Willis Towers Watson Public Limited Company WTW delivered first-quarter 2026 adjusted earnings of $3.72 per share, which beat the Zacks Consensus Estimate by 3.6%. The bottom line grew 19% year over year.
The insurer’s results reflected solid performance across both segments, growth in the Investments business, new business activity, an increase in adjusted operating income, and expanded margin. The upside was partially offset by higher expenses.
Willis Towers Watson Public Limited Company Price, Consensus and EPS Surprise
Willis Towers Watson Public Limited Company price-consensus-eps-surprise-chart | Willis Towers Watson Public Limited Company Quote
Willis Towers' Operational Update
Willis Towers posted adjusted consolidated revenues of $2.4 billion, up 8% year over year on a reported basis. Revenues increased 3% on an organic basis and 4% on a constant currency basis. The top line beat the Zacks Consensus Estimate by 1.1%.
The total costs of providing services increased 9.7% year over year to $1.9 billion due to higher salaries and benefits, other operating expenses, and depreciation. The figure also matched our estimate.
Adjusted operating income was $537 million, up 12% year over year. Adjusted operating margin expanded 70 basis points (bps) to 22.3%.
Adjusted EBITDA was $589 million, up 11% year over year. Adjusted EBITDA margin was 23.9%, which expanded 50 bps.
Quarterly Segment Update of Willis Towers
Health, Wealth & Career: Total revenues of $1.2 billion increased 9% year over year (5% decrease on a constant currency and 3% increase on an organic basis). Our estimate was pegged at $1.2 billion.
Health delivered organic revenue growth, driven by strong performance across international markets due to new business wins and renewals.
Wealth reported organic revenue growth aided by higher levels of retirement work across all regions, alongside growth in the Investments business.
Career organic revenues declined as clients deferred discretionary work amid geopolitical uncertainty in the Middle East.
The organic revenue growth in Benefits Delivery & Outsourcing declined modestly, as expanded projects and administration engagements in Outsourcing were offset by lower commissions in the Individual Marketplace.
The operating margin was 27.3%, which increased 60 bps from the prior-year quarter, primarily due to improved operating leverage and expense discipline.
Risk & Broking: Total revenues of $1.1 billion rose 9% year over year (3% increase in constant currency and 2% increase on an organic basis). Our estimate was pegged at $1 billion.
Organic revenue growth in Corporate Risk & Broking was driven by new business activity and strong client retention globally.
Insurance Consulting and Technology delivered organic revenue growth primarily from strong software sales in the Technology practice.
The operating margin increased 60 bps from the prior-year quarter to 22.6%, primarily due to the impact of foreign exchange.
Financial Update of Willis Towers
Cash and cash equivalents of $1.8 billion at the quarter end decreased 40.8% from the 2025-end level. Long-term debt increased 9.5% to $6.3 billion at quarter-end from the end of 2025. Shareholders’ equity remains unchanged from the level as of Dec. 31, 2025, at $8 billion as of March 31, 2026.
Cash flow from operations was $10 million, which decreased 71.4% year over year.
Free cash outflow was $65 million compared with the outflow of $86 million in the year-ago quarter. Free cash flow increased $21 million, primarily due to operating margin expansion and the abatement of remaining Transformation program cash outflows. It was offset by increased transaction and integration expenses in the current-year quarter as compared to the prior-year quarter.
WTW bought back shares worth $300 million in the quarter.
WTW Provides 2026 Guidance
The insurer projects share repurchases of $1 billion or greater, subject to market conditions and potential capital allocation to organic and inorganic investment opportunities.
Willis Towers expects an incremental foreign currency tailwind on Adjusted Diluted EPS of 10 cents for the remainder of 2026, resulting in a 35-cent tailwind for 2026 at current rates.
WTW expects continual improvement in free cash flow margin primarily from operating margin expansion, along with evolving business mix.
In terms of Newfront acquisition, WTW expects post-close revenues of $250 million and an adjusted EBITDA margin of 26%.
WTW Zacks Rank
WTW currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Cincinnati Financial Corporation CINF reported first-quarter 2026 operating income of $2.10 per share, which surpassed the Zacks Consensus Estimate by 8.8%. The bottom line improved significantly, from a loss of 24 cents to $2.10 per share year over year.
Total operating revenues for the quarter were $2.9 billion, reflecting a 12% year-over-year increase, though the figure missed the Zacks Consensus Estimate by 0.7%.
The Progressive Corporation’s PGR first-quarter 2026 earnings per share of $4.96 beat the Zacks Consensus Estimate by 2.5%. The bottom line increased 6.7% year over year.
Operating revenues grew 8.2% year over year to $22.3 billion, driven by 8% higher net premiums earned, a 12.7% increase in net investment income, a 3.5% rise in fees and other revenues, and 13.5% higher service revenues. The top line missed the Zacks Consensus Estimate by 1.2%. Net premiums earned grew 8% to $20.9 billion. The reported figure beat the Zacks Consensus Estimate by 1.5%.
Selective Insurance Group, Inc. SIGI reported first-quarter 2026 operating income of $1.69 per share, which missed the Zacks Consensus Estimate by 2.3%. The bottom line decreased 11% year over year.
Operating revenues of $1.4 billion increased 6.4% from the year-ago quarter’s level, driven primarily by higher net premiums earned and net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.5%. Net premiums written decreased 1% to $1.3 billion. The figure was on par with our estimate.
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Cincinnati Financial Corporation (CINF): Free Stock Analysis Report
The Progressive Corporation (PGR): Free Stock Analysis Report
Selective Insurance Group, Inc. (SIGI): Free Stock Analysis Report
Willis Towers Watson Public Limited Company (WTW): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).