WTW posted revenue growth and improved underwriting-side margins in the second quarter of 2026, with its risk and broking segment leading the way as the firm announced a $625 million AI investment plan targeting a 30% adjusted operating margin by 2028.
The global advisory and broking firm reported total revenue of $2.47 billion for the three months ending in June 30, up 9% from $2.26 billion in the same period a year earlier. On an organic basis, revenue grew 5%, an improvement from the 3% organic growth posted in the first quarter.
The risk and broking segment, the division most directly tied to insurance placement and advisory services, generated $1.16 billion in revenue, an 11% increase reported and 7% on an organic basis. Operating margin in that segment rose 100 basis points to 22.2%.
Corporate risk and broking drove organic growth through new business activity and strong client retention globally. Insurance consulting and technology contributed through software sales in its technology practice.
The health, wealth and career segment posted $1.27 billion in revenue, up 8% reported and 4% organically. Operating margin there increased 30 basis points to 24.1%.
At the consolidated level, adjusted operating income rose 15% to $480 million, with an adjusted operating margin of 19.5%, up 100 basis points from 18.5% in Q2 2025. GAAP operating margin fell 150 basis points to 14.8%, driven by $61 million in transaction and integration expenses from the January 2026 Newfront acquisition.
Adjusted EBITDA came in at $529 million, or 21.5% of revenue, up 13% from $470 million in the prior-year period. Net income declined 30% to $231 million, while adjusted net income rose 11% to $316 million.
The decline reflects $61 million in transaction and integration expenses tied primarily to the Newfront acquisition, $55 million in amortization, and a favorable $74 million tax item in Q2 2025 that inflated the prior-year GAAP baseline.
Diluted earnings per share fell 27% to $2.43 on a GAAP basis, while adjusted diluted EPS increased 17% to $3.35. Free cash flow for the first half of 2026 reached $360 million, up from $217 million in the same period last year.
Concurrent with the results, WTW launched Propel, an AI acceleration plan designed to embed artificial intelligence and automation across its operations by the end of 2028. The company expects to invest approximately $625 million in cash and incur approximately $25 million in non-cash charges to produce approximately $400 million in run-rate savings.
The scale of the commitment reflects a broader shift across insurance distribution. Acrisure, the eighth-largest brokerage by revenue, cut approximately 2,250 jobs in May 2026, explicitly citing AI and automation as the driver. That is a signal that firms across the sector are now translating AI strategy into operational restructuring rather than pilot programs.
After reinvesting approximately $50 million to support growth, WTW projects approximately $350 million in net run-rate savings. The Newfront acquisition is a central component of that strategy and is expected to contribute roughly $250 million in revenue for the year at an adjusted EBITDA margin of approximately 26%.
"We remain confident in delivering on our full-year 2026 guidance and achieving our new 2028 margin target," said Carl Hess, WTW's chief executive officer. "This performance underscores the meaningful progress we've made embedding AI and automation across our business, enabling us to deliver higher-value client solutions and a more compelling colleague experience."
WTW's board also approved a $1.5 billion increase to its share repurchase authority. The increase is in addition to approximately $500 million remaining on the existing program. The company repurchased 1,733,574 shares for $450 million during the quarter.
Full-year 2026 guidance remains unchanged, with the company projecting mid-single-digit organic revenue growth in risk and broking and continued annual margin expansion of approximately 100 basis points in that segment.
