JLT to restructure business to maximise benefits of managing general underwriter Thistle

Jardine Lloyd Thompson (JLT) has announced a 14% rise in fees and commissions to £612.9m in 2009 (2008: £526.1m) while underlying trading profit increased by 28% to £97.1m (2008: £76.2m).

The broker saw profit before tax and underlying profit before tax both increase by 10% to £102m and £104.8m respectively.

Its risk and insurance division, which comprises JLT’s retail and London Market broking business, saw combined turnover increase by 16% to £519.9m or 8% ate CRE, comprising 6% organic growth and 2% attributable to acquisitions.

Underlying trading profit increased by 22% to £97.2m for the year representing an underlying trading margin of 19% compared to 18% for the prior year.

In the retail business, turnover achieved growth of 14% to £269.5m, or 4% at CRE, comprising 3% organic growth and 1% from acquisitions. The trading margin remained at 19%.

In JLT’s London Market operation, turnover increased by 19% to £250.4m, or 13% at CRE, comprising 10% organic growth and 3% by acquisition. The trading margin was 18% compared to 16% in 2008.

In a statement, JLT announced is it restructuring its business to “maximise the benefits of Thistle, its managing general underwriter.

It said: “Thistle Underwriters, JLT's Managing General Underwriter, has made substantial progress during 2009: the creation of a new underwriting system; the development as underwriter for a number of lines distributed by the JLT Group in the UK and the acquisition in June 2009 of Ingham, a substantial specialist UK managing general agent.

“Thistle provides an end-to-end service, from designing and branding insurance products to underwriting risks through to handling of claims. It does not use its own balance sheet to underwrite the risk as the required risk capital is provided by third party underwriters.

“JLT is changing the structure of the group in the UK to maximise the potential benefits which can be generated from the development of Thistle. The activities of JLT's UK retail insurance broking operations, currently reported within Europe retail, have for the last few years been undertaken by two quite separate parts of that business. The advisory operations, which has been a traditional broking business handling larger commercial risks requiring bespoke solutions, and the non-advisory operations which distribute cover principally underwritten by a single provider for smaller standard risks.

“During the first quarter of 2010, the advisory operations will be merged with Jardine Lloyd Thompson Limited to capitalise upon the specialist strengths in that business. The non-advisory operations will at the same time be merged with Thistle Underwriters Limited, with the objective, over time, of substantially increasing the revenue stream written through this platform and increasing long term profitability for the group through more efficient product distribution.”

Dominic Burke, JLT chief executive, commented: "JLT achieved another year of strong growth and has good momentum. Whilst the insurance market rating environment remains soft, the group is well positioned for continuing growth and we look forward to the future with confidence."