Group’s retail broking profit rises in first half
New UK business drove the 1% organic growth reported by Willis Towers Watson (WTW)’s retail broking unit in the second quarter of 2016, the company’s latest results show.
The retail broking unit, called Corporate Risk & Broking, grew revenues by 7% to $623m (£477m) in the second quarter of 2016 (Q2 2015: $581m).
The bulk of the increase was caused by the company’s acquisition of the 70% of French broker Gras Savoye that it did not already own, which was completed in December 2015.
But the Corporate Risk & Broking unit also produced 1% organic growth in the quarter. WTW said Great Britain led organic growth as a result of new business in property and casualty, facultative and financial lines.
The company said that its western Europe and international segments also contributed to the growth, but the North American segment’s revenue fell slightly because of lower levels of new business.
Despite the revenue growth, the Corporate Risk & Broking’s operating profit fell by 8% to $119m in the second quarter of 2016 (Q2 2015: $129m).
But for the first half of the year, Corporate Risk & Broking’s profit was up 24% to $239m (H2 2015: £183m).
The division’s commissions and fees increased 14% to $1.26bn in the first half of 2016 (H1 2015: $1.10bn), driven by income from acquisitions. It completed the acquisition of the 70% of French broker Gras Savoye that it did not already own in December 2015.
WTW’s Investment, Risk & Reinsurance unit, which houses the company’s reinsurance and wholesale broking and capital markets businesses, made a profit of $277m in the first half of 2016, up 13% on the $245m it made in the same period last year.
Commissions and fees were up 5% to $830m (H1 2015: $792m), but there was a 4% organic decline.
WTW was created from a merger of global broking group Willis and actuarial consultancy Towers Watson, which completed in January this year.