Willis posts solid growth in Q3; reinsurance unit up 5%
Willis Towers Watson enjoyed solid growth and a big turnaround in its profits in the third quarter of 2018, which increased to $85 million in the period, a big turnaround of 254 percent on the loss of $54 million it made in the same period the year before.
For the nine months ended September 30, 2018, its net income was $621 million, an increase from net income of $339 million for the same period in the prior year. Adjusted EBITDA for the nine months ended September 30, 2018 was $1.6 billion or 25.3 percent of revenue, an increase from Adjusted EBITDA of $1.4 billion, or 23.1 percent of revenue, for the same period in the prior year.
Its overall revenues for the three months ended September 30, 2018 was $1.9 billion, an increase of 3 percent (4 percent increase constant currency and 5 percent increase organic), as compared to $1.85 billion for the same period in the prior year.
For the nine months ended September 30, 2018, its revenues reached $6.5 billion, an increase of 6 percent (3 percent increase constant currency and 4 percent increase organic), as compared to $6.1 billion for the same period in the prior year.
These numbers are exclusive of its adoption as of January 1, 2018 of Accounting Standards Codification 606, Revenue From Contracts With Customers (ASC 606), which makes it difficult to compare its 2018 figures with those in 2017. The company noted that as it moves past the adoption year, the full year financial results will be more comparable to the 2017 reported results.
Excluding the impact of ASC 606, its Investment, Risk & Reinsurance (IRR) segment posted revenues of $337 million, an increase of 5 percent (7 percent increase constant currency and 9 percent increase organic) from $321 million in the prior-year third quarter.
It said that reinsurance, investment, insurance consulting and technology, wholesale, and Max Matthiessen all contributed to the segment’s performance, primarily through a combination of new business and favorable renewals, which was partially offset by a decline in underwriting and capital management as a result of the divestiture of a portion of the US programme business in 2017 and the Loan Protector businesses in the first quarter of 2018.
“I’m extremely pleased with our third quarter results,” said John Haley, Willis Towers Watson’s chief executive officer. “Overall, our performance reflects strong organic revenue growth, continued margin expansion, and double-digit growth in our adjusted earnings per share and free cash flow. Our results indicate that we have made substantial progress toward our goals for 2018 and we expect a strong finish to the year as we head into one of our seasonally strongest quarters.”
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