Willis Towers Watson continues to expect its risk and broking business to deliver mid-to-high single-digit organic growth for 2025, despite headwinds from declining commercial insurance rates, its top executives said Thursday.
WTW swung to a net profit of $306 million in the third quarter, compared with a net loss of $1.67 billion in the same period last year, but revenue remained flat because of its sale of Tranzact.
The brokerage reported third-quarter revenue of $2.29 billion, unchanged from the prior-year period but up 5% on an organic basis.
Results were “solid,” reflecting the brokerage’s global specialization strategy and investments in talent, data and technology, which continue to drive sustainable growth, CEO Carl Hess said during WTW’s third-quarter earnings call with analysts.
Its health, wealth and career segment — WTW’s largest business — reported revenue of $1.26 billion, down 5% overall because of the Tranzact sale, but up 4% on an organic basis.
Its risk and broking operation reported revenue of $1.01 billion in the quarter, up 7% overall and 6% on an organic basis from the prior-year period.
“We’re facing headwinds from declining rates in certain segments of the commercial insurance market across various geographies,” Mr. Hess said.
“In the face of this dynamic environment, our businesses continue to be resilient,” he said.
Corporate risk and broking posted 6% organic revenue growth in the quarter, building on 10% growth in the same period last year and marking the 11th straight quarter of high-single-digit growth for the business.
Industry-wide pricing pressure is making high-single-digit organic growth harder in risk and broking, but “we believe it is still attainable,” CFO Andrew Krasner said.
CRB’s growth was driven by new business and revenue recognized from project-based placements within the global specialty businesses, which offset insurance rate headwinds.
Construction, surety and credit risk solutions made notable contributions, Mr. Krasner said.
CRB generated strong new business in all of its global markets and across almost every specialty line, said Lucy Clarke, president of risk and broking.
“Pricing pressure has continued in certain areas of the market and it’s becoming more meaningful as we make progress through the year. From our perspective, property is the most impacted class, particularly in the large and complex segments,” Ms. Clarke said.
Most lines are showing softening, other than North American casualty, where pricing continues to rise, she said.
Revenue in WTW’s insurance consulting and technology business was flat for the quarter as clients continued to be more cautious with their spending amid ongoing economic uncertainty.
WTW sold Tranzact, a direct-to-consumer health care business, to private equity firms GTCR and Recognize for $632.8 million last year.