Willis Towers Watson secures significant turnaround

Third quarter net income shoots up 257%

Willis Towers Watson secures significant turnaround

Insurance News

By Terry Gangcuangco

From a net loss of US$54 million in the third quarter of 2017 to this year’s US$85 million in net income – that is the tale of turnaround revealed by Willis Towers Watson in its latest financial report.

Chief executive John Haley, who is “extremely pleased” with the quarterly results, cited strong organic revenue growth, continued margin expansion, and double-digit growth in the broking giant’s adjusted earnings per share and free cash flow.

Willis Towers Watson’s third quarter net income represents a 257% rise from last year’s performance. As for the nine months ended September 30, net income went up from US$339 million in 2017 to US$621 million this time around.

“Our results indicate that we have made substantial progress toward our goals for 2018, and we expect a strong finish to the year as we head into one of our seasonally strongest quarters,” added Haley.

The company also reported that its Corporate Risk & Broking (CRB) segment saw a 3% increase in revenue to US$616 million in the third quarter, thanks to growth across most geographies.  

“North America and International regions continued to lead the segment with new business generation alongside strong management of the renewal book portfolio,” noted Willis Towers Watson. “Great Britain had a decline in revenue due to continued London market challenges. The CRB segment had an operating margin of 10% compared to 8% for the prior-year third quarter.”

Meanwhile the Investment, Risk & Reinsurance (IRR) segment posted a 5% increase in revenue to US$337 million; the Human Capital & Benefits (HCB) segment, 1% to US$738 million; and the Benefits Delivery and Administration (BDA) segment, 10% to US$200 million.

If we take into consideration the Accounting Standards Codification 606, which the firm adopted on January 01, 2018, net income for the third quarter will be adjusted to US$46 million while the figure for the nine-month period will be US$332 million. Also, the CRB segment will show revenue of US$622 million; IRR, US$317 million; HCB, US$778 million; and BDA, US$127 million.


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