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Global turbulence is creating headwinds for Willis Towers Watson, but it's also increasing demand for the company's health benefits business.
Executives talked about the effects of the turbulence today, during a conference call WTW held to go over results for the first quarter.
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The quarter ended March 31, shortly before April 3, when the United States started to roll out, and then change, a series of proposals for tariffs, or import taxes, that led to retaliatory moves by other governments and increased volatility in world stock, bond and currency exchange markets.
WTW is a London-based company that acts as a property and casualty insurance broker and human resources consulting firm as well as a benefits advisor.
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The recent geopolitical uncertainty "is creating near-term headwinds in certain areas, particularly in our North America career businesses, where some clients in certain industry sectors may choose to delay discretionary advisory work until they have greater clarity on the macroeconomic outlook," Carl Hess, WTW's chief executive officer, said in his opening remarks.
But Andrew Krasner, the chief financial officer, noted that WTW's global health business grew 6% in the first quarter.
"All regions saw growth," Krasner said.
"In North America, client retention and new mid-market sales led to an increase in commissions, while consulting fees increased with more projects focused on cost management and legislative change," Krasner added. "With the potential for health care inflation to go even higher in the current environment, we expect that demand to continue."
Improved health offerings for midsize employers in North America should help growth continue there and in the rest of the world throughout the rest of the year, Krasner said.
Julie Gebauer, the president of WTW's Health, Wealth & Career unit, said high health care inflation is helping WTW's benefits advice sales pipeline.
"Health care cost management is an important topic right now," she said.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
