Global insurance and reinsurance broker, JLT Group recorded organic revenue growth across all divisions year-on-year, leading to a 21% rise in trading profit in 2018.
In light of JLT’s takeover by MMC, expected to close in spring of this year, the firm has released preliminary financial results for 2018, which includes updates on key financial items.
Overall, the broker recorded organic revenue growth of 5% for the full-year 2018, with 7% in Global Specialty and 7% in UK Employee Benefits, when compared with 2017.
Revenues increased by 5% year-on-year to £1.5 billion, and the firm recorded an underlying profit before tax of £233.6 million, which is growth of 25% on the previous year.
Reported profit before tax reached £88.1 million, and JLT explains that reflects £145.5 million of exceptional items consisting principally of MMC transaction-related costs, regulatory-related costs and also Global Transformation Programme restructuring charges.
Regarding the latter, JLT notes that the Global Transformation Programme resulted in benefits of £20.7 million for a total cost of £28.6 million, and remains on track to deliver further benefits of £16.3 million this year, and full annualised benefits of £40 million in 2020.
Year-on-year, trading profit increased 21%, which the broker says was driven by organic revenue growth and also the Global Transformation Programme. By segment, trading profit increased by 25% in Global Specialty to £192.7 million, 10% in Global Reinsurance to £45.8 million, and 8% in Global Employee Benefits, to £51.2 million.
US Specialty revenue grew to US$134.4 million, while net investment losses declined to US$9.9 million, with business on track to to achieve greater profits in 2019.
At the same time, UK Employee Benefits saw its trading profit increase 55% in 2018 to £21.6 million, with this business on track to achieve a 15% trading margin in 2019.
The broker also provided some information on costs relating to the MMC deal.
“Exceptional items principally consist of MMC-related transaction costs of £77.2m (predominantly staff costs relating to the amortisation of remuneration payments and the acceleration of share awards vesting outlined in the Scheme Document), estimated net costs of £38.4m arising from the UK regulatory review disclosed in JLT’s 2017 Annual Report relating to enhanced transfer value products, and Global Transformation Programme restructuring charges of £28.6m,” explained the broker.
