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Willis Group reported net income of $246 million or $1.35 per diluted share in the first quarter of 2014, as it pursues a strategic realignment towards high-growth emerging markets.
This compares to net income of $219 million, or $1.24 per diluted share, for the same period in 2013. Total reported expenses were $771 million in the first quarter of 2014, essentially flat compared with $770 million in the first quarter of 2013.
Willis Group CEO Dominic Casserley says he is satisfied with the results. “We began 2014 with another quarter of solid mid-single digit revenue growth and positive contributions from each of our segments. Willis International and Willis North America both performed strongly. Willis Global grew modestly, with a strong contribution from its reinsurance business partially offset by its UK retail and specialty insurance businesses.”
Total revenues, which include commissions and fees, investment income and other income, were $1,097 million in the first quarter of 2014, an increase of 4.4 percent from $1,051 million in the first quarter of 2013.
Casserley believes that operating income has improved due to investment in higher growth regions, “we continue to invest in emerging markets, businesses such as Global Wealth Solutions in Asia, and client service improvements such as our Connecting Willis initiative.”
In line with its growth initiatives and financial goals, the company is going ahead with an operational improvement program which it hopes will drive shareholder value, allow it to strengthen its client service, realise operational efficiencies, and invest in new growth capabilities.
The main elements of the program will include:
- Movement of more than 3,500 support roles from higher cost locations to Willis facilities in lower cost locations, bringing the ratio of employees in higher cost versus lower cost locations from approximately 80:20 to approximately 60:40;
- Net workforce reductions in support positions;
- Lease consolidation in real estate and reductions in ratios of seats per employee and square footage of floor space per employee; and
- Information technology systems simplification and rationalization.
Casserley stated that the organisation remains "confident and committed" to this plan.
Willis, Q1, results