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    WTW
    Earnings call· Jun 2026(Q2 FY26)

    WILLIS TOWERS WATSON Q2 FY26 earnings call WTW

    Jul 30, 2026 Source

    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

    20
    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

    8
    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%——

    Operational metrics

    20
    Adjusted Operating Margin
    19.5%up 100 bps YoY
    Q2 FY26

    Expanded despite persistent global market volatility, reflecting marketplace success and cost discipline.

    Adjusted Diluted EPS
    $3.35up 17% YoY
    Q2 FY26

    null

    Foreign Currency Tailwind to Adjusted Diluted EPS
    $0.06
    Q2 FY26

    null

    US GAAP Tax Rate
    19.8%vs negative 6.8% in Q2 FY25
    Q2 FY26

    null

    Adjusted Tax Rate
    19.6%vs 18% for Q2 FY25
    Q2 FY26

    null

    Share Repurchases
    $450 million
    Q2 FY26

    Deployed capital at prevailing market prices. Part of the full year target of at least $1 billion.

    Quarterly Cash Dividends
    $90 million
    Q2 FY26

    null

    Propel Plan Cash Cost to Achieve Savings
    $625 million
    FY26-FY28

    Reflects a disciplined cash cost to achieve ratio for the $400 million run rate savings.

    Propel Plan Non-Cash Charges
    $25 million
    FY26-FY28

    Expected in addition to cash costs for the Propel plan.

    Rewards AI Client Users
    5,000roughly double last quarter
    Q2 FY26

    Demonstrates rapid adoption of AI solutions and value for clients.

    Retirement Actuarial Valuation Time Reduction
    7%
    2025

    Achieved through standardization, process improvement, and automation.

    BD&O AI Capabilities in Production
    20+
    Q2 FY26

    Deployed across service centers, member interactions, and administration operations.

    Violet Plan Participants Served
    12 million+
    Q2 FY26

    Violet suite of technologies helping to improve service delivery and productivity.

    Benefit Decision Support Use Increase (Violet)
    52%
    Q2 FY26

    Violet suite of technologies helping to improve service delivery and productivity.

    Participant Follow-ups Reduction (Violet)
    60%
    Q2 FY26

    Violet suite of technologies helping to improve service delivery and productivity.

    Insurance Schedule Generation Time Reduction (Neuron)
    4 hours to 5 minutes
    Q2 FY26

    Using Willis Navigator, part of the Neuron platform.

    Real Estate Premium Allocation Time Reduction (Neuron)
    2 to 4 weeks to minutes
    Q2 FY26

    Upon receipt of binders and final premiums, using Willis Navigator.

    Certificates of Insurance Turnaround Time Reduction (Neuron)
    hours to minutes
    Q2 FY26

    Achieved by the certificate agent with high accuracy scores.

    Geopolitical Risk Ranking (D&O Survey)
    Top 7up from 15th a year ago
    Q2 FY26

    Reflects elevated geopolitical tension as a key concern for Boards.

    AI as Important Risk (D&O Survey)
    well over half
    Q2 FY26

    AI cited as a very or extremely important risk by respondents.

    Industry KPIs

    4
    MetricValueDetails
    Capital returns$450 millionUSD
    Retention persistencystrong
    Renewal rate change pricingdeclining
    Broker specific when present5%%

    Product announcements

    3
    ProductTypeDetails
    Propellaunch
    AI workforce transformation solutionlaunch
    Willis Navigatorupdate

    Deals & partnerships

    3
    SMB Scala & MansuttiAcquisition of a prominent regional Italian insurance broker.

    Part of portfolio optimization strategy.

    Tech GolfPartnership to help clients move to action faster.

    Related to the AI workforce transformation solution.

    SoftecPartnership to help clients move to action faster.

    Related to the AI workforce transformation solution.

    Risks & headwinds

    4
    Persistent Global Market VolatilityQ2 FY26

    null

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

    Softer Labor MarketQ2 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 ConflictQ2 FY26

    nearly 50% decline in project work

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

    Declining Insurance RatesQ2 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

    5

    Career Segment Organic Growth Improvement

    H2 FY26
    Currentflat (Q2 FY26)
    Targetimprovement 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.

    Q&A highlights

    5

    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 read7 chapters

    Detailed Narrative

    01

    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.

    02

    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%.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    07

    Market Conditions and Demand Drivers

    While near-term headwind📎s 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.

    AI-generated summary of the company’s earnings call. Not investment advice.