WTW is considering re-launching back into treaty reinsurance, Goldman Sachs has revealed following a management meeting with the insurance broker.
Back in 2021, WTW sold its reinsurance arm Willis Re to Gallagher. A clause in the terms of agreement stated that WTW would not broker treaty reinsurance products again until 2024.
As the end of that clause nears, the broker shared its rationale regarding its possible re-entry into treaty reinsurance with Goldman Sachs analysts, who stated:
“WTW’s strategic rationale for considering a re-entry into treaty reinsurance primarily stems from the view that the firm can bring value to the reinsurance ecosystem through its relationships, specialised capabilities, and analytical expertise.
“To that note, when the firm divested legacy Willis Re, WTW retained analytical tools that helped run the reinsurance business, which are currently housed in the Insurance Consulting and Technology group within WTW. Nonetheless, reinsurance capital deployment opportunities will be benchmarked against share repurchases, and management is acutely aware of the need to achieve stated 2024 margin targets.”
In the same meeting, WTW also discussed topics that included organic growth and operating margin guidance.
According to Goldman Sachs: “The company’s strong organic growth has been driven by new business (greater in magnitude than rate) in light of better-than-expected performance from talent investments, and this growth should continue as recent hires become more productive.
Analysts added: “Management is confident in hitting stated margin guidance due to expected improvements driven by operating leverage, production gains, transformation savings, and the alleviation in non-recurring headwinds.”
