Willis Towers Q3 Earnings Beat Estimates on Lower Expenses

Willis Towers Watson Public Limited Company WTW delivered third-quarter 2025 adjusted earnings of $3.07 per share, which beat the Zacks Consensus Estimate by 2.3%. The bottom line increased 11% year over year.

The insurer’s third-quarter results benefited from strong revenue contributions from the Risk & Broking segment, expanded operating margin, increased adjusted operating income and reduced expenses. It was offset by lower revenues at the Health, Wealth & Career segment.

Q3 Operational Update by WTW

Willis Towers posted adjusted consolidated revenues of $2.3 billion, which remained unchanged year over year on a reported basis. Revenues increased 5% on an organic basis but declined 1% on a constant currency basis. The top line beat the Zacks Consensus Estimate by 0.5%.

The total costs of providing services decreased 38.7% year over year to $1.8 billion due to lower other operating expenses, depreciation, amortization, transaction and transformation. Our estimate was $1.9 billion.

Adjusted operating income was $467 million, which increased 13% year over year. Our estimate was $432.4 million. Margin expanded 230 basis points (bps) to 20.4%. Our estimate was 19.1%.

Adjusted EBITDA was $515 million, up 8% year over year. Our estimate was $502.1 million. Adjusted EBITDA margin expanded 160 bps to 22.5%. Our estimate was 22.2%.

WTW’s Quarterly Segment Update

Health, Wealth & Career: Total revenues of $1.2 billion decreased 5% year over year (6% increase on a constant currency and 4% increase on an organic basis). The figure beat the Zacks Consensus Estimate as well as our estimate by 1%. The decrease was due to the sale of TRANZACT.

Health delivered organic revenue growth, with increases across all regions, partially offset by prior-year book-of-business settlement activity.

Wealth generated organic revenue growth from strong levels of Retirement work in Great Britain and North America, as well as growth in the Investments business from new products and client wins.

Career revenue growth is largely driven by strong demand for advisory project work in Europe.

Benefits Delivery & Outsourcing revenues increased, driven by strong levels of project and core administration work within Europe, which was tempered by lower commission revenue in North America.

The operating margin was 28.6%, which expanded 390 bps from the prior-year quarter, primarily due to the sale of TRANZACT.

Risk & Broking: Total revenues of $1 billion increased 7% year over year (5% increase on a constant currency and 6% increase on an organic basis) and beat our estimate of $977.6 million and the Zacks Consensus Estimate of $992 million. 

The organic revenue growth in Corporate Risk & Broking was primarily backed by new business and revenues recognized from project-based placements within the global specialty businesses, offsetting the negative impact of insurance rate headwinds.

Insurance Consulting and Technology revenues remain unchanged year over year as clients continue to manage spend more cautiously amid ongoing economic uncertainty.

The operating margin expanded 70 basis points year over year to 18.8%. The increase was driven by operating leverage from strong organic revenue growth and savings from the Transformation program. It was partially offset by decreased interest income and foreign currency fluctuations.

Financial Update

As of Sept. 30, 2025, cash and cash equivalents were $1.9 billion, which inched up 0.2% year over year. Long-term debt decreased 10.3% to $4.7 billion at quarter-end from the end of 2024.

Shareholders’ equity decreased 2.6% from the level on Dec. 31, 2024, to $7.7 billion as of Sept. 30, 2025.

Cash flow from operations was $1 billion in the first nine months of 2025, which increased 10% from the prior-year period. Free cash flow for the first nine months of 2025 increased 15.7% to $838 million. The increase was primarily fueled by operating margin expansion and the abatement of remaining Transformation program cash outflows.

WTW bought back shares worth $600 million in the third quarter of 2025.

2025 Outlook by WTW

Willis Towers expects cash outflows in 2025 from the payment of accrued costs related to the Transformation program, which concluded in 2024.

The company expects share repurchases of $1.5 billion, subject to market conditions and potential capital allocation to organic and inorganic investment opportunities.

The insurer projects a foreign currency tailwind on adjusted diluted earnings per share of approximately $0.15 in the fourth quarter of 2025 and approximately $0.10 for 2025 at current rates.

WTW expects 100 basis points of average annual margin expansion over the next three years in R&B. It projects incremental annual margin expansion at HWC and enterprise levels.

Willis Towers’ Zacks Rank

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

Performance of Other Insurers

Everest Group, Ltd.’s EG third-quarter 2025 operating income of $7.54 per share missed the Zacks Consensus Estimate by 43.7%. The bottom line decreased 48.4% year over year.  Everest Group’s total operating revenues of $4.3 billion climbed 0.7% year over year on higher net investment income. The top line, however, missed the consensus mark by 2.9%. 

Gross written premiums declined 1.1% year over year to $4.4 billion. Our estimate was $4.8 billion. EG’s net investment income was $540 million, which increased 8.8% year over year. Our estimate was $490.5 million. The Zacks Consensus Estimate was pegged at $511 million. Total claims and expenses rose 9.2% to $4 billion. Our estimate was $3.8 billion.

Principal Financial Group, Inc.’s PFG third-quarter 2025 operating net income of $2.10 per share missed the Zacks Consensus Estimate by 3.6%. Also, the bottom line increased 19% year over year. PFG’s operating revenues increased 6.2% year over year to $3.8 billion, driven by increased premiums and other considerations, fees, and other revenues and net investment income. The metric missed the Zacks Consensus Estimate by 4.1%. 

Total expenses increased 3.8% year over year to $3.4 billion. The figure was lower than our estimate of $3.6 billion. As of Sept. 30, 2025, Principal Financial’s AUM amounted to $784.3 billion, which included $0.4 billion of net cash flow and assets under administration of $1.8 trillion. AUM improved 10.1% from 2024-end.

Chubb Limited CB reported third-quarter 2025 core operating income of $7.49 per share, which beat the Zacks Consensus Estimate by 26%. The bottom line increased 30.9% year over year. Chubb’s net premiums written improved 7.5% year over year to $14.8 billion in the quarter. Our estimate was $14.4 billion, while the Zacks Consensus Estimate was pegged at $14.5 billion.

Pre-tax net investment income was $1.65 billion, up 9.3% year over year. Our estimate and the Zacks Consensus Estimate were both pegged at $1.8 billion. CB’s revenues of $16.1 billion beat the consensus estimate by 1.6% and improved 7.4% year over year. Property and casualty underwriting income was $2.2 billion, up 55% year over year. The Zacks Consensus Estimate was pegged at $1.4 billion.

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