Willis Corroon rethinks strategy: Shake-up ahead for insurance broker as profits tumble after US defections

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The Independent Online
WILLIS Corroon, the insurance broker, is carrying out a strategic review that could lead to its withdrawal from some areas of business.

The review, due to be presented to the board in November, comes four years after the group was formed by the merger of Willis Faber Dumas and Corroon & Black.

'The group has moved on since then,' Peter Stevens, a spokesman, said. 'Some areas are not making good returns. We will look at the structure and the outlook of the business, and come up with something which has a good prospect of delivering good returns in the long term.'

The review was disclosed as the group revealed a pounds 9m drop in pre- tax profits to pounds 54.1m for the six months to June. The fall had been expected after disappointing results from the US in the first quarter.

Business there was hit by the defection of specialists in construction, who took a significant amount of business with them, and problems in local offices.

Mr Stevens said a new construction team had been recruited. 'Revenue is coming in, but not yet fast enough to make up for the amount taken away by the old team.'

Turnover in the US fell 2 per cent in the half-year, but that masked a return to 3 per cent growth in the second quarter after a 7 per cent decline in the first. 'It is obviously going in the right direction and I am confident it will be looking much better next year.'

The group spent pounds 8.4m on the development of its North American businesses and on new offices elsewhere in the world, which pushed expenses up 6 per cent, while sales from continuing businesses rose 2 per cent to pounds 361.6m. Mr Stevens said revenue growth had been lower than expected when the rise in expenses was planned.

Earnings per share were 7.8p, down from 9.3p, and the interim dividend was maintained at 3.3p.