Report & Accounts - JLT

Operational ReviewOperational Review12Jardine Lloyd Thompson Group plc Annual Report & Accounts 2005Latin AmericaJLT’s presence in Latin America increased significantlyin late 2004 with the acquisition of insurance andreinsurance broking businesses in Colombia, Peru andMexico. This has resulted in JLT holding a majorityshareholding in each business.These new operations, added to JLT’s existing presencein Brazil, provide JLT with a significant position in thislarge and important market. The acquisitions have alsocreated excellent wholesale opportunities for JLT’sLondon and Bermudian operations.The acquired businesses have been included in ourresults on a full year basis for the first time. In 2005turnover for the region was £17.0 million and the tradingmargin was 18%. Our operations in Mexico and Peruperformed well, however, the overall results for LatinAmerica were negatively impacted by lower thananticipated earnings from our Colombian business,but this was largely offset by a greater than expectedflow of business to our London operations.Lloyd & PartnersIn its first year's trading, Lloyd & Partners primary goalwas to consolidate and grow the predominantly USAfocused portfolio of wholesale insurance broking businesstransferred from JLT Risk Solutions at 1st January 2005.Lloyd & Partners completed its first year of operationsuccessfully with turnover of £21.6 million, down 2%, orup 7% at constant rates of exchange, against a notionalprior year turnover. A trading margin of 19% or 26% atconstant rates of exchange was achieved. All businessclasses including casualty & liability (including power)within the energy sector, healthcare & professional,property and cargo contributed positively to these results.There were significant new business wins from bothexisting and newly developed independent retail sourcesin the USA aided by new opportunities that arose in the“post-Spitzer” environment.Market conditions following the 2005 hurricanesprovided challenges as well as opportunities in thesecond half of the year, especially in the energy andproperty catastrophe areas. As insurance capacity towrite windstorm risks contracted, insurance buyers wereforced to reassess their appetite for the transfer andretention of risk.Throughout the year, Lloyd & Partners was able to attractnew senior market practitioners in all classes of business.This expansion, coupled with market conditions, meansLloyd & Partners are well placed to grow the businessfurther in 2006.