Global brokerage firm WTW has reported 6% organic revenue growth for the fourth quarter of 2023 to $2.91 billion, while net income for the period rose by 5%, year-on-year, to $623 million.
For the full year 2023, WTW achieved 8% organic revenue growth to $9.48 billion, while net income for the year rose by 4% to $1.06 billion when compared with 2022.
Effective January 1, 2023, the insurance broker realigned to provide its services and solutions across two business segments: Health, Wealth & Career (HWC) and Risk & Broking (R&B), and three geographies: Europe, International, and North America.
Starting with the company’s HWC division, in Q4’23, total revenue increased by 4% on an organic basis to $1.8 billion, as operating income rose 8% to $729 million, leading to an operating margin of 40.5%, compared with 39.0% a year earlier. WTW says that organic growth was led by Benefits Delivery & Outsourcing, driven by Medicare Advantage sales.
In R&B, organic revenue growth of 12% resulted in a figure of $1.08 billion for the quarter, while operating income rose by 32%, year-on-year, to $354 million, with an operating margin of 32.9% compared with 28.3% a year earlier.
WTW explains that Corporate Risk & Broking generated exceptional organic revenue growth driven by strong new business, improved client retention and rate increases. Insurance Consulting and Technology had organic revenue growth from software sales and increased project revenue.
Based on current and anticipated market conditions, WTW expects to deliver revenue of $9.9 billion or greater and mid-single digit organic revenue growth for the full year 2024.
The company also expects to deliver approximately $88 million in non-cash pension income for the full year 2024.
WTW expects to deliver approximately $425 million of cumulative run-rate savings from the Transformation program by the end of 2024, up from $380 million previously, and total program costs of $1.125 billion, up from $900 million previously.
In Q4 2023, WTW realized $37 million of incremental annualized Transformation program savings, bringing the total to $337 million in cumulative savings since the program’s inception.
Cash flow from operating activities were $1.3 billion for the year ended December 31, 2023, compared to $812 million for the prior year, the broker noted.
Free cash flow for the years ended December 31, 2023 and 2022 was $1.2 billion and $674 million, respectively, an improvement of $518 million.
During Q4 and year ended December 31, 2023, WTW repurchased $196 million and $1 billion of WTW shares, respectively.
“WTW closed 2023 with robust momentum, delivering strong organic revenue, margin, and earnings growth in the fourth quarter to cap a solid financial performance for the year,” said Carl Hess, WTW’s chief executive officer.
“Our topline results and healthy pipeline for 2024 reflect the success of our growth initiatives with both new and existing clients. Alongside the strong revenue growth, our progress simplifying and transforming our operations drove efficiencies and margin expansion in the quarter. We also made progress on our commitment to improve cash flow.”
“I applaud my colleagues for their hard work in growing, simplifying and transforming WTW. I look forward to our working together in 2024 as we aim to achieve our strategic and financial goals and create value for our shareholders,” Hess said.
