Willis Group Reports Second Quarter 2008 Results; Continued Execution of Shaping Our Future Strategies for Profitable Growth Drives Results

Business Wire, July 31, 2008

7 Percent Growth in Reported Commissions and Fees; Strong 3 Percent Organic Growth in Commissions and Fees despite Soft Insurance Market

Reported Earnings per Diluted Share $0.27; Adjusted Earnings per Diluted Share increased 9 Percent to $0.59

NEW YORK -- Please replace the release dated July 30, 2008 with the following corrected version due to multiple revisions to the table entitled, "WILLIS GROUP HOLDINGS LIMITED SEGMENTAL SUPPLEMENTAL FINANCIAL INFORMATION (in millions)(unaudited)."

The corrected release reads:

WILLIS GROUP REPORTS SECOND QUARTER 2008 RESULTS; CONTINUED EXECUTION OF SHAPING OUR FUTURE STRATEGIES FOR PROFITABLE GROWTH DRIVES RESULTS

7 Percent Growth in Reported Commissions and Fees; Strong 3 Percent Organic Growth in Commissions and Fees despite Soft Insurance Market

Reported Earnings per Diluted Share $0.27; Adjusted Earnings per Diluted Share increased 9 Percent to $0.59

Willis Group Holdings Limited (NYSE: WSH), the global insurance broker, today reported results for the quarter and six months ended June 30, 2008.

"Our three percent organic commissions and fees growth is a testament to our successful top line growth strategies and diversified business mix, despite continued softness in the insurance marketplace," said Joe Plumeri, Chairman and Chief Executive Officer.

"We continue to diligently execute Shaping our Future strategies for profitable growth with the key Shaping our Future Marketing and Client Profitability initiatives gaining momentum," continued Plumeri. "We are recognizing identified cost savings and remain vigilant on expense management while continuing to make investments for future growth."

Second Quarter 2008 Financial Results

Reported net income for the quarter ended June 30, 2008 was $39 million, or $0.27 per diluted share, compared with $78 million, or $0.54 per diluted share, a year ago. The results for the second quarter 2008 were significantly impacted by pre-tax charges totaling $62 million for contract buyouts, severance and other costs.

Excluding these charges, which are reviewed in detail later in this release, adjusted earnings per diluted share increased 9 percent to $0.59 in the second quarter 2008 from $0.54 a year ago. The impact of foreign currency translation increased second quarter 2008 earnings per diluted share by $0.01 compared with the second quarter 2007.

Total reported revenues for the quarter ended June 30, 2008 were $661 million compared with $626 million for the same period last year, an increase of 6 percent. The effect of foreign currency translation increased reported revenues by 4 percent.

Organic growth in commissions and fees was 3 percent in the second quarter 2008 compared with second quarter 2007. This reflected net new business won of 5 percent; there was a negative 2 percent impact from declining premium rates tempered by other market factors, such as higher commission rates, higher insured values and changes in limits and exposures. Improved client retention levels and momentum from Shaping our Future growth initiatives, such as Shaping our Future Marketing and Client Profitability, also contributed to organic growth.

The International business segment contributed 10 percent organic growth in commissions and fees in the second quarter 2008 compared with the same period in 2007. There was continued strength in Europe, especially Spain, Denmark and Norway, and in Latin America, as well as our emerging market countries including Russia and China.

The North America segment reported organic growth in commissions and fees of negative 1 percent compared with second quarter 2007 in a soft insurance market. The North America segment continues to make strategic investments in targeted practice areas and geographies.

The Global segment, which comprises Global Specialties and Reinsurance, recorded flat organic growth in commissions and fees in the second quarter 2008 compared with second quarter 2007. Global Specialties had positive organic growth in commissions and fees across many specialty businesses. Reinsurance reported negative organic growth in commissions and fees due to declining rates across most areas and higher retention levels by the primary carriers.

Reported operating margin was 11.6 percent for the quarter ended June 30, 2008 compared with 22.0 percent for the same period last year. Excluding the charges, adjusted operating margin was 21.0 percent for the quarter ended June 30, 2008 compared with 22.0 percent a year ago, as we continue to reinvest growth in strategic hires and key initiatives. Foreign exchange translation had a negative 40 basis point impact on the adjusted operating margin.

Six Months 2008 Financial Results

Reported net income for the six months ended June 30, 2008 was $205 million, or $1.43 per diluted share, compared with $247 million or $1.65 a year ago. The results for the first six months of 2008 were significantly impacted by pre-tax charges totaling $95 million for contract buyouts, severance and other costs.

Excluding these charges, which are reviewed in detail later in this release, adjusted earnings per diluted share increased 16 percent to $1.91 in the six months ended June 30, 2008, up from $1.65 a year ago. The impact of foreign currency translation increased earnings per diluted share for the first six months of 2008 by $0.09 compared with the first six months of 2007.