annual report 2010 distinctive. Choice. Jardine LLoyd Thompson Group plc

Transcription

1 annual report 2010 distinctive. Choice. Jardine LLoyd Thompson Group plc

2 CONTENTS Overview Financial Highlights 1 Who We Are/Where We Operate 2 What We Do 3 Our Strategic Vision 4 Our Structure 5 Segmental Breakdown 5 Business Review Chairman s Statement 6 Chief Executive s Review 8 Executive Team 12 Key Performance Indicators 12 Review of Operations Risk & Insurance 14 Australasia 15 Asia 15 Latin America 16 Canada 16 Europe 17 Insurance Management 17 JLT Specialty 18 Lloyd & Partners 18 JLT Reinsurance Brokers 19 Associates 19 Employee Benefits 20 Thistle Insurance Services 21 Finance Director s Review 22 Risk Management Report 26 Corporate Governance Directors Profiles 30 Directors Report 32 Remuneration Report 38 Corporate Social Responsibility 45 Financial Statements Independent Auditors Report 48 Consolidated Income Statement 49 Consolidated Statement of Comprehensive Income 50 Consolidated Group Balance Sheet 51 Consolidated Statement of Changes in Equity 52 Consolidated Statement of Cash Flows 53 Accounting Policies 54 Notes to the Financial Statements 1. Alternative Income Statement Segment Information Operating Profit Investment income Finance Income and Costs Employee Information Services Provided by the Group's Auditor and Network Firms Income Tax Expense Earnings Per Share Dividends Goodwill Intangible Assets Property, Plant and Equipment Investments in Associates Available-for-Sale Financial Assets Derivative Financial Instruments Employee Benefit Trust Trade and Other Receivables Cash and Cash Equivalents Trade and Other Payables Financial Instruments by Category Borrowings Deferred Income Taxes Provisions Share Capital and Premium Non-controlling Interests Other Reserves Qualifying Employee Share Ownership Trust Cash Generated From Operations Business Combinations Business Disposals Retirement Benefit Obligations Jardine Matheson Group Commitments Principal Subsidiary and Associated Companies 104 Company Accounts Independent Auditors Report 106 Balance sheet 107 Reconciliation of Movements in Shareholders Funds 107 Accounting Policies 108 Notes to the Company Accounts 109 Group Five Year Review 111 Advisors & Shareholder Information 112 Principal JLT Offices 113

3 FINANCIAL HIGHLIGHTS ANOTHER YEAR OF STRONG FINANCIAL PROGRESS Continued strong organic growth of 7% across the business m % change OVERVIEW Total revenue* % Underlying trading profit** % Underlying profit before tax*** % Reported profit before tax % Pence per share % change Reported diluted EPS 41.7p 33.1p 26% Underlying diluted EPS*** 40.5p 33.8p 20% Total dividend per share 22.5p 21.0p 7% Total revenue* Underlying Underlying Underlying trading profit** profit before tax*** diluted EPS*** m m m Pence p 33.8p p * Total revenue comprises fees and commissions and investment income ** Trading profit, being total revenue less operating expenses *** Underlying results exclude exceptional and non-recurring items Jardine Lloyd Thompson Group plc Annual Report

4 OVERVIEW WHO WE ARE JLT is an international group of Risk Specialists and Employee Benefits Consultants and one of the largest of its type in the world. We offer a distinctive choice to our clients and partners through our combination of independence, scale and specialism. As an independent business, we are able to operate with autonomy and flexibility. We have the scale to provide solutions to the complex demands of the world s leading companies and to deliver global servicing whilst recognising that the needs of each of our clients is unique. By developing highly specialised services, we provide our clients with a depth of expertise and experience. The value we create is driven through the personal determination of our 6,200 highly motivated and skilled people. WHERE WE OPERATE More than 100 owned offices in 34 countries employing some 6,200 employees. Australia Barbados Bermuda Brazil Canada China Colombia Finland France Guernsey Hong Kong India Indonesia Ireland Italy Japan Korea Macau Malaysia Malta New Zealand Norway Peru Philippines Singapore South Africa Spain Sweden Taiwan Thailand UAE (Dubai) UK USA Vietnam 2 Jardine Lloyd Thompson Group plc Annual Report 2010

5 WHAT WE DO RISK & INSURANCE The Risk & Insurance group comprises our specialist broking operations around the world and our predominantly London Market based specialist risk, wholesale insurance and reinsurance broking businesses. It offers clients a distinctive choice through a combination of independence, flexibility of approach, scale and specialisation. Retail Successfully delivering an increasingly specialist retail insurance broking service to clients in the local, national and international markets. Specialty Offering clients in selected industries insurance broking and risk management advice through dedicated specialist teams with deep client industry expertise. Wholesale Providing brokers in the US and elsewhere with access to insurance capacity in London, Bermuda and Continental Europe through our independent specialist wholesale broker. Reinsurance Delivering to clients a more analytical approach to reinsurance broking and a wider variety of specialist risk management solutions. EMPLOYEE BENEFITS Providing services and products to meet the changing demands of today s pension and employee benefits market. Trustee Solutions Offering a range of services designed to meet the requirements of pension scheme trustees including actuarial and investment consulting, administration, governance and communications. Employee Benefit Solutions Providing advice on the design, implementation and operation of defined contribution and benefit schemes including online client solutions for pensions, reward and flexible benefits management. Wealth Management As responsibility for retirement savings shifts to the individual, we offer advice, support and portfolio management services. Technology and Systems Providing a range of systems and web-based solutions such as Profund and BenPal, we support the management of pensions and benefits arrangements. Pension Capital Strategies Providing strategic consultancy and execution for a range of derisking and risk transfer options to sponsors and trustees of defined benefit schemes. Independent Trustee Services Providing independent trustee services to Defined Benefit schemes, particularly to those where risk and conflict may arise or complex transactions may be contemplated. OVERVIEW THISTLE INSURANCE SERVICES Thistle Insurance Services, which includes the Group s Managing General Underwriter, is an underwriting and distribution company, which markets products on a non-advisory basis. Thistle can offer the fully integrated services of an insurer with the exception of providing the underwriting capital, as capacity is provided by an authorised insurer, therefore the Group does not take any underwriting risk to its balance sheet. Direct Providing personal and small commercial risk products. Affinity Providing insurance products to all types of affinity groups. Public & Social Providing insurance solutions to local government and housing authorities and products to their tenants. Broker Distribution Supporting independent brokers in and the distribution of insurance products. Broker Facilities Providing UK regional brokers with access to the London insurance market. JLT INTERNATIONAL NETWORK The JLT International Network operates in over 135 countries and is a combination of owned, partly owned and non-owned insurance broking and employee benefit consultancy operations. Services in Over 135 Countries Operating in over 135 countries and offering risk management and employee benefits solutions. A Unique Network Utilising the combined resources of owned, partly owned and independent operations to the benefit of multi-national clients. Access to Specialty Capabilities Providing clients with access to the combined specialty skills of the JLT International Network Partners and Members. An Activity Managed Network Actively managed by JLT to provide a flexible, high quality and innovative service to clients Jardine Lloyd Thompson Group plc Annual Report

6 OVERVIEW OUR STRATEGIC VISION Our vision is built on five strategic pillars that balance the interests of our clients, our people, our partners in the markets in which we trade and our shareholders. 1. To provide a distinctive and entrepreneurial work environment We are delivering this by: attracting, developing and retaining leading industry professionals encouraging creativity and innovation, unconstrained by unnecessary bureaucracy and processes protecting our distinctive values and culture 2. To operate as One Firm and bring the best of JLT to our clients and trading partners anywhere in the world We are delivering this by: collaborating to ensure that all parts of the Group work together to deliver client solutions preventing artificial boundaries such as reporting lines or geographies to stand in the way of protecting each client s interests harnessing our shared insight, knowledge and creativity 3. To focus and grow in specialist areas within our existing operations where we can offer distinctive products, services and independent choice We are delivering this by: focusing on risks and services which are complex and fast-changing adding value to clients by offering deep industry expertise to meet their individual needs remaining independent 4. To build our international reach and relevance, especially in the world s high-growth economies We are delivering this by: positioning the business to participate in the growth and increasing prosperity and influence of the faster growing countries of the world deepening the scope and scale of our presence within our existing operations investing in targeted acquisitions 5. To improve the way we work and serve clients by investing in the efficiency and effectiveness of our people, systems and processes We are delivering this by: re-engineering our business processes to enhance our productivity for the benefit of our clients utilising technology to achieve increased efficiency and competitiveness developing our world class knowledge-centre in Mumbai 4 Jardine Lloyd Thompson Group plc Annual Report 2010

7 OUR STRUCTURE Jardine Lloyd Thompson Group Employee Benefits 18% Risk & Insurance 77% Thistle Insurance Services 5% OVERVIEW London Market 41% Retail 36% JLT Specialty Lloyd & Partners JLT Re Australasia Asia Latin America Canada Europe Insurance Management 23% 8% 10% 14% 9% 5% 4% 3% 1% % = Contribution to Group revenue in 2010 SEGMENTAL BREAKDOWN 2010 Revenue by division 2010 Turnover by location of client Risk & Insurance 576.6m Europe 9% Rest of World 2% Employee Benefits 132.0m Asia 11% UK 37% Thistle Insurance Services 37.7m Australasia 16% Americas 25% Turnover excludes investment income Jardine Lloyd Thompson Group plc Annual Report

8 BUSINESS REVIEW CHAIRMAN S STATEMENT 2010 has been an exciting and successful year for JLT. We have once again achieved a strong financial performance, notwithstanding challenging trading conditions and the continued investment in the business for future growth. Particularly pleasing has been the impressive organic growth achieved across the Group and many actions have been taken over the year to enhance our ability to generate profitable and sustainable growth. We enter 2011 in very good shape and with long term finance in place to support the next phase of JLT's development. Performance Total revenue grew by 21% to million, or 14% at constant rates of exchange, comprising organic growth of 7% and 7% attributable to acquisitions. Underlying profit before tax was million, up 24%, while reported profit before tax was million, up 17%, after net exceptional costs of 10.7 million, mainly attributable to the business transformation programme and acquisition integration costs. Reported diluted earnings per share have increased by 26% to 41.7 pence per share. I am pleased to report that the directors have resolved to recommend an increased final dividend of 13.7 pence per share for the year to 31st December 2010 which will be paid on 4th May 2011 to shareholders on the register at 8th April This brings the total dividend for the year to 22.5 pence per share, an overall increase for the year of 7%. The report of the Chief Executive, Review of Operations and Finance Director s Review cover the performance of the Group in more detail. Share buy-back As in previous years, we will be seeking renewal of our standing share buy-back authority at the forthcoming Annual General Meeting. Corporate Developments As mentioned, the past year has seen a number of important developments for the Group. In July, we announced the expansion of the JLT International Network in Europe through an exclusive trading agreement with three of Europe's leading independent brokers, SIACI Saint Honoré in France, GrECo Group in Austria and Ecclesia Gruppe in Germany. JLT also acquired a 20% interest in GrECo in addition to its existing 20% in SIACI. Ecclesia also holds a 13% shareholding in GrECo. This is an important development to strengthen the JLT International Network in Continental and Eastern Europe. The trading agreement encompasses compatible branding and mutual development of all insurance, reinsurance and employee benefits activities, including shared technology, for the benefit of clients across all our industry sectors. Within Employee Benefits, the integrations of the acquisitions in late 2009 and early 2010 of HSBC Actuaries and Consultants and iimia Wealth Management have been an outstanding success as is evidenced by the results achieved by our employee benefits business in In late 2010, the Group completed the refinancing of its revolving credit facilities and now has committed unsecured long-term bank facilities of some 351 million on competitive terms, with maturities varying between 2015 and This gives us a very strong base from which to invest for future growth. Most recently, in January 2011 we announced the establishment of a new subsidiary presence in Johannesburg, South Africa which we anticipate will be operational by April 2011, subject to regulatory clearance. JLT's entry into this market underlines its belief in the growth potential of South Africa both domestically and as a hub for the African continent. Group Board and senior management changes The past year has seen a number of changes to our senior management team. As I noted in my review last year, Brian Carpenter retired from the Board at the Annual General Meeting in 2010 but remains with the Group as Chairman of JLT Australia and New Zealand. Jim Rush and William Nabarro retired from the Board and the Group on 6th August and 31st August respectively. After more than four years as Group Finance Director, Jim returned with his family to Australia. He was succeeded, as Group Finance Director, by Simon Mawson, formerly Director of PT Astra 6 Jardine Lloyd Thompson Group plc Annual Report 2010

9 Number of staff by region Americas 950 Europe 3250 Asia 1150 International Tbk responsible for Finance, Risk Management and Information Technology. William worked for some eight years at JLT, latterly as Group Commercial Director and Chairman of the Employee Benefits business. William decided to step down from the JLT Board in order to move back to the North of England to pursue a career in education. The Board is very grateful to Jim and William for their very significant contributions to the successful development of the JLT Group over the years and wishes them both every success in their new careers. Duncan Howorth has assumed responsibility as International Chairman of our EB operations worldwide while Mark Wood has been appointed as Non-Executive Chairman of JLT's UK Employee Benefits activities. Mark was formerly Deputy Chairman of Paternoster, the specialist life assurance business that he founded. Jonathan Palmer-Brown, who joined the Group Executive Committee on 1st September will, subject to FSA approval, assume the role of Chairman of JLT Specialty Limited (formerly Jardine Lloyd Thompson Limited), in place of Andrew Agnew who left the Group in September. James Twining joined JLT as Group Strategy Director and a member of the Group Executive Committee in January James was formerly with McKinsey & Company and his career has spanned investment banking through to operating his own e-procurement business. In addition to her responsibilities as Group Legal Director, Chairman of JLT Insurance Management and CEO of our Latin America Operations, Vyvienne Wade has assumed responsibility for our operations in Southern Europe from February Most recently we announced the appointment of Mark Drummond Brady as an Executive Director from 1st March Mark has been with JLT Group since 1987 and is currently International Chairman of Risk & Insurance and a member of the Group Executive Committee. Australasia 850 His role is to promote and co-ordinate the development of the Group's risk and insurance business internationally in its chosen areas of specialism and to spearhead the continued expansion of the JLT International Network. Our staff On behalf of the Board I would like to welcome all those who have joined us in 2010 and to record our thanks to JLT staff around the Group for their contribution to another very successful year. Each year I have commented on the outstanding quality and commitment of our people and once again in 2010 the outstanding results achieved by the Group are a proper reflection of their hard work, energy and dedication. Outlook Our clear focus on clients, coupled with the benefits of the investments we are making in leading industry professionals, systems and acquisitions, provide us with confidence that we will continue to make financial progress in 2011, building on the strong momentum developed in Geoffrey Howe Chairman 22nd March 2011 BUSINESS REVIEW Jardine Lloyd Thompson Group plc Annual Report

10 BUSINESS REVIEW CHIEF EXECUTIVE S REVIEW Retail UNDERLYING TOTAL TRADING REVENUE m PROFIT m TRADING MARGIN 21% 24% Employee Benefits UNDERLYING TOTAL TRADING REVENUE m PROFIT m London Market UNDERLYING TOTAL TRADING REVENUE m PROFIT m TRADING MARGIN 19% 21% Thistle Insurance Services UNDERLYING TOTAL TRADING REVENUE m PROFIT m We have delivered another set of strong results in 2010, in spite of the continued challenging trading conditions in all our key markets. These challenges included a very soft rating environment, intense competition and historically low interest rates in many parts of the world. Overall, the Group achieved a 21% increase in revenues in 2010, representing a 14% increase at constant rates of exchange. Our continued market-leading organic growth of 7% has been achieved by winning market share through substantial new business wins and increased client penetration across the whole Group. Our growing contribution from operations in high-growth economies, coupled with the benefits of the investments we have made in leading industry professionals, systems and acquisitions, means that we entered 2011 with real momentum, excitement and ambition for what JLT can become. Key financial highlights Our Risk & Insurance group delivered a 17% increase in revenues, or 8% at constant rates of exchange, reflecting our continuing ability to drive strong organic growth. Within our Risk & Insurance group, our retail businesses had a stellar year, fuelled by our Asian and Latin American operations, delivering 10% organic growth and an improved trading margin up by 3 percentage points to 24%. Our London Market operations delivered organic growth of 6%, representing a strong performance in the face of very challenging market conditions. The reported trading profit margin increased by 2 percentage points due to the benefit of favourable currency movements. The trading margin at constant rates of exchange remained unchanged on the prior year as we continued to invest in recruiting leading industry professionals, adding further to our overall capabilities and growth prospects TRADING MARGIN 16% 17% TRADING MARGIN 10% 13% A key element of JLT's success in 2010, and of the platform we have created for the years ahead, has been our ability to attract, develop, and just as importantly, retain some of the best people in the market. 8 Jardine Lloyd Thompson Group plc Annual Report 2010

11 Our Employee Benefits group delivered underlying organic growth of 4%. This is a pleasing outcome in a year when its primary focus has been on the successful integration of the HSBC Actuaries & Consultants Ltd (HACL) and iimia Wealth Management acquisitions, which have contributed to an overall revenue increase of 46% to 132 million. Our employee benefits business now contributes 18% of the Group s total revenues. The trading margin improved from 16% to 17% and we expect further improvement in 2011 as the full benefits of the HACL and iimia integrations flow through to the bottom line. Thistle Insurance Services, our underwriting and distribution company, has been able to deliver an 11% increase in revenues, which includes organic growth of 6%. The business has also seen an improvement in its trading margin which we expect to grow as we build scale. Work on the introduction of the Thistle business model to our operations in Australia, Canada and beyond is also underway. Details of the performance of each individual business area are set out in the Review of Operations on pages 14 to 21. Placing our performance in perspective This year s 21% increase in revenues comes on the back of a continuous period of strong organic revenue growth. Over the last three years we have grown our revenues by 52%, of which 21% was organic. This represents a compound annual growth rate of 15%. Importantly, this strong revenue growth has not come at the cost of profitability. Over the same three-year period, our underlying trading profit has grown by 63%, a compound annual growth rate of 18%, achieved whilst continuing to make significant investments in market leading industry professionals and infrastructure. Total Revenue m Underlying Diluted EPS PENCE 26.0p p 33.8p 40.5p We have achieved this profit growth despite a reduction of over 10 million in investment income over the last three years, as interest rates have declined to historically low levels in many parts of the world. In 2010, investment income contributed less than 5% to the Group s profits, compared to 22% in Excluding investment income our underlying trading profit has achieved compound annual growth of 26% over the last three years. This is as a consequence of the efforts we have made in improving the sustainability and quality of our earnings throughout the Group s operations. As a result, we have grown our underlying earnings per share over the last three years by 56%, achieving an annual compound growth rate of 16%. Our strong performance in 2010, and indeed over the last three years, has been achieved despite facing strong headwinds in both the insurance broking and employee benefits sectors. Notwithstanding the benefit of favourable exchange rate movements, we have faced a very soft rating environment, a continued period of low interest rates, the ongoing impact of the financial crisis on consumer and business confidence, rising unemployment in many major economies and a reduction in government spending with a resulting impact on the private sector. All of these factors have led to an ever-more robust competitive environment, as brokers and insurers have battled for market share. The growth we have achieved in 2010 is therefore testament to the efforts and energy of all my colleagues and to the continued support of our clients and the wider insurance markets around the world. Debate has continued within the insurance industry around the reintroduction of contingent commissions whereby insurers pay brokers revenues over and above commissions earned directly on the client s business. At JLT our primary focus will always remain on our clients; it is through our continued success in winning and retaining business that we see the greatest opportunity to continue our track record of delivering strong rates of organic growth. To support our belief in transparency we have for many years disclosed in our annual report earnings received by way of incentive or contingent commissions. In 2010 we received 9.9 million, being approximately 1% of the Group's revenue for the year. Attracting and developing the best people A key element of JLT s success in 2010, and of the platform we have created for the years ahead, has been our ability to attract, develop and, just as importantly, retain some of the best people in the market. BUSINESS REVIEW 3 YEAR COMPOUND ANNUAL GROWTH RATE OF 15% 3 YEAR COMPOUND ANNUAL GROWTH RATE OF 16% Jardine Lloyd Thompson Group plc Annual Report

12 BUSINESS REVIEW CHIEF EXECUTIVE S REVIEW CONTINUED During the year, we were able to strengthen our specialist teams substantially by attracting leading industry professionals from around the world to join us in areas such as aviation, financial lines, professional services and non-marine reinsurance. People join JLT because they want to be part of a strong team whose reputation for client service, integrity and excellence is, we believe, unrivalled. JLT also offers something distinctive in the market to both new and existing employees - a strong entrepreneurial and innovation-led culture, that encourages people to be creative and does not constrain them with unnecessary management layers and processes. It is vital that JLT continues to invest in talent when the right opportunities present themselves. But our focus remains on ensuring that our new colleagues add value quickly and, just as importantly, that they enrich rather than dilute JLT s unique culture and values, of which we are fiercely protective. Acting as One Firm 2010 has seen a continued drive towards operating as One Firm, to bring the best of JLT to all our clients and trading partners. In practical terms, this means not allowing artificial boundaries such as reporting lines, profit centres or geographical location to stand in the way of protecting our clients interests. In 2010 there were many examples of different parts of JLT from around the world working together to share their experience and expertise. This is not only across our Risk & Insurance businesses but also includes our Employee Benefits capabilities. Our One Firm approach demands that all parts of the business work together to deliver client solutions. Delivering on our specialisms 2010 has seen a continued focus of our activities and the growth of specialisms in offering distinctive products, value-added services and independent choice to our clients. Specialist areas include aerospace, oil and gas, marine, life sciences, telecommunications, construction and financial lines - risks which are complex, fastchanging, and rely on deep industry expertise to meet each client s needs. During 2010 our UK advisory retail business was successfully integrated into JLT Specialty, the new name for Jardine Lloyd Thompson Limited. This change underlines the Company s position as one of London s leading specialty brokers and it has enabled JLT s specialty capabilities to be more successfully promoted throughout our UK regional offices. The early success of this strategy has been demonstrated by JLT Specialty winning the UK National Broker of the Year award also saw our Australasian, Canadian and Asian operations accelerating their move away from being generic mid-market broking operations and from 2011 onwards, our specialist Aerospace insurance broking capabilities have transferred from JLT Re to JLT Specialty. Today JLT s full advisory broking services are structured according to industry specialisms and are operated nationally or region-wide. Good progress has been made and this is opening up new sales opportunities which will support further organic growth in the future. This approach ensures that we are adding real value to our clients and has been reflected in the market leading positions we have been able to build around the world. For example, more than 30% of the FT Global 500 companies are JLT clients. Expanding our reach and relevance 2010 has shown the continued fruits of our strategy to expand our international reach and relevance, especially in the high-growth economies of the world. This is driven by the desire to position the business to fully participate in the growth, increasing prosperity and influence of the faster growing economies of the world. It also assists us in better serving our existing clients who are looking to expand their own operations in these same markets. Asia delivered a strong performance in 2010 with powerful organic growth of 20%, clear evidence that we continue to better exploit our strong market position in an exciting and developing part of the world. Our senior team in Asia has been strengthened over the last 12 months by the recruitment of a number of leading industry professionals and we have achieved significant new business wins in the Aviation, Major Corporate, Construction and Employee Benefits specialisms. Our Latin American (LATAM) businesses again showed impressive results driven by organic growth of 25%. With a trading profit contribution of 11.7 million, LATAM is becoming an increasingly important part of the Group. It should also be remembered that our LATAM businesses, alongside our other regional activities, produce significant revenue flows to our London market operations. A further indication of our commitment to targeted international growth is our recent announcement of a new start-up operation in South Africa, a market we are committed to both in its own right and as a gateway to sub-saharan Africa. In addition we expanded our European operations with the acquisition of Tripol in Norway, a specialty broker with expertise in Real Estate and Construction. We also continue to invest in the development of the JLT International Network, an important strategic asset comprising both Group members wholly and partially owned and selected partners in countries where we have chosen not to invest, or have not yet invested. In 2010 we acquired a 20% stake in GrECo and reached an exclusivity agreement with Ecclesia underpinning our drive into Germany and Austria and the emerging markets of Eastern Europe. 10 Jardine Lloyd Thompson Group plc Annual Report 2010

13 Delivering strong organic growth with an increasing contribution from high-growth economies. Organic growth Risk & Insurance Australasia Asia Latin America Canada Europe Ins Management 2% (2%) 6% 11% Retail 10% JLT Specialty Lloyd & Partners JLT Re 6% 4% 8% London Market 6% Employee Benefits Thistle Insurance Services Group Total 4% 6% 7% 20% Organic growth is fees and commissions excluding the impact of acquisitions, disposals and the impact of currency. 25% As the programme has matured, we have identified further ways in which it can add value, leading us to believe that by the end of the programme in June 2012, we should be able to achieve recurring annual savings of 16 million for a total cumulative cost of 19 million. This is up from our original target of 14 million annual savings at a cumulative cost of 18 million. A significant part of these savings have come from re-engineering and then moving a series of back office processes to our whollyowned facility in Mumbai. This has led to a marked improvement in the quality of the output. Inspired by these successes, our operating businesses are now investing in expanding the remit of our Mumbai operation so that it evolves into a knowledge centre, in addition to its more transactional responsibilities. Seizing the opportunity Macro-economic conditions remain very challenging and the rating environment soft. However, we have seen severe natural catastrophes in the last quarter of 2010 and into 2011, most recently the earthquake in Japan and its tragic aftermath. It is too early to gauge whether the combination of these losses will have any lasting effect on the rating environment. A harder insurance market would undoubtedly be helpful to insurers but this is much less clear for brokers, who tend to benefit more from a stronger economy, which is certainly the case for JLT. Furthermore, the breadth, scope and health of JLT s business places it in a strong position to continue to grow. Our focus on specialisms and value-added services has strengthened our position in sharp contrast to other more commoditised offerings. And our increasing activity in high-growth economies has positioned us to participate in the strong growth of those markets. Finally, of course, any upward movement in interest rates will feed into an improvement in our investment income and thus earnings. It is by focusing on balancing the interests of our clients, our people, our insurance partners and of course our shareholders, that we have been able to deliver continued success in 2010 and build real momentum and belief. And it is by continuing to drive this momentum, that we believe we will take JLT to new heights of success in 2011 and beyond. BUSINESS REVIEW Driving efficiency and effectiveness In 2010 we continued to invest in the efficiency and effectiveness of our systems and processes, in the knowledge that as JLT grows in size and complexity, we need to be smarter about using technology to automate or simplify our processes where we can. We are now at the halfway mark of our three-year business transformation programme and by the end of 2010, we had cumulatively spent some 14 million of exceptional costs, securing recurring annual savings of 11 million. We are reinvesting these savings directly into the business and over time they should earn further returns. Dominic Burke Chief Executive 22nd March 2011 Jardine Lloyd Thompson Group plc Annual Report

14 BUSINESS REVIEW EXECUTIVE TEAM Members of the Group Executive Committee (from left to right) Adrian Girling Chairman of Thistle Insurance Services Ltd, JLT Canada and of Jardine Lloyd Thompson - Northern Europe. Adrian has been with JLT for over 30 years and has been CEO of Jardine Lloyd Thompson UK Limited, now Thistle Insurance Services Limited, for 14 years. Jonathan Palmer-Brown Chairman-elect JLT Specialty Limited Jonathan joined JLT in 2010 and is Chairman-elect of JLT Specialty Limited (subject to FSA approval). He is a former Chairman of the London and International Insurance Brokers' Association and sits on the London Market Group. Mark Drummond Brady* International Chairman Risk & Insurance Mark joined JLT in 1987 and built JLT's Financial Solutions operation. Today Mark plays a key role in developing JLT's Risk and Insurance business internationally and leading the continued expansion of the JLT International Network. Mark was appointed a Director of the Group in March Alan Griffin Chairman and CEO, JLT Reinsurance Brokers Alan joined JLT in 2005 to build the Group's capabilities in reinsurance and aviation. Alan entered the insurance broking industry in 1969 and has held various senior management positions within both reinsurance and aviation insurance. Dominic Burke* Group Chief Executive Dominic joined the Group in 2000 when his business Burke Ford was acquired by JLT. After joining he became CEO of JLT's UK retail and employee benefits business. He was Group COO before being appointed Group CEO in December John Lloyd Chairman and CEO, Lloyd & Partners Ltd John was a founding partner of Lloyd Thompson in 1981 and served as its chairman from 1993 until its merger with JIB Group in1997. He was a Director of the JLT Group until the creation of Lloyd & Partners in Warren Merritt CEO, Asia Pacific Warren joined JLT Australia in 1984 and has also spent a number of years working in JLT's London Market operations. He became Managing Director of JLT Asia in 2008 and more recently he was appointed CEO Asia and joined the Group Executive Committee in January KEY PERFORMANCE INDICATORS Trading margin showed a positive trend across the Group s business areas, the trend being particularly strong in Retail where the Group is benefitting from its focus on high-growth economies, particularly Asia and Latin America, resulting in a 39% increase in Retail underlying trading profit. The increased trading margin has been achieved through a combination of organic revenue growth, the benefits of the business transformation programme, the benefit of currency movements and continued focus on cost control. This focus is evidenced by the further reduction in the staff cost to turnover ratio in each segment. These improvements have lead to a 24% increase in underlying PBT to million and contributed to an underlying diluted earnings per share of 40.5p, up 20% on Total Revenue Per Employee 000 Trading Margin* % Underlying PBT** m Underlying** Diluted Earnings Per Share Pence % 16.7% 17.4% p 33.8p 40.5p GROUP Jardine Lloyd Thompson Group plc Annual Report 2010

15 Simon Mawson* Group Finance Director Simon joined JLT in August Simon is a Chartered Accountant and has held senior financial positions in Jardine Matheson and PT Astra International, prior to which he worked for PricewaterhouseCoopers in various parts of the world. Martin Hiller CEO, JLT Specialty Limited Martin joined JLT in 1988 and was a founding member of the JLT Construction team. He became Managing Director of the Construction team in Martin joined the Group Executive Committee in 2006 and was appointed CEO of JLT Specialty Limited in Duncan Howorth CEO, JLT UK Employee Benefits Group and International Chairman of Employee Benefits Duncan joined JLT in 2000 when Abbey National Benefit Consultants was acquired by JLT to expand its Employee Benefits offering. Duncan became Managing Director of JLT Benefit Solutions Ltd in late 2005 and subsequently CEO and a member of the Group Executive Committee in Vyvienne Wade* Group Legal Director, CEO of Latin America, Chairman of JLT Insurance Management and JLT Southern Europe Vyvienne joined JLT in 1987 and was appointed as Group Legal Director in In 2002 Vyvienne was appointed to the main Board. Vyvienne is also a Non-Executive Director of Lloyd & Partners Ltd and is on the Board of the London and International Insurance Brokers Association. Leo Demer CEO, Australasia Leo joined JLT Australia in 1985 and was appointed Managing Director of the Risk Services Division in Leo became Managing Director of JLT's Australian and New Zealand businesses in January 2008 and was appointed CEO of JLT Australasia and joined the Group Executive Committee in January Mike Methley Group COO Mike joined JLT in 1994 and was appointed Managing Director of JLT Asia in Mike was appointed COO of JLT Management Services in 2008 and subsequently Group COO and a member of the Group Executive Committee in January James Twining Group Strategy Director James joined JLT in January 2011 as Group Strategy Director and a member of the Group Executive Committee. James previously worked at Mckinsey & Company and his career has spanned investment banking through to running his own e-procurement business. *Executive Director (more details on pages 30-31) BUSINESS REVIEW RETAIL LONDON MARKET EMPLOYEE BENEFITS THISTLE INSURANCE SERVICES Total Revenue Per Employee *Trading margin represents trading profit, being total revenue (fees and commissions and investment income) less operating expenses, divided by total revenue. Underlying PBT** m **Underlying results exclude exceptional and non-recurring items. Jardine Lloyd Thompson Group plc Annual Report

16 BUSINESS REVIEW REVIEW OF OPERATIONS RISK & INSURANCE Risk & Insurance provides broking and risk management services for clients across an extensive range of business sectors. Principal lines of business Retail Successfully delivering an increasingly specialist retail insurance broking service to clients in the local, national and international markets. Specialty Offering clients in selected industries insurance broking and risk management advice through dedicated specialist teams with deep client industry expertise. Wholesale Providing brokers in the US and elsewhere with access to insurance capacity in London, Bermuda and Continental Europe through our independent specialist wholesale broker. Reinsurance Delivering to clients a more analytical approach to reinsurance broking and a wider variety of specialist risk management solutions. Financial highlights TOTAL UNDERLYING TRADING REVENUE m PROFIT m TRADING MARGIN 20% 22% The Risk & Insurance group comprises our retail broking operations around the world and our predominantly London market based reinsurance broking, specialist risk and wholesale insurance broking businesses. Throughout 2010 the macro-economic conditions remained very challenging in all of our key markets. This included a very soft insurance rating environment as many insurers continued to seek to win or retain market share. There was also intense competition amongst brokers as they too sought to retain and win new business. This was particularly acute in those sectors of the industry where products are becoming more commoditised, with price the key differentiator. For JLT, this trend underlines further the importance of moving away from generic mid-market insurance broking operations. To this end significant progress was made during the year in Australasia, Canada and Asia to structure the provision of full advisory broking services according to client industry served and for these to then be operated nationally or region wide. A very similar structure has been successfully operated in JLT's London Market specialty business for some time. Against the competitive market conditions, our Risk & Insurance businesses delivered strong results with revenues in 2010 increasing by 17%, or 8% at constant rates of exchange (CRE), to million. This was essentially due to our ability to continue to drive organic growth. Trading profit for our Risk & Insurance group was million, an increase of 31% on Our retail broking operations in all territories performed well in competitive market conditions with combined organic growth of 10%. Particularly pleasing performances came from our operations in Asia and Latin America, where our focus on industry specialisms that match those industries which are driving growth in these fastergrowing economies, has proved particularly beneficial. These sectors include natural resources, construction, telecommunications and aerospace. Our London market operations performed well as a whole with combined organic growth of 6% in very challenging market conditions. Lloyd & Partners, our London based specialist wholesale broking operation, experienced particularly strong competition from the US domestic market. JLT Specialty was launched at the beginning of this year (formerly Jardine Lloyd Thompson Limited) to emphasise further our specialty capabilities. In 2010 the trading profit margin for our Risk & Insurance group was 22%, increasing by 2 percentage points over % of this 2% increase was through the benefit of favourable exchange rate movements. This improvement in trading margin was achieved despite the investments in the recruitment and retention of leading industry professionals right across our Risk & Insurance businesses. On pages 15 to 19 there is a more detailed commentary on the activities and performance of each of our businesses in the Risk & Insurance group. 14 Jardine Lloyd Thompson Group plc Annual Report 2010

17 AUSTRALASIA Principal lines of business Public Sector Thistle Echelon Employee Benefits Specialty ASIA Principal lines of business Aviation Energy Construction Property Capital Risks Employee Benefits Revenue of million was up 21%, or 2% at CRE, with trading profit up 28% to 29.9 million. The trading margin increased from 26% in 2009 to 28% in In the year the Australasian business modified its structure to be aligned with JLT s global specialisms. It is now structured under five operating divisions: Public Sector, Echelon, Specialty, Thistle and Employee Benefits. The Public Sector division, which includes our local, state and federal government authorities business, once again had an excellent year showing good organic growth and an excellent increase in the PBIT line. Echelon comprises our claims management and risk and advisory services business which again showed good growth through 2010 and remains a business with strong potential for significant future growth. Specialty encompasses our retail and corporate businesses and has been more closely aligned with JLT s global strengths such as Construction, Energy, Mining, Financial Lines and Advisory Corporate businesses. This sector of the market is the most competitive and continues to be affected by the soft market conditions and highly competitive fees among the major brokers. Thistle includes our Affinity business along with our regional network operations. This business has had another successful year and at the same time has positioned itself for the establishment of its underwriting business during Employee Benefits is largely built around Life and Health and has again shown good growth during Investments in additional resources during the year means that this business is well positioned for growth in Strong growth was recorded in a majority of the businesses through the retention and penetration of existing business and substantial new business wins in Aviation, Capital Risks, Construction, Employee Benefits, Energy, Major Corporate and Risk Management. Throughout Asia we continued to invest in leading industry professionals during the year and have added senior resource in China, Hong Kong, Indonesia and Singapore both in the Specialty and General areas. Our Private Client Services business had substantial year-on-year growth through their operations in Singapore and Hong Kong. Hong Kong showed a record year with significant business wins during Singapore delivered strong growth in the retail and specialty operations. Our Agency business, ANDA, maintained its contribution notwithstanding the entry of new competitors in The restructuring and attainment of our broking and reinsurance licenses in Japan places us on a new footing for 2011 allowing us to balance our activities with the existing Agency business. Strong revenue growth in China of 30% and the continued recruitment of senior resources during the fourth quarter of 2010 will support future growth as we implement our next level of initiatives during BUSINESS REVIEW Financial highlights TOTAL UNDERLYING TRADING REVENUE m PROFIT m Financial highlights TOTAL UNDERLYING TRADING REVENUE m PROFIT m TRADING MARGIN 26% 28% TRADING MARGIN 21% 21% Jardine Lloyd Thompson Group plc Annual Report

18 BUSINESS REVIEW REVIEW OF OPERATIONS RISK & INSURANCE CONTINUED LATIN AMERICA Principal lines of business Energy, Oil & Power Aviation Industrial Risk Construction Employee Benefits Reinsurance JLT s LATAM businesses have made good progress in 2010 with strong growth in revenue of 44%, or 30% at CRE. Strong organic growth of 25% was recorded and trading profit almost doubled. We have a strong flow of captive management in Latin America. JLT has now established itself as one of the leading brokers in the region with specialisms ranging from Employee Benefits through to Aviation, Construction, Energy, Oil & Gas, Mining and Reinsurance. The business comprises subsidiary operations in Brazil, Colombia, Peru and an associate in Mexico. LATAM has expanded in all lines of its business with particular progress in the Construction and Aviation fields, as well as in Employee Benefits. BenPal, JLT s online flexible benefits software platform, has been deployed in Brazil. In addition LATAM continued to produce significant revenue streams to the JLT London Market businesses. During 2010 we have welcomed a number of new colleagues, particularly in Brazil where we continue to focus on growing our business in both the Retail and Reinsurance sector. CANADA Principal lines of business Construction Corporate Natural Resources & Energy Sport, Hospitality & Leisure Public Sector Risks Professional Risks JLT Canada bounced back from a disappointing 2009 to produce total revenues of 30.3 million which was a 22% increase over 2009 and an 11% increase at CRE. The trading margin increased by 6 percentage points to 16%. During the year we restructured our operations along Speciality lines which mirror the Group approach and integrate local opportunities with global JLT initiatives. We have continued our business transformation programme, which will enable us to implement optimal back-office support to meet client needs more cost effectively and support is now being provided from our team in Mumbai. This has assisted in improving the trading margin in Despite the challenges of the Canadian economy, its underlying strength in commodities links well with our specialist structure, with strong operations in Construction and Natural Resources & Energy. Our Corporate business benefitted from a number of strategic new appointments. Our Public Sector business again had a strong year with continued expansion and our Professional Practice business achieved excellent results. Financial highlights TOTAL UNDERLYING TRADING REVENUE m PROFIT m Financial highlights TOTAL UNDERLYING TRADING REVENUE m PROFIT m TRADING MARGIN 21% 28% TRADING MARGIN 10% 16% Jardine Lloyd Thompson Group plc Annual Report 2010

19 EUROPE Principal lines of business Corporate Schemes Affinity INSURANCE MANAGEMENT Principal lines of business Classic Captive Management Protected Cell Vehicles Transformer Type Transactions Our European business was restructured with effect from the beginning of 2010 with the UK Corporate business being transferred into JLT Specialty Limited and the UK Scheme and Affinity business being rebranded as Thistle Insurance Services Limited. The business now comprises operations in Scandinavia, Ireland, Italy, Spain and Poland. Our business in Poland was transferred to GrECo in the final quarter of the year as part of the acquisition of a 20% stake in that company. Notwithstanding the economic recession in all of the European retail markets in which we operate, particularly Ireland, we achieved positive results. Our operations increased revenue by 1% to 21.7 million and increased its trading margin by 1 percentage point to 16%. Significant growth was achieved within our Scandinavian business following the launch of our Lavaretus underwriting agency specialising in the provision of insurance products for power barges. We also concluded a small acquisition, Tripol, in Norway at the year end which offers good growth prospects for 2011 in two of our global specialisms, Construction and Real Estate. Our offices in Italy and Spain also achieved strong growth and despite the difficult economic conditions Ireland produced good results. Trading conditions throughout our European offices remain challenging with premium rates remaining soft. This has been a challenging year for JLT Insurance Management as changes in legislation have prompted some clients to cease using Bermuda captives. Whilst continuing soft market prices are reducing the attractiveness of captives for the time being, Insurance Management remains an important adjunct to our retail client base as an essential part of risk management. JLT Insurance Management operates in Bermuda, Singapore, Guernsey, Barbados and in Malta through a joint venture. BUSINESS REVIEW Financial highlights TOTAL UNDERLYING TRADING REVENUE m PROFIT m Financial highlights TOTAL UNDERLYING TRADING REVENUE m PROFIT m TRADING MARGIN 15% 16% TRADING MARGIN 8% 6% Jardine Lloyd Thompson Group plc Annual Report

20 BUSINESS REVIEW REVIEW OF OPERATIONS RISK & INSURANCE CONTINUED JLT SPECIALTY Principal lines of business Accident & Health Aerospace Claims Consultancy Communications, Technology & Media Construction Corporate Recovery Risks Credit, Political & Security Risks Energy Financial & Professional Lines Food & Drink Global Insurance Service Leisure Life Science and Specialty Chemicals Marine Real Estate Sports & Entertainment Transport & Engineering UK Retail JLT Specialty Limited once again delivered a strong performance, with revenue increasing 10% (5% at CRE) to million and a trading margin of 22%, buoyed by a strong new business performance in a challenging market and the positive impact of past strategic investments. JLT Specialty Limited was known as Jardine Lloyd Thompson Limited until 1st January The new name more accurately reflects the vision it has to become London's leading specialist insurance broker in defined sectors. To further reinforce our specialist position two structural changes have taken place. In the first half of 2010 we successfully integrated the UK advisory retail business into JLT Specialty, allowing us to improve the promotion of the specialty sectors through our UK regional offices. Secondly, the Aerospace insurance broking business was transferred from JLT Re to JLT Speciality at the beginning of 2011, a natural fit given its specialty focus. We continually strive to enhance and extend these specialist capabilities and continue to have success recruiting leading specialists, attracted by our culture and an environment that enables them to succeed. LLOYD & PARTNERS Principal lines of business Property Cargo, Fine Art & Specie Healthcare & Professional Casualty Energy & Marine Programmes Lloyd & Partners comprises our London and Bermuda specialist wholesale broking businesses. It experienced another year of strong competition from the US domestic market, especially for general property and casualty risks. Soft market conditions prevailed in most other classes, offshore energy being the one exception following the loss of the offshore rig at Macondo. Lloyd & Partners arranged payment of the claim for the loss of this rig, the largest single offshore rig loss in history, within seven working days. The impact of this loss on rates has, however, proven to be less significant than anticipated. Despite the challenging market and economic environment a very creditable 12% increase in revenue was achieved (4% at CRE). The London business achieved headline growth of 13% which reflects solid levels of income growth from our Energy & Marine, Cargo, Fine Art & Specie and International Property and Casualty teams. The new programme team also made a sound contribution in its first full year of operation. The Bermuda business achieved good organic revenue growth of 7% with Casualty returning a strong performance on the back of a lack of capacity and hardening rates in London. Trading profit increased by 29% and we improved our trading profit margin by a further three percentage points to 23%. Financial highlights TOTAL UNDERLYING TRADING REVENUE m PROFIT m Financial highlights TOTAL UNDERLYING TRADING REVENUE m PROFIT m TRADING MARGIN 20% 22% TRADING MARGIN 20% 23% Jardine Lloyd Thompson Group plc Annual Report 2010

21 JLT REINSURANCE BROKERS Principal lines of business All classes of treaty and facultative reinsurance All classes of aerospace insurance Solid progress was made in both our Reinsurance (JLT Re) and Aerospace Insurance Broking (JLT Aerospace) businesses. Overall total revenue grew by 14%, including 8% organic growth, with a trading margin of 19% against 18% in Although there were a number of natural catastrophes, including major earthquakes in Haiti, Chile and New Zealand, as well as the man-made loss of the offshore rig at Macondo, the financial loss to the reinsurance market was easily absorbed. Generally, the reinsurance market continues to enjoy abundant capital which is the main driver for the continued downward pressure on rates. Despite the soft rating environment, we achieved 20% growth (16% organic) in turnover for our key Non-Marine segment. Equally satisfying was a 22% (13% organic) increase in turnover for Aviation reinsurance business whilst our core Marine and Energy business was flat with a small negative in organic terms. A key feature in today's market is our ability to assist our clients with matters concerning their capital and solvency management. With this in mind, in April 2010 we launched JLT Advisory Limited, a wholly owned subsidiary of JLT Reinsurance Brokers Limited. From the beginning of 2011 JLT Aerospace has been transferred and incorporated into JLT Specialty Limited. JLT Aerospace grew its revenue by 17% (9% organic). Our goal of becoming the world's leading aviation broker is on track. We continued to win market share and by the close of 2010 we have become the third largest global airline insurance broker. ASSOCIATES SIACI SAINT HONORÉ SIACI Saint Honoré (S2H), our 20% owned associate company headquartered in Paris, continues to flourish as a leading provider of insurance broking and employee benefits services to major French companies and multi-national corporations. In 2010, S2H's consolidated revenues grew by 8% to 173 million and pre-tax profits were 45 million. A number of important new business wins were made in the year, including the construction lines business of GDF Suez, the energy company, secured with support from JLT. The value of our joint collaboration and its impact in bringing business to the London Market has continued to grow in To extend this collaboration, JLT RS France, formerly 100% owned and operating in the Oil & Gas sector has become a 60:40 JLT/S2H joint venture. S2H's international healthcare insurance and claims handling operation, principally based in Calgary, Paris, Dubai and Shanghai, also continues to expand, enjoying a double-digit increase in revenue in GRECO JLT acquired a 20% equity share in the GrECo Group in July GrECo is an independent insurance broker and consultant and market leader in Central and Eastern Europe. It has 52 offices with 660 employees in 15 countries, being Austria, Bulgaria, Croatia, Czech Republic, Hungary, Kazakhstan, Lithuania, Poland, Romania, Russia, Serbia, Slovenia, Slovakia, Ukraine, and Uzbekistan. All offices outside Austria are being branded GrECo JLT. The consolidated revenues increased by 21.5% from 52.2 million to 63.5 million in The revenue increase can mostly be attributed to growth in Poland, Russia and Croatia as well as the acquisition of an insurance brokerage in Austria. BUSINESS REVIEW Financial highlights TOTAL UNDERLYING TRADING REVENUE m PROFIT m JLT STERLING During 2010, JLT merged its former Mexican wholesale and reinsurance business (JLT Mexico) with Grupo Lorant Martinez & Salas (Lorant MS) to create JLT Sterling. Sterling Re Intermediario de Reaseguro S.A. de C.V, which trades as JLT Sterling, is a joint venture company incorporated in June 2010 in which JLT has a 34% shareholding, the balance of the shares being held by Lorant MS TRADING MARGIN 18% 19% Jardine Lloyd Thompson Group plc Annual Report

22 BUSINESS REVIEW REVIEW OF OPERATIONS CONTINUED EMPLOYEE BENEFITS Principal lines of business Trustee Solutions Offering a range of services designed to meet the requirements of pension scheme trustees including actuarial and investment consulting, administration, governance and communications. Employee Benefit Solutions Providing advice on the design, implementation and operation of defined contribution and benefit schemes including online client solutions for pensions, reward and flexible benefits management. Wealth Management As responsibility for retirement savings shifts to the individual, we offer advice, support and portfolio management services. Technology and Systems Providing a range of systems and web-based solutions such as Profund and BenPal we support the management of pensions and benefits arrangements. Pension Capital Strategies Providing strategic consultancy and execution for a range of de-risking and risk transfer options to sponsors and trustees of defined benefit schemes. Independent Trustee Services Providing independent trustee services to Defined Benefit schemes, particularly to those where risk and conflict may arise or complex transactions may be contemplated. Financial highlights TOTAL UNDERLYING TRADING REVENUE m PROFIT m Our UK Employee Benefits business delivered a 46% increase in revenues and a 52% increase in trading profit in the year. This reflected the acquisitions of HSBC Actuaries and Consultants and iimia Wealth Management. Organic growth for the year was 4%. The acquisitions, which have now been integrated into the business, provide us with a strong range of services to meet our clients needs in the future. Market developments during the year have reaffirmed the importance of these investments. For example, we see rising demand for investment consulting services as Defined Contribution schemes grow under the UK Auto Enrolment regulations which take effect from The UK pension taxation changes for high earners have increased demand for individual pension and financial advice, providing opportunities for our Wealth Management business. We continue to witness considerable change in our market as the trend from Defined Benefit to Defined Contribution pensions continues and responsibility for retirement provision increasingly transfers to the individual. The UK Defined Benefit market still holds over 1 trillion of liabilities across 6,500 schemes in the private sector. Whilst we estimate a little over half of these assets will remain in long-term run-off under occupational scheme structures, we expect the balance to be actively managed via forms of liability reduction or transfer. This represents a large and long-term opportunity for supporting scheme sponsors and trustees. At the same time, we are witnessing increased attention and growth in Defined Contribution schemes. The UK Government s decision to proceed with Auto Enrolment legislation and the creation of National Employment Savings Trust will increase the size of, and flows to, these schemes. Employers will need guidance and support in meeting their new obligations under this legislation and we intend to be active in assisting employee engagement and investment solutions for scheme members. During 2010 we have seen the value our clients attach to our Employee Benefits technology BenPal. We have secured over 50 implementations and have a healthy pipeline of new business. BenPal enables employers to manage online the entire employee benefit programme (usually consisting of Pensions, Healthcare, Life and Disability Protection, as well as Voluntary Benefits) with low administration and a high employee benefit experience. Our Wealth Management business comprises financial planning, Self Invested Personal Pension administration and Discretionary Fund Management meeting the needs of higher earners and high-net worth clients. Reflecting the increasing regulatory environment for pensions and the role of the Pensions Regulator, our Independent Trustee business, ITS, had a very strong year. ITS added to a number of high profile appointments in recent times with its appointment to the Uniq scheme which has recently closed the UK s first major deficit for equity swap, further underlining its pre-eminent position in the independent trustee market. TRADING MARGIN 16% 17% Jardine Lloyd Thompson Group plc Annual Report 2010

23 THISTLE INSURANCE SERVICES Principal lines of business Direct Providing personal insurance and insurance for small commercial risks direct to customers via online and traditional platforms. Affinity Providing insurance solutions to members of all types of affinity groups. Public & Social Working with associations, local and national government to provide insurance solutions for them and their tenants. Broker Distribution Supporting more than 2,000 independent brokers in underwriting and the distribution of insurance products. Broker Facilities Working with UK regional brokers to provide them access to the London Insurance Market. Our Thistle business was restructured at the beginning of 2010, when the UK Scheme and Affinity business was combined with our Thistle Managing General Underwriter (MGU) and rebranded as Thistle Insurance Services Limited. Thistle s MGU is an underwriting and distribution company which markets products on a non-advisory basis, writing small-ticket highvolume business. It provides an end-to-end service, from designing and branding the products, to underwriting the risk and handling claims. The MGU performs all of the activities of a traditional underwriter, except that it uses third-party capital rather than that of the JLT Group. Thistle's revenue is generated in part by a fee earned for administering the MGU and in part by sharing in any underwriting profits on the business written with the capital provider. Importantly Thistle does not however share in any underwriting losses. During the year, the MGU has traded in a very competitive marketplace which has meant that very disciplined underwriting has been essential. Thistle also administers a number of Managing General Agencies (MGAs) where it has limited authority to bind certain types of business on pre-agreed terms with an insurer. On this type of business, Thistle earns its revenue by way of commission on the business written rather than its profitability. Whilst all parts of the business have operated in a very competitive environment, we increased total revenue by 11% to 37.7 million and increased trading margin by 3 percentage points to 13%. We have continued our business transformation programme, which has seen us develop a major new office in Gloucester providing an integrated conventional, tele-marketing and online distribution capability. This will enable us to service new and existing clients to better effect. Our offices in Birmingham and Southampton have been consolidated into the new Gloucester office. BUSINESS REVIEW Financial highlights TOTAL UNDERLYING TRADING REVENUE m PROFIT m 2010 Gross written premium 112m MGA* Facilities 75m TRADING MARGIN 10% 13% Thistle MGU** 37m *Managing General Agency **Managing General Underwriter Jardine Lloyd Thompson Group plc Annual Report

24 BUSINESS REVIEW FINANCE DIRECTOR S REVIEW We are the largest European based company providing these services and are quoted on the London Stock Exchange. Performance Summary The Despite Group challenging was formed trading February conditions 1997 continuing by the merger in all its of key Jardine markets, JLT once again delivered a strong financial performance in Insurance This is summarised Brokers and in the Lloyd table Thompson below which Group. includes a comparison using constant rates of exchange (CRE). Lloyd Thompson was founded in 1981 and listed on the London Stock Exchange in October The merger combined Lloyd Thompson s m specialist skills in the London Market with Total Jardine Revenue Underlying Trading Profit Trading Margin Insurance Broker s international network 2010 which Growth included a CRE significant RISK & INSURANCE presence in the Asia Pacific region. Retail businesses: Since the merger, the Group has continued to expand its international Australasia presence. In 2007, JLT has announced 21% a number 2% of Organic* 2% CRE % CRE 28% % bolt-on Asiaacquisitions as it continues to build 64.3 for the 26% future. 21% 20% % 22% 21% Latin America % 30% 25% % 29% 21% Canada % 11% 11% % 17% 10% Europe % 3% 6% % 16% 15% Insurance Management 4.9 (1%) (2%) (2%) % 6% 8% % 11% 10% % 24% 21% London Market businesses: JLT Specialty % 5% 6% % 19% 20% Lloyd & Partners % 4% 4% % 21% 20% JLT Reinsurance % 7% 8% % 16% 18% % 5% 6% % 19% 19% % 8% 8% % 21% 20% EMPLOYEE BENEFITS % 46% 4% % 17% 16% THISTLE INSURANCE SERVICES % 11% 6% % 13% 10% Central Overheads (27.0) (27.0) (13.5) % 14% 7% % 16% 17% Underlying trading profit Associates after tax Underlying net finance costs (3.5) (2.6) Underlying profit before taxation Net exceptional costs (10.7) (2.8) Profit before taxation for the year Underlying tax expense (37.7) (30.0) Non-recurring tax credit and tax on net exceptional items Non-controlling interests (4.2) (2.4) Profit after taxation and non-controlling interests Underlying profit after taxation and non-controlling interests Diluted earnings per share 41.7p 33.1p Underlying diluted earnings per share 40.5p 33.8p *Organic growth is based on total revenue excluding the effect of currency, acquisitions and disposals and investment income. Total revenue comprises fees, commissions and investment income. CRE (Constant rates of exchange) 22 Jardine Lloyd Thompson Group plc Annual Report 2010

25 The results for 2010 demonstrate the ability of the Group to achieve continued organic growth, with the savings derived from the business transformation programme providing the continued capacity to invest in client facing staff and technology. Underlying trading profit for the year increased by 25% to million, an increase of 9% at constant rates of exchange (CRE), reflecting: revenue growth of 21% to million, an increase of 14% at CRE. This increase comprised organic growth of 7% and a contribution from acquisitions, also of 7%. Included within revenues is investment income on fiduciary funds of 5.6 million (2009: 6.4 million). an improvement in underlying trading margin, which increased from 16.7% to 17.4%, notwithstanding continued investment for growth. As a consequence the operating cost ratio has continued to reduce. However, while the Group s reported trading profit margin increased by 70 basis points to 17.4%, at CRE it fell to 16.0% as the trading margin improvements in the businesses were counteracted by an increase in the Group s central costs. This increase in central costs was due largely to litigation and professional indemnity settlements incurred in the year which were higher than we would normally expect. Reported profit before tax was million (2009: million) which includes net exceptional and non-recurring costs of 10.7 million, comprising business transformation programme costs of 7.3 million, integration costs of 5.5 million, offset by net gains of 2.1 million. The tax charge to the year was 24.5 million, representing an underlying tax expense of 37.7 million, reduced by a non-recurring tax credit of 13.2 million, primarily relating to a reassessment of the Group's tax position, following the resolution of several long outstanding tax matters with various tax authorities. The underlying effective tax rate was 29%. Profit after tax and non-controlling interests increased by 19.8 million to 90.7 million. Diluted earnings per share increased by 26% to 41.7p on a reported basis and by 20% to 40.5p on an underlying basis. Business transformation programme The Group's three-year business transformation programme is on schedule to complete by June The objective is to reduce the cost of business by streamlining back-office processes, allowing us to enhance delivery of the services we provide to clients. By the end of the programme, this initiative is expected to deliver some 16 million of recurring cost savings per annum, in return for cumulative one-off costs of 19 million. Due to the material size of this non-recurring expenditure, the one-off costs to achieve the programme are being treated as exceptional. BUSINESS REVIEW H m Actual Actual Forecast Forecast Incremental One-off costs (7) (7) (4) (1) Associated benefits Cumulative One-off costs (7) (14) (18) (19) Recurring benefits The results for 2010 demonstrate the ability of the Group to achieve continued organic growth. Jardine Lloyd Thompson Group plc Annual Report

26 BUSINESS REVIEW FINANCE DIRECTOR S REVIEW CONTINUED Operating cost ratio Underlying operating costs divided by turnover 85.8% Dividends 84.2% 83.2% Dividend cover Underlying diluted earnings per share divided by total dividend per share 1.5x 1.6x 1.8x The board is recommending a final dividend in respect of 2010 of 13.7p per share. Together with the interim dividend of 8.8p per share, this brings the total dividend to 22.5p per share, an increase of 7%. This represents improved dividend cover of 1.8 times, based on underlying diluted earnings per share, compared to 1.6 times in Balance sheet and cash flow Net debt at 31st December 2010 was 76 million. The increase of 34 million compared to 2009 was primarily due to investment in our continuing acquisition programme. Net pension liabilities reduced by 15 million to 73 million. This is mainly due to the change to the statutory inflation rate from RPI to CPI which is used for the valuation of deferred pensioners liabilities in the UK defined benefit pension scheme. Otherwise key pension scheme assumptions remain on a consistent basis with prior years. Financing and liquidity During 2010 the Group successfully refinanced its long term committed bank facilities. In September the Group completed a private placement of $125 million fixed rate long-term unsecured loan notes with a group of US investors. The loan notes have maturities between 2017 and The refinancing programme was completed with the replacement of the Group's existing committed five year revolving credit facilities of 250 million with a new five year committed facility of 270 million provided by the Group's relationship banks. The Group now has increased unsecured committed debt facilities equivalent to a total of 351 million with maturities spread between 2015 and The additional headroom provides JLT with core committed long term funding and flexibility to support the future growth of the business. The higher coupon and margin rates available in the market will of course have an impact on our borrowing cost, which in 2011 we currently expect to increase by approximately 2.5 million. Foreign exchange management The Group is exposed to transactional and translational exposure. The transactional exposure arises primarily in the London Market businesses, which have a sterling cost base but which have a significant proportion of US dollar-denominated revenues of approximately US$260 million per annum. This represents 22% of the Group s revenue. The Group continues to operate a prudent hedging programme to reduce the volatility caused by exchange rate movements, by entering into forward foreign exchange contracts. In 2010, the Group achieved an average rate after hedging of US$1.55, which was consistent with the average market rate of US$1.55. The Group s hedging position as at 1st March 2011 is set out in the table below along with an indication of the potential year-on-year revenue impact based on current market rates. USD Revenue Protection Full Year Projections Actual Forward Rates Average market rates Hedging rates achieved As at 28th Feb 2011 $1.55 $1.51 $1.53 $1.53 $1.54 % Revenue hedged 90% 84% 77% 70% 10% Market forward rates as at 28th Feb 2011 $1.62 $1.61 $1.60 $1.59 Blended achieved rates after hedging $1.55 $1.53 $1.55 $1.55 $1.58 Value of $260m revenue 168m 170m 168m 168m 165m Approx YOY revenue impact 16m 2m ( 2m) - ( 3m) 24 Jardine Lloyd Thompson Group plc Annual Report 2010

27 As a guide, each one cent movement in the achieved rate (taking into account the hedges in place) currently translates into a change of approximately 1 million in revenue, with a corresponding impact on trading profit equal to approximately 65% of the revenue change. The Group s financial risk management, exposures and policies are included under the Risk Management Report on pages 26 to 29. Acquisitions The Group continues with its strategy of seeking accretive bolt-on acquisitions. On 25th January 2010 the Group acquired iimia Wealth Management, a leading private clients consultancy and discretionary portfolio management business for a total consideration of 9.5 million of which 0.8 million is deferred. This business contributed revenue of 6.2 million and a net profit of 0.7 million to the Group in On 22nd December 2010, the Group acquired Tripol AS, an Oslo based broker specialising in the real estate and construction business. The total purchase consideration was 3.8 million, including deferred consideration of 1.1 million. This business made no material contribution to Group revenue and net profit in Basis of presentation The Group's 2010 financial statements include a consolidated income statement, balance sheet, statement of comprehensive income, statement of changes in equity and a statement of cash flows. These statements have been prepared in accordance with International Financial Reporting Standards. Statutory accounts of individual Group companies are prepared, as required, in accordance with applicable local accounting standards. The balance sheet of the parent company, Jardine Lloyd Thompson Group plc, which is included in this Annual Report, has been prepared in accordance with generally accepted accounting principles in the UK. BUSINESS REVIEW Simon Mawson Finance Director 22nd March 2011 Jardine Lloyd Thompson Group plc Annual Report

28 BUSINESS REVIEW RISK MANAGEMENT REPORT The Group takes a holistic approach to risk management and the control environment. Responsibility and accountability are shared across all Group companies, with ultimate responsibility resting with the Board. Each operating company maintains controls and procedures appropriate to its own business and regulatory environment while conforming to Group standards and guidelines. The identification and mitigation of major business risks is the responsibility of operational management and the Board. In accordance with the Combined Code, an effective process is in place to identify, assess and manage key risks faced by the Group. This process has been in place throughout the financial year and up to the date that these financial statements were approved. As a global company, JLT faces a range of risks, each of which has the potential to impact on financial performance or the achievement of strategic business objectives. We recognise the growing importance of managing our risks within acceptable and practical limits and have invested further in the development of our internal risk management capabilities during the course of This has included the introduction of a dedicated Group risk management function and the design and implementation of an enhanced risk management framework for the Group. JLT's Group-wide risk management activities are supported and co-ordinated through a centralised Group risk management team, led by the Group Chief Risk Officer. In each of our regional operations the Group Chief Risk Officer works with executive management to ensure that the risk management framework is being used consistently and also to communicate decisions taken at Group level. Monitoring of risk is carried out internally by the group risk function and assurance gained through financial, operational, compliance and quality based auditing. Significant failures are reported to the executive directors to ensure that remedial action is taken. The Board reviewed the Group s procedures for the management of risk during the year and is satisfied that appropriate processes and procedures are in place in order to identify and manage the significant risks faced by the Group. The responsibility for internal controls within associated undertakings rests essentially with the senior management of those operations, the role of the Group being to monitor its investments and to exert influence, normally through Board representation. The directors acknowledge that they are responsible for the Group s systems of internal control and for reviewing their effectiveness and this review has been undertaken during the year. Risk management framework Our risk management framework sets out the structure for the governance and oversight of risk and summarises the process for the management of risks within the Group. Corporate governance and oversight Our risk governance framework acknowledges that responsibility for the management of risk resides with the operational management of our businesses, but allocates responsibility for the oversight of risk management to the local Boards and Audit & Risk Committees. This structure operates across our international operations with ultimate responsibility and oversight resting with the Group Board and the Group Audit & Risk Committee. Risk management process We have a formal risk management process embedded consistently within all the Group's operations. This process provides guidance for the identification, measurement, treatment, monitoring and reporting of risks. It also addresses the definition and measurement of risk appetite and how this should be articulated and managed in line with Group prescribed tolerances. The risk review process is based on both bottom-up and top-down assessments of risk with each Group company maintaining a 'live' business risk register to articulate clearly and assess current and emerging risks. The objective of the process is to capture and quantify risk, taking account of the effectiveness of the risk mitigating controls and actions within each Group company. The Group Risk Management function reviews and challenges risks independently across the Group and produces an aggregated view of the risk for the Group as a whole. During the year a global risk management system was introduced enabling more consistent recording, reporting and improved analysis of risk information across the Group. The principal risks faced by the Group are summarised in the table opposite. 26 Jardine Lloyd Thompson Group plc Annual Report 2010

29 Principal Risks Nature of Risk Risk Mitigation STRATEGIC AND OPERATIONAL RISKS Strategic Risks Loss of Key Staff Risks to the business model arising from changes in external events, our markets and customer behaviour as well as risks arising from mergers and acquisitions Risks arising from the inability to retain key staff within our core business operations GEC and Board review of strategic risks Strategic review and planning process Global efficiency initiative Acquisition due diligence and risk assessment processes Succession planning processes Effective appraisal and development programmes Robust contracts of employment Business Interruption Loss of IT Environment Information Security CONDUCT OF BUSINESS RISKS Errors & Omissions Regulatory Sanctions/Financial Crime Risk of business interruption arising from a major external event Risks arising from non-performance of an IT supplier, malicious act, cyber crime and staff not following group IT policies and procedures Risk of loss of records, breach of confidentiality or inadequate security measures Risks arising from non-compliance with operating procedures in place across the Group, or alleged negligence in provision of services/advice Risks arising from non-compliance with or misinterpretation of local and international regulations and failure to meet regulatory standards Dedicated Group business continuity management function Detailed Group business continuity policy and procedures Regular independent review and testing of business continuity plans Detailed IT policy and procedures in place Strong governance procedures over IT outsourcing and service level agreements in place Monitoring of compliance with a Group IT security policy and service level agreements Limits of authority in place. Group Information Security Policy Risk-based monitoring and reviews monitoring performed by Group Information Security Officer and Internal Audit Common operating procedures and compliance policy Continuous training in errors & omissions avoidance Central and regional risk and compliance monitoring Strong procedural and systems controls including workflow management Regular and ongoing quality and compliance audits Insurance programme Common operating procedures and compliance policy Continuous staff training programmes Central and regional risk and compliance resource Regular and ongoing compliance audits BUSINESS REVIEW FINANCIAL RISKS Capital Risk and Liquidity Foreign Currency Interest Rate Risk Risks arising from an inability to maintain an efficient capital structure and ensure an optimal cost of capital Risk of adverse impact on the balance sheet or earnings arising from exposure to significant foreign currency transactions Risk of adverse impact on earnings from net exposure to changes in interest rates Monthly management reviews of Group balance sheet Management of refinancing and liquidity risk including maintenance of adequate, committed credit facilities Compliance with regulatory minimum capital resources and regular stress testing Prudent management of currency exposures through the maintenance of a rolling hedging programme using forward foreign currency transactions and derivatives where appropriate Regular review and sensitivity analysis Prudent use of interest rate hedging instruments where appropriate to hedge future interest rate exposures Counterparty Risk Risk of loss of own cash, fiduciary funds, investments and deposits, derivative assets and trade receivables as a result of the failure of key counterparties Board approved investment and counterparty policy to: - limit the concentration of funds and exposure with any one party - define cash and investments policy Active management and monitoring of counterparty limits, financial strength and credit profile of key counterparties Regular review by Board and Audit & Risk Committee of counterparty limits, ratings, credit default swap spread rates, utilisation and compliance with applicable regulation Jardine Lloyd Thompson Group plc Annual Report

30 BUSINESS REVIEW RISK MANAGEMENT REPORT CONTINUED Financial risk The Group has in place financial risk management policies, which are approved by the Board, and uses various financial instruments, including derivatives, to manage these risks. Currency risk The Group s major currency transaction exposure is to the US dollar and arises in our London Market businesses which earn annual US dollar denominated annual revenue of approximately US$ 260 million. Consequently, the Group s results are highly sensitive to changes in the Sterling/US dollar exchange rate; each one cent movement in our achieved rate, after hedging, currently translates into a change of approximately 1.0 million in revenue and a corresponding impact on trading profit equal to approximately 65% of the revenue change. Group policy is to take a prudent approach to the management of these exposures by maintaining a rolling hedging programme as described on page 24. The table below illustrates the sensitivity of the achieved average rate after hedging for US dollar revenue earned in the UK if the balance of current unhedged forecast revenue was sold forward based on a range of spot rates: Potential achieved average rate USD/sterling spot rate The Group also has transactional currency exposures in the UK to the Euro and Australian dollar and these are selectively hedged through forward foreign currency transactions. The Group does not hedge exposure to currency movements that affect the translation of the profits of overseas subsidiaries earned in foreign currencies, except to the extent that those profits are expected to be distributed to the holding company. The Group has significant investments in overseas operations. Movements in exchange rates between balance sheet dates will affect the sterling value of the Group s consolidated balance sheet. The currency profile of the Group s borrowings is managed to mitigate exposure to translation exposures where practical and cost effective. Interest rate risk The Group has both interest bearing assets and interest bearing liabilities that give rise to net exposures to changes in interest rates, primarily in US Dollars and Sterling. Where appropriate, the Group uses interest rate swaps and forward rate agreements to hedge or match future interest rate exposures. The Group's policy is to continue to adopt a prudent approach to the management of net interest rate exposures arising from the Group's cash and borrowings. Each 0.5% movement in the average achieved rate of return impacts interest income receivable by approximately 2.8 million, based on average invested balances. US private placement loan notes The Group has entered into cross-currency interest rate swaps to hedge the exposures arising from the proceeds of the US dollar denominated loan notes which have been swapped into Sterling at Libor based floating interest rates. Counterparty credit risk The Group's gross exposure to credit risk at 31st December 2010 is 755 million, representing own cash, fiduciary funds, investments and deposits, derivative assets and trade receivables. The Group maintains a counterparty policy based on credit analysis, market data and published ratings criteria to manage the concentration of funds and exposure to individual counterparties. Deposit limits are assigned to each counterparty appropriate to their credit rating and overall financial profile. The financial profiles and approved limits for counterparties are kept under continued review with reference to published financial and credit data. The Group manages its own cash and invested fiduciary funds in the form of deposits with investment grade banks, AAA money market funds and other secure short-term money market instruments in accordance with this investment and counterparty policy, which is agreed by the Board of Directors, and, in respect of fiduciary funds, all relevant regulatory guidelines. All deposit counterparties are subject to review at Board level. 28 Jardine Lloyd Thompson Group plc Annual Report 2010

31 The Group s approval criteria include a requirement that financial institutions maintain a minimum long-term rating of A, with additional reference to market credit default swap spreads and capital base and Tier 1 capital ratios. All exposures to individual counterparties are subject to a formal credit limit to control concentrations of credit exposure and limit the impact of default risk. Counterparty limits, ratings, credit default spread rates and capital base, together with utilisation levels, are reviewed regularly and reported to the Group Board and Audit & Risk Committee. The respective credit quality by rating of each class of financial asset is included within the notes to these accounts. Commodity price risk The Group does not have a material exposure to commodity price risk. Capital risk and liquidity The Group's objectives when managing capital are to safeguard the ability to continue, as a going concern, to provide returns for shareholders and benefits for other stakeholders and to maintain an efficient capital structure to ensure an optimal cost of capital. In order to achieve these objectives, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group classifies net debt and equity as capital and manages its balance sheet through monthly management reviews, controls and financial reporting. The Group continues to maintain adequate, committed, longterm credit facilities to ensure that it is well positioned to meet the variances of the seasonal capital requirements and to support the strategic growth of the businesses. There are no restrictions on the use of these facilities in the normal course of business. The insurance broking operations within the Group operate in a number of jurisdictions where local regulation requires a minimum level of capital to be maintained. The total regulatory capital to be held by the Group is not considered significant in the context of the total available capital. BUSINESS REVIEW The total capital of the Group at 31st December 2010 and 2009 was as follows: 'm Total cash (69.3) (57.8) Borrowings Net debt Total equity Total capital Jardine Lloyd Thompson Group plc Annual Report

32 CORPORATE GOVERNANCE DIRECTORS PROFILES G M T Howe, Chairman Non-Executive Geoffrey Howe was appointed a Non-executive Director in January 2002, became Joint Deputy Chairman in November 2004 and the Senior Independent Director in April He was appointed Chairman in April 2006 when he relinquished the appointments as Senior Independent Director, Chairman of the Remuneration Committee and member of the Audit Committee. He remains a member of the Nominations Committee. He is Chairman of the Nationwide Building Society and a nonexecutive director of Close Brothers Plc. He was formerly Chairman of Railtrack Group plc, a director of Investec plc, group general counsel of Robert Fleming Holdings and managing partner of Clifford Chance. 2. D J Burke, Chief Executive Dominic Burke joined Jardine Lloyd Thompson in 2000, when the Burke Ford Group of companies, of which he was Chief Executive and co-founder, became part of JLT. Dominic is Chairman of the Group Executive Committee and was Chief Executive of the UK and Ireland Insurance Broking and the Group's Employee Benefits businesses until December He was appointed a Director and Chief Operating Officer of Jardine Lloyd Thompson Group plc on 1st January He was appointed Group Chief Executive on 1st December 2005, standing down as Chief Operating Officer on that date. He was appointed a Non-Executive Director and Deputy Chairman of Newbury Racecourse PLC in November Lord Leach of Fairford, Deputy Chairman Non-Executive Rodney Leach was Chairman of Jardine Insurance Brokers, latterly JIB Group plc, between 1988 and He was appointed Deputy Chairman of the Company in February He is Chairman of the Nominations Committee and a member of the Remuneration Committee. Other directorships include Jardine Matheson Holdings, Rothschild Continuation AG and various listed Jardine Matheson Group companies. 4. M F G Drummond Brady Mark Drummond Brady has been with the JLT Group since 1987 and has held a number of senior posts in the Group. He is the Group s International Chairman of Risk & Insurance. He was appointed a Director of Jardine Lloyd Thompson Group plc on 1st March 2011 and is a member of the Group Executive Committee. 5. R J Harvey Non-Executive Richard Harvey was appointed a Non-Executive Director in December He is a member of the Audit & Risk, Nominations and Remuneration Committees. He is a fellow of the Institute of Actuaries. He enjoyed a long and successful career in the insurance industry principally with Norwich Union where he was Chief Executive from 1998 to 2000 and subsequently with Aviva plc where he was Group Chief Executive from 2001 to He was also Chair of the Association of British Insurers from 2003 to He is Non-Executive Chairman of PZ Cussons plc. 30 Jardine Lloyd Thompson Group plc Annual Report 2010

33 S L Keswick Non-Executive Simon Keswick was a non-executive director of JIB Group plc between 1988 and 1997 and was appointed a Director of the Company in January His other directorships include Jardine Matheson Holdings Limited and other Jardine Matheson Group companies. He is a member of the Audit & Risk, Remuneration and Nominations Committees. 7. N R MacAndrew Non-Executive Nick MacAndrew was appointed a Non-Executive Director in July He is Chairman of the Audit & Risk Committee and a member of the Remuneration and Nominations Committees and is Senior Independent Director. Nick is a Non-Executive Director of Fuller Smith & Turner plc and Wates Group Limited, and was until recently Chairman of F&C Asset Management plc. A chartered accountant, he was previously finance director of Schroders plc and Chairman of Save the Children. 8. J G H Paynter Non-Executive John Paynter was appointed a Non-Executive Director in October He is Chairman of the Remuneration Committee and a member of the Audit & Risk and Nominations Committees. A barrister, John joined Cazenove & Co in 1979 and became a partner in the firm in 1986 and Head of Corporate Finance in He became Vice Chairman of the JP Morgan Cazenove investment banking joint venture on its creation in March 2005 and retired in July 2008 following a 29 year career in the City during which he advised on many landmark transactions and advised some of the UK's largest companies, including many in the banking and insurance sectors. He is a non-executive director of Standard Chartered plc, Standard Life Investments Limited and Standard Life Investments Holdings Limited and is a senior advisor to Greenhill & Co International. 9. Simon Mawson, Finance Director Simon Mawson, a chartered accountant, was appointed Finance Director of the Group on 6th August He is a member of the Group Executive Committee. He joined JLT from PT Astra International Tbk, an Indonesian listed conglomerate, where he was Director responsible for Finance, Risk Management and Information Technology. Prior to Astra, he worked for PricewaterhouseCoopers in Leeds, London and Hong Kong and for Jardine Matheson in various financial positions in Hong Kong. 10. V Y A C Wade Vyvienne Wade was appointed a Director in 2002 and is a member of the Group Executive Committee. She is Group Legal Director, CEO of JLT Latin America, Chairman of JLT Insurance Management and of JLT Southern Europe. A barrister and member of the Inner Temple, Vyvienne joined JLT in 1987 and was made Group Legal Director in In 2002 Vyvienne was appointed to the main board and has since become CEO of JLT's Latin American operations and Chairman of JLT's Insurance Management and of the Southern European businesses. Vyvienne is also a Non-Executive Director of Lloyd & Partners Limited and is on the Board of the London and International Insurance Brokers' Association. CORPORATE GOVERNANCE Jardine Lloyd Thompson Group plc Annual Report