Willis Towers Watson Public Limited (WTW) 28 Oct 212021 Q3 Earnings call transcript

Good morning. Welcome to the Willis Towers Watson Third Quarter 2021 Earnings Conference Call. Please refer to willistowerswatson.com 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 Willis Towers Watson's 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. subject and are statements forward-looking to uncertainties. risks These from today, to and results these may company discussed materially differ law. by obligation Actual the those undertakes unless required statements, update no

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

financial measures non-GAAP be discussed. During certain the may call,

For the Haley, reconciliations I'll Watson's, Chief measures, website. Please section non-GAAP Willis Towers materials as well go these measures, Relations as regarding John company's of the earnings now other other turn please most and Investor Officer. the information refer Executive sir. release the the to call in of ahead, to recent over

Thanks joining Good call. for and us XXXX thank for very you earnings morning, quarter third much. everyone, our

and this Watson of the extraordinary of I underscores organization. amazing value an continually itself evolve. even combination our I and Officer. Carl is years company. enabled strong than and ago. and been XX has to Chief resilience ago Willis this Joining Officer; Andrew great started reinvent will call as Towers so as Today's The Wyatt our when future me our earnings CEO CEO be my of and Wyatt when looks it more different at It's XX this Krasner, did today it started people than to call Financial years remarkably last exceptional President first Company journey the company Chief Watson our of Hess, and Executive

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should basis, increase in revenue of $XXX connection, EBITDA period on prior prior as net that, termination year of results. metrics constant third the million compared continuing a the third quarter with discontinued measures, Reported which of XX.X% $XXX Now, received let's for up income, billion, quarter. includes X% XX% organic to quarter include to third our as million, quarter, to the XXX adjusted $X that, GAAP on proposed the all points proceeds improvement. on $XXX was where third up basis, $XXX million, the or profitability otherwise. year, for except basis, specifically on for of currency same up be Aon. revenue income was revenue operations X% Please up note representing combination EBITDA a to million, the compared last or in It the quarter, an move X% third referenced in a Adjusted business are year of noted for and with XXX% $X quarter, margin dollar billion Net basis. the third and basis XX.X% an the was operations compared as stated

share. increased quarter, an for $X.XX Overall, of strong and which discontinued XXX% $X.XX, Adjusted For operations of per revenue. include per diluted $X.XX prior third margin as the compared to was earnings increase grew share were earnings the were a quarter. quarter, increase the reflecting year. enhanced it an earnings to year. in XX% compared We prior the per We share, diluted we

unallocated of will organic margins an segments detail. at prior of basis, some by all the which amortization sequential other up HCB prior organic are with XX% clear unless continued in calculated strong inclusive This commentary expenses specifically rewards transaction quarter, year. exclude include and with do market and and driven To for on which compensation. demand Rewards intangibles, Benefits Human our look and segment our consider surveys, work, results coupled acquisitions, improvement operating as advisory compared integration increased to segment otherwise. using periods, or compensation and The be Segment stated more regarding we Talent of items demand hiring of costs of comparability broad-based revenue each as segment quarter let's and engagement products and revenue Now, constant well from to provide segments third resulting certain represented results non-core corporate compensation driven advisory on such & as talent prior was The services. mergers the assessments offerings. a on to results. our employee basis discretionary X% compared X% revenue and currency for increased the basis listing an by was revenue result Capital

Benefits the and increased quarter. Our for Health X% revenue

primarily of and work compared We project and legislative Retirement driven third by in a result grow minimum we Administration Historically, guaranteed Both and strategic base offset in HCB's growth. reduction continued brokerage HCB's appointments. outside funding increased with near-term with result North North US global should margin quarter, in sequential also America basis HCB will as demand advisory improvement the conditions overall that HCB. continue year, continue grew long-term management declines organic stable a market believe for and drive Great revenue Britain continue. for America, remain favorable Great X%, work, of industry-leading remains revenue growth as and HCB and to America sustainable outlook was talent pension momentum due equalization had increased benefit prior tailwinds in work. to business expense revenue for our trend year drove on new as XXX work grew We're with and has market work bulk activity Solutions their of by lump and operating North positive. de-risking prior and to to sum the compared efforts. changes points flat pleased lower Britain. HCB's less margin benefit to reviews. Revenue from local by Technology margins

Europe margin narrow containment the to company. time, may Western growth reflects lesser pronounced trail of senior basis million the FINEX, of Risk settlements. X% by Now of of and increase XXX in in Corporate staff, respectively an third the let's America's basis colleagues revenue this book as operating departure and revenue million of third a our increased be we year has look Sweden first to pressured Revenue most them When the Poland International joining margin we at industry XXXX lose certain were retail XX.X% which for quarters in from and prior continuation $XXX cost The third for caused due as and CRB's XX% gains Corporate by currency of in particularly it was XXXX geographies. lines. by XXXX. new colleagues and organic leave quarter XX.X% the point a Britain's This constant who segment increases driven of expect quarter. an in had X% and Risk with so FINEX revenue of driven the of M&A, revenue Construction in manage competitors. The & to those, lines. third Aerospace up the operating revenue benefit for the of the and on and the & mainly to half by or quarter. being the an averages The dynamic CRB effective revenues margin in by may end third Broking time on in second quarter. of growth the improvement, was and to and with gap insurance relationships expected which the Broking CRB's business $XXX compared the which business prior North result far to nominally impact to up offset growth delayed. revenue degree year organic such primarily largely X% was was client in Great sales From of business quarter in compared

core colleagues year. CRB a basis, about third is and the third stemming quarter just headcount the down last health. quarter compared as XXX to During focused or under of On we X%, attrition on net hiring

benefits executed both retention short-term rates our which for peaked incentive CRB. attrition provide and on have We long-term and we believe plans already have

So ahead we transitory longer-term of expect business may the worst outlook and some disruption remains us of is headwinds us, positive. the our while behind have CRB we that for

annual and Consulting year basis for sales. Reinsurance advisory work on sold coupled a the decrease Risk $XXX for increase of which third in It third The careful in IRR. business or compared XXXX. increase grew quarter. Investment an top of constant BDA and line from XX.X% Administration Outsourcing margin third wholesale in discontinued $XXX was performance-based sold of expansion as strong as Individual as Marketplace led of revenue client IRR Advantage cost business revenue with Benefits XXXX was year will minus margin this third the was largely XX% revenue Technology prior products. points largely was business, Insurance also increase decline in excludes revenue segment also segment's million quarter. capacity broking & an $XXX to the Delivery minus prior sales of revenue an and which The Miller basis largely an alongside and operating million Matthiessen for an for enrollment currency our solid with in X.X% on IRR the technology efforts revenue our growth Revenue Investment its basis contributed business by Medicare margin year operating $XXX with The has primarily to the driven was a result of basis XX% to management. by been of demand TRANZACT compared growth by and and quarter million Life growth with year organic X% currency line from due The for growth turning which revenue to in Max margin organic The by to prior The to Outsourcing XX% top the of the expanded under constant XXX the business. of of excludes in X.X% March base. operations. usher containment the was BDA's prior margin both of in was Revenue with expansion X.X% line segment X% new delegated business which a The & opportunities which by Benefits Now IRR's a contributed which on lines Marketplace of operating quarter. quarter. of period, quarter assets from third and ahead XXXX; BDA had the growth compared and Individual subsidiary driven September in increased growth. had increased as Benefits reinsurance reported million up basis or to

to continue momentum We BDA our into positive the going feel quarter, which seasonally of business about fourth the our strongest is quarter.

in and this clients I extraordinary that for I'd to expansion to ahead gratitude be the I'm challenges a overall, is CEO opportunity quarter. and growth, line with top Towers to serve shift this company strong our the in a We meet shareholders our Willis our opportunities closing, all my very trust like believe pleased undergoing massive you. EPS overall So it's strategy. while results financial deepest organization. and their our well with been conclusion, express privilege Watson positioned margin to lie in delivered colleagues, of for In to performance the go-forward and our growth and

turn Now, to the call over Andrew. I'll

your Thanks, joining of Thanks retirement Good all you to of for John. us. year. in wish you We the everyone. best the morning at all the end

First, like to to my all appreciation our colleagues. I'd extend of

each a the the supporting colleagues pull other and of and have and We clients, communities to we continue to deliver. lot they and teams have asked in work continue our proud our of our done which I'm all live. work together

to capital highlighted by organic effective make strong John in continue quarter we another management. continued growth, progress third As improvement noted, the quarter, of revenue and operational

long-term we we hosted continued We generate are execute demand to reassured discretionary feel we profitable for to positioned on our are that Moreover, and we announced last growth. improved well our Investor month. the during goals the services by Day ability solutions by the and meeting

reductions the about of real scalability, operations investments more better excited cost margin estate expect toward million to in modernizing The are are and deliver making our colleague client transform expected rationalizing and we $XXX points we're efforts. We early XX%. year XXX platforms, global adjusted and improvement experience. operating target to and operations, streamlining our create right-shoring transformation Through we our margin contribute XX% making XXXX to IT, with fiscal flexibility progress basis will of enhanced

Now, overall detailed to I'll financial the turn results.

of $XXX $XXX of Adjusted in XXX revenue. prior XX.X% operating year income revenue of from for operations can supplemental from income the year-to-date million which third results or Income million or page the XX.X% billion third third was see billion quarter quarterly detailed operations of or the $XX quarter. year X.X% XX.X% a of fee, up you was third $X.X XXXX $X the for for included As quarter reminder, materials. continuing the continuing and on XXXX X revenue, from quarter, points the prior revenue, or the operations of termination basis from up million

$X.X XXXX, includes XXXX billion continuing $X.XX the from For our operations EPS $X XXXX the were that diluted and respectively figure and and quarters fee. termination third of

basis both XXXX. year quarter $X.XX. EPS for diluted increased continued up XXXX, diluted compared of XXXX For represented to and for share quarter Further, third EPS adjusted the the of of prior for third the a per quarter of $X.XX prior third in on quarter share operations, XX% diluted the to to loss $X.XX as Total quarter operations to the compared EPS, of EPS our $X.XX per XXXX year third $X.XX including $X.XX a third discontinued of basis quarter. the discontinued third was and

or third of to prior $XX earnings the diluted million compared increase Foreign an currency the negative for $X.XX in changes of to with this per revenue share quarter year our quarter consolidated rate X% revenue caused headwind adjusted quarter.

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

due impact which rate prior quarter unfavorable down Our year, for the of from the non-recurring items. adjusted was tax XX.X%, third elevated in discrete the XX.X% was to

ended on strong $X.X capacity equivalents full capital with balance $X.X cash facility. with the quarter undrawn of We and our third liquidity sheet. and revolving to credit the billion position a billion Turning and cash

the our We the have The during and Free balance strong compared We of continue same of operations a $XXX fees well significant of of cash termination also successfully positioned would legal perspective. billion million the remains of flexibility. partially bonds Towers Absent incentive free to aim compensation to to Stanford the net approximately was in and increased settlement free year-over-year billion we profile for million. offset previously months these announced in financial flow Watson repaying the merger by million the have reduced Towers year. leverage in was believe year. versus This period Watson sheet Willis integration from a due the outstanding transaction quarter. or includes net and receipt maintain the $X.X flow, cash prior prior of $XXX durable higher $XXX fee, first approximately settlements discontinued $XXX and Willis by items, $X.X $X billion million. nine of XXXX, to which XX.X% up increase was of and flow payments cash been liquidity

price be we capitalize deploying on return to cash resources through to short-term Willis capitalize into and stock highest remain current communicated weakness. Watson to upon price In opportunity repurchased recent committed shares for paid X.X capital billion. for ended terms At to $XX in $X generate XX billion $XX of we and million to dividends the nine that allocation, million levels, Towers $XXX that. significant to billion September we Investor At net our of months Day, have expect capital XXXX. We share repurchases we our continues

Day $X activity. repurchase of of share billion we near our approximately discussion, communicated term part Investor As

component $X the in will during that conclude to XXXX, first that XXXX. completed, repurchases and commence remaining billion we expect the with of With

to unique termination full Looking reporting our operations for quarter a core one-time fee, ahead that recognize year, performance the a recovery. billion alongside company's fourth performance been in complexity expectations setting clouded strategic macroeconomic shifts discontinued year divestitures factors the the economic $X by for we and still our This created have metrics recent have year. and evolving

like margin and around XX% organic year we continuing to say that basis. growth adjusted XXXX, expect the So an revenue to on a for operating would operations XX.X%, produce we clarify of full and X%

to impact goal of negative margin costs new which XXXX the rightsize We the XXXX our expect path which year-end operating from XX% relief received includes this during stranded transition agreement. to the intend of guide note begin we to margin. adjusted to Re, the baseline that under in Please services fiscal sale Willis the be to XX% the we cost period a of

Going value we keep business or on providing long-term prefer the to of guidance. drivers annual not forward, quarterly will the continue focus and

We strategic quarter these our with are reflection pleased resilience results and on very priorities. our and a are third of focus they direct

have our to momentum, gives robust which financial balance We stakeholders. in team, our all solid me strong a continue excellent an value sheet driving confidence for results, and ability

future, our the drive work to talented now, confidence our the I about turn John. to in the company leadership in rest Willis leadership Carl to excited Watson's strong team our culture. I'm explore of to back And and the think Towers with I'll call As ahead. the colleagues opportunities and have continue forward I team, and

to us that anticipate much beginning questions results future. of Hess Carl very are of need I our And for with Andrew. call, about have be what line also. at as the most the Thanks on We we going the mentioned the your

the from bulk And answering questions. and may to going in are Carl chime so Andrew be of the while vast I time-to-time,

to turn let's your So questions.

Thank Fargo. with first Elyse question Instructions] from [Operator The Greenspan Wells you.

Your line is open.

also question the My organic guide Thanks. for on morning. the just first Hi. is view CRB. and Good

X% of the out guide the would X% was put imply guys organic, year-to-date you a fourth XXXX given quarter X%. So in which

year. So make then through next there but I departures growth the want impact And question, CRB thinking to sure half say peaked, of first you be that second an that that compressed could within having alluded correct. just to is the did you from

three we think kind for organic CRB of segment could X% remain So should the a next quarters? as that that within

Yeah. Sure. Andrew. Elyse. This Thanks, is

question your I'll take So growth the for of rest year. the first around the organic part of

I full think to for we that you're of guidance the expect align in terms thinking our QX stated of year. properly X% where relative about would to

front we less Carl. of have some a organization. the on is respect good actually terminations the Analyst Elyse, There talked been we've look business, Day, back with the now terminations, for hiring. in respect the this foot at encouraging And on to where we're revenue about seen we in exceeding the the QX as outlook With seen side, CRB hires, and mitigation sort have we to getting morning. of hiring trends new for toward departures

CRB that year that, remained up comes As new know client and will and it have people, on to model. we I a global when management strong business us We strong think going into look of help and last XXXX a to but results hiring revenue, thanks our precedes sales business forward. light and – are of for discipline validation

a first industry While gains of half that some those at year. us but on phenomenon. the it It's lower general, the continuation leads going the And through in a seen to continue revenue book averages are to grow, to XXXX. we last new that the probably is be thinking have have sales of of our business, that end through CRB are impacted

have guys sense said CRB, the John you then had last this were QX if of we was like What And the was back number guess, QX. it to can have of the at peak? couple of versus just when been past colleagues look I so that that done? you going you of what down worst within the quarters would peak a the departures that, kind guys hiring get XXX over are the

it's seen the but – what than are pin to down, is I we've lower departures QX So departures. I hard mean, think, QX

made, there. on plan do. That past just of of think, vengeance during resumed hiring the but to period already to that. the a side hire, was we're we out continue very And was So low with peak has the we've not that hire we business other what the the combination,

they So recs were well increased from open a well where are our at this time. open ago year –

good meaning on the And one the headwind quarter the margin growth last gets lab full as margin, are that by in there Is – revenue year year's guide there with will hiring level of well. and back the hiring? inflated think improvement for margins been and of one, from a departures was in is track offset the next or any that impact industry do the with that to you kind once the expense

Yeah. there do we're to be We positive with continues as in expect I outlook. willing slowing improvement margin say sort to But of about the margin business margin ramp that, I expect deliver the what margin the mean, of of our first rate think do the some activity three improvement. margin remain is to improvement up quarters. that, seen QX. we happy we're through will very about we've that We

Okay. for the color. Thanks

you. Thank

Thank you.

question, Next we have Mark Marcon.

is Your line open.

morning. questions. taking Good And thanks my for

you and XXXX you over think it if on focusing working – with is investors targets. First, How year pleasure the bit next back-end the in appropriate been career. of decades. stellar the as just following much the talk this start year? a the It's of that Wondering longer-term expansion to be margin expectations you of we kind loaded as should terms going How your of on of framing of about congratulations pacing? just a just John sort from to progress can about year kind pace a little

Carl. saw it's Mark Yes. Good I morning. --

relatively period. to we steady do that already costs to that the through of as transformation there's like we think right? margin think and that half program many period the reason a operating expect Analyst bit we've be leverage I in Then get right short-term which the through I parts started throughout of that be backloaded. but headwinds some get the There's shouldn't would XXXX improvement at into the we the maybe tend transformation looking we two And Day. identified the first rewards loaded programs think say to constant the effect should business relatively out front be to no phenomenon lay

it. Got

of as are year And not so back be in for half probably on it to side. probably a and improvement and next assume more a year full XXXX going that be half lot XXXX, And of would the of reasonable XXXX the margins that first tepid bit little bulk out go fair? the XXXX. really Is going to the And improvement. the of then we into

future think we'd materials Investor in the about we'd the I of to that and say Day we're fiscal refer XXXX. to the end is margins what XX% that targeting the by XX%

Okay. the revenue is in to how in Great. occurred And have characterize group? to then impact regards that to future you CRB with just that the terms going departures already would that of occur the with regards

less right? I than obviously right revenue that book the of talking I'd make I sort think out we're sales point impact well-known on think cost I about. the book sales up revenue book side X% range but multiples of which sales vary mean with a pretty

your I macro you significant answer but level So isn't the for on the don't enterprise. multiples that a think take can in

within the you point business which are the Great. about of then future in of terms HCB And part at excited this growth? most

terms identified for Day Investor perspective think businesses got the scale opportunity significant We've we are our at Well, where we one we for a scope both in the from of Health being do our a is That portfolio. contributors and to think all Benefits the retirement perspective what market-leading and HCB a valuable we right business current we can that business. see said enterprise. so HCB

And our there's year with had very, all great benefits. has very hubs we've for respect administration services Reward of continues services its helps rebound market and and demand do has a capital last buyer a business phenomenal technology business Our to and with lot and human us to share. prominence we think Talent got gain in strong a that we what

a lot across there's like entire So to portfolio. that

Thank you.

Thank you.

Wolfe with Research. Zaremski Mike have we question Next

all Follow-up and on good the Great. the thanks growth, margin color. for guidance

Specifically near-term if the saying I margin the correctly costs. from a that understand stranded includes you're guidance negative impact

assuming guys they to of going stranded are how were the we to kind to you them laid as I'm contemplated and quantify our know to want that is costs numbers. that just and long-term be that we think kind guidance material through it's how we out. if those I of margin of in back thinking about something be understand or So kind able have out, should

something the Sure. going XX%. contemplated you alluded longer-term as is right not now, absolutely quantify to we're in That's guidance of XX% to but to

about $XXX those And not be cost. past Okay. of -- in will on you'll Got have some -- million calculate kind maybe to agency if the -- lot included potential. will governors be your it charges. cost of of rating sticking leases, look of looks how kind the those XX-K. looked when I'm think they charges curious have if a know the with the of I at a of as there's guess, agencies you at the shedding lot program, related the And then also, buybacks we -- in it. leverage, the like I some distant excluded rating of

wanted that's I It if versus work way Thanks. any is seems about just peers. the a want more just see environment remote So to I moving things. right be -- to of think clear. like, if towards directionally flexibility Willis to

Yes.

to restructuring don't ability expect On from impact question, part efforts your we there repurchase our to the shares. the first any be of on

allocation point. them But expect the repurchase calculations for real about the of for that plans. any that on I'll specific question in to or be be we a a estate headwind share rating ask they're going that. treat capital to don't Carl activities to As our may how chime agency to again,

a to XX,XXX afforded the ways I that we've COVID. result had or voluntarily colleagues of adapted new we working think, that marvelously not were as have of

up have to correctly can just collaborate and respect excellent learned real clients. to other turn able to to fashion lessons the with office rather collaboration we've we as our space, we're with but serve client estate to not and those technology through, each we're come in come how have footprint be our respect to continue real how portfolio and ably, estate in space. lessons a the to implementing identified. into those going service, We're will stellar our And than taking you team We with employ we

you. Thank

Thank you.

with Hughes Mark have we Next Truist.

congratulations momentum great about In do these do here, conditions clients out? sharp John. market talked How think it could last? space, turnaround. a tight the recovery and to labor see morning, Yes, you thank good expect resignation HCB how you, long Do You this playing persist? you the

about workforce you're talking our workforce the clients' services. or and I'm our you for not clarify? Could demand sure our

for your Talking Yes. their demand clients' workforce and about your services.

Just your upswing. you that from opportunity, hearing some then, of what the so durability perspective this your about revenue are And they obviously will just think persist? this how clients long on impacts

Yes.

work business, driven tightening that demand strong and rewards So, for affects I there's hiring for mean includes no labor question engagement and assessments, has compensation our talent our demand that been work. markets survey that by employee

that both to demand be economic able adequately to meet near-term that labor going All of sure continue combination and to some We don't that across a organization. this. -- short-term think affect the of there's that. we're that are making because effects these have be to seen are quite that of We given strong to markets resourced And continue, anticipate demand tight. we

chains our of markets. are and undisrupted You tell doing insight for supply bring portfolio the we'll a to the what some to maximize into a point business globally is talent rates But that where give us we're when we means our value can for vaccination we global best think this certainly, to across you some tailwind and the good are us.

in numbers Britain? were American What organic? CRB, the And what gave you regional the North -- then American those international and Fair North was think Great I enough.

We're getting that.

Just Yes. second. a

XX%. revenue So, up North America was

up nominally. Britain International flat X%; Great basically X%; Europe Western

final one then And Great. question.

was talked about had next to pension that equalization year the you in that last quarter for in think that strong case? there Is perhaps. I work, work still be the Britain the visibility Great equalization

better related as additional we'll work globally that from the remained schemes after think equalization and work be And year. been said it have pension of higher Day. seeing do course, We to expect to we levels that are schemes be funded. to That's Analyst Yeah. kind markets this true of

Thank you much. very

you. Thank

Thank you.

Next, we have Paul Newsome with Sandler. Piper

people seeing you Are or your seeing people place? a business something little that just through it you I inflation in of or manage just bit need on some hire that of a guess, globally leading And Just to question. any wage that, it's follow-up broadly? getting is these more with to costly concerns that keep the

for new across on talent So the definitely, we're the organization. market

from that or industry probably in our business definite of markets number that week last a are So we're talent. heard areas definitely of I are think that for there over noticing our people hot you the And so.

global are We business. a

that been great with able a our a the sure engagements We able to organization manage management globally this the very deal to into across and factor We talent make client pools, meeting as And to I and cycles to source and with are to range it in think business. be it. can resources the has organization team as We well through talent to market gives drop does talent we're assist that. few us do demand. staff respect us is prepared a planning of we wide

other kept sort in business? different think Is anything commercial the business that has about isolated of there commercial business any CRB staffing reason of than businesses? the lines the a why you your focused there have may issues more on the them insurance of Is been versus or is little versus bit sort businesses unique

I of extremely constructed number served. our and oriented are a that think the way are in businesses they're there team

contracts, relationship-centric -- -- right example technology with where seven each our you our relationships are very our on if years not extreme services business much So five long-term administrative of scale, clients might At being an and individual typically a our of the to as the firm, dependent it's face other the business right? maybe any single a They're member you to end with and institutional. mid-market team client. very the where CRB have extremely

of lie. where the dynamics of sort relationship different economics terms fundamentally just the in So

John. Congratulations the Thanks Great. color. for to

Thank you. you. Thank

Next, we James. with have Peters Greg Raymond

of on in Good …calling behalf morning. Peters. Greg

the couple lower over maybe industry growth CRB the mentioned of next You quarters.

expect your it is $XX as growth right go may you hire, towards you towards accelerate XXXX As to that target? billion

Yes.

Can Okay. And the the is how stand-alone of the progress and then business it's reinsurance and it benefits of reinsurance I the business clarify there? the ongoing more margin while divesting you of nature reinsurance a accretive. business, understand --

has business been reinsurance the So historically more average. profitable than the

have And of been increasing is the pointed is ours. major cost eroded much due a very the are pressures, is this buyer no costs talked cost and people. fact right? the will look got most area stand-alone. compensation faster it industry. of company. major than than of future the about higher to rest the a of a bit in that's out an possible that One We As It's of longer significantly the our sort problem of you earlier costs in different to rest reinsurance the It's a business a where be where -- hub margins compensation those

traditional capital addition, In $X $X provided time, or the right, point not reinsurance $X the at this in is reinsurance. by of markets, in every market

Our they margins are for margins markets everybody providing and reinsurance services traditional capital through than much the are through brokerage. lower else's

of XXXX. than deal end that's -- an regulatory cleared respect that that that timing talked thought no business we've additional to the later and is as the the quarter closing progressing we other The it we to have face. conditions for divestiture, customary we unchanged so as be as that required won't headwind is we And approvals is With the subject it to about clearances to and and well expect of would. that first

point maybe connected of organic part Okay. that. CRB. you Can a you part a gains segment clarify of growth And the in release, was appreciate In settlements mentioned press clarification. just or of to if I that just income?

the Yes. segment. revenue That for the is figures in

the questions. very much you Thank for Okay.

you. Thank

you. Thank

Autonomous Next Research. we have with Ryan Tunis

Appreciate had direction. sounds do expect of that right some interested Hey, organic that kind year, earlier more the headed understanding the headwind of Good attrition I'm in think get this or -- that in thanks. into of trends trend Question morning. say the like some you half bit into first But, its grow of that are reflects growth the that it you we kind way to how headwind the XXXX? of you impact that is quarter's -- more Would of this headwind loaded do working hiring organic. for the a full fully issues as you've Carl.

Yes.

that to I in and of do industry growth alluded the had through the we expect prepared expect we average gap lower think as of John narrow in terms to year as half that progress to dynamic end towards be remarks, first next year. the of his rates throughout

then, far expert And BDA, an this on in it. I'm Got business. from

get a expect can year that are X%. that model difficult what In we how barely you it but to think outcomes of how XX%, ago? for a comp quarter before fact, maybe I looks plus organic. type I of the help of fourth feel year was trying terms me to it, the plus at to was about I'm hoping comparison difficult just range in I so could the know mean given

So, make ramp-up staffing our earlier a year this have on for couple begun of in we're to a market things One capitalize to sure is maybe annual the fully as TRANZACT right? demand. bit color, XXXX the enrollment for we business period staffed

market somewhat quarter July growth remain We although about operating overall and revenue revenue But right? grow which year commensurate lead lower our Direct, focusing higher response growth. tied opportunities to media in margin Hispanic acquisition year. that's also Omni acquired the driven is income highest of on seasonally revenue the direct growth margin. last it's -- And TRANZACT, operating XX% should the cost is growth there, close full-service in will to dollars Revenue revenue revenue a the the agency our is is so that for for QX to constant. dollars

a of last That and the period annual higher fourth XX% growth in We our period plus Medicare comparable significantly If our look revenues Advantage growth the correlated open have Advantage led enrollment had in year from right, you strong plus to year revenue enrollment correlated building materially year-to-date by enrollment impacted period. year XXXX in fourth the that We a quarter strong Medicare growth higher annual anticipate first of the this the revenue is base quarter. to was sort in ago highly the period. with back, that note we period strong was in the QX annual open right a continued open quarter And first enrollment double-digit XXXX, in quarter enrollment year to strong enrollment period XX%. but last we're not QX, growth off.

Thank you.

with KBW. Shields have Meyer we Next

is of leading other lot margin on margins. also I a has to there differential a obviously, it There's Adam. of on focus think the for, expenses. I was that guess I CRB And contributes focused And Willis brokers? most maybe been component question revenue and Longer-term between wondering Thanks.

Sorry, it's what Can you revenue clarify, component? Andrew. you mean by

I is there charging Willis' other possible, bluntly competitors? element insurance than less Yes. it of any guess put as as some to brokers

No.

helpful. certainly, then That's And Okay. second small...

And hopefully quite clear

sorry I'm

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Sorry

the Yes. within unequivocal the impact margins CRB settlements maybe here. It in of impact and the Is a there seems the pretty ballpark on

Sure. Yes.

a The produced points. basis book CRB So margins XXX we about is -- XXX to improvement about the alluded contributed which basis sales, earlier, impact during on margin quarter. point the of

in there still point without XXX improvement margin component a would have basis been that that segment. of So

Perfect. Thank much. you Okay. so

Thank you.

you. Thank

Rosenbaum Stifel Shlomo with have we Next

Most question. Hi. questions Thank my you of to one for taking been answered. ask just my questions. want have I

TRANZACT Just over a next expectations of in expect and into should continue the to terms how XXXX? You your that talked -- about in quarter. of growth the we fourth little going some bit

business. -- you. And in getting wondering, was a it's but about the business to of context how strong very a should the been in ahead bigger well just it's runway we of So that become I think

think very still comments some germane. Day had that we remain, during Analyst think I we

is as couple the on minutes a short the to very of enrollment period. correlation That will be influence definitely between first quarter. open all I the a term period there said the prior annual strong of enrollment activity the tends quarter ago, First right to fourth

financial Gene this that. forward, Day enterprise. we maximize market how addressable control as with in and large we the certain we of to as right what sure, for for Looking position we our And we be. it. have work can to want a this make the Analyst about growth have during a of the said that sense potential making Wickes that we sort it we in sure great of Gene makes is picture make sure a we think, to tremendous see destiny terms big We And extent

I join wrap try Great like to can here going we're say of and to very calls thank and are John at would shoes And these think Thank us. John. XX to with big that you and back to it I you. Andrew I fill up forward. before you pass least yours, going

time. we lead done all tremendous for what organization have this grateful you have very to things and done are us You for this all

conclusions, to Well, appreciate pleasure us I and From thanks analysts, over with joining call. this the to for years. the I've the all been have to very you, and would analysts our craft. necessarily they've always I admired bring done. agreed your you like I with of your been that work with the on impressed a say it's day much. thanks one, to that I but and the quality always dedication work haven't intelligence the

So, And Andrew, thanks updating good call. forward. will be much then and luck next and going you Carl very on our

So long.

all Thank Thank concludes call. conference today's for you. you participating. This

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