WTW - Earnings call transcript Q4 2024 | Willis Towers Watson Public Limited Company

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Operator

Good morning. Welcome to the WTW Fourth Quarter and Full Year 2024 Earnings Conference Call. Please refer to wtwco.com for the press release and supplemental information that were issued earlier today. Today's call is being recorded and will be available for the next 3 months on WTW's website.

in of may Act the comments within forward-looking of the meaning the Private of today's constitute call statements XXXX. Some Securities Reform statements forward-looking are to and These subject uncertainties. risks and update these unless materially those differ may law. statements undertakes results to discussed required Actual today, obligation no the from by company

most For disclosures morning section Form risk earnings of filings. recent investors a press of in as review Willis should release SEC other detailed and discussion this well the other as the the more issued other Watson and these factors, forward-looking XX-K statements Towers

financial During the call, may certain non-GAAP measures discussed. be

reconciliations of refer well as to the company's For the and other please recent measures most in measures, release website. earnings these the of the other non-GAAP section information Relations as materials regarding Investor

turn Carl Chief call Hess. go now Please the to WTW's ahead. over Officer. Executive I'll

Carl A. Hess

for WTW's Call. everyone. us morning, Quarter Good Earnings joining you XXXX Full and Thank Year for Fourth

is Officer. Andrew Financial Krasner, Chief Joining me today our

Before our devastating we begin, I'd California affected. sympathy all deepest and the those in wildfires to like to acknowledge express

colleagues, you For with areas our time. the impacted, business this lend in support partners are difficult and continue through we thoughts our will and clients to our

and in The strong strengthened us landmark team's with businesses playing and was for and XXXX XXXX. to Grow, perform. priorities for on XXXX Thanks our of to deliver market collaboration, entered momentum our our to focus strategic WTW. all year X-year our Simplify competitive a position enabled we Transform has completion the and our financial targets

and our business how year in operate. and in and a strategic years our become strategy simplified quarter Grow, in enhance successful business the and agile and to innovation, business was XXXX We Investor The at hard of work faster-growing, execution reflected more we results. Transform modernize talent fourth our our full investments and grew efficient company. made of transform more Simplify making discussed and to the have we X profitable by WTW Day more focused As to December,

adjusted growth We the of delivered revenue X% up XX.X%, organic prior an basis over in fourth XXX year. quarter operating margin with the points

divested recorded X% XX.X% XX, Excluding organic TRANZACT, adjusted December revenue and margin. operating which we growth we on

incremental the and delivered bringing Our transformation $XX total X% to of year-over-year. savings which quarter, now savings life of program during has over concluded, increase million share $XXX per diluted Adjusted annualized $X.XX were the program, the earnings million.

mid-single-digit year-over-year XX.X% For the we full organic operating target to X%, excluding in or revenue year, TRANZACT. expanded expansion. margin excluding to fulfilling of our XX.X% line TRANZACT, our margin points growth basis XXX had X%, adjusted commitment We with or by annual

We're our were excited amplifying our created Our at WTW last over adjusted XX% now performance and new We're portfolio. for diluted performance, strategy as strengths earnings solid our building are to the on optimize per our proud year-over-year. the the of on next XXXX X up implement share efficiency and chapter $XX.XX, extending accelerate we and enhance focused foundation we've years. and

a a organically strategy. And connections and rebalanced business margin to and businesses, our improvement. focused we'll across and both continuous expanding footprint drive flow committed by investment proceed to to our our leveraging focused to and global we're framework by accelerate To advancing guided optimize cash mix, allocation strengthening portfolio, To efforts performance, our to DO we're core and free capital on our continuing on efficiency, investing improve WE inorganically business. enhance and our delivering innovate, improvement

and best-performing because we're our in focusing an of path objectives strategic at most Investor represent ideas. for the confident rather heavily about a Day, many than investing evolution businesses. our We discussed revolution on our we As feel forward

strategic wins minutes take few in priorities. our client several around reflecting key some our color me of quarter, share to a the Let fourth

Software. who as much a changed analytics smaller our a incumbent cross-segment appoint a lines using global trust the global their our with over this about mandate our Intelligence client how which to insurance solutions to contributor collaborative and provider its previously the industry-leading the Risk logistics client coverage wanted management. brokers. worked with. signing portfolio capabilities global as Our includes insurance they team with and thought innovative It of key by all a were contract, well client Together major us built, work and to their benefits led to We

segments Delivery programs, expand large approach global and to Service Management Benefits full businesses spectrum H&B and continue between a going Similarly, in communications businesses our business focus relationship teams insurance brokerage our helped and and to both IT strengthening our across implementations. to technology embark our Asia of in CRB helped the quarter, on and connectivity collaboratively. collaboration across and connections alongside for existing of Highlighting leading group smart us regions. vendor Global Europe cover our We'll fourth across secure this market Model global engage the a In a Asia. appointment with a

our delivered revenue enable to or build to margin sustained X% on expansion. growth excluding organic connections core mid-single-digit with further organic have financial growth TRANZACT in and X% of core our growth, strong us we're smart sustained and HWC's record businesses innovation in fourth priorities track growth focus on that HWC, strategic the In growth continuing will quarter. XXXX and

Many the of business our wins priorities. fourth in quarter new in reflecting HWC

analytics to contracts deep our to ability service We our that areas add client matter. breakthroughs in multiyear create continue expertise, core new sophisticated technical to and our due

service areas. focus resulted extend smart connections Our on that in wins across

diversified outsourcing States providers. fastest-growing world's Health adviser, largest governance and retirement Management investment awarded us For outsourcing global example, contract. unseating manufacturing care company, one incumbents. Plan We And pension our chose United Fortune and XXX experience systems the a communications Benefits and of work and adviser the want for health one in employee as long-term ongoing retirement us the international airlines decades-long their of nonprofit

high to company deepening our our fourth and leading on building reflect focused expanding quarter, of support results, mega Europe. In specialties and specialization border won value generate In tools logistics that specialization multiple a of a did company. the of construction based our strong continues single-digit new CRB, as program existing new specialty project we so number we're specialized while teams geographies a our spanning and customized growth lines. R&B, to organic the a the an Eastern created expertise lines across into in And R&B in strategy. In talent large manufacturing delivered Asian Middle for contracts strategy

And driven expertise analytics by Our capabilities software and multiyear global us for large work we ICT, and secure the with solutions. global efficiency a our collaboration our the insurer technology a all local for coverage the project. in won of helped risk contract

I a portfolio. moment to also highlight progress want to our our take optimizing on

sale cultural we cash the for flow. in reentering $XXX the as We're mix, recognizing focused of improving we this We'll And and a disruption our Investor enhancing organic opportunities December our and of about some and and cash flow market As discussed divestiture details minimizing We're and venture I later. reach at margins alignment. our will that to importance and Day, we're XXXX. we mentioned business business investment. value the margins Capital, expect pursue, financial thoughtful be million to chain, the also strengthen Andrew the our starting insurance across approach on creating XX joint and operating expanding earlier, clear taking free TRANZACT on prioritizing disciplined a Bain through growth completed provide reinsurance rates, with

our As ahead, feel I our XXXX. in I year look outlook at the confident position for and

market. have We strong momentum in the

support EPS our on we've will shortly. But changes growth over mid-single-digit and and reflect and progress want to cash in I to across a a Andrew what annual from framework to against regulatory hand him, we're financial political continued seeing in operating outlook that adjusted it demand strategy and client these margin. services. We the we've financial X our details flow for tend our years. make Day U.S. gained annual growth, growth and the to on We elsewhere share at before past take cash ongoing globe, performance margin Investor organic been journey on calls adjusted expansion, and that for to I moment continue more in the flow free free steady December introduced the

simplified better and optimistic WTW's have it. we for I never more have transformed, We about much have have we are grown, future. we been and

their are more more We're more to aligned on our realizing accelerate value focused, enhance we've performance growth focused to continued for continuing across expansion keenly efficient the attractive we're connected, and our company markets. our more into potential elevate strategic And all continued our to We optimizing we're company. clients our shareholders. and and profitable efficiencies improving our our than financial through for their positioned improvement. and business ever flow and to create And to free been. innovation deliver well We're performance thank position. I colleagues margin for to to and expansion contributions WTW next want our and cash commitment for

And turn Andrew. with call to I'll that, over the

Andrew Krasner

Thanks, Carl. year. X% revenue increase Adjusted In expanded the were prior margin excluding morning, fourth basis delivered or to us diluted of thanks Good XX.X% per earnings joining or organic the Adjusted an and growth operating for excluding we XX.X% quarter, XXX over X%, TRANZACT. $X.XX, of today. X% share points TRANZACT.

or XX.X%. For the XXX growth full operating organic we X% margins delivered TRANZACT. excluding of X% to basis year, revenue points Adjusted expanded

over earnings per period. the points Adjusted up our XXX diluted expanded TRANZACT, $XX.XX, Excluding basis margin to XX.X%. XX% were prior share

against our as Transform Our Grow, full well our us entered year execution strategic Simplify, we results strong positioning XXXX. reflect priorities,

be specifically some that Career Next, fourth segments results last provide will otherwise. commentary unless prior of the to regarding to comparability stated on X% quarter of results. Health, I'll compared with Note reviewing year. segment organic Wealth grew an basis, the and spend all revenue time our our periods,

X% as X% HWC Excluding with the Day. was outlined our HWC year X%. grew which we excluding The growth outlook TRANZACT, TRANZACT, for segment organic full or line at in generated Investor revenue

primary Portfolio, new at Management Health and activity. or driver Our excluding Benefits well. achieved retention client of the for growth which XX% discussed meaningful expansion strong continued of we book grew geographies Day, Investor double-digit our quarter with All the contributors. XX% The Client was Global as being business Business business a

activity a project as commissions of consulting results. Europe America our in and timing We North and impacted robust consulting also projects positively expected, saw

We business current pipeline expect Health and our growth new success our to based single-digit focus. in in high XXXX on XXXX sales deliver

saw activity. Europe low grew a retirement LifeSight changes. the X% demand level We our project grew in North well of strong legislative for quarter single-digit to on projects in higher implement in by revenue as America as business. the back consulting growth driven Wealth also fourth

Our solutions. investments to successful strong and business a new low wins growth delivered new despite business single-digit comparable due

expect expectations. sold some with Timing projects business. Career growth in continue growth single-digit below revenue to quarter, to the limited delayed low the the quarter X% in delivered We in our Wealth growth QX.

growing continue at organic year, mid-single-digit X% the For are levels. confident growth, that similar will Career full we recorded and Career

Outsourcing & Delivery the X% Benefits versus last quarter year. of fourth revenue declined

Excluding and TRANZACT, growth grew marketplace. X% individual in shopping Benefits for Outsourcing work retirees new BD&O client plans revenue and notable with in project new wins

full Excluding grew XXXX, in TRANZACT, as facing quarters. previous X% a headwind we've the insourced Benefits BD&O that from year and a its discussed health for client large administration despite significant

to Looking by ahead, compared operating was to we XX.X%, fourth increase points basis BD&O the for primarily driven margin a XXX the quarter expect mid-single-digit grow transformation at savings. of rate. HWC's an year, prior

full For by XX.X%. by operating basis and points grew year, points, to excluding the basis TRANZACT XXX HWC's XXX to XX.X% margin

we As Day, XXXX, in we continued mentioned HWC. expect at expansion margin for Investor

a prior Broking. basis a was XX of headwind from the activity X% double-digit decline excluding of business points XX.X% X% on business combined & interest Risk to income. and Moving basis or on an an margin revenue comparable expanded basis in to of in XX despite Operating activity organic year. point book up quarter top book Fourth

Broking saw & growth. organic the For Risk revenue year, X% full

impact the book and income, R&B's X%. rate of growth also business Excluding of interest activity was

had Broking a & growing quarter, X%. Risk Corporate solid

with strong of a and Excluding improvement driven on CRB activity and regions retention globally levels X% and income, in of comparable revenue contributions new from top business book client grew by all continued business interest double-digit generation.

quarter. Robust marine drove particular which in supported growth lead a new Solutions, new mentioned, business as strong lines strong Carl the Europe growth Construction, whole contributors a and with activity Natural Aerospace. Resources, with growth the Great been number our was across performance in and Financial of business North strength region delivered Britain to way range of specialty Marine facultative this Facultative, Western growth and having in wide major and FINEX, surety continues lines to specialization and a by client As countries double-digit America's retention growth. the in strategy

specialty region had lines. as Asia strong in double-digit Our our board Latin across organic with growth international Central America, Europe increases the of as many notable well and

was Revenue XX% growth our in Technology and sales and led up to Insurance by Consulting business. Moving services. technology modest consulting strong

an ICT As ongoing intentional creating we is for mix in clients consulting in technology our solutions. technology driving integrated discussed value and Day, by shift investment our at Investor

high both Looking ahead, to continue mid- we ICT. from growth to single-digit expect CRB and

R&B's prior of operating margin as operating XX leverage from a business year well basis point primarily organic quarter, for increase transformation fourth headwinds XX.X% over our activity offset interest as quarter, was income. book things the partially growth declining revenue from to due and by the

by December, Broking deliver XXX optimization. to our outlined average platform we next operating points to efficiencies, As and leverage deployment in we and margin over continue additional the operating X expansion adjusted expect of R&B annual Global years driven in basis including the of workflow

point over greater leverage basis results. for from annualized completed We transformation level the inception. Now XX.X%, million bringing incremental Adjusted the savings, let's operating of primarily the to of by driven fourth the had savings our $XX cumulative was now quarter and XXX year, continued benefits to transformation prior operating margin total $XXX a since turn increase million program. enterprise program's

current Foreign rates, for the approximately headwind a to for we Based $X.XX exchange exchange expect adjusted adjusted and current be at $X.XX spot EPS of of on headwind on a quarter. XXXX. EPS was our outlook foreign to

U.S. quarter Our GAAP prior year. the was rate versus XX% in tax for the XX.X%

quarter quarter compared to for Our the the adjusted rate fourth XX.X% was of tax in XX.X% XXXX.

year XX.X%. was full adjusted rate Our tax

a be tax XXXX, more though do rate. We with expect see potential our some XXXX favorable relatively for that we consistent rate of to modestly

$X.X sale which goals. business resulted portfolio accelerate on will towards long-term free TRANZACT this of noncash and full full partially a free sale outflows primarily year, each, us and by focus, the loss XXXX, and flow $X in in an not XX. GAAP of strategic year in pretax transformation $XXX the cash payments. are diluted As our year operating billion the charges of discretionary The by the onetime are progress compensation million results. margin impairment December sharpen WTW over included believe prior offset expansion adjusted to of driven reflected earnings completed related generated charges share. We mentioned, We These billion simplify Carl transaction and margin help our cash per of cash are our related increase flow for from our

expected be offsets expect of flow Given from the transformation our Re expanding cash the earnout XXXX annual spending partial our we continue margin as payment, in sale down expansion, flows cash residual transformation-related TRANZACT, cash margin and cash of from expenses, cash operating wind which taxes to free classified Willis will with and on the activities.

full During $XXX and million share to of billion shareholders $XX bringing to our repurchases for $X.XX return in million, us capital via quarter, returned million we $XXX shareholders dividends of the year. the to

on I up, minutes few want provide XXXX. some take wrapping Before to a thoughts to

free reporting. better to with adjusted to we cash with Also, the capitalized costs. upcoming First, information income EPS, industry non-GAAP outflows Starting recast metrics cash flow margin our free and performance slides we align Please will adjusted to appendix from changes supplemental our historical of the measures. view of EBITDA operating software for reflect core reflect exclude the rate. on and our changes flow detailed how our tax for cash effective refer these and will pension are making adjusted non-GAAP and some better to XXXX, we QX

repurchases position maintain we and to as the priorities. component allocation capital we our primary return approach, a our of in Second, strategy. to in discussed and as the of rebalance to share Simplify Day allocation Growth, success at form We Transform thanks are December, central now Investor capital intend of a capital our

XXXX, share conditions repurchases market capital in potential allocate growth approximately sustainable to margins. subject inorganic organic continue $X.X to expect to to allocation and our plan to billion and platform and opportunities. We talent and investment expand to in of drive We invest

and insurance We enhancing with value priorities will the improving strategic also emphasize chain reach and expanding cash M&A mix our across aligned free our margins flow. increasingly our business of our

of to will $X.XX EPS expect as we to investment we start-up development to our in program, a a be which be support this initial As our $X.XX reinsurance headwind year. joint to making its adjusted venture part venture investments

provided Finally, we slides, financial XXXX which I've for in considerations at financial Investor have in these in well. most of Day some framework our and our introduced December comments release and discussed as

pleased our are and we closing, Q&A. In open continue With very with up that, in business strong for to XXXX performance this momentum in expect XXXX. let's it

Operator

Fargo. Elyse with question first of [Operator line Wells from comes Greenspan Instructions] Our the

Elyse Greenspan

My -- I first HWC, unallocated on than said costs of within guide other fluctuate. and question margin basis XXX points in overall was just know just improving can thoughts There kind is R&B. no you obviously, on improvement.

just margin overall you think through go the improvement? you about improvement And margin in of to can tailwinds kind headwinds So and 'XX? how

Carl A. Hess

good Sure, Elyse. you, Thank morning. and

this going 'XX. capturing ways, We our to to for estate the margins organizations few We're right right and our program. expect know enhance to our going work, technology expand in on WE going how to right continue efficiency our to strategy. right do Transformation We're a DO place, right? leverage We're to real benefits from through focus

work we're Secondly, AI be see gains. we opportunities to in our to delivery. And opportunities our and see processes. We and intelligently focused optimization productivity enhance lastly, more responsibly invest client service leverage then work support to additional to further on and process in automation streamline enhance consistent our

Andrew Krasner

as Elyse, about the think And of puts 'XX walk expansion we the can margin some and I you takes opportunity. through

divestiture. of confident X And TRANZACT margin a on over in discussed HWC, record as has program transformation to as expect achieve R&B additional to Within XXX set expansion expect margin a this roughly to be R&B. enterprise the impact have deliver our growth margin. delivering of have track XX at we where TRANZACT years. approximately on Day, will incremental the of drive up we're beyond tailwind efficiencies And we point to of the strong ability expansion, for So basis sale average points the we in and we us basis Investor our next the

net in Our $XXX XXXX. unallocated million was

be there to been walked through. in just in with I expect has roughly And acknowledge from interest line may some be contemplated declining we what We that and XXXX pressure XXXX. rates modest

Elyse Greenspan

buyback on higher from and been coming is flow earnout of then know stemming cash the right, this guys strong to TRANZACT I I Re talking were proceeds, right? position free might have thought you would follow-up you're approach, capital and still more balanced my kind the is the still have Day. And Willis Investor just cash given management, generation.

So bit can might a And you how Is these transactions Just deal what the through now think walking us then activity, more Willis of just time little things? billion. us of came in spend up terms is with smaller M&A right through you consider? help equation. part $X.X

Carl A. Hess

our Yes, be may sure, I clear, be allocation capital Elyse. mean, just shareholder right, central strategy. a of returns component to

remain expect could remains You opportunistic, us stock aggressive believe we undervalued to right, in our as and marketplace. the

next just capital a organic not are opportunities. do we other as expect for holding ourselves specific years to few M&A and the toward deploy We to target

Andrew Krasner

share Yes. of approximately investment XXXX, and billion, opportunities. inorganic and we're repurchases organic allocation And $X.X for potential expecting to market capital subject to conditions

opportunities As we that, to if marketing and pacing our continuously levels conditions presents advantage the think monitor itself. opportunity of of we cash about the accelerate repurchases to take

we'll think buybacks, seeing carefully you're we've amount we options which that investments to shareholders. And of it's as always and prudent for talked our we're capital strategic for about I ensure past, value maintain all evaluate maximizing of and creation appropriate that's in share to flexibility, there. considered And financial what M&A an have, internal include allocation the believe as

Operator

of Peters question James. Our the next Gregory with Raymond comes line from

Charles Peters

everyone. morning, Good

like on XXXX. be For pieces free some to first in the moving focus I'll flow. seems going It cash there's question,

then you in on just comments. you that, little more perspective to XX%. So update go did Maybe your -- back going us of Can maybe of the for reference also longer-term happen. that? objective -- you them go And you ratio, some on we what's have can related and your on detail can this conversion a into to

Andrew Krasner

Greg. Yes, Absolutely, sure.

compensation flow of we're margin primarily XX.X%. we $X.X enhancing during business The continuing XXXX. for working of Day, offset our of and of by margins. intensely billion all partially That mix, transformation free as from the of on outflows discussed at Investor the capital we our enhancing by is million improving margin operating represented progress management that by happy was our beginning cash we've focused flow operating evolve free flow last cash with $XXX cash made And are to also, related profile our margin discretionary and very cash payments, free flow cash increase improve to year. and So free a driven to year expansion an and course,

approximately was there XXX from spending. about XXX headwind and XXXX, basis headwind TRANZACT from point point In Transformation basis

for So XX.X%, flow we those factors improve normalizing we to our flow this. XXXX free a margin around continue expect free delivered cash cash and upon of margin to

cash historical free cash As a supplemental the reminder, the and appendix and starting flow free costs, in outflows for we slides. flow recast QX, cash reflect software non-GAAP capitalized measures margin will of in

give the XXXX, of And in there million the taxes we in up TRANZACT, Re settlement program, expected Transformation terms which margin spending cash about $XX of to normalized the on around think more XXXX. we cash to continue the related we from as free transformation-related and the XXXX Willis cash headwind wind of expansion, down of a million we a around expect costs expect related our expanding basis, a margin to accrued in operating in $XX earnout, XXXX. outflows cash flow of expect sale concluded to reported and specifically, And annual of

Charles Peters

detail. Thanks on is had. other guess had question sticking you commentary for the the I I the

mentioned in headwinds. foreign prepared You your remarks exchange

about be there going that I'm between the considering to of the reinsurance these And foreign exchange going is up think is headwind on be the You provide reported the financials? some curious financials? to reinsurance I to but are we the also seasonality two is going any spread segments, geography show exchange should inside your up costs? where guess we show talked Could foreign venture. how about and evenly when your us you perspective joint out issues reinsurance in

Andrew Krasner

Yes, sure.

that below the for side the an expect relates on the $X.XX So are headwind full in margins. FX sterling, year. we and terms be side, $X.XX a FX, exposures line And our to to of about dollar. euro as In share reinsurance of geography it operating the Canadian will largest relative QX of

Operator

question comes line next from Our the TD Kligerman Andrew of Cowen. with

Andrew Kligerman

in and So Michael departure big to Chang your big, strategy, added replace as the other recently and think with then people, some I've some heard. of him, you hires I

then of into And Carl, on to build expand at was specialization thought the you the WTW want of new that call, that program. I hallmarks I geographies. heard kind out one you -- specialization and I to he was while And say heard

sounds is might what net like So just new part your of as means by it be? you if And hiring that confirm, you plan? on result. pretty what that mean be geographies, elaborate to prominent And will still a robust that could areas very specialization your

Carl A. Hess

Sure.

has a last the with the we've generating from driver few our for of been strategy. pleased R&B. really It been years are key We Specialization over results growth

continue see the in overall industry entire Specialty We market face from strong structure others business, growth us in rate. CRB not our We strategy verticals. our that industry and to the growth just outpaces in along the that parts our average businesses and apart our sets and the think

of in region. in geography, on real have example, client that given we And of as In and verticals our have demand specialties dynamics large in where America base in depending industry each teams right? estate this have nuances segment. for we regions of leisure commercial For as this part that local demand hospitality particular North different Europe, for auto, we specialty their sort local strategy, and

North is customers on are mean, lines for place centers continued the from we're geographies. it I years. clients, Specialty of this. with last business as it's right, natural strategy, for pleased North work the to been that's focus the heritage we our because U.K. on led in in is geography, to So for America, America, go which global our really in But expanding right? And the that our basically we but where works done the successful, results our the strong Specialty in to strategy, with we region largest the start see building this and growth because

welcome to growth his were tremendous Donnelly leadership accomplished leader excited Specialty are in the respected your what and will during accelerate help and a our and to I with highly strategy We That's to drive very second forward Pat alluding with is a WTW. mean, to the we're welcome in us Pat background region, you quarter. question. and looking

Andrew Kligerman

great. That's

then that's there tailwind is expansion. done mature kind those just So X X, the still that thinking about what years hires, last in from with exciting a you've as And producers of into roles now of kind their that doing on matured based generally will into growth at you're Or has new be new and WTW? the expanding what your and geographies and like?

Andrew Krasner

and improvement hires do from the CRB continued of the new segment. with It's had in we expect all last And as productivity growth have of to And new cohorts Broking, hires & those the those in well. We're pleased Risk years. the few we've very Andrew. Yes. growth rates organic contributed over some

efforts recent the all specialty of hires strategy that's contribution from of the competitive And a have had the competitive of that. our growth driving rates and colleagues even our are function the rates. However, would growth without

Operator

Our next Cox question of comes with the from line Sachs. Goldman Rob

Robert Cox

not cash flow? I And if the I the you could Could free just a cash dollar amount, that, you that that impact if miss talk would sorry, outflows just about you'd reinsurance on this, so there expect confirm question the JV. had annually?

Andrew Krasner

of bolt-on cash in size, show a we it as terms continue sitting of would the overall to you Yes, investing statement it over a free be as cash up can correct. flows. would That start-up. the in period year outside And flow, several section think fund of of of the acquisition

Carl A. Hess

for growth timing, front opportunity us. don't state this several in potential margin right. the investment I organic and And expect years. of the essentially Yes. steady on next of we the mean the of amount is the rates to see achieve size right, depend We the full will

Robert Cox

the book excluding just helpful. sounds of like is growth Okay, which stronger XX%, got peers. to organic was wanted much Health, I on business than That's it. sales, it And still ask

the to is had of is if of that wins driving contributing growth. that any Just curious you of any business the kind touched And upon large growth? there new forward

Andrew Krasner

Yes, sure.

this So the what Europe And America geographies. And within right, in management led increased project global the to remains The quarter high for lead for while fourth benefit some XXXX, in XX% expansion we single-digit by And strong business the of lumpiness growth and revenue comparable balanced international shared the health be growth brokerage North more and our in second and market with was as growth care to continue growth expect on activity could given basis the a consistent our as Investor throughout XXXX. well income client you're expect that excluding and inflation in quarter-by-quarter was levels. demand portfolio Health. stronger quarter of rates at Day, business. continuous to employment book overall we

Operator

Scott [ next with comes Alex Our ] from question Barclays.

Unknown Analyst

what market, too First that stay that seems something is doing in to seeing the getting in companies accelerating sizable are one you that's like have to in larger I and pretty maybe thought if the if you're with have and maybe of for are in, on actually? the I think was interested be large what environment. a M&A context opportunities buyback private interest just about how you just just It larger I'd

Carl A. Hess

think strategy. their other I companies comment of terms in Yes. what may won't on

thinking our this. infrastructure about the a So X Look, over how years, company. bit the strengthened I'll and on solidified last we've probably we're focus

tools our to focus targets right trying and have and long-term presence. efficient potential Broking business. look strategy We In our key one with value. areas high to more our and and at achieve integrate WTW three We deliver key our as the processes business to business high merger of enhance our mix Wealth strengthening growth markets, improve our right? First, offers efforts while in objectives, core and

and help we would fill expand designed our right? and footprint. want And our Second, across cash accelerate profile, further our flow that the growth chain to to businesses enhance gaps, target insurance capabilities third, margins reach free our value and

satisfy course, disruption with I target, business be we're for firms not criteria hypothetical laid of good I'm to the but out. comment going that fit culturally looking a on just minimal could and

in thoughtful So our we're environment. in going to and that approach disciplined be

Unknown Analyst

second the helpful. of about and into And That's XXXX? XXXX that we and that, maybe given to extra texture around your how some one, compared the thoughts just all that high-level I have should you maybe environment just includes but evolving? that's the of guidance on know environment for how pricing And sort pricing guys think

Carl A. Hess

when assume risk about talking you're environment. I referring the to you're commercial pricing

Unknown Analyst

Typically & yes. sorry. yes, Yes, Broking, Risk

Carl A. Hess

outcomes stabilized and the our especially just to and for mean are clients quarter. loss-free that's in to lines clear. the mean I yes. clients. managed in are the positive most market. sort I increased market insurers for Okay, look I and to leading insurance The risk growth, wanted of driven non-cat continuing of for competition well advantageous market remains other fourth be

with lines except for continue lines. point on professional and a contrast and our From clients. Most firm of American or to leading Latin maybe reductions cyber in our improving geographic but Pacific still reductions insurers risk that property be compete supply market challenging. the comp kind clients available international Market lead remains still and And decelerating towards North view, some of shift market, rate showing Asia local with profile. rather America available, to in for the for the workers' Global the depending are Casualty results the softening Rate better market are stable where and markets

the rate during of year. don't it our us this R&B as a we significant how headwind Overall, or in portfolio past or tailwind view terms impacts across quarter

we've primarily was a it's the us. for last well difference as the really reorientation we will a made by that's about and growth retention, over high and investments years think to R&B Our specialization, of the us earlier, as the continue driven differentiate business few towards talked business made we new

Operator

Our will next question Michael line BMO. come from with of the Zaremski

Unknown Analyst

This Charlie for is on Mike.

terms going of Can commitments the thinking color the or add Carl financial approach. a some mentioned more about you Just else reinsurance And in areas anything about? venture, to share buyout on be or should terms the see back opportunity? we can there you the whether option is anything joint focused what you

Andrew Krasner

not agreement the in terms of going the to and specific We're timing of that nature. into terms Yes. get things JV of

deploy the to of if expand us we to see makes to, sense the structure and on flexibility just when size I think opportunity the we alluded with that as continue it capital provides that based to will critical in for impact there. owned point wholly is time future, have some the for and makes asset if us Whether an reach the potential mass opportunity WTW and take some sense. to to at that's what

And there. the opportunity business so we're really about excited

more it it I a as looking about to platform to think evolves. and it the lot contribute will talking forward

Unknown Analyst

taxes that rate. color to mentioned add you you around opportunity an well? get more with some maybe favorable Andrew, Can a as And

Andrew Krasner

a Pillar Yes, perspective. efficient still still to implemented sure. there We're tax from opportunities and looking being for are moving pieces is X there. globally, some always be

to So slight be we gave. I guide think upside that there some the could

Operator

Newsome the next John with Our Sandler. line of Piper from come question will

Unknown Analyst

tough It's about my of & it's the insurance similar kind and business of hoping your But still comment I the Risk back hear for with a environment Wealth expand pick with that that could up to first. a and you Paul. Health inflation the upon Broking lot about competition. that did first business. maybe But Risk could to a & well. you you Broking was I We talked thing health way of translate actually environmental but add, in sort pricing you if and about kind as what to Career

Andrew Krasner

have in we there, Obviously, Sure. good of pretty span businesses a HWC.

outside are America. for universal inflation on North those North markets indirect has in Let inflation me the are an paid prevalent among America direct which and insured large in has in small/middle Health start plans, Health. impact and on with care Care America. Health self-insured nearly fully a impact markets premiums plans North

cost can the keep engage health check, in plans During for care ways which high us. new inflation, periods of sponsors of opportunities generate in to often self-insured

We in have North business of and North our smaller Health America relatively others. outside market a portion to compared middle America,

pleased the streams. business which we helped That that trend to revenue for and our growth being Health high for pipeline expect for 'XX, and that inflation outlook single-digit one commission expected Health's based growth result, are XX% continue only was with one, that and organic factors that deliver said, of care we but on very prospects leads to for our

Wealth The several over right? business components. to got is Wealth, Moving

stretch demand business plans The of regulatory that and risk Our pension drivers can you is pension often pension activity what multiple largely call decades. are long-term or there which then for relationships drive with consulting growth to would annuity-based derisking transfer.

assets surplus for we overall also volume buyouts is similar U.S. On strong of drive the sorry, factors that that compared years. be system, and interest as drive drives derisking are think that the the PRT of but such demand to we activity, strategies that continue to demand see level side, in there consulting. the -- the environment in buy-ins annuity expected strategies rate prior for The pension to

the still to to our That respect digital On who we Engage. substantial most have sensitive to recurring software like of be project of one those taken with benchmarking the rebalancing and product, committee we and derisk on been now relationships, compensation multiyear. Career and One activity. compensation side, this balance activity probably greater intend solutions portfolio, we've but about. meaningful A have we past includes over our like and type things things a work, have appointments to but of Embark economically it is is focused couple businesses, the think years our annuity

marketplace Wealth change demand disciplined can activity. be Like business were we business, for company Second and RFPs, for rethinking to here. We're is strategy our our focus. wouldn't the talent drives If there generating simply is regulatory a we growth seeing out are. responding their the and we this what in the

lastly, & this very growth, contracts rate. Outsourcing. not renewal profitable typically for And are Delivery then very, These just high for Benefits, with manage business but We do multiyear a growth.

can on opportunity. point I good achieve driving we'll we contract, the pass return where price beyond mean the see So a if competitive a on down activity we think we

like So our That's quick survey there, out by there. it measured is of think to the HWC. a growth we of opportunity

Unknown Analyst

great. market particularly you your that point, could had Casualty second towards general middle market in are middle-market platform Property long That's just in a are market at to trying look or question, curious, & within lacking the Maybe business, I'm we that platform. platform. that geographies middle expand particularly for a there switch strong to this as you've

Carl A. Hess

off, from a On we've the perspective, seen good first across performance the growth portfolio.

lots includes over And companies world. that business years. past the a of growing in-market been have the several all We geographies across we've

quite strategy. we're happy with So that

opportunity well world's at potential the as we underway. inorganic well. is Now largest looking we the we have that insurance in We organically market as place we terms are opportunity, will relatively for there a highlighted as as we see where where and past been be significant geographies the both are of the years several the see as which addressing there U.S.,

Operator

Securities. of next Truist Our question Hughes comes Mark with the line from

Mark Hughes

already is like cost. the XX.X% cash, for the looks capitalized that include it's In that normalized headwind? Is about recast free XXX software It bps. that

Andrew Krasner

No. Yes.

go current with which that will calculation not So XXXX the QX. is new XX.X% I a forward, the referenced on in basis, start

Mark Hughes

Is call So fair? bps a that that might take XXX we out, it, as baseline, XX.X%.

Andrew Krasner

fair correct. basis, normalized That's on Yes. a

Mark Hughes

you Okay. mentioned expand business. bit? your you for helpful on And how regulatory Carl, activity that be Could then may political a little

Carl A. Hess

to clients and options, understanding Yes. they for change what business, formula for expect well in of others of that's change, very very a the a for their and turn of the future. change. potential faced implementation to That's regulatory their are the that we long I time, with do worked environments us mean when evaluation to and can us continue

Operator

next will Our the from of line come Shanker Josh America. Bank question of with

Joshua Shanker

world to very you Paul. a appreciate I your that Thank bit. really Carl, the around want little talk with about I much. visit

on can't of as talented people keep the hard business, see business you want You In we sensitivity? revenue them sensitivity recessionary impact to terms recessionary much, for versus a of revenues should have sensitivity? but recovery. Or lot a with it margin very impact in economic margins? is it How produce just of the who on the more is

Carl A. Hess

question. good Really Yes.

been firm, that economic I and is But you our muted. produced at I'd all, look revenue can sensitivity all in environment we've in you First overall see to yes, growth prior the to there growth, price produce a more to guess economic been and sort of but the it's if business we've revenue of out this conditions. look point different of history, sorts is able

is they our downside our And at chunk manage just looking upside in of colleagues terms substantial us line, bottom help the a in through compensation. variable employee, However, as our share of our as compensation well. the

thick Fan results through result. operating deliver so to as we've or stable And able and more been stable a income

Joshua Shanker

in that for of the maybe the about, concern forefront, some there's And at confronted There's it Great. were concerns terms also two worry inflation more recession. about potential of things sort about the faith and revenues than your both is a bigger are each with recession did impact the in two on that generated? other the your net other? simultaneously, way Or inflation out one

Carl A. Hess

Yes. saying, like thinking climates Remember XXs, you're about fabulous I that. those is what guess,

will over able help I as insurance there the to our we've just alluded that It the for work different can to, across segments our ways. as Wealth be are estate of inflation workforce does mean, the some price manage I able of of very affect, efforts the like may real fees that right as think that. getting asset our been location programs of decades business be to couple different I chunk values the well commission-based of will in we terms past in well us some the parts affect right costs that to of across also control [indiscernible]. is business. income in with in -- a compensation costs. just biggest organization, manage we've asset-based as we our as But both through And help got the course,

last of So including in weather well positioned years, that climates, all this the so X sorts increasingly over we organization, we've economic pretty flexibility engendered think because of we're stagflation. and to

Operator

come Evercore line ISI. of the David Our question next Motemaden will from with

David Motemaden

believe but basis operating mix question has points since I back, changed called a had of margin sort enterprise, XXXX, than know I'm just back going out bigger the natural a expenses. faster bit then. had the natural and I guys in around but leverage picture around revenues the operating of leverage, a you XX I for growing then, year just

stands thinking So in pieces before I'm moving some consider baseline as if wondering that a still other about good the XXXX? to of here

Andrew Krasner

mix that business time have that relevant been at as suggested. may think that with you I

part were think I portfolio. several components are obviously that business no longer of there the

basis best alluding at is margin HWC, do what tailwind already which think I So was now TRANZACT. points has the divestiture X the improvement in in then of level -- which R&B, the it factoring on and next the I over is way to earlier, incremental think years to high enterprise margins the I XXX continued average in for think very about

to think I about you best think probably So the that, sort going if margin weight of the way about think the that's opportunity portfolio, forward. expansion

David Motemaden

what XXXX. sort Okay. of what sort and employee to guys on saw up follow just then Great. base And of the wanted growth in hiring employment within Willis you

to And specifically, maybe headcount into to it think I like good more a is How XXXX, in X% that grow to XXXX? sort expecting about like was look X% and if think in that growth. XXXX? was headcount of I producers at how guys rate run just you are

Carl A. Hess

growth this bad it got way. replenish base, had were way the create with mean, talk profitable it. It's had our a days, enhancing and than trajectory. to opportunistic current a ability think our But achieve our more effect about look focused We revenue and we our talent ago about hiring little bit these at several are of that's efforts we years the strategic to a value. philosophically, Yes. sustainable, goal I effort to on

to going hitting to any they're or prevent expense And so base, margin incremental overall there talent from in whether are with investments, aren't targets. respect hiring our and they're our in technology us

we We the expect to to hiring those contemplate. with get

Operator

Shields KBW. Our Meyer line come with the of next will from question

Meyer Shields

modeling small Two questions.

the goes a if you billion any $X.X activity, little talk unclear. baseline there but of inorganic share that is I'm is assuming account? no that does or that substance down, $X.X take billion repurchases, about First, When some into the

Andrew Krasner

that billion Yes. return opportunity the come share and from baseline the funds aside of opportunities find that $X.X invest could is an inorganic we depending -- size attractive on in any repurchases. down The to those

Meyer Shields

on then ballparking any in I either impact you And timing Carl, or Career. Okay, of way thanks mentioned clarification. some revenues for margins? there the Is think, issues the

Carl A. Hess

turn broadly, remarks, projects clients fully start our discussions -- the to with the And to QX, expect our -- in this help clients to robust, products -- deliver to to I consulting and talked from delayed to our we pipeline little talked and the those QX right? proactive between address. that's continue mean, more More we quarter. about up remains software prospects bit that many and growth. pattern that a The want a I were needs be Well, designed right? We level of balance prepared they're sold, have

Operator

Hess concludes to Carl turn the for today's like session. remarks. back to closing I'd That question-and-answer call

Carl A. Hess

want clients. XXXX globally. and look I momentum to all implement made Thank you, thanks to we XXXX such and of colleagues dedication to has Their success. updated again WTW our us. and my appreciation you continue forward to once strategy commitment our our for all maintaining again, as in extend I deliver for a our joining

have day. and you, Thank great a

Operator

call. This conference concludes for participating. Thank today's you

You may disconnect. now

Willis Towers Watson Public Limited (WTW) 4 Feb 252024 Q4 Earnings call transcript