4 November 2016 Insurance

Willis Towers Watson reports loss in Q3 as integration costs hit

Willis Towers Watson reported a net loss of $32 million in the third quarter of 2016, compared to a pro forma net income attributable to Willis and Towers Watson of $209 million for the prior-year quarter.

Net loss attributable to Willis Towers Watson for the third quarter of 2016 include pre-tax $49 million of restructuring costs and $36 million of integration expenses.

Re/insurer Willis and professional services company Towers Watson shareholders approved the merger of the two companies  in December 2015.

Willis Towers Watson's total revenues were $1.78 billion for the third quarter of 2016, an increase of 2 percent compared to Willis and Towers Watson pro forma revenues of $1.75 billion for the same period in the previous year.

For the quarter, the Investment, Risk & Reinsurance segment had commissions and fees of $292 million, a decrease of 9 percent from pro forma $320 million in the prior-year third quarter. The Wholesale, Risk Consulting and Investment revenue growth was more than offset primarily by a decline in Capital Markets, as transactions have slowed dramatically, and there has been softness in the North American Reinsurance market. The Investment, Risk & Reinsurance segment had total revenues of $299 million, which includes interest and other income, and an operating margin of 8 percent.

"We continue to deliver revenue growth led by the acquisition of Gras Savoye and organically by Exchange Solutions,” said John Haley, CEO of Willis Towers Watson.

Broker Willis has made a firm offer to acquire the remaining 70 percent of French insurance broker Gras Savoye for €550 million in April 2015.

“I am pleased with the progress against our integration plans, revenue synergy activities and our enhanced efforts to manage profit margin. We expect to see strong earnings growth for 2016 and I remain very confident in achieving our long-term merger objectives.”

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