Q3 2021 results season is in full swing, and Willis Towers Watson (WTW) has become the latest insurance business to reveal how it fared last quarter. All GAAP profitability metrics published by the company include the benefit of the US$1 billion income receipt received as a result of the termination of the proposed Aon transaction during the third quarter of 2021
The broking giant saw its total revenue increase 4% from US$1.90 billion (around AU$2.53 billion) in Q3 2020 to US$2.0 billion (around AU$2.66 billion) in Q3 2021, with constant currency growth of 3% and organic growth of 7%. For the nine months ended September 30, 2021, revenue was US$6.29 billion, an increase of 6%, compared to US$5.95 billion for the same period in the prior year.
Meanwhile, WTW’s income from operations for Q3 2021 was US$1.1 billion, up from US$66 million in Q3 2020 and its adjusted operating income rose 120 basis points compared to last year to US$264 million. Net income attributable to WTW in Q3 2021 was US$903 million, up 646% from US$121 million in Q3 2020. For the nine months ended September 30, 2021, income from operations stood at US$1.5 billion, up from US$280 million in the same period last year.
Adjusted operating income was US$920 million, or 14.6% of revenue, an increase of 210 basis points compared to the same period in the prior year. Net income attributable to WTW for the nine months ended September 30, 2021, was US$1.8 billion, an increase of 250% from US$520 million for the same period in the prior year.
Net income, which includes discontinued operations, for the third quarter of 2021 was US$907 million, an increase from net income of US$122 million, for the prior-year third quarter. Adjusted EBITDA for the third quarter of 2021 was US$415 million, an increase from adjusted EBITDA of US$375 million. Net income, which includes discontinued operations for the nine months ended September 30, 2021 was US$1.8 billion, up from US$537 million for the same period last year. Adjusted EBITDA for the nine months ended September 30, 2021 was US$1.4 billion, up from adjusted EBITDA of US$1.2 billion last year.
WTW’s corporate risk & broking (CRB) segment saw revenue of US$697 million, up 7% from US$649 million in the prior-year third quarter. On an organic basis, North America led the segment primarily from new business across M&A, FINEX, construction and aerospace. Revenue in International, Great Britain and Western Europe also increased with new business generation and strong renewals across several insurance lines, most notably, in FINEX and retail. The CRB segment had an operating margin of 16.3%, as compared to 12.5% for the prior-year third quarter.
WTW’s investment, risk & reinsurance (IRR) arm had revenue of US$172 million, a decrease of 22% from US$220 million in Q3 2020. The IRR segment had an operating margin of 12.9%, as compared to 9.3% for the prior-year third quarter. Its human capital & benefits (HCB) segment saw revenue of US$852 million, an increase of 7% from US$796 million in the prior-year third quarter. The HCB arm had an operating margin of 28.4%, as compared to 26.3% for Q3 2020.
Commenting on the results, John Haley, Willis Towers Watson’s chief executive officer said he was proud of the year to date. He noted that the Q3 2021 results are highlighted by solid revenue growth, continued margin expansion, and strong adjusted EPS growth.
“During the third quarter, Willis Towers Watson continued to evolve our leadership, structure and portfolio of businesses,” he said. “We introduced our new Global Leadership Team (GLT) and our grow, simplify, and transform strategy. We have significant core strengths which we believe will help guide our strategy that is designed to generate value for all our stakeholders, external and internal, going forward.”
