On February 4, 2025, Willis Towers Watson PLC (WTW, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full year of 2024. The company, formed from the merger of Towers Watson and Willis Group in January 2016, operates globally in advisory, insurance brokerage, and solutions, with two main segments: health, wealth, and career, and risk and brokering.
Performance Overview
Willis Towers Watson PLC reported a 4% increase in revenue for the fourth quarter of 2024, reaching $3.04 billion, compared to $2.91 billion in the same period last year. This growth was consistent with a 5% increase on an organic basis. The company's diluted earnings per share (EPS) for the quarter was $12.25, significantly surpassing the analyst estimate of $7.45. Adjusted diluted EPS was $8.13, a 9% rise from the prior year.
Financial Achievements and Challenges
For the full year 2024, Willis Towers Watson PLC achieved a 5% increase in revenue, totaling $9.93 billion. However, the company reported a net loss of $88 million, primarily due to impairment charges related to the sale of TRANZACT. Despite this, the adjusted diluted EPS for the year was $16.93, a 17% increase from the previous year, indicating strong underlying performance.
The company's operating margin for the fourth quarter improved to 29.7%, up 300 basis points from the previous year, while the adjusted operating margin increased to 36.1%. For the full year, the operating margin decreased to 6.3%, down 810 basis points, but the adjusted operating margin rose to 23.9%, reflecting effective cost management and operational efficiencies.
Segment Performance
The Health, Wealth & Career (HWC) segment reported a 3% increase in revenue for the fourth quarter, driven by growth in project work and brokerage income in North America, as well as expansion in the Global Benefits Management client portfolio. The Risk & Broking (R&B) segment saw a 6% increase in revenue, with strong performance in Corporate Risk & Broking and Insurance Consulting and Technology.
Key Financial Metrics
| Metric | Q4 2024 | Q4 2023 | Y/Y Change |
|---|---|---|---|
| Revenue | $3,035 million | $2,914 million | 4% |
| Net Income | $1,248 million | $623 million | 100% |
| Diluted EPS | $12.25 | $5.97 | 105% |
| Adjusted Operating Margin | 36.1% | 34.2% | 190 bps |
Analysis and Outlook
Willis Towers Watson PLC's strong revenue growth and improved margins highlight its successful execution of strategic initiatives, despite challenges such as impairment charges. The company's focus on operational efficiency and strategic transformation has positioned it well for future growth. The divestiture of TRANZACT and the anticipated headwinds from the reinsurance joint venture are expected to impact future earnings, but the company's robust cash flow and capital allocation strategies, including significant share repurchases, demonstrate confidence in its long-term prospects.
WTW is entering 2025 with considerable momentum after delivering on our 2024 financial targets through solid revenue growth, robust margin expansion and earnings growth," said Carl Hess, WTW’s chief executive officer.
Overall, Willis Towers Watson PLC's financial results for 2024 reflect a strong performance, with significant achievements in revenue growth and operational efficiency, despite facing certain challenges. The company's strategic focus on growth, simplification, and transformation continues to drive value for shareholders and positions it well for future success in the competitive insurance industry.
Explore the complete 8-K earnings release (here) from Willis Towers Watson PLC for further details.
