Q4 revenue up 4.2%, ‘modest decline’ in commissions and fees from North America at Willis Group

Willis Group Holdings plc had a 12% increase in fourth-quarter net income while organic commissions and fees in North America dropped 4.9% year over year, the London-based commercial insurance brokerage and risk management firm reported Tuesday.

In a filing with the United States Securities and Exchange Commission, Willis reported revenue of $958 million during the three months ending Dec. 31, 2014, up 4.2% from $919 million during the same period in 2013. All figures are in United States dollars.

Fourth quarter net income was up 12%, from $74 million in 2013 to $83 million last year.

Willis ranked third in the world’s commercial non-life insurance broking market in 2013, Finaccord Ltd. reported last October.

On Tuesday, Willis released its organic commissions and fees – which exclude both the net impact of foreign currency movements and the net impact of acquisitions and disposals. Organic commissions and fees in North America were $328 million in Q4 2014, down 4.9% from $345 million in 2013.

“Organic growth was negatively impacted by the non-recurrence in the current quarter of a $5 million revenue recognition adjustment that positively impacted revenue in the fourth quarter of 2013,” Willis said in a press release Tuesday. “Excluding the impact from this one-time adjustment, organic commissions and fees would have been down 0.5%. The modest decline was largely driven by the Construction and Real Estate/Hospitality practices both being down mid-single digits in the quarter. These practices were impacted by reduced project-driven revenues partly due to timing of such projects moving to past and future quarters.”

But in North America, Willis “continued to generate solid levels of new business and retention levels were consistent with the prior year,” the company stated. “The Human Capital and FINEX practices performed well during the quarter, delivering mid-single digit and high-single digit growth, respectively.”

For the full year, organic commissions and fees in North America were $1.365 billion in 2014, up 1.2% from $1.349 billion in 2013.

Also for the full year, Willis reported company-wide net income of $373 million on revenues of $3.8 billion, compared to $377 million on revenues of $3.655 billion in 2013.

Company-wide, Willis Group reported commissions and fees of $939 million in Q4 2014, up 3% from $911 in Q4 2013. For the full year, commissions and fees rose 3.7%, from $3.633 billion in 2013 to $3.767 billion last year.

“We continued to reshape Willis to improve earnings, both organically and through acquisition,” stated Dominic Casserley, Willis Group Chief Executive Officer, in a release. “During the quarter, we welcomed new colleagues from Max Matthiessen, SurePoint Reinsurance, and IFG into Willis and, early in 2015, reached an agreement to acquire a majority interest in Miller Insurance Services.”