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JLT progresses despite ‘challenging’ conditions

Employee benefits group JLT sees “new opportunities” emerging from the significant changes affecting the UK pensions industry, stating there has been “solid progress” in its UK business.

The insurance and employee benefits group’s interim management statement, published today (4 November) stated that from July to September it had “a number of new client wins and a strong pipeline of activity”.

It added that trading performance was broadly in line with expectations and organic revenue growth consistent with the rate delivered during the first six months of the year.

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This was achieved despite the continuing marked decline in the insurance and reinsurance rating environment experienced since the beginning of the second quarter of this year.

“While the impact of the strength of sterling in the third quarter of 2014 was not as material as that experienced in the first half, currency movements will nonetheless impact the year-on-year results,” the statement warned.

The risk and insurance businesses managed to deliver good overall levels of organic revenue growth despite increasingly challenging trading conditions, driven by new client wins and increased penetration, with an overall strategy of deepening specialty capabilities and expanding geographic reach.

The integration of Towers Watson Re is “progressing well” and the combined JLT Re business is building a deal pipeline for 2015 and beyond, with continued investment through the addition of new talent and the build out of analytics platforms.

Mark Drummond Brady was appointed deputy group chief executive, while Mike Reynolds was appointed global chief executive of JLT Re. He retains his position as group finance director until the appointment of his successor, for which a formal search process is underway.

Dominic Burke, the group’s chief executive, said: “Trading conditions remain challenging, given the decline in the insurance and reinsurance rating environment, which continued into the third quarter. As we indicated at the time of our interim results, we remain cautious about the outlook for the underlying business for the full year.

“The good levels of organic revenue growth we are achieving demonstrate the success of our strategy of deepening our specialty focus and expanding our geographical reach and give us confidence in our investment plans which are designed to drive sustainable and long term growth.”

peter.walker@ft.com