Report & Accounts - JLT

Operational ReviewOperational Review10Jardine Lloyd Thompson Group plc Annual Report & Accounts 2005AustralasiaIn Australia and New Zealand we achieved goodgrowth with turnover at £60.9 million, up 8% on theprevious year, 4% up at constant rates of exchange.The trading margin of 26%, albeit down slightly from 28%in 2004, continues to reflect the strong management ofthis business.The retail division, comprising natural resource andconstruction, corporate, affinity, professional & executiveliability and the regional network, were all impacted by thecompetitive insurance market conditions but despite thismany of our operations continued to grow their turnoverand maintain excellent margins. Our natural resourcesand construction operations had excellent new businesswins in the energy, services and construction sectors.The risk services division continued its strong financialperformance with the Echelon consultancy businesshaving considerable success with its core productsof risk management and claims management.Risk Services' key market segment of local governmentagain showed growth in 2005 and this remains a sectordominated by JLT.New Zealand had another solid year and, with theacquisition of Risk Solutions Ltd in 2005, we arewell placed to further develop our presence in thecorporate sector.AsiaAsia's turnover increased by 2% to £30.5 million with atrading profit of £5.4 million producing a trading margin of18% compared to 21% in 2004. During the year theAsian insurance and reinsurance markets saw ratesreduce in all areas and this once again impacted turnovergrowth in the region, particularly given that much of ourincome is derived from commissions. Notwithstandingthis, turnover did increase and we enjoyed strong newbusiness growth in Hong Kong, Malaysia and Korea.In addition, our regional specialty lines successfullyacquired major new clients in the financial & professional,construction and marine cargo sectors.In November, JLT submitted an application to form a newjoint venture insurance and reinsurance broker inmainland China. We are hopeful that this business willbecome licensed in 2006 and thus allow us to fullyestablish a presence in this fast growing and importantmarketplace. The new operation, which will be majorityowned by JLT, will focus on large commercial risks andseek to serve both local and overseas clients.For the fourth time in five years, JLT Asia won the awardfor Asia Broker of the Year. An independent panel ofjudges commended JLT Asia's innovation in developingnew risk management and insurance tools and productsalong with the industry leading role the company took inresponding to the Asian Tsunami disaster.