WTW reports 6% revenue rise, loss related to unit sale

Willis Towers Watson PLC Thursday reported third-quarter revenue of $2.29 billion, up 6% overall and on an organic basis over the same period last year, driven by double-digit organic growth in its risk and broking business.

But WTW reported a net loss of $1.67 billion, versus a profit of $139 million in the year-earlier period, due to pre-tax non-cash losses and impairment charges related to the pending sale of its direct-to-consumer health care business Tranzact.

WTW announced Oct. 1 it would sell Tranzact to private equity firm GTCR LLC for $632.8 million.

WTW saw strong demand across its businesses as insurance rates continued to stabilize and soften due to a slowdown in U.S. inflation, top executives said on an earnings call with analysts.

Its risk and broking operation reported $940 million in revenue for the quarter, up 10% overall and on an organic basis from the prior-year period.

“Our specialty businesses continue to generate the strongest growth in the segment,” CEO Carl Hess said on the call.

Corporate risk and broking had a “solid quarter, growing 10%, with strong contributions across all geographies,” including double-digit growth in Britain, Western Europe and other international regions, led by WTW’s facultative, crisis management and financial solutions businesses, Chief Financial Officer Andrew Krasner said. Two of its largest specialty businesses – FinEx and construction – had “very strong” growth, Mr. Krasner said.

In North America, CRB had “solid growth,” including strong contributions from construction, marine and natural resource businesses, Mr. Krasner said.

Commercial insurance rates are starting to decrease, mostly in international countries, and to a lesser extent in Europe and North America, Mr. Hess said.

Property and financial lines rates are falling, while cyber liability stabilized after the CrowdStrike event in July, but quickly returned to decreasing rates, he said. Casualty lines are stabilizing globally, except for North America, Mr. Hess said.

“Hurricane Milton did not seem to increase natural catastrophe rates, but its financial impact is still uncertain,” Mr. Krasner said.

Rates for specialty lines continued to stabilize, but with some increases in political risks and trade credit, Mr. Krasner said.

WTW’s insurance consulting and technology business saw a 7% revenue increase as double-digit growth in its technology practice, which includes software sales, was partially offset by continued tempered demand in consulting practices, WTW said.

Its health, wealth and career segment – WTW’s largest business – reported $1.33 billion in revenue for the quarter, up 4% overall and organically.

WTW’s transformation program realized $52 million of incremental annualized savings in the quarter, bringing its cumulative annualized savings total to $446 million since its launch in 2021.