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    Willis Group Reports Second Quarter 2010 Results

    $0.52 reported, or $0.54 adjusted, net income
    per diluted share from continuing operations

    2 percent reported, or 4 percent organic, growth in commissions and fees compared with second quarter of 2009, driven by 16 percent new business growth and solid client retention

    21.2 percent reported operating margin; 21.4 percent adjusted operating margin, up 20 basis points compared with second quarter of 2009

    NEW YORK, July 28, 2010 — Willis Group Holdings plc (NYSE: WSH), the global insurance broker, today reported results for the quarter and six months ended June 30, 2010.

    “Our second quarter results continue to reflect the strength of our geographic diversity and our relentless focus on building the business,” said Joe Plumeri, Chairman and Chief Executive Officer, Willis Group Holdings. “Organic growth in commissions and fees was 4 percent, driven by 16 percent new business growth and solid client retention. This result was in the face of a continued soft insurance market and challenging economic conditions. We continue to exercise disciplined expense management while funding investments for future growth.”

    Second Quarter 2010 Financial Results

    Reported net income from continuing operations for the quarter ended June 30, 2010 was $89 million, or $0.52 per diluted share, compared with $87 million, or $0.52 per diluted share, in the same period a year ago. Reported net income from continuing operations for the second quarter of 2010 was impacted by a net loss on disposal of operations of $3 million after tax, or $0.02 per diluted share, and for the second quarter of 2009 by certain items, which are detailed later in this release.

    Adjusted net income per diluted share from continuing operations increased 4 percent to $0.54 in the second quarter of 2010 compared with $0.52 in the second quarter of 2009. Foreign currency movements favorably impacted earnings by $0.03 per diluted share compared with the second quarter of 2009. In addition, a pre-tax gain of $12 million, or $0.04 per diluted share, was recognized on the curtailment of the US pension plan in the second quarter of 2009.

    Total reported revenues for the quarter ended June 30, 2010 were $799 million compared with $784 million for the same period last year, an increase of 2 percent. Total commissions and fees were $789 million, an increase of 2 percent from $772 million in the second quarter of 2009. Foreign currency movements unfavorably impacted reported commissions and fees by 2 percent. Investment income was $10 million in the second quarter of 2010, compared with $12 million in the second quarter of 2009. This decline was principally due to lower interest rates.

    Organic growth in commissions and fees was 4 percent in the second quarter of 2010 compared with the second quarter of 2009. Net new business growth of 6 percent reflected strong new business generation of 16 percent and solid client retention. Partially offsetting net new business growth was a 2 percent negative impact from declining premium rates and other market factors.

    The North America segment reported a 2 percent decline in commissions and fees in the second quarter of 2010 compared with the second quarter of 2009. Organic commissions and fees declined 1 percent in the second quarter of 2010 compared with an 8 percent decline in the same period a year ago. North America generated new business growth in the teens, with improved client retention, and also benefited from positive growth in the employee benefits practice. In addition, there was a $2.9 million favorable impact from a one-time accounting adjustment related to the HRH acquisition within the specialty businesses. The segment continues to be impacted by headwinds from soft insurance market conditions and ongoing weakness in the US economy. Operating margin was 20.5 percent in the second quarter of 2010. This compares with operating margin of 22.3 percent in second quarter of 2009, which included the pre-tax gain of $9 million from the curtailment of the US pension plan.

    The International business segment reported 6 percent growth in commissions and fees and contributed 8 percent organic growth in commissions and fees in the second quarter of 2010 compared with the same period in 2009. Growth was recorded across all regions, with double- digit expansion in Latin America, Asia and Eastern Europe. The UK and Ireland retail market recorded modestly positive growth after several negative quarters. Operating margin was 23.5 percent in the second quarter of 2010.

    The Global segment, which comprises the Reinsurance, Global Specialties, Faber & Dumas, and Willis Capital Markets & Advisory divisions, reported 4 percent growth in commissions and fees and 7 percent organic growth in commissions and fees in the second quarter of 2010 compared with the second quarter of 2009. Willis Capital Markets & Advisory was the primary driver of organic growth in the second quarter as a result of increased capital market activity. Reinsurance and Global Specialties also contributed positive growth in commissions and fees. Reinsurance continues to generate strong new business despite market softness, while the Global Specialties practices, especially Financial and Executive Risks and Energy, were significant contributors to organic growth in the second quarter. Operating margin was 31.8 percent in the second quarter of 2010.

    Reported salaries and benefits were $456 million in the second quarter of 2010 compared with $443 million in the second quarter of 2009. Salaries and benefits, as a percentage of revenues, were 57.1 percent in the second quarter of 2010 compared with 56.5 percent in the second quarter of 2009. Salaries and benefits in the second quarter of 2010 include $32 million of amortization of cash retention payments compared with $26 million in the second quarter of 2009. As of June 30, 2010, December 31, 2009 and June 30, 2009, the Company included $217 million, $98 million, and $142 million, respectively, in other assets on the balance sheet, which represented the unamortized portion of cash retention payments made before those dates. Salaries and benefits in the second quarter of 2009 included the pre-tax gain of $12 million on the curtailment of the US pension plan.

    Reported other operating expenses were $135 million in the second quarter of 2010 compared with $139 million in the second quarter of 2009. Other operating expenses, as a percentage of revenues, were 16.9 percent in the second quarter of 2010 compared with 17.7 percent in the second quarter of 2009.

    Reported operating margin was 21.2 percent for the quarter ended June 30, 2010 compared with 21.0 percent for the same period last year. The operating margin in second quarter of 2009 was impacted by the pre-tax gain of $12 million on the curtailment of the US pension plan. Excluding certain items, which are detailed later in this release, adjusted operating margin was 21.4 percent for the quarter ended June 30, 2010 compared with 21.2 percent a year ago. Adjusted operating margin reflected continued solid growth in organic commissions and fees, rigorous expense management, and favorable foreign currency movements, partially offset by amortization of retention payments.

    Six Months 2010 Financial Results

    Reported net income from continuing operations for the six months ended June 30, 2010 was $293 million, or $1.71 per diluted share, compared with $279 million, or $1.66 per diluted share, in the same period a year ago. Reported net income from continuing operations for the first six months of 2010 was impacted by a charge of $12 million, or $0.07 per diluted share, relating to the devaluation of the Venezuelan currency and a net loss on disposal of operations of $3 million after tax, or $0.02 per diluted share. Reported net income from continuing operations for the six months ended June 30, 2009 was impacted by certain items, which are detailed later in this release.

    Adjusted earnings per diluted share from continuing operations increased 7 percent to $1.80 for the six months ended June 30, 2010 compared with $1.68 in the comparable period of 2009. Foreign currency movements positively impacted adjusted earnings per diluted share by $0.09 in the six months ended June 30, 2010 compared to the same period in 2009. In the first half of 2009, adjusted earnings per diluted share from continuing operations were positively impacted by the US pension curtailment gain of $12 million pre-tax, or $0.04 per diluted share.

    Total reported revenues for the six months ended June 30, 2010 were $1,771 million compared with $1,714 million for the same period last year, an increase of 3 percent. Foreign currency movements increased reported revenues by 1 percent.

    Organic growth in commissions and fees was 4 percent in the first half of 2010 compared with the comparable period of 2009. This growth reflected net new business won of 6 percent partially offset by a negative 2 percent impact from declining premium rates and other market factors.

    Reported operating margin was 26.5 percent for the six months ended June 30, 2010 compared with 25.6 percent for the same period last year. Excluding items detailed later in this release, adjusted operating margin was 27.3 percent for the first half of 2010 compared with 25.8 percent a year ago. Operating margin in the first half of 2009 included the pre-tax gain of $12 million on the curtailment of the US pension plan.

    Tax

    The effective tax rate was 27.3 percent for the quarter ended June 30, 2010 and 26.4 percent for the six months ended June 30, 2010. Excluding the impact of nonrecurring items, the underlying tax rate for the quarter and six months ended June 30, 2010 was approximately 26.0 percent, the same as the 2009 full year rate.

    Capital

    As of June 30, 2010, cash and cash equivalents totaled $139 million and total debt was $2.3 billion. Total equity was $2.4 billion.

    Dividends

    The Board of Directors declared a regular quarterly cash dividend on the Company’s ordinary shares of $0.26 per share (an annual rate of $1.04 per share). The dividend is payable on October 15, 2010 to shareholders of record on September 30, 2010.

    Conclusion

    “I am pleased with the progress we have made in growing our business through the first six months of 2010. While the external environment is still challenging, we are up to the challenge. We continue to manage the business to maximize the opportunity for success in any environment, growing and investing in our business, while keeping a sharp focus on expense management,” Plumeri said.

    Conference Call and Web Cast

    A conference call to discuss the second quarter 2010 results will be held on Thursday, July 29, 2010, at 8:00 AM Eastern Time. To participate in the live teleconference, please dial (866) 803-2143 (domestic) or +1 (210) 795-1098 (international) with a pass code of “Willis”. The live audio web cast (which will be listen-only) may be accessed at www.willis.com. This call will be available by replay starting at approximately 10:00 AM Eastern Time, and through August 29, 2010 at 11:59 PM Eastern Time, by calling (888) 568-0518 (domestic) or +1 (203) 369-3480 (international) with no pass code, or by accessing the website.

    About Willis

    Willis Group Holdings plc is a leading global insurance broker. Through its subsidiaries, Willis develops and delivers professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. Willis has more than 400 offices in nearly 120 countries, with a global team of approximately 17,000 employees serving clients in virtually every part of the world. Additional information on Willis may be found at www.willis.com.

    Forward-Looking Statements

    We have included in this document ‘‘forward-looking statements’’ within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. These forward-looking statements include information about possible or assumed future results of our operations. All statements, other than statements of historical facts that address activities, events or developments that we expect or anticipate may occur in the future, including such things as our outlook, future capital expenditures, growth in commissions and fees, business strategies, competitive strengths, goals, the benefits of new initiatives, growth of our business and operations, plans and references to future successes, are forward-looking statements. Also, when we use the words such as ‘‘anticipate’’, ‘‘believe’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘plan’’, ‘‘probably’’, or similar expressions, we are making forward-looking statements.

    There are important uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking statements contained in this document, including the following:

    • the impact of any regional, national or global political, economic, business, competitive, market, environmental and regulatory conditions on our global business operations;
    • the impact of current financial market conditions on our results of operations and financial condition, including as a result of any insolvencies of or other difficulties experienced by our clients, insurance companies or financial institutions;
    • our ability to continue to manage our significant indebtedness;
    • our ability to compete effectively in our industry;
    • our ability to implement and realize anticipated benefits of the Shaping Our Future, Right Sizing Willis, Funding for Growth initiatives or any other new initiatives;
    • material changes in commercial property and casualty markets generally or the availability of insurance products or changes in premiums resulting from a catastrophic event, such as a hurricane, or otherwise;
    • the volatility or declines in other insurance markets and premiums on which our commissions are based, but which we do not control;
    • our ability to retain key employees and clients and attract new business;
    • the timing or ability to carry out share repurchases or take other steps to manage our capital and the limitations in our long-term debt agreements that may restrict our ability to take these actions;
    • any fluctuations in exchange and interest rates that could affect expenses and revenue;
    • rating agency actions that could inhibit our ability to borrow funds or the pricing thereof;
    • a significant decline in the value of investments that fund our pension plans or changes in our pension plan funding obligations;
    • our ability to achieve the expected strategic benefits of transactions;
    • changes in the tax or accounting treatment of our operations;
    • any potential impact from the new US healthcare reform legislation;
    • the potential costs and difficulties in complying with a wide variety of foreign laws and regulations and any related changes, given the global scope of our operations;
    • our involvements in and the results of any regulatory investigations, legal proceedings and other contingencies;
    • underwriting, advisory or reputational risks associated with non-core operations;
    • our exposure to potential liabilities arising from errors and omissions and other potential claims against us; and
    • the interruption or loss of our information processing systems or failure to maintain secure information systems.

    The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results. For more information see the section entitled ‘‘Risk Factors’’ included in Willis’ Form 10-K for the year ended December 31, 2009 and our subsequent filings with the Securities and Exchange Commission. Copies are available online at http://www.sec.gov or www.willis.com.

    Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved.

    Our forward-looking statements speak only as of the date made and we will not update these forward-looking statements unless the securities laws require us to do so. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this document may not occur, and we caution you against unduly relying on these forward-looking statements.

    Non-GAAP Supplemental Financial Information

    This press release contains references to non-GAAP financial measures as defined in Regulation G of SEC rules. Consistent with Regulation G, a reconciliation of this supplemental financial information to our GAAP information is in the note disclosures that follow. We present such non-GAAP supplemental financial information, as we believe such information is of interest to the investment community because it provides additional meaningful methods of evaluating certain aspects of the Company’s operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. This supplemental financial information should be viewed in addition to, not in lieu of, the Company’s condensed financial statements.

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