Re/insurance broker WTW has reported revenues of $1,953 million for the third quarter of 2022, down 1% from the same period last year but up by 6% on an organic revenue growth basis.
This represents an acceleration from the organic revenue growth rate of 3% that the broker reported in Q2 of this year, following a 2% growth rate in Q1.
Net income for the Q3 period continued to slump following the collapse of WTW’s merger deal with Aon, falling 79% from the prior year period to $192 billion due to a $1 billion income receipt that was received as a result of the termination.
WTW’s Risk & Broking (R&B) segment, which includes businesses previously aligned under the Corporate Risk and Broking segment, as well as the Insurance Consulting and Technology business, posted revenue of $765 million for Q3, representing a decrease of 3% compared with last year, or an organic increase of 6%.
On an organic basis, Corporate Risk & Broking generated organic revenue growth across all regions, primarily driven by WTW’s global lines of business, most notably in Aerospace, Natural Resources and FINEX.
Insurance Consulting and Technology’s organic revenue grew primarily as a result of new software sales, while book-of-business settlement activity was largely in line with prior year and did not meaningfully affect Corporate Risk and Broking’s organic growth rate.
Meanwhile, the Health, Wealth & Career segment posted revenue of $1.16 billion, representing a decrease of 1% compared with Q3 2021, or an increase of 4% in organic growth terms, with all segments contributing towards this growth.
Based on these results, WTW is maintaining its 2022 full-year targets for organic revenue growth, which is expected to be recorded at a “mid-single digit” level.
The broker also expects to deliver adjusted operating margin expansion for the full year, as well as $110 million in cumulative run-rate savings from the Transformation Program and a $20 million year-over-year decline in non-cash pension income.
“We had a strong third quarter, which reflected increasing momentum as a result of the continued execution of our Grow, Simplify and Transform strategy,” said Carl Hess, WTW’s Chief Executive Officer.
“Our organic revenue growth accelerated to 6% as the investments we’ve made in talent, technology, and transformation began to yield results. In addition, we have expanded our adjusted operating margins, with 110 basis points of improvement over prior year,” Hess continued.
“Our strategic momentum, continued strong demand for our services amidst macroeconomic volatility, and the resilience and flexibility of our business give us confidence in our ability to drive growth, expand margins and create value for our shareholders over the long-term.”
Looking ahead to 2024, WTW has recast its financial targets due to the transfer of ownership of its Russian subsidiaries, adding that it “does not anticipate resuming operations in Russia within the foreseeable future.”
Currently, it is estimated that the annualized run-rate impact from the divestiture of the firm’s Russian operations is approximately $120 million of revenue.
