Willis Towers Watson Public Limited (WTW) 30 Apr 202020 Q1 Earnings call transcript

Good morning and welcome to the Willis Towers Watson's first quarter 2020 earnings conference call. Please refer to our website for the press release and supplemental information that was issued earlier today. Today's call is being recorded and will be available for the next three months on our website.

Some of the comments in today's call may constitute forward-looking statements within the meaning of the Private Securities Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. materially obligation discussed unless to law. differ company and required may no undertakes update results from today those the by Actual these statements

a other the in Watson earnings other release issued XX-K these review For and as other forward-looking our press discussion SEC well most morning investors Form as the of Towers factors, in filings. should and section statements this detailed more disclosures Willis risk of recent

discuss certain non-GAAP During the call, measures. we may financial

as well earnings as information measures materials non-GAAP the of to of recent reconciliations measures, these most in section refer release other please company's Relations For regarding other website. the the the Investor and

now Chief Willis I the to over Towers turn Executive John go Watson's Please Haley, will Officer. call ahead.

and our us for everyone Thank thank you XXXX quarter you on very call. earnings joining Good first much. morning

me of Joining our Keefe, Chief are our Burwell, today and Financial Rich Officer Mike Investor Relations. Head

performance, talking are So Towers first our to global pandemic. quarter before we how want and by get we managing during COVID-XX this I start Watson into Willis about

and mitigate all, safety our did First The for your have The are the and financial families first all focus has have crisis you not to to material COVID-XX our results of the healthy. as COVID-XX escalated hope to a of our mobilized our primary well-being staying been the of XXXX. and impact risk I colleagues pandemic we fiscal colleagues. of adverse quarter

XXXX. general of impact for on the economic could of that COVID-XX and expect our we results negatively activity However, the remainder impact revenue

and to monitoring while health We directives. adhering spread the COVID-XX, of closely are impact governmental

events. access, office travel, business and on restrictions implemented have We meetings

continuity protocols for workers including now effective. which business and and work management incident We place, operations home processes essential split are globally from team have in thorough

clients capabilities, and We frequently objectives response remote with by via meeting colleagues, working our team. coordinated our overseen management and critical incident are while vendors communicating

effective. experienced remote in XX% Currently, and that we were we had are XX,XXX are for colleagues remotely. infrastructure working believe working collaboration of working technologies our Before and the virtually more pandemic, already implemented than

we the a management across team For way example, are and our effectively top this operated years. spread globe number have for of a leaders as

were extremely and remarkable. to the colleagues continue to of of one situation way this is am support have resilience needs I our to agility mobilize to able So another. colleagues proud adapted. and we our address their and our demonstrate their commitment quickly clients' They the

help Watson they times. that well solutions We are their benefits. and you more clients of are their manage protect continue we Towers a the they We clients, are providing We valuable them these develop valuable We know, their of source solutions. that especially our will help their our now. times As risk. in help capital even good strengthen as during deploy Willis highly sure contributions trusted be they clients them feel to help services make and support during These our people. We to them a business to their to are unprecedented relevant optimize disruptions. and institutions. difficult partner and navigate

innovative crisis on marketplace. add global to some this will focused While manifest, of the long take we competitive ways an term in are finding and unpredictable affects time increasingly value to

needs. facing at clients to are and our the those to of and the services pressures forefront meet be our We continue issues are structuring will we

to of be future our Willis a success Towers great our client's stories. part colleagues Watson think I and going are

to the this our the depend could extent COVID-XX future perspective, will pandemic. business brought predict. a Against on on which of we realize continuity extremely recent by from we to and high to-date Overall, which But are a developments reported a level we financial backdrop, first impact challenging difficult the despite solid business maintained productivity quarter. disruptions have that position

to safeguard approach For a that taking against our reason, this future uncertainty. company proactive we are

entering environment are challenging relative We a strength. from of position this

operational financial maintaining paramount. and performance So is momentum our

mitigate prolonged preserve to to our actions necessary as impact consequences adverse operations. might We and a negative sustain swift our are to event margins take prepared help that in we the

monitor the Mike company to of balance situation capital We contingency to our and shortly. the further and assess evaluation will provide about possible the will plans, team's liquidity continue and implications stakeholders. sheet the about insight and company's

with a conservatively a are We managed company strong foundation.

in strategy backdrop this our business. our in economic believe we the successful. and crisis to strength have through is colleagues, current well-positioned challenging, manage the I and are our that emerge we of While confidence

an company the of of March Aon Willis in Managing people, the and strong and Aon risk first market-leading On into in and Watson of for was stock products and we expertise, the Towers Willis impact Towers journeys insights definitive with pandemic quarter. COVID-XX the transaction. next Aon in combination data-driven provides a all belief between clients and firms is announced a The are clients in innovation, a professional development entrance X, have the in the our natural offering Watson combination for only shared services. our which service to the the not areas step Both agreement capital.

accelerate This strategy gives collaboration. our deal us innovation and the growth through opportunity to

excited as significant Watson, creation. We are Willis and for this about next what our very Towers for of the our means and shareholders colleagues step for value it step

the to half transaction shareholder of required the receipt of XXXX, the approvals, other in of required closing. close and approvals regulatory first customary expect subject satisfaction to We the to conditions

first continue revenue that results. now $X.X quarter So this one first XXXX. pleased prior XXXX of to solid on environment, was move our report constant again basis up a generating an included experienced quarter basis am segments. year on basis. an compared quarter, $XX X% the organic of quarter the currency our we on of on strategy across and and up despite this difficult billion, X% revenue for and as negative first Once up to commitments, deliver for let's on movement. X% I Reported our Reported currency organic growth to to the all we quarter results million

prior or quarter up million million, $XXX revenue, first $XXX EBITDA XX.X% of $XXX prior the as was year for Adjusted as the to quarter. of quarter an net of year compared of or adjusted improvement. on revenue, income EBITDA million basis increase compared the of representing margin the first XX.X% of basis EBITDA in points the first income $XXX adjusted and was a X% Net million XX% to XXX

of revenue performance. earnings For per per EBITDA share earnings was compared an year. compared were X% Adjusted $X.XX, per share the reflecting the share grew quarter. it the and had diluted an a quarter, diluted prior prior and increase of year. increase $X.XX, margin Overall, to We earnings adjusted to XX% were enhanced solid

other segments stated revenue each of acquisitions and from as To unallocated commentary as segment resulting well detail. results comparability expenses our using consider clear more our mergers Segment discretionary with corporate are calculated which exclude look segment non-core organic in be prior such and periods, at of will provide basis let's all transaction include margins as costs and specifically otherwise. segments The Now on unless the operating regarding to integration we of amortization intangibles, items compensation. certain results. results

benefit benefits quarter an capital again to outside increased of up and the and growth year. management currency new while of X% on X% activity first basis organic the local revenue benefits, appointments America, performance global constant health contributed revenue The this and prior with business product HCB, generating North drive America. quarter and revenue The compared segment to was country strong delivered continuing to of and revenue wins in the project growth North expansion human

in latter work in and a which in administration and and work revenue decline of the Canada. funding largely an survey the advice, benchmarking quarter. increased funding of advisory Britain X%. activity back Technology nominally, as solutions pulling of minimum in spending began work half sales, project XX% mostly rewards offset Great Retirement pension were on Talent increased increased revenue uptick new mainly a business by from revenue in as companies Great result increased a and and equalization activity Britain. as in result guaranteed project other discretionary

economic to points segment HCB by businesses cost HCB's COVID-XX reflects largest future for first are is XX we adapt employees, well-positioned prior while help to related topline businesses basis quarter. prospects to growth This efforts. of year to highly management about ways improved and protect through the experts confident all the XX% HCB's solutions by advice careful our compared provide react, of the margin a costs. are and alongside employers operating within crisis. business operations, managing the the In environment look it. impacted and to customers and sustain downturn, and improvement

revenue growth quarter. broking CRB, strong America's quarter. Great as and or including alongside sale new growth was prior look business had organic a a strong Europe revenue growth led in from driven of quarter. an first risk which was currency on the X% basis Now renewals, and X% X% by first at North XX% by the Britain year revenue wins. gain first constant book The and Their revenue business. the facultative driven compared contributed the on X% respectively increase to by of and grew for business let's declined corporate Western renewals. international's improved

lower a impacted PC most hub quarter. XX.X% lines year operating neutral Great salaries strong results Now of This benefits primarily to aerospace. first revenue and Absent flat change, revenue is CRB certain an from $XXX change, these of X%, model this Britain's reduction by revenue XX.X% the to grew and change our finex, which by which materially business, in performance in including million in results in by increased an and were revenue remuneration for is quarter with lines solutions, international's income, X% expense. negatively margin business. the operating and new with compared equal was this financial of prior across business

constant from growth or organic combination X% portfolio. Insurance and Turning on million business continued to to growth IRR. as of by prior increased to grew and technology favorable investment, X% compared quarter. currency basis through with segment's lead services risk to X% $XXX quarter expansion the the of the increased consulting basis mainly new reinsurance Investment delegated renewals. net an the continued for and year investment X% on technology Revenue revenue X% first first of a Reinsurance sales. and increased a

was wins. up new basis, an business from XX% wholesale Our business on organic mainly

margin to growth alongside This had the the of topline businesses. year quarter. improvement operating an compared of IRR reflects XX.X%, first XX.X% prior as successful scaling for

sources increased value offerings potential growth by priorities, people. continue trajectory. We focusing their clients feel IRR's to of technology, our about on risk for operations, capital, the strategy, portfolio IRR's and unlocks business good

which these marketplace. are elements remain important increasingly uncertain and an All in competitive of

segment project and growth. prior work currency first X% from resulted BDA basis mid large constant year the by the a organic market for client base XX% quarter. on segment's Revenue increased the and an on increased basis expanded in BDA's and

demand see benefits strong client wins. outsourcing's services, new core to several continue in We for resulting

margin, operating first X.X% The over a margin BDA minus the driven up segment had with of improvement prior $XXX million, in quarter. year topline XX.X% XX% by revenue the The primarily from a minus growth. was

long business. of while We health sponsors also term optimize their employees plan this helps solutions optimistic administrative and better practical and term long millions the financial and enable welfare BDA opportunities It offers which are tomorrow. commitments liabilities of about retirees for to to growth burden. honor today's reducing individuals a

growth growth, with So very global quarter. pleased all progress. grew significant the revenue environment. to all steady adapting and first in changing the had rapidly overall, basis an We adjusted am We organic margin EPS expansion our performance across businesses, meaningful on I while very financial strong

over I now turn will Mike. to the So call

their the for I like continued and delivering like our clients express to Thanks related do and for Willis a complex solve colleagues we would serve we we XX,XXX thank I are problems clients at world also the difficulties to challenges. And being in at heart experiencing COVID-XX of intend reliable support the Watson continue trust we pandemic around they would clients John. is despite pandemic. of my confront as strength to another Helping a the as Towers to their of quarter us. gratitude source result fully for the our everything unique

organic with expansion Our adjusted and growth, robust first EPS start good quarter growth. margin underlying a to strong revenue the year represented

operations. Now detailed I results. overall the to financial from will turn income

the operations. XX principally down points revenue, longer from was $XXX income software first was viable. XX.X% from of non-cash income operations decline which charge internally first of operations no discuss Income first abandonment million to of or resulted or from $XXX quarter The developed from me a prior the million Let quarter XX.X% for revenue. commercially was year from that of the due basis

had million, normalized flat basis $XXX been prior income in for from we would XX if quarter operating quarter. million year TRANZACT. Adjusted the have was first $XXX for first of points higher revenue. Adjusted at income of Adjusted up operating margin $XX the XX.X% margin operating the remained acquisition

turn earnings Now let to me share. per

quarters $X.XX $X.XX our For XXXX, was and and diluted the respectively. EPS first of XXXX

the per our prior share EPS quarter. $X.XX to year was up to as adjusted XX% first first quarter the compared share XXXX, For of in per $X.XX

resulting Foreign unfavorable exchange of for was net aligned with approximately in our $X.XX expectations the impact a quarter.

to turn effective our tax rate. me Let

versus Our U.S. quarter was GAAP XX.X% year. the tax in the XX% rate for prior

the quarter. tax lower rate in slightly effective discrete The Our for the non-U.S. adjusted certain in first XX.X% up first releases XX.X%, to quarter was tax rate allowance year rate valuation the primarily prior year from due prior was jurisdictions.

balance to Turning the sheet.

comprehensive on nature to liquidity evolve, our The COVID-XX a capital pandemic strong the time. business model the resilient and navigate the planning scenarios, financial to including I and a well-positioned and As serve. global completed deep this uncertain reduced of situation with to downturn We our the of prepare we and industries broadly period have the and markets the impact had that is continues clients economic we entered and around long and we for world. has possibility all first believe We are broad impacting operational believe profound quarter liquidity position.

this on on million Watson, flexibility. balance to $XXX equivalents leaning a cash quarter to of financial are our looking to efficiency with and cash exited Towers capacity our To revolving that we sheet are end, $XXX by maximize cost Willis initiatives. environment proactively strong Understanding balance cash we We and into this can and our and credit impact facility. and conserve continue million first liquidity maintain sheet to the undrawn managing the ample with aim durable of help current in have

for and cost curtailing spending freezes, implementing capital These of series of structure actions discretionary expenditures. and reducing a some hiring including include management strategies variable categories our travel our cost

for reduce adequate monitor situation or further appropriate preserve services In liquidity and solutions outflow and to continue proactive demand the will addition, we measures take to deteriorates. cash if

million first and year. the million payments. timely in to $XX year-over-year versus For more is of due prior $XXX the flow standpoint XXXX, to was lowest of collections. negative free primarily billings seasonally cash a our due negative is compensation The from cash QX our impact free quarter cash quarter incentive flow the improvement in flow

approximately terms $XX any and quarter of paid In capital allocation, dividends million repurchase did first of in in shares we the not XXXX.

connection remainder combination result to As of prohibitions of we transaction a shares with agreement the do business Aon, our any reminder, a pending XXXX. the certain expect repurchase in given as with not during

Let's full talk guidance. about year XXXX our

but We around real all of are not of the yet are seeing signs signs a concern slowdown in the us. business economic

our of magnitude duration As John the first the fallout results The potential pandemic, financial subsequent the unknown. of the withdrawing the not year factors, company Since at financial understanding unable to we XXXX. will to these provided accurately the a this impact we it's are position the once believe we forecast have the of guidance in reach impractical for COVID-XX from remain But indicative results of impact this economic had and company economy, XXXX. impact detailed that on of the its guidance no time. provide material economic are this recovery geographic for speed the year. the company's mentioned The quarter this previous and its pandemic. reassess remainder duration fiscal of impact is this full depth, Considering clearer the of of we uncertainty earlier, for on of

agile we want balance and resources allocate disciplined However, strong still that ensure business in continuity a reassure I very efficient to we our maintaining while to operations way you and remain sheet. the

confident quarter. I in performance business. uncertainty financial near solid delivered remain of the the underlying we our in the first global the fundamentals Despite in overall, market, So term

a create manage are the term and businesses to times enable and us business we our through our We a of portfolio that as stakeholders. operational diverse is well-positioned before strength we emerge company through of us and dedication these both flexible. help believe have resilient operations situation we our manage and all we continue challenging well is that value We believe our times strong. that We have current even and And been to businesses stronger. our weather to and through believe long times. our believe to we We portfolio for fundamentally tumultuous experience, will believe difficult

I now, John. So turn you, back to call the will

Mike. take much very we questions. your now And Thanks will

[Operator Instructions].

question Stifel. line first Shlomo Our with Rosenbaum the of comes from

Your is line now open.

it's in maybe going are public a Hi. my Good business anticipation. morning. the Aon seeing they market has there business? you comment end versus what you commented Thank going are your to taking merging be for on through just pending on wanted am with questions. over of you kind ask now on there I given you what your reducing business is Since announcement or in to kind if them, versus that salaries difference already combination broadly are John, I with there. they just right to internally if strategy something your Aon, Is on that sure of take not anticipation difference? a going in

Shlomo, thanks question. for Yes. the

are and are make of running though first time up during to we manage this merging, So all, merging that especially because have ourselves as even to we independent we we sure maybe this. competitors

we strategy like collaborate we or able are this. market like on clients or the anything so And anything how are to or handling not

to independent we to completely come So have solutions.

lot really about it's hard what so for And to Aon's me thing. went a say into

our if we have think of will to have. to successfully, we think We our take if it been do those look we to I the to things, cut at back cash to is that that want we protect from actions want spending they do we attempting bone. down, said, strong needed. be sufficient. We very really cutting really judgment wanted discretionary whatever probably can in Mike We these we looked flow. to terms on all our as down when standpoint, And we cut

stricter But successful depends of looks pace on have is, COVID-XX are the we don't we how a will remain fact have on and a the discussion in was U react of what know. exactly just initiatives the different or that. in take we remain If to think all agile V think are recovery these what Whether I to part we we matter have we we like. W a or we Mike we in action part is, to scenarios. emphasizing our And ready recovery, of and those think with

But basically, is first this and the of priority say was foremost as way colleagues. safety we well-being the to our and that approach our

The health sure financial a manage that second priority too. take we has care making the been And making we includes standpoint and benefit our of business. colleagues of our sure compensation from

are while So contemplate circumstances we there are something that, avoid to we clearly them. would where hoping like

but for margin that of I little Great. change you growth TRANZACT. business would seasonality, the color. with own you on clarity operating BDA know Can leverage, you that them with of sense appreciate to do bit you because a us segment, the provide I what is to TRANZACT? can And growing? in was in be the bit that over get the didn't of thing just in If operating year Okay. just there, does have year-over-year one a And quarter? that helpful. the little if give how of a last with then improvement

Mike, take that? you Yes. through want do us to

quarter, our BDA encapsulates the Yes. TRANZACT. we in really overall, with the which question. Shlomo, have we in the nominal And first obviously TRANZACT. what's we When been happened you of thank look TRANZACT seeing XX% with revenues Sure, quarter, although, for are almost segment losses John. have at for pleased you fourth the come

So earlier carrying in the seeing, expenses are obviously, the periods. we

happening really as we in what changes small see So impacted really much overall. as quarters don't last

nicely to XX% TRANZACT very, continues growth had and very We for it strong. us. continues very be to So, grow

and looking coming growth just it. with we the pleased segment, year, see So for fourth TRANZACT TRANZACT. very XX% a to the Shlomo, again, the in obviously at we continue overall are the over with of being quarter performance of piece big it BDA Obviously,

Okay. Thank you.

you. Thank

the of from question Baird. comes line next Marcon Mark Our with

is open. line Your now

your doing to to, of, Can is over questions if set questions. then digest what of you Thanks you second are different two based have should John, One up morning. is? the little experience, exposure terms lines course regards really how recessions. performing? Good set hear would And since end those a being questions. everybody end be, feeling career, we color And downturn? impacts? reacting? Obviously, the seen how been it? deeper. half of Aon how And April Thank sets of with they That's little have you. Glad you are basically us and the end if one's are to you the What I up of of the think my basically announcement associates had could economic transaction? a And through up about second that to along of bit the multiple early feeling think well. segments on ends they had to vertical going you for bit since are questions. the regards in taking they first how just significant, your broad how that, this up And of the through that time with about impacting could COVID of how is segment-by-segment have in go you March, give terms

of world then we us seeing is, Thanks about much, will I do comments. will what what will of our make Sure. colleagues around I result were COVID. as I first ask Mark. through a question very will March the I in the But with a And details to couple your start take and Mike

and shelter I was that out. beginning announced course to be So all when week are March announced the was that think when of just all, lockdowns in coming the first deal Europe of just particularly in place U.S., and and we the X in on of

that week able with virtually. then communicate. be we colleagues and we to time have We So been folks us able communicate couple about talk to had of very get for to and a great our But this. it out was not first to think, been I to meetings overall have a able,

bigger were our this of to in to I thing ways because suspect, these colleagues I us is, how interesting the some all actually from with got was quickly that think of And were trying this to midst uncertainty COVID-XX with helped one and we combination. the what do lockdown to being maybe in home trying to do notion to needs here firm whole and new building be not more and either but be more getting a better what and of getting than client two firms address were. predecessor is the we be that to innovative able is emerging new

draw when the And kind broad happening beginning this strengthens how see you always COVID-XX, very people for it does case of in there I with questions asking does think about firm couple mean what's the fit. having with still innovative a result time big frankly, actually and mergers what before, are of And the the a a to this is where that capability. these

I large of due think I promise that's think of than able we will had have seen we being the in people And to a this part expected. deliver positive what to much embracing I faster see together. deal

So of but where Greg seeing we days some some we it's sides to some still able folks And to think of and sessions the leaders talk the have we have are a think about our from of number I and lot a of have talk have both Aon that. able been had folks. I to excitement some I where of Case sessions to had early been senior

for to were day than that the the And So be, deal we more excited I day. it about more were we think, rationale convinced today we we this about excited announced continue pretty and it.

good So I feel think, probably generally about think as we could. as we we

lots having one Let recessions, scenarios, of you that different time around long downturns. different the seen of me right, is just say, advantages different you a of are have been

think through challenging, this least have more to I any ones probably we predict difficult of and before. the more one COVID-XX been than is certainly at

financial one well. the in through, is Towers Watson crisis that that most one actually, pretty both and recent that financial managed through Watson memory. the we think I managed was crisis Willis Willis Towers But

large have recurring before revenues, we we of to pretty XX% And the XX much revenues we our year. start know

big a So that's help.

low I little are make to that is clients this challenging. a think kind the business, this whether a Those of though, its general little bit are we the harder on we more of that have imponderables effect It's seeing out a because have deal are we going is economy. with crisis, that bit

think saw some I we impact.

that. the some hard you us see Mike and was that's of the details growth to the completely strip we there when growth rates, It's the in had was in from lowest. some some quarter. impact bit some certainly you by a ask and will saw international for hit it's Asia Traditionally were to through the when in isolate was I in highest lot hard out our little rate the of of CRB. February in it impacts But fact I of Asia actually but they to going because March lockdowns. you their affected a through actually when CRB COVID take particularly first us We that know

you But segment-by-segment. us some Mike, can the take of through

John. Yes,

give little we you are the of take and a business. by segments it of from the I further what line in then maybe HCB each So of will color bit segment seeing and

retirement lower a So is, we seeing what we at you from are our interest if to business, look standpoint, see continue risk rate a environment.

So bulk sum we increase. expect lump to activity

their damage be or strategies may reduced ROI funding levels. they see opportunities may But limit can over but driven look this diversified to sponsor at continue plans, nonetheless, maybe we some the some longer or may and at people see have it this act that hesitant, given they in liability their investment they to be work, and to BLS looking have strategies bulk and year do to about they thinking such However, term. for work, been in that hesitant allocation lump their stats that the funding sum wish

opportunity. as And so an to we that see continue

opportunities and In revenue we business, solutions and benefits business, benefits. around voluntary off-cycle see products, bundled our health HCB our

standpoint, risk obviously lower We helping list of just in unemployment reducing H&B result kind any due changes They to putting have sales. rather the are the an with obviously offset of commission, also been COVID. seeing thinking in it. to increases and their is lower and of From impact retention terms the not challenge the high this some rates in about in in a the it ultimate commission revenue, has business of unemployment, on geographies,

opportunities we consulting our segment activities. CRB risk management standpoint, a seeing risk From services, in analytics are

We economic M&A it and even aerospace or are and to stuff degree, finex seeing mentioned John terms obviously overall. just in relates in solutions, having seeing areas activity some obviously lower industry this as general volumes impact the hospitality are some and of deal and global to you the lower conditions finance

you segment, as to investment are of If most surplus to using protection. reinsurance and reinsurance current our retain levels clients look IRR means capital clients consequent at purchase. that their are business, our in likely portfolios drop Damage reinsurance

are as see from We seeing And to and we a to look some rates. tailwind risk look for continuing continuing rate ways are clients pressure obviously increase obviously to at reductions. from are

TRANZACT, a to uptick back has And retiree been be people now very question the operations. continued through around pre interest, us in looking a there people to their a it in to for manage savings. client our at earlier segment. strong and BDA BDA The in continues post XX segment And obviously, our exchange for and cost we our present cost where particularly real opportunity

what's any question. just to kind color So actually to I flair hopefully I segments pause will of our detail, feeling some gave give in think to going across there the and hopefully you happening some John, without more

what most I to just are seem percentage estate is Can quick real you to Can hospitality, that about finance, areas ask that? you some the global one your affected, How exposure just terrific. the about talk That's aerospace, maybe thinking whether it's be companies? follow-up?

no client, client of just there that By that comment overall. on is up even me to let X% our gets revenues. So

industry, affected we industry look the an particular. insurance, that high to by this. exception it of any we in seen not financial has when exposure have at by don't we area have particularly really been that's but particular So with insurance But generally,

affects, any So not we particularly Mark. are about worried industry

you very Thank much. Great.

you. Thank

Elyse Our next question Greenspan comes Fargo. with from the Wells of line

Your line open. is now

Good morning. question. first Thanks. My Hi.

I does the but for pull part three than your And you is of outlook lag see of more next over throughout the out right see that now range you second what organic, that So see could lot inorganic in how more it's us a year. to quarter? might then some potentially slowdown in of of or it's a as I slowdown of see understand level the we if guess the uncertainty as meaning a is maybe the may there question, a could third things, and want actually businesses, see, to could there potentially like, in desire even the different there a quarters? sense big give the we get businesses, that growth your the qualitative

Yes.

Elyse, say, saw reason let did me we we uncertainty So just I we the did, had guidance range. wide is because the reason relatively what we pull the considered think the a

seeing that. fortunate. that, are to going are said And or aviation their are There having like really are very we very revenue. not we some have hits fortunate Now the be we to industries sense, others that seen or hospitality in enormous

extreme of would revenue But on more less doing be economies scenarios. it economic we But remainder depending you well decline That's the well been, even to poorly. are hand, when think the certainly activity, are rate general on year? when the going We economies on the see not and doing we could our digit do to well other this a the from at be hit's impossible. may what how think bad double for that's the do have we

it, thought at range looked that's kind about. we of we as the So

not but pretty decline? extreme Could we That's get to a double impossible. digit it's

are than more the quickly found it. we planning some too much didn't that on many of we We kinds there So Elyse. more those to did looked variables there We so than But to couldn't this. get that scenario much are that. do just at we attempt that, things

But I industries We where said, think see the I don't hits enormous not good they in news going is, are as are their to really distressed see of these that. revenue. some we

as kinds services mentioned that that times. I well beginning, of As difficult need as times our in in services good in the the provide we clients are

see we, continuing. so And the for part, most those

that in of, projects is, have the the canceling the where of to rewards. seen capital clients in services And benefits and delaying most when it's all that mind have. the think It's our or is one end and the human difficult there one maybe Now, area we sometimes up our most area, lags? will probably terms activity. discretionary there economic talent are some I we in comes always

So are lead some quarter think that could to Yes. see some working, may something are And for faced with upsides of quarter? here that's it prior employees. different third deals new that opportunity work that the downturns. into we that clients is to going their because we also, second working see bit little having we ways in makes there clients that that occur with of and the from have seen we through. help one The we a thing be go kind And having out for new be as this

see this is that talent some upside we normally maybe has a and in rewards downturn. wouldn't So a

of rest For businesses, that our of see don't think a most of the kind lag. I we

economic going it's or less activity. tied to think be more to I overall the

a pickup that I actually in have right funded with very their levels, their with are in status, accounting retirement, contribution with the clients a beginning downturn with see little activity think in we concerned cost. sometimes because we their can our

So get the that, we bit a very least a pickup in of of a early downturn. months of actually at

might quarter has worse make might the little because that the But so quarter than the second of it bit And third a second. pickup. be a

hope I So that's helpful,.

you the it's nondiscretionary comment that emphasize HCB we business, work when John, our to you business, think which and point there is of repeat. our just look is just to maybe that I example would in one for also is a yours have at lot I made

if seeing you think going a non-recurring And projects, yes, it's work, in we retirement in definitely But by replaced what clients truly revenue. the terms replacing colleagues supporting they the being amazing and COVID is in are agile of related are responding in The and in support of recurring discretionary the of is example, work work. that that are marketplace about debatable. For the doing that slow-up a timing our you they on or have our it. way

I to wanted just sorry, So, point you emphasize that made. John,

is I is on The Mike. think very much he most with saying. usual what thanks with some Elyse. the from get or some movements, relative downturn of as point size outweigh the, No, delayed Mike not. of so discretionary is COVID, about difficulty projects these only the that to things how of We And the know of to one that, don't right as does

for had And Okay. That's for your original business I margins first a comes the year, to recall XXXX, better than thought. did the just BDA online. at would year-over-year due the in And that I guidance if segment as how hindrance being helpful. we have TRANZACT the with actually as pointed of you margin and quarter, better look to to part

business like maybe segment performed. it the going was BDA within something the there quarter? that improvement from just TRANZACT? on So in Or ongoing Was away

Yes. I say. quarter, a I they just had think what good mean would is we

I the that still biggest business think year we impact the year. when we the year frankly, this course, make to this TRANZACT TRANZACT be And them wanted do and expect negative to of and BDA. for we in have highly and year only in And quarters point this versus end profitable thinking had a year the that's compared of had full we last year strong is last a BDA is that whole those the but in we improvement to about year. of at it's

guys helpful. can expense much Or expenses? lack some context, base percent cost is you there your transportation Have kind T&E the ever That's the due last traveling? benefit One some question. slowdown give your from and how way in to and could entertainment of disclosed of some a of you your us cost to as COVID understand way

have disclosed that. we think don't I ever

our seen have We costs. travel

up, guidance the to obviously And our start throughout be we see will out world, we relaxing most right traveling. people not have folks of have actually as some But we to we that. for of traveling not So be now. things opening

one some force expect think of that as task return think ways a is, we of going to we think and come back we from do. I work are home we we become We with don't same actually what this, and doing the there will we the are on to have we working. things of with a virtual things working feature are meetings that

but or as will we back, as come we when be frequently won't even be again we did. traveling so the probably same we And way traveling

we how a will all moment, so we the reduction entertainment But plays out. expense. impact have our And and to for have travel that had in see

savings. and our been we for But course, some some in virtual increase have of Of meetings. had webhosting our net the net it's cost a

for the color. Thank Okay. you

you. Thank

comes Greg Raymond line James. question next the Our from with of Peters

open. now is line Your

slowdowns that it I and as COVID? you with update below you realize are moved And company morning. has that with sold But on any would price as feedback? much curious can be of the since you I if the too, but pending about comment as really the market obviously in is a down $XXX. approvals us never at what Good Can stock I envisioned announcement, the the a you shareholder transaction. down limited anticipate regulatory am result

good I think I new I Greg, them. they all, So some of regulators think is a on don't At bit we reasonably that But this this I will mean front, the think first margin, pretty being as to virtually an regulatory that that. the efficient But lot little be become things other have of and and slower? are working are, people, they Perhaps. think the like at impact. of a will enormous see

the shareholders, to feedback had from regard we pretty have with feedback positive think from I shareholders.

about of a the see I next feel they as evolution. they pretty And value this as can the step as said, see we opportunity think I the I in combined accomplish and firm. think the good what they

there accounts just XXX. up revenue, around setting you And then is receivable ASC and cetera, on assumptions when Obviously, question second et the numbers that of are change the result the might employees, HCB. chaos assumptions XXX revenue in like in I is unemployment, unfolding? dramatic around of embedded especially year you wondering through rise the assumptions think your just how ASC a with that's as And am my about the

want that? you to comment Mike, on

as it Yes, this change don't it John. see see of will, the but as meaningful it terms we to good relates something I in relates were numbers. It's to meaningful we now It's we right don't change obviously a looking a stage, a at thinking Yes. question. about, Greg. really

I do Okay. objectives growing when social of two a asked seems relevant industry synergy with bit world, impact the layoff as so like guess pledges, to But with the there this I question is covered And and I and And year your I because unemployment. little in corporate comments, I should you think just John. you out we going feel no think this the is because well. to the responsibility it same sense of Thanks. question final know companies cetera. And that's Marsh of have among a or ask et number rising

it I I So throw would at too. you thought

Yes.

our we of are also. Willis take that synergy we want combination feel targets the going is lot And this think and Towers of one all want asked Aon have to around been about jobs we account. was combination. I from about earlier see be have sure don't that's in been And that. work Watson I has the coming be that also I A company, the I things But non-people costs have the think -- great some probably has and And into offers of and a opportunities and always want been we positive we will colleagues. think But people the firm of very I to around this how think the a to thing. people our related meaningful to increased work for colleagues meaningful that opportunities for firms. synergy has think our make don't we think will are our that targets company are I be I combined

think And the so that's excitement. I

answers. your Thank for you

you. Thank

next Styblo line David Jefferies. Our the from question with comes of

now is open. line Your

the for Thanks question. morning. Good Hi.

that include little revenues, a types Can understand are there and we going year. to I think XX% just benchmark a for every down could what could the you that might salary? the forward? rewards provide at bit you XX% of talent that does could works that's be risk the knowing we about some puts in an XX% of that's XX% like of if would you evaluating other color or what those as out? more known annual I so pushed to pay out? renewable are higher to where then done to talked takes pushed are for things types know guys there of risk projects year, you be or is going what projects type employee earlier have getting still so And For that not that and And within about those sense the get example, survey parse of

you thank Dave, Sure. for the question.

line just So done of about are try to whether are a retirement, our at hit segment, they for let's business and single the you then highlights I think think about But versus client, they it year. being done every will here. look for HCB every if or trust

never So in we multiyear that. place that of doing place in take arrangements have are can and are arrangements servicing for terms that we granted But in clients. multiyear have we

just it nonrecurring or in of like So I that know thinking something recurring about think terms and that's about XX-XX what, don't that. maybe

And bulk about, projects. work look as if other I earlier in sum mentioned do at they thinking types my of do lump comments they or are you nonrecurring,

look COVID-XX. side our the are how thinking people seeing at wants you and some you You of deal equation. nonrecurring that about business, But at how terms with manage look our in they or CAS business of rewards do are if of equally, talent workforce, retrench they their that do

they important surveys annual nature off shut what terms looking so are to those seeing And of change, in but we the of projects are client base the for. but those either very are

HCB. COVID-XX of discretionary sitting feel although they putting have So are on at are solutions do some we people how questions spend some is you that the around are looking multiyear in changing, we and mix but manage seeing the table. We arrangements

If general CRB you you move are conditions. seeing I think segment, obviously economic our to

obviously I construction and think still But insurance not a look, at anything they putting mean, seeing look are you aerospace are there. are spot in if insurance insurance. still much that. comments. buy people entertainment and looking and this the up mentioned you hotels or John or I not seeing related to at needs we his may project are They but hospitality yet are out

my included. the multiyear IRR be in our on that relationships price relationships you rates And our it's to you because going in that, high we relationship. really on on about that their to are place reinsurance again, think change to obviously tailwind their segment, seeing, I to And really going when are retention investment multiyear say, in particular, there keeping are want are mind that not manage a of am relationship. at people very are first are look if fortunate to bit that are see people's we And reinsurance. up business I

and relationships in we BDA that So on segment, term the exchanges. in various have long of terms arrangements our our agreement

good we yes, John XX% said, XX%, So is, like it's that's pretty it. there discretionary. But about feel

But We we spend help to our manage work changing about make very is situation be obviously is. are with to fortunate this and to thinking how based and successful be the sure that the in manage we discretionary are revenue our it aligned through nature it. where that our meaningfully going cost of manage clients after we

for on market? characterize be Okay. the the guys that with Thanks What you one divestitures? just transaction do And would you on gets comfortable about you that concerned to be And overlap extent Aon. potential guys second that. then risk How would book? reinsurance with

And about good extraordinarily together. two we to some the good in had our advice have the from law we ability some on the antitrust look, world. feel the So, leading firms bring of firms pretty

your to of I TRANZACT then of not Corona slowdown heard then some to a home are to on I the TRANZACT. guys into demand all ability year-over-year. know potential March just on wondering not to deciding seeing have what absolutely the April? miss also senior going shop lastly, are those Curious and right those transition side, the there. How impact color out the manifesting trends of is from perhaps cycle? on am seniors year-over-year then sales just in as there. as down I out about comment we volume? given that But strong And call some you work Humana about appreciate much, was slowing buying now? from folks Okay. the growth if of And is

to want you do that? Mike, So, take

John. I could, if Yes,

thanks So the again question. for Dave,

are changes from I reacting prepared, talked done an happening John's his outstanding to BDA colleagues XX% our from our working he In COVID-XX and that have that includes management be team about remotely. think job to Gene and home have of of to been in able XX% and work TRANZACT. people,

said really So the ability clients good is, really focused even it's some much team TRANZACT, frankly, truly of his they of be on we things so model it specifically job should ongoing virtually. are have to well that and the done. such. comes between that have And serving to business and be able forward Gene into how run do it's going and a really work the based ourselves, on business impressive, the their to what asking done migrating drilling they to It leadership have John and been

means about good how good reacted to really I agility to what responded. So the our have they and team way We just think that have feel that we kudos and are lucky of team they and the the in that we to management team. feel about very and well it blessed

a would And not we I just senior result that as this. of decline in seen thing the buying a have other add is

a time the is there these less opportunities people also. we But at home little to impacts I look at to more hand, makes that seen some think seniors on reluctant buy. some have other with

that foresee being major issue. as don't a we So

of said, we strong be year. through expect BDA the I the As to remainder

Thanks. Great.

call Haley Thank like the closing you. to turn would back This remarks. I John concludes today's question-and-answer now for to session.

us you quarter the stay our and I the your look all you at very and beginning, today. Again, So joining forward we second on thanks much call everyone safe for as hope updating with I results. to said families,

So long.

today's you for call. participating. this Ladies and gentlemen, Thank concludes conference

You now disconnect. may