Willis Q1 profit jumps on higher income from operations

Broker Willis Towers Watson reported a 43.7 percent year-on-year increase in net profit for the first quarter of 2017 as the income from its operations rose.

Net income was $352 million in the first quarter, an increase from $245 million in the same period a year ago.

Operating income from its four segments, namely Human Capital & Benefits, Corporate Risk & Broking, Investment, Risk & Reinsurance and Exchange Solutions, grew to $731 million in the first quarter from $665 million a year earlier.

Income from operations before income taxes and interest in earnings of associates increased to $397 million from $262 million over the period.

“I’m very pleased with the first quarter results,” said John Haley, Willis Towers Watson’s CEO.

Our integration efforts remain on-going, and I expect that we will continue to navigate challenges over the next two years. However, with the strong foundation of our core businesses and the opportunities of our integrated offerings, I remain confident we will achieve the potential we envisioned when creating Willis Towers Watson.”

For the first quarter, the Human Capital & Benefits segment recorded an operating margin of 37 percent in the first quarter of 2017. Commissions and fees increased 3 percent (5 percent increase at constant currency) to $951 million. Retirement revenues increased in the first quarter led by Great Britain and Western Europe. The demand for actuarial consulting projects and the timing of the European Easter holiday, which was observed in the first quarter of 2016, accounted for the increase, according to a company statement.

The Corporate Risk & Broking segment recorded an operating margin of 19 percent in the first quarter. Commissions and fees were up 1 percent (3 percent increase at constant currency) at $650 million. International led revenue growth, primarily due to regulatory changes, which brought forward business into the first quarter of 2017. Additionally, China and Hong Kong delivered significant new business. Western Europe also had strong organic growth, primarily in Southern Europe and France, as a result of new business wins, according to the company.

In the Investment, Risk & Reinsurance segment the operating margin was 44 percent. Commissions and fees were up 1 percent (5 percent constant currency increase) at $502 million. Wholesale, Investment, Risk Consulting and Software, Max Mathiessen and Reinsurance all posted notable revenue growth, primarily as a result of strong sales and increased performance fees and timing, according to the statement.

The operating margin in the Exchange Solutions segment was 21 percent in the first quarter. Commissions and fees were up 10 percent year-on-year (10 percent at constant currency) at $179 million. Retiree and Access Exchanges revenues increased by 6 percent and Active Exchanges revenue growth was 24 percent, primarily as a result of the 2017 annual enrolment season. Technology and Administration Solutions had strong revenue growth as well, as a result of obtaining new clients and experiencing a higher level of project activity, the company said.