Willis Towers Watson unveils Q4 and full-year figures

Transaction costs from mega-merger impacted net income

Willis Towers Watson unveils Q4 and full-year figures

Insurance News

By Alicja Grzadkowska

Willis Towers Watson’s fourth quarter and full-year results are now out, and much like its merger partner Aon, the risk and insurance giant has reported solid figures.

Revenue came in at US$2.76 billion (SG$3.66 billion) for Q4 2020, compared to US$2.69 billion for the same period in the prior year, demonstrating an increase of 3%. Meanwhile, for the year ended December 31, 2020, total revenue was US$9.35 billion (SG$12.41 billion), a bump up of 3% from the US$9.04 billion reported for 2019.

However, income from operations for the fourth quarter of 2020 looked less rosy, coming in at US$587 million, or 21.2% of revenue, reflecting a decrease of 430 basis points compared to the same period in the prior year, while net income for Q4 2020 was US$476 million, marking a decrease of 13% from US$544 million for the same period in the prior year. This was partly attributed to US$45 million of transaction and integration expenses primarily concerning the pending merger with Aon, as well as US$50 million of provisions for significant litigation.

A similar story appears for the full year, where income from operations was US$1.2 billion, or 12.6% of revenue, again showing a decrease (this time of 210 basis points) compared to the prior year. Net income for the year ended December 31, 2020 was US$996 million, a drop of 5% from US$1.04 billion for the prior year.

The broking behemoth also highlighted the effects of the coronavirus on its results, stating, “During 2020, the COVID-19 pandemic had a negative impact on revenue growth, particularly in our businesses that are discretionary in nature, but otherwise it generally did not have a material impact on our overall results.”

A notable highlight in the results was cash flow from operating activities for the year, which was US$1.8 billion, up 64% compared to US$1.1 billion for the prior year. Moreover, Willis Towers Watson’s Corporate Risk & Broking segment performed well, with a revenue of US$888 million, a small bump from US$877 million in the prior-year fourth quarter. North America led the segment with new business generation and strong renewals, but the region’s performance was partially offset by a drop-off in Western Europe, where COVID-19 had an impact on certain insurance lines.

“Our performance in the fourth quarter provided a strong finish to a good year in a difficult environment,” said John Haley, Willis Towers Watson’s chief executive officer. “We produced solid margins, almost doubled free cash flow, and delivered remarkable adjusted EPS growth. The results reflect the strong dedication and adaptability of our colleagues and their commitment to the values that underpin our company. I couldn’t be prouder of Willis Towers Watson’s accomplishments to date and I look forward to our continued momentum in 2021 as we move toward our planned combination with Aon.”

Related Stories

Keep up with the latest news and events

Join our mailing list, it’s free!