Re/insurance broker Willis Towers Watson (WTW) has increased its overall revenue by 3% during the second quarter of 2020, helped by organic growth and favourable renewal factors for its reinsurance business.
Revenue was reported at $2.11 billion for Q2 2020, compared with $2.05 billion for the same period last year.
Looking at the Investment, Risk & Reinsurance (IRR) segment specifically, revenue was $413 million, an increase of 1% from $409 million in the prior-year second quarter.
In this segment, most lines of business contributed to organic growth, with Reinsurance and Wholesale in particular benefiting from new business wins and renewal conditions.
Insurance Consulting and Technology revenue also grew from technology sales, while Max Matthiessen revenue decreased as a result of the negative impact of COVID-19 on financial markets.
For the Corporate Risk & Broking (CRB) segment, revenue was $701 million, an increase of 2% from $690 million in the second quarter 2019.
On an organic basis, North America continued to lead this segment, followed by International and Western Europe, primarily with new business generation along with strong renewals.
The revenue increase was partially offset by a decline in Great Britain, which was primarily due to the impact of COVID-19 on certain insurance lines.
WTW warned that the COVID-19 pandemic would negatively impact our revenue and operating results for the remainder of 2020, and potentially beyond.
However, it noted that the extent to which its business and financial position will be affected will depend on factors such as the scope of the virus going forward, as well as the types of measures imposed by government authorities.
“During the second quarter of 2020, the COVID-19 pandemic had a negative impact on revenue growth, particularly in our businesses that are discretionary in nature, but otherwise it generally had no material impact on our overall results,” WTW stated.
“Some of our discretionary, project-based businesses saw a reduction in demand, and potential negative impacts on our revenue and operating results may lag behind the developments thus far related to the COVID-19 pandemic,” it added.
For the second quarter 2020, WTW’s net income decreased by 32% to $102 million, while income from operations was $163 million, a decrease of 90 basis points compared to Q2 2019.
And for the first six months of the year, WTW similarly reported a 5% increase in revenue to $4.58 billion and a 15% decrease in net income to $415 million.
“I am pleased with our second quarter results,” said WTW CEO John Haley. “Our strong execution and our focus during this challenging environment helped us deliver another quarter of solid financial performance.”
“We demonstrated the resilience of our overall business and diversified portfolio of offerings through continued revenue and earnings growth, robust free cash flow enhancement and a strengthened balance sheet,” he added. “We are confident the actions we are taking in this challenging environment will enhance our agility and allow us to generate long-term value for all of our stakeholders.”