Global insurance and reinsurance brokerage, Willis Towers Watson (WTW), has announced a 1% rise in revenue to $2.01 billion for the third-quarter of 2020.
For the quarter, income from operations declined by 180 basis points compared to the same period in 2019, reaching $73 million. While net income of $121 million in Q3 2020 represents a jump of 61% from the $75 million reported in Q3 2019.
For the first nine months of the year, WTW has reported revenue of $6.59 billion, an increase of 4% on the $6.35 billion reported for the same period in 2019. At the same time, income from operations for 9M 2020 declined by 110 basis points, year-on-year, to $596 million. While WTW reports that net income for the nine month period reached $520 million, representing year-on-year growth of 4%.
John Haley, the broker’s Chief Executive Officer (CEO), commented: “I am very pleased with the Company’s financial results for the third quarter and year to date. Despite the challenging operating environment brought on by the COVID-19 pandemic, we delivered solid margins, strong free cash flow growth, and adjusted EPS growth.
“The third quarter results are reflective of our prudent cost-management and liquidity preservation efforts. Though there is looming uncertainty around the duration and severity of business disruptions, I am encouraged by the resilience we have demonstrated to date, and we remain confident in our ability to drive improvements and deliver value for our clients and shareholders.”
By segment, and WTW’s Investment, Risk & Reinsurance unit reported revenue of $331 million in Q3 2020, with most lines of business contributed to growth on an organic basis. Reinsurance growth was driven by new business wins and favorable renewal factors, notes WTW, while Insurance Consulting and Technology revenue grew from technology sales.
The Corporate Risk & Broking segment recorded revenue of $649 million in Q3 2020, compared with $651 million a year earlier.
The broker’s Human Capital & Benefits division saw its revenue fall by 1% year-on-year in Q3 2020 to $796 million, as the global impact of COVID-19 negatively impacted demand in the Talent and Rewards business.
WTW’s Benefits Delivery & Administration segment recorded revenue of $226 million in Q3 2020, which represents an increase of 26% from the $179 million announced for Q3 2019.
Commenting on the ongoing COVID-19 pandemic, WTW notes that widespread uncertainty remains and that it expects the pandemic to negatively impact its revenue and operating results for the rest of 2020, and beyond.
“During the third 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,” explains WTW.
Previously, the broker withdrew its full-year 2020 guidance owing to the uncertainty being caused by the pandemic and notes today that this remains unchanged as the firm is unable to predict the extent of the impact of COVID-19.