“Our colleagues who joined us during 2022 and 2023 have become increasingly productive and have brought our talent base back to full strength, as evidenced by the segment’s strong organic revenue growth in the second half of 2023,” Hess told investors on the global broker’s 2023 annual results call.
WTW is now focusing on “strategic and opportunistic” talent acquisition in businesses and geographies likely to generate the most profit and growth potential, Hess said.
The global broker has ramped up investment in talent acquisition in recent years, following its failed mega-merger with Aon.
The deal, scrapped amid competition concerns pressure from the US Department of Justice, saw valued colleagues exit the business, former WTW CEO John Haley acknowledged in an August 2021 H2 earnings call in which he confirmed the business was “aggressively” recruiting. At the time, Haley, who retired from WTW in January 2022, pointed to the merger process having made new hiring difficult due to uncertainties around where incoming employees would fit into the business.
Specialization is set to remain a core focus for WTW’s risk & broking segment into 2024 after driving growth last year, as the global brokerage also looks to build out the geographic reach of its managing general underwriter (MGU) Verita, Hess confirmed during the 2023 full year earnings call.
“Our specialization strategy and risk in broking was a key driver of growth for both the segment and the enterprise,” Hess told investors on the global broker’s 2023 results call. “Our specialty businesses continue to have significantly higher growth than the rest of the segment.
“This growth is driven in large part by improved client retention, expansion of existing client relationships, and our strengthened ability to attract new clients and win back old ones has validated this approach.”
The global business has completed the building out of 12 industry verticals in North America, with work to continue across Western Europe and a launch process targeted for 2024 for its international business.
The business is taking a “tailored approach” to specialization across the regions, Hess said.
WTW’s startup MGU Verita has experienced growth, with expansion on the cards as the group looks to tap in to differentiated revenue streams.
“Just in the fourth quarter of 2023, we’ve onboarded brokers, bound premiums and received submissions from both external and our own brokerage clients,” Hess said. “In 2024, we’ll focus on expanding our MGA and MGU strategy to additional geographies.”
The Portsmouth, New Hampshire-based property, casualty, and financial lines MGU launched last September, with an initial focus on hospitality and leisure, financial institutions, and professional services businesses.
The global broking and advisory business, which reported revenue up 7% for the year, at $9.5 billion, and net income of $1.1 billion (2022: $1 billion), saw its share price rise on the release of its results on Tuesday morning, closing at $268.45, up 7.1% from a close of $250.60 on Monday evening.
Across the business, restructuring costs for the year trended down, at $68 million (2022: $99 million). The global broker’s transformation program, hailed by Hess as a “significant benefit to our bottom line”, drove cost savings of $37 million in 2023, delivering cumulative savings of $337 million since the program’s 2021 inception.
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