continuing global economic uncertainty.
The company described insurance broking unit JLT Specialty’s performance as “good” overall. Performance in sectors such as energy and marine reflected the effects of depressed commodity prices and reduced activity in those sectors, but other divisions, such as aviation and construction performed well.
JLT also hailed the “strong” pipeline of business at JLT Speciality, and said there were “several significant client wins” in the period.
Employee benefits challenges
JLT said its international employee benefits business saw good growth in the period. But it added that trading in the UK employee benefits unit “remained challenging” in the period.
This time last year, JLT issued a profit warning, saying profits would be hit by difficulties in the UK employee benefits division because regulatory changes had led to a sharp slowdown in the business.
The company has embarked on a restructuring programme for UK employee beneftis, which has included job losses.
It said in the interim management statement that it is on track to achieving the remaining £7m of cost savings from the restructuring.
JLT said that it expected the overall trading environment to remain challenging for the rest of 2016.
The company added: “Despite these conditions we continue to invest across the group to drive future growth, improve margins and win market share. We are confident that our specialty-focused strategy will continue to deliver good levels of organic revenue growth.”