WTW posts 4% higher revenue on mixed rating environment

WTW reported $2.34bn in first-quarter revenue, up 4% overall and 5% on an organic basis from the year-earlier period, in a mixed rating environment with pricing increasing in some lines but softening in others. The brokerage said it expects to deliver revenue of $9.9bn or greater and mid-single-digit organic revenue growth for full-year 2024. First-quarter net income fell 6% to $194m from $206m in the prior-year period. The brokerage incurred $143m in charges related to its transformation programme and restructuring. WTW’s risk and broking segment, which includes corporate risk and broking and its insurance consulting and technology business, reported $978m in revenue, up 8% both overall and on an organic basis. The rise in organic revenue reflected strong client retention across all geographies and higher levels of new business activity, WTW said. “Our specialty businesses continue to strongly outpace the rest of the segment’s growth and we also continue to see sustained client retention rates in the mid-90s,” said WTW CEO Carl Hess on an earnings call. Specialty lines growth was led globally by financial lines and natural resources, the broker’s CFO Andrew Krasner said. WTW’s health, wealth and career segment reported revenue of $1.34bn for the quarter, up 4% on both an overall and an organic basis. The rating environment remains mixed, with some flattening and even softening in certain insurance lines such as directors’ and officers’ liability and cyber, Krasner said. Increased frequency of natural disasters, social inflation and geopolitical conflicts are driving rate increases in various lines such as casualty, especially in North America, and globally in political violence and terrorism, he said. WTW realised $33m of incremental annualised savings related to its transformation program in the quarter, bringing the total to $370m in cumulative annualised savings since its inception. The programme, launched in 2021, is expected to generate $425m of run-rate savings by the end of this year, with total programme costs of $1.13bn. Hess said WTW has replenished its talent base and going forward is focused on strategic and opportunistic hiring. “We’re not just hiring to fill our bench, we’re hiring to take advantage of specific opportunities to create value,” he said, citing the hiring of former Marsh executive Lucy Clarke, who is set to join WTW in the third quarter. The US Federal Trade Commission’s ban on noncompete employee clauses will be manageable, WTW’s top executives said. Hess said that the brokerage uses non-solicitation agreements in the course of its business and views the FTC ban, which business groups have already sued to stop, as a “manageable situation”. “Non-solicitation, non-disclosure-type agreements don’t function to prevent someone from taking a job at a competitor,” and there’s no rule tied to that type of restrictive covenant, Hess said. This article first appeared on our sister website Business Insurance. For further news from Business Insurance, please click here.

WTW posts 4% higher revenue on mixed rating environment

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