Willis Towers Watson (WTW) has reported organic reinsurance revenue growth over the fourth quarter of 2020, driven by new business generation and favourable renewal factors.
Reinsurance led the revenue growth in the broker’s Investment, Risk & Reinsurance (IRR) segment, which posted an overall 1% increase in organic revenue growth.
However, this was offset by a 9% decrease in constant currency which meant the segment’s revenue actually decreased by 7% over the quarter to $292 million.
Overall, WTW’s revenue increased by 3% to $2.76 billion in Q4, up from $2.69 billion for the same period in 2019, including organic revenue growth of 2%.
For the full year, revenue also grew by 3% to $9.35 billion, or by 2% on an organic growth basis.
But net income decreased by 13% to $476 million over Q4, and by 5% to $996 million over 2020.
The IRR segment, which includes WTW’s insurance broking business, saw growth partially offset by declines in other businesses with pressure on discretionary work negatively impacting both Insurance Consulting and Technology and Investments.
Wholesale revenue also declined as a result of headwinds across certain coverage lines coupled with a strategic shift in its operating model, and the IRR segment finished Q4 with an operating margin of 11%, versus 9.1% in Q4 2019.
Looking at WTW’s other segment, Human Capital & Benefits (HCB) posted flat Q4 revenue of $865 million, while Corporate Risk & Broking (CRB) saw a small 1% increase to $888 million In contrast, revenue for Benefits Delivery & Administration (BDA) jumped 16% (including 16% organic growth) to $693 million, led by TRANZACT.
WTW acknowledged that COVID-19 had a negative impact on its revenue growth over 2020 and warned that it would continue to impact results through this year.
“Our performance in the fourth quarter provided a strong finish to a good year in a difficult environment,” said John Haley, Chief Executive Officer at WTW.
“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,” he continued.
“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.”
Executives at Aon recently maintained that the planned combination with WTW is still expected to complete within the first half of 2021, despite an ongoing investigation into the deal by EU regulators on anti-competition grounds.
