Net income up for Willis Group in Q1; plans to move some job locations

Willis Group Holdings has reported a net income of $246 million for the first quarter of the year, up from $219 million in the prior year quarter, and has announced plans for an “operational improvement program,” which will include some job locations being moved.

Total revenues for the quarter were $1.097 billion, a 4.4% increase from $1.051 billion in the first three months of 2013, Willis reported on Tuesday. Total reported commissions and fees improved to $1.09 billion, up 4.2% from $1.046 billion in Q1 of 2013.

The North America segment saw 4.7% organic commissions and fees growth in the first quarter of 2014 compared with the first quarter of 2013, while the International segment saw a 7.2% organic growth.

The Global segment, which includes Willis Re, Global Insurance (Willis UK and Specialties businesses), Facultative, Risk, and Willis Capital Markets & Advisory, saw 2.0% organic growth in commissions and fees in the first quarter of 2014 compared with the prior year quarter.

“Growth in the segment was led by Willis Re, which recorded high mid-single digit growth in the seasonally largest quarter for the reinsurance business, driven by high-teens growth in Specialty reinsurance and mid-single digit growth in North America reinsurance,” Willis said.

“The Global Insurance unit had a disappointing quarter, down high single digits primarily due to lower performance in three of the unit’s major businesses: Willis UK, Transportation, and Construction, Property & Casualty,” the firm’s statement said.

“The weaker performance reflects varying degrees of lower new business growth, lower retention and negative timing of revenues amongst those businesses.”

As part of its Q1 results, Willis also announced “a multi-year operational improvement program” that it says will result in cost savings of approximately $420 million through 2017 and annual cost savings of approximately $300 million starting in 2018.

Part of that plan will include “net workforce reductions in support positions,” although the number of positions being eliminated wasn’t provided.

It will also include moving more than 3,500 roles from higher cost locations to lower cost Willis locations.

The program will also include “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.”