WTW posts higher Q4 revenue, profit

Willis Towers Watson PLC Tuesday reported fourth-quarter revenue of $2.91 billion, up 7% overall and 6% on an organic basis compared with the year-earlier period.

Results were boosted by double-digit organic revenue growth in corporate risk and broking on the back of strong new business, improved client retention and rate increases.

Net income for the quarter totaled $623 million, up 5% from $593 million in the year-earlier period.

For full-year 2023, revenue totaled $9.48 billion, up 7% overall and 8% on an organic basis from 2022. Net income for the year was $1.1 billion, up 4%.

The brokerage expects to deliver revenue of $9.9 billion or greater and mid-single-digit organic revenue growth for full-year 2024.

Fourth-quarter revenue for the brokerage’s risk and broking segment, which includes corporate risk and broking and WTW’s insurance consulting and technology business, was $1.08 billion, an increase of 13% overall and 12% on an organic basis.

On an earnings call Tuesday morning with analysts, WTW CEO Carl Hess, said the brokerage’s specialization strategy in risk and broking was a key driver of growth for both the segment and the enterprise overall.

“Our specialty businesses continue to have significantly higher growth than the rest of the segment,” Mr. Hess said.

WTW, which built out 12 industry verticals in North America last year, is in the process of launching this industry model across Western Europe and intends to build out more industry verticals in its international business this year, he said.

The brokerage will make “strategic and opportunistic” hires to strengthen its capabilities in lines of business and geographies that offer the greatest potential for growth and profitability, Mr. Hess said.

“Our colleagues who joined us during 2022 and 2023 have become increasingly productive and grown our talent base back to full strength,” Mr. Hess said.

WTW made significant investments in hiring as it rebuilt its operations following its failed sale to Aon PLC in 2021.

Specialty lines — led globally by natural resources, facultative, FINEX, financial solutions, crisis management and construction — were major contributors to the strong growth performance, WTW Chief Financial Officer Andrew Krasner said on the call.

The broker’s North America corporate risk and broking business benefited from strong new business in construction, natural resources, marine, aerospace, real estate, and hospitality and leisure, Mr. Krasner said.

WTW’s health, wealth and career segment reported fourth-quarter revenue of $1.80 billion, up 4% overall and 4% on an organic basis.

WTW realized $37 million of incremental annualized savings related to its transformation program in the quarter, bringing the total to $337 million in cumulative annualized savings since the program’s inception, Mr. Hess said.

The program, launched in 2021, is now expected to generate $425 million of run-rate savings, up from $380 million previously forecast.

The additional savings will primarily come from technology modernization and process optimization, Mr. Krasner said.