Global insurance broker WTW has announced 5% organic revenue growth to more than $2.34 billion for the first quarter of 2024, although Group net income fell by 6% year-on-year to $194 million.
Alongside the slight dip in net income, WTW has reported Q1 2024 income from operations of $280 million, down 2% on the prior year quarter’s $285 million.
However, adjusted EBITDA for the quarter was $568 million, or 24.3% of revenue, an increase of 13% compared to adjusted EBITDA of $503 million, or 22.4% of revenue, in Q1 2023.
Within the company’s Risk & Broking segment, total revenue increased 8% on both a reported an organic basis to $978 million from $904 million, as the unit’s operating income rose 13% to $203 million, with a Q1 2024 operating margin of 20.8%, compared with 19.9% a year earlier.
WTW attributes the higher revenue to strong client retention across all geographies and higher levels of new business activity. The operating margin improved as a result of interest income, transformation savings and revenue growth in Corporate Risk & Broking, partially offset by the impact of book-of-business activity, foreign exchange, and Insurance Consulting and Technology’s flat revenue growth.
Turning to WTW’s Health, Wealth & Career business, and reported and organic revenue growth was 4% to $1.34 billion. Operating income increased 9% year-on-year to $336 million, as the operating margin spiked by 110 bps to 25.1%.
WTW explains that organic revenue growth in Health was driven by the continued expansion of its Global Benefits Management client portfolio in both International and Europe.
At the same time, the broker’s Wealth businesses generated organic revenue growth from higher levels of retirement work in North America and Europe. Career had organic revenue growth from increased project work in Employee Experience and Work & Rewards, and organic growth in Benefits Delivery & Outsourcing was driven by higher volumes and placements of Medicare Advantage and life policies in Individual Marketplace, says the firm.
“We started 2024 with solid first quarter results that, together with our robust pipeline and continued progress transforming our businesses, position us well to achieve our goals for the year,” said Carl Hess, WTW’s Chief Executive Officer.
Looking ahead, WTW has confirmed that it expects to generate revenue of roughly $9.9 billion or greater and mid-single digit organic revenue growth for the full year 2024.
The global brokerage is anticipating an adjusted operating margin of 22.5% – 23.5% for the year, and expects to deliver adjusted diluted earnings per share of $15.40 – $17.00, and produce approximately $88 million in non-cash pension income for the full year 2024.
Additionally, WTW expects to deliver approximately $425 million of cumulative run-rate savings from its transformation program by the end of 2024, with total program costs of $1.125 billion.
“Our successful strategic execution and strong demand for our industry-leading solutions drove healthy organic growth, with solid margins and earnings per share. We also maintained our disciplined approach to capital allocation, with $101 million of share repurchases during the quarter. Looking ahead, we are confident in our ability to deliver on our commitments, backed by our focus on strategic growth initiatives and operating efficiency,” added Hess.
