Insurance broker WTW beats fourth-quarter profit estimates on robust product demand (updated)

Willis Towers Watson

04/02/2025 20:01

(Adds analyst comment in paragraphs 6 and 7, stock movement in
paragraph 5)
    By Prakhar Srivastava
       Feb 4 (Reuters) - Insurance broker Willis Towers Watson
 WTW.O  beat Wall Street estimates for fourth-quarter profit on
Tuesday, driven by a strong performance in its risk and
brokerage business.
    Businesses increased spending on insurance products as they
prioritized financial security to safeguard against risks,
despite higher premium prices.
    Insurance brokers' commissions are tied to the premiums
insurers charge.
    Revenue from Willis Towers Watson's risk and broking unit,
which advises clients on risk management and lets them negotiate
and place policies with insurers, rose 6% from a year earlier to
$1.14 billion, on the back of higher new business activity and
strong client retention.
    However, the company's shares are down 4.1% at $317.1.
    "The stock's decline is likely tied to concerns around free
cash flow, buyback levels and reinsurance costs," said TD Cowen
analyst Andrew Kligerman.
        "Organic revenue growth of 5% was in line with
consensus, but below 3Q24's 6%, so investors may be disappointed
in that as well," he added.
  
    Meanwhile, the company's largest segment - health, wealth
and career - saw revenue rise to $1.85 billion from $1.80
billion a year earlier, boosted by increased project work and
brokerage income in North America. 
    Willis Tower Watson posted adjusted net income of $827
million, or $8.13 per share, for the three months ended Dec. 31,
compared with $775 million, or $7.44 per share, a year earlier.
    Analysts on average were expecting earnings of $8.03 per
share, according to data compiled by LSEG.
    Total revenue in the quarter jumped 4% from a year earlier
to $3.04 billion.
      
    

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Willis Towers Watson's stock performance in 2024 compared with
its peers    https://reut.rs/4hGBVtk
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 (Reporting by Prakhar Srivastava in Bengaluru; Editing by
Krishna Chandra Eluri and Mohammed Safi Shamsi)
 ((Prakhar.srivastava2@thomsonreuters.com;))