Jardine Lloyd profit up 12 percent

LONDON (Reuters) - Insurance broker Jardine Lloyd Thompson (JLT.L) on Friday reported a better than expected 12 percent rise in its first-half profit, and said it was set for further growth despite a tough economic climate.

Jardine Lloyd, which makes money through fees and commissions on insurance policies it arranges, said it had an underlying pretax profit of 59.7 million pounds for the six months to June 30, up from 53.4 million pounds in the same period last year.

Analysts had expected a profit of 56 million pounds, according to the average of five estimates collected by the company.

Jardine Lloyd shares were up 1.5 percent at 448 pence by 9:41 a.m., valuing the company at more than 923 million pounds. The stock has risen 10 percent in the past year.

"We think it's a good overall growth story," said Noble analyst Rakshit Ranjan.

Jardine Lloyd's profits increase came on the back of a strong trading performance, the company said, with turnover climbing 16 percent on the year to 309.7 million pounds.

Revenues were lifted in part by new contracts to arrange insurance on government-backed construction projects aimed at reviving the economy, Chief Executive Dominic Burke told Reuters in an interview.

That helped offset slower progress in the company's employee benefits business, where turnover rose just 1 percent as cash-strapped businesses cut their spending.

Burke said that while there were signs of an increase in the price of catastrophe, credit and aviation insurance, prices overall remained subdued, weighed by intense competition.

"We regard the market as a soft market. We'll wait until 2010 before the market turns, I think," he said.

The cost of windstorm insurance in the Gulf of Mexico has risen significantly because of hurricanes Ike and Gustav last year, but this has been offset by a drop in sales as many oil companies operating in the region have decided hurricane cover is too expensive, Burke added.

"There simply was not the appetite to buy at the pricing that was put on the table," he said.

The company said that while the economic climate is "challenging," 2009 would be "a year of further progress for JLT."

The group is paying an interim dividend of 8.5 pence per share, unchanged from last year.

(Reporting by Myles Neligan; Editing by Mike Nesbit)