WTW: top stalwart to exit; Willis Re deal revival on the horizon and more
'Aggressive' hiring is not the only strategic move being mulled by Willis Towers Watson as the broker begins to move on from its collapsed mammoth merger deal with Aon. The John Haley-led (pictured) company is exploring strategic options for its reinsurance broking business Willis Re, while looking for a new chief executive officer to lead through its next phase of development.
The company stalwart Haley, who has served as WTW CEO and director since the start of 2016 and been with the company for over 44 years (having joined in 1977), has revealed his intention to retire. Under his leadership, the company went public in 2000, and completed three historic mergers, in 2005, 2010 and 2016 that formed present-day Willis Towers Watson.
"I still intend to retire, and I will continue to work with the Board to ensure a smooth transition of the CEO role," revealed Haley, adding that as part of the succession planning process the company's board of directors has been working with him to ensure a smooth transition of the CEO role.
Answering questions from analysts during its second quarter earnings call, Haley stated that his contract runs through the end of the year. "I think the intention would be not to extend that, but to identify a successor and have that successor named before that time," he said. "I'll be working with the board on that, the board has a very thorough process and considers everything, of course, we – this is not new, we've been doing this for a lot of years and so we're not just starting at square one here."
Willis Towers Watson extended Haley's employment agreement mid last year - for the third time since 2016. The company wanted him to stay until the completion of its now scrapped business combination with Aon. Haley's contract, dated March 1, 2016, was first amended on July 18, 2018, followed by May 20, 2019.
While announcing its quarterly and half-year 2021 results, Haley affirmed that the company is focused on moving forward independently. "We are well-positioned to compete vigorously and independently across our businesses around the world," he declared.
Haley also revealed that the plan to offload its reinsurance business Willis Re is still on, despite the collapse of its $3.57 billion deal with Arthur J Gallagher. Gallagher had agreed in May to buy Willis Re to smooth the way for Aon’s acquisition of the whole business, but the deal fell apart following the termination of Aon-WTW's $30 billion merger after they "reached an impasse" with the US Department of Justice.
"We're conducting a review of strategic alternatives for Willis Re, our reinsurance operations," confirmed Haley. "The Board has authorised us and our advisors to initiate such a process."
"While we highly value the Willis Re platform and our colleagues who contribute to its success, we believe now is an appropriate time to explore strategic alternatives for this business," he added.
Haley noted that there can be no assurance the strategic alternatives review process will result in a sale of Willis Re.
Additionally, the company has reinstated its share buyback programme, which had been suspended to comply with the terms of the agreement with Aon. It will be taking some "strategic actions" over the next couple of months, which will be revealed on its upcoming Investor Day on September 9.
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