Broker claims 20% increase includes wins from Aon and Marsh

Jardine Lloyd Thompson (JLT) claimed that it took business off global rivals Marsh and Aon to help push pre-tax profits up by 20% for the first six months of the year.

Chief executive Steve McGill said JLT had won "significant" new business from its larger competitors.

He said joining forces with regional brokers in the US had helped to drum up business from American corporations needing access to the London insurance market.

McGill predicted high rates would continue "through 2003 and beyond", buoyed by the stock market crash and insurers' need to repair their balance sheets.

He said: "We are seeing the challenge of the hard insurance market impacting on clients and clients looking to get the most innovative solutions from their intermediaries."

There was a "clear flight to quality" which was now accelerating, he said.

He said JLT, the world's fifth largest insurance broker, could win business from larger rivals by being a "specialist boutique" whose senior executives were actively involved with the market.

Before exceptionals and goodwill, pre-tax profit was £50.9m for the period to June 30 compared to £42.3m for the same period in 2001.

The company continued its unbroken record of increasing its dividend by declaring an interim payment of 7.5p, a 14% increase on last year's 6.6p.

JLT's stock rose 2.4% on Tuesday morning when it made the announcement.

The group's main insurance broking business reported turnover up by 16% to £156.2m and a profit margin of 27%.

Some of the most profitable lines of business included accident and health, cargo, casualty, construction, energy, financial and professional risks and marine reinsurance.

Its employee benefits business, which last week announced a multi-million pound deal to look after pension funds for the Prudential, increased its revenue by 6% to £38m. Its profit margin was 10%.

Despite the lower return than the broking side, McGill said the market for pension administration was growing at about 20% a year. "You don't have that same sort of growth possibility on the risk and insurance side," he said. "One is a hedge against the other."

Investment income fell by 17% to £9.2bn in the period from £11.1bn last time.

McGill said this reflected falling interest rates rather than the stock market crash because JLT did not invest in equities.