Can AI Products and Automation Drive WTW's Growth and Higher Margins?

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Can AI Products and Automation Drive WTW's Growth and Higher Margins?

Willis Towers Watson Public Limited Company WTW, in tandem with the industry trend, is expanding its insurance technology capabilities. Insurers are increasingly adopting artificial intelligence and advanced analytics to improve risk management, pricing and underwriting. Fragmented data, rising claims costs and evolving risks are increasing demand for solutions that streamline workflows and support better decision-making.

WTW’s RiskIQ Nexus platform consolidates policy, premium, loss and exposure data, helping organizations analyze risks and prepare for renewals. Separately, Radar AI Assistant, within Radar Vision, helps insurers identify patterns across pricing, underwriting, claims and portfolio data. Wider adoption of these solutions could strengthen client relationships, support cross-selling and generate additional demand for WTW’s technology and analytics services. However, the products’ individual revenue contributions have not been disclosed.

Beyond product development, WTW is pursuing productivity gains through AI, automation and technology. Its Propel AI acceleration program targets approximately $400 million in annualized run-rate savings by 2028, with about $350 million expected to remain after reinvestment in growth. 

WTW’s second-quarter 2026 results showed improving operating leverage, with Risk & Broking organic revenue growing 7% year over year, while Health, Wealth & Career recorded 4% growth. Management is targeting an adjusted operating margin of approximately 30% in 2028.

The growth opportunity lies in combining AI-enabled client solutions with internal efficiency gains. However, implementation costs and slower adoption remain key risks. Stronger product adoption could support demand for WTW’s technology and analytics services, while successful automation could improve profitability.

What Are Peers Doing?

Arthur J. Gallagher & Co. AJG is integrating AI, proprietary data and specialist expertise into its insurance brokerage and risk management services. In 2026, Gallagher introduced Blueprint, which combines AI-driven analytics with industry expertise to help clients assess risks and optimize insurance programs.

Brown & Brown, Inc. BRO is pursuing AI-driven transformation to improve operational efficiency and customer service. In July 2026, the company announced partnerships with Anthropic, McKinsey and Accenture to enhance employee productivity, customer experience and business processes.

WTW’s Price Performance

WTW shares have lost 11.3% over the past year compared with the industry’s 22.7% decline.

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WTW’s Valuation

The stock is undervalued compared with its industry. It currently trades at a price-to-earnings multiple of 13.54, below the industry average of 14.27.

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Estimate Movement for WTW

The Zacks Consensus Estimate for WTW’s third-quarter 2026 and fourth-quarter 2026 earnings per share (EPS) has moved down 0.9% and 0.2%, respectively, in the past 30 days. The same for full-year 2026 and 2027 EPS has moved down 0.1% and 0.08%, respectively, in the past 30 days.

The consensus estimate for WTW’s 2026 and 2027 EPS and revenues indicates a year-over-year increase.

WTW stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Willis Towers Watson Public Limited Company (WTW): Free Stock Analysis Report
 
Arthur J. Gallagher & Co. (AJG): Free Stock Analysis Report
 
Brown & Brown, Inc. (BRO): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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