Willis Towers Watson PLC on Thursday reported organic revenue growth of 3% for the second quarter as its top executive said it still expects to report mid-digit growth for all of 2022 despite the uncertain economic outlook.
Willis reported second-quarter revenue of $2.03 billion, down 3% from $2.09 billion in the year-ago period. Excluding a 4% foreign currency headwind, revenue increased 1%.
Second-quarter net profit was $114 million, down 39% from $186 million in the same period in 2021, according to the brokerage’s earnings report released Thursday before markets opened.
CEO Carl Hess said on an earnings call with analysts that second-quarter results were “in line with our expectations.”;
Willis is starting to see top-line benefits from its investment in talent and expects the second half of the year to reflect “accelerated benefits” from new hires, Mr. Hess. Hiring activity in the second quarter matched that of the first quarter, which was the highest since 2019, he said.
Willis is well positioned to weather macroeconomic uncertainty, including both inflation and a potential recession, Hess said.
“Our business portfolio is relatively non-cyclical. We estimate that 80% of our revenue base is recurring, often built on non-discretionary solutions and services,” he said.
Recession exposure in economically sensitive and more discretionary industries, primarily in the health, wealth and career segments, is expected to be relatively low, he said.
Willis’ risk and brokerage segment reported second-quarter revenue of $852 million, down 4% from $885 million in the prior year, but up 3% on an organic basis. Settlement activity on the books was broadly in line with the second quarter of 2021 and did not meaningfully impact enterprise risk and the broker’s organic growth rate, Willis said.
Corporate risk and brokerage saw revenue growth in all regions, driven by new business, with notable strength in mergers and acquisitions, aviation, natural resources and financial, executive and professional risk, CFO Andrew Krasner said.
Internationally, corporate risk and brokerage led growth, driven by construction and natural resources, Krasner said.
Growth in North America and Europe came from both new business and improved customer retention due to the expansion of teams in those regions, he said.
The growth in the insurance consulting and technology business stemmed from sales of new software and increased advisory work.
Willis’ health, wealth and career segment reported revenue of $1.16 billion, down 2% from $1.18 billion in the year-ago period, but up 2% on an organic basis.
Willis said it expects to deliver more than $80 million in cumulative savings from its transformation program by the end of 2022, up from $30 million previously.