Insurance and reinsurance broker Willis Towers Watson (WTW) has reported an encouraging start to the year with total revenue growth of 5% to $2.6 billion, with organic growth of 4% and constant currency growth of 1%.
Revenue spiked for the broker in Q1 2021 from the $2.47 billion reported in Q1 2020, while income from operations reached $452 million, or 17.5% of revenue, representing a year-on-year increase of 290 basis points.
Net income for the first quarter of 2021 amounted to $736 million, or 28.4% of revenue, compared with net income of $313 million, or 12.7% of revenue, for the same period in the prior year.
Within net income attributable to WTW, which totalled $733 million for Q1 2021, is included pre-tax $24 million of transaction and integration expenses related to the pending merger with Aon.
With the exception of the firm’s Investment, Risk & Reinsurance (IRR) business, all operating units reported an increase in revenues for the first quarter of 2021 when compared with the same period in the previous year.
WTW’s IRR unit has reported revenue of $605 million for Q1, which is a decline of 2% (5% decrease constant currency and 4% increase organic) from the prior year period.
The broker notes that on an organic basis, the majority of lines of business contributed to the growth. In Reinsurance, growth was driven by both new business and favourable renewal factors.
In the Corporate Risk & Broking division, revenue increased by 10% (5% increase constant currency and 5% increase organic) to $810 million.
The company’s Human Capital & Benefits business recorded revenue growth of 3% (flat constant currency and flat organic) during Q1 2021 to $875 million.
Lastly, WTW’s Benefits Delivery & Administration segment had revenue of $287 million during the period, which is an increase of 24% (24% increase constant currency and 23% increase organic) on the prior year Q1.
John Haley, WTW’s Chief Executive Officer (CEO), commented: “Willis Towers Watson had an encouraging start to the year with strong first quarter results.
“We are proud of our financial performance and our unwavering commitment to client service. We delivered revenue growth, meaningful margin expansion and strong earnings-per-share growth. Our results reflect both increased demand for our solutions, as well as our sustained focus on profitable growth.
“We continue to build upon our solid foundation and believe we are well-positioned to continue driving value for all our stakeholders. As always, I would like to thank all of our colleagues for their tremendous efforts this past quarter in support of our clients and each other.”
The global brokerage has also commented on the risks and uncertainties related to the ongoing COVID-19 pandemic, noting that the extent to which it impacts its business depends on future developments, which are hard to predict.
“We continue to expect that the COVID-19 pandemic will negatively impact our revenue and operating results for 2021. During 2020 and through the first quarter of 2021, 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,” explains the firm.
