Exchange rates aid Willis Corroon: Fall in investment income cancelled out

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The Independent Online
WILLIS CORROON, the transatlantic insurance broking group, has reported pre-tax profits of pounds 70.1m compared with pounds 60.9m, for the first nine months of 1993.

Roger Elliot, executive chairman, said the improvement included a pounds 6.1m gain arising from differences in foreign exchange rates over the past year.

This gain more than compensated for a pounds 3m decline in net interest and investment income due to lower interest rates, which were partly offset by rising cash balances.

Although the insurance business cycle is still attempting to come out of recession, Willis saw revenue from its insurance broking operations climb from pounds 460.3m to pounds 527.8m for the nine-month period. It described the trend as 'encouragingly higher than that achieved in the first half of the year'.

It added that control of operating expenses had been maintained so that for the nine months, as at the mid-year stage, these were virtually unchanged in underlying terms against the same period last year.

Revenue growth continued to benefit from higher premium levels set by worldwide reinsurers and by UK direct underwriters for most classes of business. In the US market most premium rates other than those for highly exposed property risks are still depressed by competition.

Willis said the profits of the group's mainstream broking and consulting businesses for the nine months were pounds 67.9m - 30 per cent ahead of those for the same period in 1992. These businesses continued to benefit from strategic investments made in them in the past three years.

Willis has had to make additional reserves on its marine account and further provision for uncollectable reinsurance, which resulted in a loss for the discontinued UK operations of pounds 1.9m for the third quarter.

Willis intends to dispose of a majority shareholding in Gryphon Holdings, which contains the group's US underwriting operations, by way of an initial public offering.