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WTW broking arm outpaces Aon, Marsh and Gallagher on organic growth
WTW said its Risk & Broking segment delivered 7% organic revenue growth, while its reported net income fell 30% year on year to $231 million due largely to higher Newfront-related transaction and integration costs.
Four of the world’s biggest insurance brokers reported second-quarter results within nine days of each other, enabling a rare like-for-like comparison across their broking operations. WTW and Arthur J. Gallagher reported on 30 July, Aon the day before, and Marsh McLennan about a week earlier, with WTW coming out strongest on broking-side organic revenue growth.
In WTW’s Risk & Broking segment, organic revenue grew 7% in the quarter. Gallagher’s most directly comparable Brokerage unit grew 5%, while Aon’s Risk Capital solution line was around 5% organic, based on growth of 5% in both its Commercial Risk and Reinsurance component lines. Marsh McLennan’s Risk and Insurance Services segment grew 3% organically, with a 2% decline at Guy Carpenter reflecting softer reinsurance pricing.
When looking at Marsh’s core broking alone, organic growth was 4%, still three points behind WTW. Gallagher’s combined organic growth across its Brokerage and Risk Management segments was 6%, but the figure includes Gallagher Bassett, whose third-party claims administration business grew 12% organically, making it less comparable to placement-style broking measures.
Despite the stronger broking performance, WTW’s reported profitability weakened on a year-on-year basis. Net income fell 30% to $231 million and diluted earnings per share dropped 27% to $2.43, which the outlet attributed mainly to transaction and integration costs tied largely to WTW’s Newfront acquisition, with those costs rising from $2 million in the prior-year quarter to $61 million this quarter. On adjusted measures, however, adjusted diluted EPS rose 17% to $3.35 and adjusted operating margin expanded 100 basis points to 19.5%.