This discussion includes references to non-GAAP financial measures as defined in Regulation G of SEC rules. We present these non-GAAP financial measures, such as organic revenue growth, 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. Organic revenue growth excludes the impact of acquisitions and disposals and year over year movements in foreign exchange from revenue growth. We believe organic revenue growth provides a measure that the investment community may find helpful in assessing the performance of operations that were part of our operations in both the current and prior periods, and provide a measure against which these businesses may be assessed in the future. In addition, because we conduct business in many

countries, the impact of exchange rate movements may impact period-to-period comparisons of revenue. These financial measures should be viewed in addition to, not in lieu of, the Company's unaudited condensed consolidated financial statements for the three and six months ended June 30, 2009.

This discussion includes forward-looking statements, including under the headings 'Business Overview and Market Outlook', 'Executive Summary', 'Liquidity and Capital Resources', 'Interest Expense' and 'Income Taxes'. Please see 'Information Concerning Forward-Looking Statements' for certain cautionary information regarding forward-looking statements and a list of factors that could cause actual results to differ materially from those predicted in the forward-looking statements.

BUSINESS OVERVIEW AND MARKET OUTLOOK

We provide a broad range of insurance brokerage and risk management consulting services to our worldwide clients. Our core businesses include Aerospace; Energy; Marine; Construction; Financial and Executive Risks; Fine Art, Jewelry and Specie; Special Contingency Risks; and Reinsurance.

In our capacity as an advisor and insurance broker, we act as an intermediary between our clients and insurance carriers by advising our clients on their risk management requirements, helping clients determine the best means of managing risk, and negotiating and placing insurance risk with insurance carriers through our global distribution network.

We derive most of our revenues from commissions and fees for brokerage and consulting services and we do not determine the insurance premiums on which our commissions are generally based. Fluctuations in these premiums charged by the insurance carriers have a direct and potentially material impact on our results of operations. Commission levels generally follow the same trend as premium levels as they are derived from a percentage of the premiums paid by the insureds. Due to the cyclical nature and impact of other market conditions on insurance premiums, they may vary widely between accounting periods. Such variations can result in a reduction in premium rates

leading to downward pressure on commission revenues (a "soft" market) which in turn can have a potentially material impact on our commission revenues and operating margin.

A "hard" market occurs when premium uplifting factors, including a greater than anticipated loss experience or capital shortages, more than offset any downward pressures on premiums. This usually has a favorable impact on our commission revenues and operating margin.

From 2000 through 2003 we benefited from a hard market with premium rates stable or increasing. During 2004, we saw a rapid transition from a hard market to a soft market, with premium rates falling in most markets. The soft market continued to have an adverse impact on our commission revenues and operating margin from 2005 through 2008 with premium rate decreases averaging approximately 10 percent across our market sectors in 2008.

In first half 2009, the benefit of rate increases in the reinsurance market and stabilization in some specialty markets was more than offset by the continuing soft market in other sectors and the adverse impact of the weakened economic environment across the globe.

Our North American and UK and Ireland retail operations have been particularly impacted by the

weakened economic climate and continued soft market with no material improvement in rates across most sectors. This has resulted in first half 2009 declines in revenues in our UK and Ireland retail

business and many of our North American operations, particularly our US construction business where many projects have been postponed or cancelled.

EXECUTIVE SUMMARY

Overview

Despite the difficult trading conditions, we reported 1 percent organic commissions and fees growth in second quarter 2009 and 2 percent growth in first half 2009 compared with the same periods in 2008. This reflected growth in Global operations, in particular in Reinsurance, and many of our International businesses partly offset by a fall in organic commissions and fees in our North America, UK and Irish retail operations where revenues were adversely impacted by the continued soft market and weak economic conditions.

Operating margin for second quarter 2009 was 21 percent, compared with 12 percent in second quarter 2008, and for first half 2009 operating margin was 26 percent, compared with 21 percent in first half 2008.

Results from continuing operations for second quarter 2009

Net income from continuing operations in second quarter 2009 was $87 million, or $0.52 per diluted share, compared with $39 million, or $0.27 per diluted share, in 2008 as the benefit of an improved margin and a lower effective tax rate were partly offset by the dilutive impact of HRH, including HRH's lower operating margin, increased interest expense and intangibles amortization together with the increased sharecount arising from the acquisition.

Total revenues at $784 million for second quarter 2009 were $123 million, or 19 percent, higher than in second quarter 2008. Organic revenue growth of 1 percent and a 26 percent benefit from net acquisitions and disposals in second quarter 2009, driven primarily by the fourth quarter 2008 acquisition of HRH, were partly offset by a negative 7 percent impact from foreign currency translation and a $8 million decrease in investment income compared to 2008.

Organic revenue growth of 1 percent reflected net new business growth of 4 percent and a 3 percent negative impact from declining rates and other market factors.

Operating margin at 21 percent in second quarter 2009 was 9 percentage points higher than in 2008 with the increase mainly reflecting:

• a $60 million reduction in costs incurred in connection with our Right Sizing Willis initiatives and 2008 expense review, as discussed below, equivalent to approximately 9 percentage points;

• the realization of savings from our previous Shaping our Future and 2008 expense review initiatives together with a reduction in discretionary expenses, driven by our Right Sizing Willis initiatives in 2009;

• a $12 million curtailment gain realized on the closure of our US defined benefit pension plan to accrual of benefit for future service, equivalent to approximately 2 percentage points; and

• a net foreign currency translation gain equivalent to approximately 2 percentage points;

partly offset by

• the acquisition of HRH which has a lower margin than the remainder of the Group;

• a $20 million increase in amortization of intangible assets, primarily related to HRH, equivalent to approximately 3 percentage points;

• a $17 million increase in pension expense, excluding the $12 million US curtailment gain discussed above, driven by lower asset levels in our UK and US pension plans, equivalent to approximately 3 percentage points; and

• an $8 million decrease in investment income as global interest rates have fallen sharply since first half 2008, equivalent to approximately 1 percentage point.

Results from continuing operations for the six months ended June 30, 2009

Net income from continuing operations for first half 2009 was $279 million, or $1.66 per diluted share, compared with $205 million, or $1.43 per diluted share, in same period 2008.

Total revenues at $1,714 million for the first half of 2009 were $258 million, or 18 percent, higher than in 2008, as organic revenue growth of 2 percent, driven by our Global and International operations and a 25 percent benefit from net acquisitions and disposals, mainly reflecting the HRH acquisition, were partly offset by a negative 8 percent impact from foreign currency translation and a year over year decline in investment income.

HRH's first half 2009 results, net of related funding costs and intangible amortization, contributed $0.01 per diluted share. New shares issued as part consideration for the HRH acquisition had a $0.29 dilutive impact on first half 2009 earnings per diluted share.

Operating margin at 26 percent in first half 2009 was 5 percentage points higher than in 2008 which was mainly attributable to a $77 million reduction in costs incurred in connection with our Right Sizing Willis initiatives and 2008 expense review, as discussed below; and the realization of savings from these initiatives; partly offset by an increased amortization charge for intangible assets arising on the HRH acquisition; and the dilutive impact of HRH's lower operating margin.

2008 expense review and Right Sizing Willis

Our Shaping our Future strategy is a series of initiatives designed to deliver profitable growth. In order to fund a portion of these initiatives, we conducted a thorough review in 2008 of all businesses to identify additional opportunities to rationalize our expense base.

Additionally, in the latter part of 2008 and in light of the global economic uncertainty, we launched Right Sizing Willis to reinforce our cost saving initiatives. Right Sizing Willis initiatives include talent management to either improve or manage out poor performers, location optimization and aggressive reduction of discretionary spending.

In first half 2009, we incurred severance costs of $18 million pre-tax ($13 million net of tax, equivalent to $0.08 per diluted share) in connection with our Right Sizing Willis initiatives, $2 million of which were incurred in second quarter 2009.

In first half 2008, we incurred pre-tax costs of $95 million ($68 million net of tax, equivalent to $0.48 per diluted share) in connection with the 2008 expense review, of which $62 million was incurred

in second quarter 2008. The first half 2008 costs comprised:

• $42 million to buy out remuneration packages that did not align with the Group's overall remuneration strategy;

• $24 million of severance costs relating to approximately 350 positions which were eliminated; and

• $29 million of other operating expenses, including property and systems rationalization costs.

Discontinued operations

On April 15, 2009, the Company disposed of Bliss & Glennon, a US-based wholesale insurance operation acquired as part of the HRH acquisition. Gross proceeds were $41 million, of which $3 million is held in escrow for potential indemnification claims.

Bliss & Glennon's net assets at April 15, 2009 were $39 million, of which $35 million related to identifiable intangible assets and goodwill. In addition, there were costs and income taxes relating to the transaction of $2 million. There was no gain or loss recognized on this disposal in second quarter 2009.

HRH acquisition and integration

On October 1, 2008, we completed the acquisition of HRH, the eighth largest insurance and risk management intermediary in the United States.

We remain confident that the acquisition of HRH will:

• substantially improve our position in key markets including California, Florida, Texas, Illinois, New York, Boston, New Jersey and Philadelphia;

• greatly strengthen our position as a middle market broker and reinforce our large account presence; and

• enable the combined Willis HRH operation to deliver enhanced value to clients through a more robust and diversified platform.

We have made significant progress in the first half of 2009 in implementing the integration processes that we believe will lead to successful fulfillment of our stated goals, reflected by:

• maintaining high producer retention levels;

• good progress on integration of all work streams and, on a combined pro forma basis, we anticipate total cost savings of approximately $170 million in 2009 from synergies, the closure of the US pension plan and other Right Sizing Willis initiatives; and

• that as of June 30, 2009, approximately 90 percent of HRH's contingent commissions have either been converted to the higher standard commissions or we have reaffirmed with carriers that the existing agreements will remain in force for so long as permitted by the regulatory authorities or until the commissions are converted, whichever occurs first.

We recognized goodwill on the HRH acquisition of approximately $1.6 billion. Based on our internal forecasts of the combined Willis HRH future revenue streams and anticipated synergies from the deal, we believe the combined goodwill for North America of $1.8 billion was not impaired as of June 30, 2009. However, if we fail to recognize some or all of the strategic benefits and synergies expected from the HRH transaction, goodwill may be impaired in future periods.

Gras Savoye

In our 2008 report on Form 10-K we noted that AXA had exercised its option to put to us its shareholding in Gras Savoye & Cie ("Gras Savoye"), our French Associate, of approximately 4 percent, subject to pre-emption provisions set out in the shareholders agreement. In March 2009, existing shareholders chose to purchase 2 percent and in April 2009 Gras Savoye bought back the remaining shares and canceled them. As a consequence of these transactions, we now control just under 50 percent of the voting rights.

In June 2009, we announced that we are in discussions regarding the potential sale of a portion of our interest in Gras Savoye. However, we continue to be strongly committed to our global partnership with Gras Savoye. We intend to retain a substantial interest in Gras Savoye following any such sale (which we currently estimate to be approximately 30-39 percent) and also intend to acquire a majority interest in Gras Savoye at some point in the future. We currently expect to delay the 2010 call and would expect a potential transaction to remove the put presently exercisable by the Gras Savoye shareholders. We believe that the transaction would provide the parties with additional time to

effect a better transition and integration of the two companies. No definitive agreement with respect to any sale has been reached or entered into by Willis.

Other equity transactions

During first half 2009, we acquired the remaining 20 percent of our Venezuela operations at a cost of approximately $7 million, bringing our ownership to 100 percent as at June 30, 2009.

In April 2009, we acquired the remaining 12 percent of our Irish operations at a cost of approximately $17 million, bringing our ownership to 100 percent as at June 30, 2009.

Cash and financing

Cash at June 30, 2009 was $103 million, $73 million lower than at December 31, 2008.

In March 2009, we issued 12.875 percent senior unsecured notes due 2016 in an aggregate principal amount of $500 million to Goldman Sachs Mezzanine Partners which generated net proceeds of $482 million. These proceeds, together with $208 million cash generated from operating activities and cash in hand, were used to pay down the $750 million outstanding on our interim credit facility as of December 31, 2008.

Total debt, total equity and the capitalization ratio at June 30, 2009 and December 31, 2008 were as follows:

                                       Jun 30, 2009        Dec 31, 2008
                                       (millions, except percentages)

              Long-term debt         $          2,390     $        1,865
              Short-term debt                     106                785

              Total debt             $          2,496     $        2,650

              Total equity           $          2,158     $        1,895

              Capitalization ratio                 54 %               58 %

As of June 30, 2009, we had drawn $95 million under our revolving credit facility compared with $nil as of December 31, 2008 and $260 million as of June 30, 2008. Drawings under our revolving credit facility are typically higher in the first half of the year due to bonus payments in the first and second quarters.

Liquidity

Our principal sources of liquidity are cash from operations, cash and cash equivalents of $103 million

at June 30, 2009 and remaining availability of $205 million under our revolving credit facility.

As of June 30, 2009, our short-term liquidity requirements consist of:

• payment of interest on debt and $105 million of mandatory prepayments under our 2013 term loan;

• capital expenditures;

• working capital; and

our long-term liquidity requirements consist of:

• the principal amount of outstanding notes; and

• borrowings under our 2013 term loan and revolving credit facility.

Based on current market conditions and information available to us at this time, we believe that we have sufficient liquidity to meet our cash needs for the 12 months from today's date, which includes the payment of principal on our $250 million July 2010 notes.

To improve our liquidity and finance acquisitions, from time to time we explore additional financing methods which could include additional borrowings, equity or debt issuances, asset sales and using the proceeds therefrom to repay outstanding indebtedness. However, there can be no assurance that any additional financing will be available to us on acceptable terms. We intend to refinance our 2010 notes, but if market conditions become unacceptable, we expect to access our revolving credit facility and significantly reduce our cash outflows from our financing and investing activities. In addition, for a discussion of risks related to our put and call

arrangements, see the section in our Annual Report on Form 10-K for the year ended December 31, 2008 entitled "Risk Factors - We have entered into significant put and call arrangements which require us to pay substantial amounts to purchase shares in one of our associates. Those payments would reduce our liquidity and short-term cash flow."

In an effort to reduce future cash interest payments as well as future amounts due at maturity, we may from time to time seek to retire or purchase our outstanding debt (including the 2010 notes) through tender offers, cash purchases, in open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Long-term liquidity for debt service and other contractual obligations will be dependent on continued generation of free cash flow and, given favorable market conditions, future borrowings or refinancing. However, our cash requirements could be materially affected by a deterioration in our results of operations, as well as various uncertainties discussed in this section and elsewhere in this document, which could require us to pursue other financing options. As stated above, there is no assurance that financing will be available to us on acceptable terms.

We continue to identify and implement further actions to control costs and enhance our operating performance, including cash flow. These actions include the rationalization of our cost base through our ongoing Right Sizing Willis initiatives.

OPERATING RESULTS - GROUP

Revenues


                                                                                                Change attributable to:
                                                                                     Foreign             Acquisitions        Organic
                                                                     %              currency                 and             revenue
Three months ended June 30                 2009        2008        Change          translation            disposals         growth(i)
                                              (millions)

Global                                    $  207      $  191             8 %                  (4 )%                  5 %             7 %
North America                                332         193            72 %                   - %                  80 %            (8 )%
International                                233         257            (9 )%                (15 )%                  1 %             5 %

Commissions and fees                      $  772      $  641            20 %                  (7 )%                 26 %             1 %

Investment income                             12          20           (40 )%
Other income                                   -           -             - %

Total revenues                            $  784      $  661            19 %

                                                                                                 Change attributable to:
                                                                                      Foreign             Acquisitions        Organic
                                                                      %              currency                 and             revenue
Six months ended June 30                 2009          2008         Change          translation            disposals         growth(i)
                                             (millions)

Global                                 $    482      $    468             3 %                  (7 )%                  4 %             6 %
North America                               703           384            83 %                   - %                  90 %            (7 )%
International                               502           561           (11 )%                (17 )%                  1 %             5 %

Commissions and fees                   $  1,687      $  1,413            19 %                  (8 )%                 25 %             2 %

Investment income                            25            42           (40 )%
Other income                                  2             1           100 %

Total revenues                         $  1,714      $  1,456            18 %

(i) Revenues comprise commissions and fees, investment income and other income. Organic revenue growth excludes the impact of foreign currency translation, the first twelve months of net commission and fee revenues generated from acquisitions and the net commission and fee revenues related to operations disposed of in each period presented, from commissions and fees. Our method of calculating this measure may differ from that used by other companies and therefore comparability may be limited.

Second quarter and first half 2009 revenues were significantly higher than 2008 due to the acquisition of HRH in fourth quarter 2008. The benefit of the acquisition revenues was partly offset by an adverse year over year impact from foreign currency translation and lower investment income due to sharply reduced global interest rates.

Our International and Global operations earn a significant portion of their revenues in currencies other than the US dollar. In both second quarter and first half 2009, reported revenues in International and Global were adversely impacted by the year on year effect of foreign currency translation, in particular due to the strengthening of the dollar against both the euro and pound sterling, compared with the equivalent periods of 2008.

Investment income in second quarter 2009 was $8 million lower than 2008 and $17 million lower

in first half 2009, with the decreases reflecting significantly lower average interest rates in 2009. The impact of rate decreases on our investment income is partially mitigated by our forward hedging program, from which we expect to generate significant additional income in 2009 compared to current LIBOR based rates.

Organic growth in commissions and fees was 1 percent in second quarter 2009 and 2 percent in first half 2009 as the benefit of good growth in our Global operations and many of our International operations was partly offset by declines in our North America, UK and Irish retail operations reflecting the weak economic environments and continuing soft market conditions.

Organic revenue growth by segment is discussed further in 'Operating Results - Segment Information' below.

General and administrative expenses

                                                        Three months                Six months
                                                       ended June 30,             ended June 30,
                                                      2009         2008         2009          2008
                                                             (millions, except percentages)

Salaries and benefits                               $    443      $  428      $    923      $    839
Other                                                    139         141           277           290

General and administrative expenses                 $    582      $  569      $  1,200      $  1,129

Salaries and benefits as a percentage of revenues         57 %        65 %          54 %          58 %

Other as percentage of revenues                           18 %        21 %          16 %          20 %

Second quarter 2009

General and administrative expenses at $582 million for second quarter 2009 were $13 million, or 2 percent, higher than in 2008. This increase was mainly attributable to:

• the impact of expenses relating to HRH, equivalent to approximately 24 percentage points;

partly offset by

• the $60 million reduction in costs incurred in connection with our Right Sizing Willis initiatives and 2008 expense review discussed above, equivalent to 11 percentage points, of which $49 million related to salaries and benefits and $11 million to other expenses;

• reductions in salaries and benefits, excluding pension costs, and discretionary expenses, including lower travel and professional fees, driven by our Right Sizing Willis initiatives; and

• a year over year benefit from foreign currency translation, equivalent to approximately 9 percentage points, as the impact of losses on forward contracts was more than offset by gains relating to the significant strengthening of the dollar against the pound sterling, in which our London market based operations incur the majority of their expenses, and the euro.

Salaries and benefits were 57 percent of second quarter 2009 revenues, compared with 65 percent in 2008, reflecting the benefits of:

. . .