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Willis Towers Watson (WTW) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Financials· Jul 30, 2026

Source: earnings call transcript

Executive summary

Willis Towers Watson Q2 FY26 — AI Acceleration Plan 'Propel' Targets 30% Operating Margin by 2028

Willis Towers Watson delivered strong Q2 FY26 results, highlighted by 5% organic growth and 100 basis points of adjusted operating margin expansion, driven by marketplace success and cost discipline. The company unveiled "Propel," an AI acceleration plan aiming for $350 million in net run rate savings and a 30% adjusted operating margin by 2028, reflecting a strategic reinvestment of efficiencies into growth. This initiative builds on existing technology adoption to enhance client solutions and operational effectiveness, positioning WTW for sustained long-term performance despite ongoing market volatility.

Highlights

5

  • Achieved 5% organic growth for the quarter, driven by strong marketplace success.

  • Expanded adjusted operating margin by 100 basis points to 19.5% year-over-year, demonstrating cost discipline.

  • Delivered adjusted diluted EPS of $3.35, representing a 17% increase over the prior year.

  • Risk & Broking segment led growth with 7% organic expansion, including double-digit growth in most specialty businesses.

  • Announced 'Propel' AI acceleration plan targeting $350 million in net run rate savings and a 30% adjusted operating margin by 2028.

Concerns

3

  • Career segment revenue was flat, with a nearly 50% decline in project work in the Middle East due to ongoing conflict.

  • Persistent global market volatility and a softer labor market led to deferred discretionary projects.

  • Insurance rates continued to decline across most lines, with U.S. casualty as a notable exception.

Guidance & targets

CategoryTargetConfidence
Propel Plan Run Rate Savings
$400 million
high materiality
High
Propel Plan Net Run Rate Savings
$350 million
high materiality
High
Enterprise Adjusted Operating Margin
approximately 30%
high materiality
High
Health, Wealth and Career Adjusted Operating Margin
approximately 35%
high materiality
High
Risk & Broking Adjusted Operating Margin
approximately 30%
high materiality
High
Full Year 2026 Organic Growth
mid-single-digit
high materiality
High
Full Year 2026 Adjusted Operating Margin Expansion
continued annual expansion
high materiality
High
Full Year 2026 Free Cash Flow
improving
high materiality
High
Full Year 2026 Share Repurchases
at least $1 billion
high materiality
High
Health, Wealth and Career Organic Growth
mid-single-digit
medium materiality
High
Health, Wealth and Career Margin Expansion
continued expansion
medium materiality
High
Health Organic Growth
high single-digit
medium materiality
High
Wealth Organic Growth
high end of the low single-digit range
medium materiality
High
Career Organic Growth
low to mid-single-digit
medium materiality
Medium
Benefits Delivery and Outsourcing Organic Growth
low single-digit
medium materiality
High
Risk & Broking Organic Growth
mid-single-digit
high materiality
High
Risk & Broking Margin Expansion
100 basis points
medium materiality
High
Insurance Consulting and Technology Organic Growth
low to mid-single-digit
medium materiality
High
Adjusted Tax Rate
relatively consistent with prior year
low materiality
High
Foreign Exchange Tailwind to Adjusted Diluted EPS
approximately $0.35
low materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Health, Wealth and Career (HWC)
Organic revenue increased 4%, driven by continued strength in Health and steady performance from Wealth. Operating margin expanded by 30 basis points due to improved operating leverage and expense discipline.
Operating margin: 24.1% (+30 bps YoY)
—4%—24.1%
Health (within HWC)
Grew 8% organically, supported by new business wins and project work, building on 8% organic growth in Q2 FY25. Demand driven by high healthcare inflation.
—8%——
Wealth (within HWC)
Grew 2% organically, reflecting higher retirement-related activity across geographies. Expects high end of low single-digit growth for full year.
H1 FY26 Organic Growth: 3%
—2%——
Career (within HWC)
Revenue was flat, with higher communications, change, and pay work offset by a nearly 50% decline in project work in the Middle East due to conflict. Grew 3% organically outside the Middle East.
Organic Growth (ex-Middle East): 3%Project work decline (Middle East): nearly 50%
—flat——
Benefits Delivery and Outsourcing (BD&O, within HWC)
Grew 1% organically, driven by expanded outsourcing engagements and administration contracts, partially offset by lower individual marketplace commissions outside of the annual enrollment period.
—1%——
Risk & Broking (R&B)
Organic revenue growth was 7%, with operating margin increasing 100 basis points due to operating leverage on strong revenue growth and expense discipline.
Operating margin: 22.2% (+100 bps YoY)
—7%—22.2%
Corporate Risk & Broking (CRB, within R&B)
Delivered 7% organic growth, driven by new business activity, double-digit growth in most specialty businesses, and strong client retention. North America led growth, particularly in construction, natural resources, surety, and M&A.
Organic Growth (H1 FY26): 4%
—7%——
Insurance Consulting and Technology (ICT, within R&B)
Grew 6% organically, following 5% growth in Q1, primarily reflecting strong software sales and new multi-year deals in its technology practice.
—6%——

Product announcements

ProductTypeDetails
Propellaunch
AI workforce transformation solutionlaunch
Willis Navigatorupdate

Deals & partnerships

SMB Scala & Mansutti Acquisition of a prominent regional Italian insurance broker.

Part of portfolio optimization strategy.

Tech Golf Partnership to help clients move to action faster.

Related to the AI workforce transformation solution.

Softec Partnership to help clients move to action faster.

Related to the AI workforce transformation solution.

Risks & headwinds

Persistent Global Market Volatility Q2 FY26

null

Mitigation:Company's strategy of specialization, data and analytics, and connected advice continues to resonate.

Softer Labor Market Q2 FY26

null

Mitigation:Led certain clients to defer discretionary projects, particularly in Career segment. Propel plan aims to free up capacity for high-value client work.

Middle East Conflict Q2 FY26

nearly 50% decline in project work

Mitigation:Impacted Career segment revenue, but company expects momentum to improve in H2 2026.

Declining Insurance Rates Q2 FY26

rates continued to decline across most lines

Mitigation:Company's specialization strategy and breadth of specialty offerings position it to keep growing through the cycle. U.S. casualty is a notable exception with rising rates.

What to watch in Q3 FY26

Career Segment Organic Growth Improvement

H2 FY26
Current flat (Q2 FY26)
Target improvement towards low to mid-single-digit

Why it matters

The Career segment was impacted by geopolitical headwinds in Q2; its recovery is key to overall HWC performance and full-year guidance.

We expect momentum in Career to improve in the second half of 2026 supported by our expanding pipeline of opportunities, including regulatory-driven activity, a positive outlook for our compensation benchmarking practice and our AI workforce transformation offering that Carl discussed.

Find out whether WTW delivers this. Inve re-checks your case every morning.

Q&A highlights

Seeking more texture on the 7% R&B organic growth, and if the global specialization model leads to a more volatile revenue base compared to the past.

Carl Hess highlighted the 7% R&B organic growth (on top of 6% last year) and 7% CRB growth, attributing it to specialization, talent, and technology investments, which Propel will further enhance. Lucy Clarke added that the acceleration included a "small amount of delayed activity" from Q1, strong new business across all global markets, double-digit growth in most specialty businesses, and strong client retention. She emphasized that one-off project revenue is a normal part of their business and doesn't indicate increased volatility.

“It did include a small amount of delayed activity from Q1 in CRB, which moved forward as we expected. In CRB, we generated strong new business across all global markets and had double-digit growth in almost every specialty business.”

asked by Michael Zaremski · answered by Lucy Clarke

3 min read 7 chapters

Detailed narrative

Propel AI Acceleration Plan

WTW introduced "Propel," an AI acceleration plan designed to generate approximately $400 million in run rate savings by the end of 2028, with a net of $350 million after reinvesting $50 million into growth. This initiative involves a cash investment of $625 million and aims to achieve an enterprise adjusted operating margin of 30% by 2028, with segment targets of 35% for HWC and 30% for R&B. The plan leverages existing AI tools and technology to streamline operations, enhance client solutions, and free up capacity for high-value client-facing work.

AI Integration and Early Benefits

The company has already seen significant benefits from AI and automation. In HWC, the "rewards AI" compensation intelligence tool serves over 5,000 client users, doubling from last quarter. Core retirement actuarial work has seen efficiencies, reducing valuation time by 7% in 2025 in North America and enabling backfilling roles at a 9-to-10 ratio. In BD&O, over 20 AI capabilities are in production, improving service delivery and productivity, such as reducing participant follow-ups by 60%.

Neuron Platform in Risk & Broking

In Risk & Broking, the AI-powered operating platform "Neuron," which integrates Newfront's Navigator system, is streamlining complex processes. Tasks like compiling insurance schedules, previously taking 4 hours, are now completed in 5 minutes. Real estate premium allocations, once 2-4 weeks, are now done in minutes. Contract reviews are available on demand, with the tool continuously learning. These are live applications, not pilots, demonstrating tangible productivity gains.

Client-Facing AI Solutions and Partnerships

WTW is embedding AI into client workflows for improved data analysis and faster solution delivery, while automating high-volume tasks like benefits calculations and claims processing. The company launched an "AI workforce transformation solution" in June, helping clients pinpoint AI productivity opportunities and adapt total rewards programs. New partnerships with Tech Golf and Softec will further accelerate client action.

Strategic Growth and Client Wins

The company's specialization strategy and investments in talent and technology are driving new business wins and strong client retention. In HWC, WTW secured a multi-year enterprise transformation mandate with a Fortune 5 company and won an end-to-end pension administration assessment for a large US bank. In R&B, they displaced an incumbent broker for a global asset manager using their Connected Risk Intelligence platform and secured wins in high-growth sectors like digital infrastructure and Power and Renewable Energy.

Portfolio Optimization and Newfront Integration

WTW completed the acquisition of SMB Scala & Mansutti, an Italian insurance broker, strengthening its European footprint. The integration of Newfront remains on track, with cost synergies ahead of plan. Newfront's Navigator has been rebranded as Willis Navigator and integrated into the Neuron platform, streamlining legacy systems and contributing to the intelligence layer for insurance risk and capital solutions.

Market Conditions and Demand Drivers

While near-term headwinds like global market volatility, the Middle East conflict (impacting Career segment), and a softer labor market persist, robust demand for WTW's advice is driven by high healthcare inflation, regulatory change, rapid technological advancements, elevated geopolitical tension, and economic uncertainty. The latest D&O survey shows geopolitical risk as a top 7 concern (up from 15th), and AI as a very or extremely important risk for well over half of respondents.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.