HRH said the second-quarter expense—which is a non-cash asset impairment charge—relates to the departure of "certain key producers" at its London-based HRH Reinsurance Brokers Ltd. unit who were responsible for "a significant portion of the operation's revenue."
The key producers’ exits took place before the announcement that Willis Group Holdings Ltd. would pay $2.1 billion to acquire HRH, said the broker. HRH then entered into a co-brokering agreement in an effort to serve and to retain the subsidiary's clients, it said.
Also contributing to the decline were HRH's acquisition of Banc of America Corporate Insurance Agency L.L.C., increased professional and claims fees, the timing related to the shift from contingent commissions to supplemental commissions and increased costs related to the employee medical program, HRH reported.