Q4 2021 Willis Towers Watson PLC Earnings Call

Good morning, welcome to the W. T W fourth quarter 2021 earnings conference call.

Speaker 1: Good morning. Welcome to the WTW fourth quarter 2021 earnings conference call. Please refer to www.co.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 WTW's website.

Please refer to W. TWC O dot com or the press release and supplemental information.

<unk> issued earlier today.

Today's call is being recorded and will be available for the next three months on <unk> website. Some.

Speaker 1: Some of the comments in today's call may constitute forward-looking statements within the meaning of the Private Securities Reform Act of 1990.

Some of the comments in today's call may constitute forward looking statements.

And the meaning of the private Securities Reform Act.

1984.

Speaker 1: These forward-looking statements are subject to risks and uncertainties. Actual results may differ materially from those discussed today, and the company undertakes no obligation to update these statements unless required by law. For a more detailed discussion of the other risk factors, investors should review the forward-looking statement section of the earnings...

These forward looking statements are subject to risks and uncertainties actual results may differ materially from those discussed today and the company undertakes no obligation to update these statements unless required by law.

For a more detailed discussion of the other risk factors investors should review the forward looking statements section of the earnings press.

Speaker 1: released issued this morning as well as other disclosures in the most recent form, 10K and other Willis Powers Watson SCC funds.

The release issued this morning as well.

Disclosures and the most recent Form 10-K and other.

Willis towers Watson SEC filings.

Speaker 1: During the call, certain Mono GAAP financial measures may be discussed for reconciliation of the Mono GAAP measures as well as other information regarding these measures. Please refer to the most recent earnings release and other materials in the investor relations section of the company's website. I will now turn the call over to Carl Hess, WTW's Chief Executive Officer. Please go ahead.

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

The non-GAAP measures as well as other information regarding these measures. Please.

Please refer to the most recent earnings release and other materials in the Investor Relations section of the company's website.

I will now turn the call over to Carl Hess Wcw's Chief Executive Officer. Please go ahead.

Good morning, everyone and thank you for joining us for Ww's fourth quarter 2021 earnings call. Joining me today is Andrew <unk>, our Chief Financial Officer.

Speaker 2: Good morning, everyone, and thank you for joining us for WTW's fourth quarter 2021 earnings call. Joining me today is Andrew Krasner, our Chief Financial Officer.

Speaker 2: I'm pleased to be here today for my first earnings call as WTWCDO. I've officially been on the job for about six weeks and it is truly an honor to lead this company.

I am pleased to be here today for my first earnings call as Wdw's CEO I have officially been on the job for about six weeks and it is truly an honor to lead this company.

Speaker 2: WTW looks very different than it did over 30 years ago when I first joined the company and it's been an extraordinary journey, one defined by continuous innovation and change.

W. Tw looks very different as it did over 30 years ago. When I first joined the company and it's been an extraordinary journey, one defined by continuous innovation and change.

Speaker 2: As we move forward as an independent company, we recognize the need to grow, simplify and transform. Our recently refreshed brand and new matching stock ticker, WTW, are key signals of this new era.

As we move forward as an independent company, we recognize the need to grow simplify and transform our recently refresh brand a new metric stock ticker Wdw are key signals of this new era.

Speaker 2: Our new brand evolves our identity to both reflect our rich history and also inspire our...

Our new brand evolves or identity to both reflect our rich history and also inspire our future. We may have a new brand a new ticker and the leadership team to set us on a bolder path, but certain things will never change our client focused teamwork integrity respect index. Amongst these are our values. They are in our DNA and at the core of everything we do <unk>.

Speaker 2: We may have a new brand, a new ticker, a new leadership team to set us on a bolder path, but certain things will never change. Our client focus, teamwork, integrity, respect, and excellence. These are our values. They're in our DNA and at the core of everything we do. WCW leadership and colleagues are excited about this bold new approach and we hope you are too.

Tw leadership and colleagues are excited about this bold new approach and we hope you are too.

Speaker 2: I'm pleased to report that we continue to see progress in our independent path forward. As we mentioned back in October , we executed on our 8 incentive plans, which provide both short-term and long-term retention benefits, and these have been well received.

I am pleased to report that we continue to see progress in our independent path forward as we mentioned back in October we executed on a rate incentive plans, which provide both short term and long term retention benefits and these have been well received we.

Speaker 2: We've also seen significant measurable improvements in colleague engagement.

We've also seen significant measurable improvements in colleague engagement.

Speaker 2: Meanwhile, the pace at which we've been attracting new talent to fuel our path forward has been truly impressive. We hired more people in the second half of 2021 than we hired during the entire year in 2020. And the elevated attrition levels we saw in 2021 are behind.

While the pace at which we've been attracting new talent to fuel our path forward has been truly impressive we hired more people in the second half of 2021 that we hired during the entire year in 2020 and the elevated attrition levels. We saw in 'twenty one are behind us.

Speaker 2: We also made some early progress in our transformation program, which Andrew will expand upon later in the call. Last, but not least, we've been steadfast in applying financial discipline, as illustrated by our full year margin and year over year margin improvement. As stewards of our financial assets, we plan to continue our emphasis on returning capital to shareholders through share repurchases, which we believe provide the highest return opportunity.

We also made some early progress in our transformation program, which Andrew will expand expand upon later in the call.

Last but not least we have been steadfast in applying financial discipline as illustrated by our full year margin of year over year margin improvement.

As prudent stewards of our financial assets, we plan to continue our emphasis on returning capital to shareholders through share repurchases, which we believe provide the highest return opportunity.

Speaker 2: We're encouraged by the progress we're making on our strategic initiatives. While we have hard work ahead of us in 2022, we're kicking things off with renewed energy and conviction. Our talented colleagues will strive to meet and exceed the expectations of the clients and individuals we are privileged to serve.

We're encouraged by the progress we're making on our strategic initiatives. While we have hard work ahead of us in 2022, we're kicking things off with renewed energy and conviction our talented colleagues will strive to meet and exceed the expectations of the clients and individuals we are privileged to serve.

Speaker 2: In the current environment, our clients are striving to create continuity and clarity in an environment of ongoing disruptions.

In the current environment, our clients are striving to create continuity and clarity in an environment of ongoing disruption.

Speaker 2: Future-focused leaders acknowledge that risk has become a mainstream element of business decisions and will remain so. Today, the frequency and complexity of threats continue to increase due to factors including geopolitics, economic volatility, population health, climate change, supply chain, talent and technology.

Future focus leaders acknowledge that risk has become a mainstream element of business decisions and will remain so.

Today, the frequency and complexity of threats continue to increase due to factors, including geopolitics economic volatility population health climate change supply chain talent and technology.

Speaker 2: To combat threats and create opportunity, organizations must connect current and future risks.

To combat threats and create opportunity organizations must connect current and future risks.

Speaker 2: Act on environmental, social, and governance and sustainability commitments, and build organizational resilience. The time to act is now. WTW's unique perspective connect solutions, strengthen organizations, and helps clients better prepare for and thrive in and uncertain.

On environmental social and governance, and sustainability commitments and build organizational resilience. The time to act is now W. TWC unique perspective connect solutions strengthens organizations and helps clients better prepare for and thrive in an uncertain future.

Speaker 2: For example, WTW designed the world's first parametric insurance solution for Belize's sovereign debt restructuring.

For example, W. Tw design the world's first parametric insurance solution for believes its sovereign debt restructuring this.

Speaker 2: This unique transaction includes targeted insurance protection to cover Belize's loan servicing obligation in the event of certain natural catastrophes such as herics.

This unique transaction includes targeted insurance protection to cover believes as loan servicing obligation in the event of certain natural catastrophes such as Hurricanes.

Speaker 2: Hurricanes can create large-scale devastation and disruption to economic activity, thereby halting development. The custom solution allows believes to focus scarce financial resources on recovery rather than debt servicing and reflects WTW's commitment to using our expertise to shape and fortify resilience in the communities we serve.

Hurricanes can create large scale devastation and disruption to economic activity, thereby halting development. The custom solution allows beliefs focus scarce financial resources on recovery, rather than debt servicing and reflects wdw's commitment to using our expertise to shape and fortify resilience in the communities.

We serve.

Speaker 2: Before we discuss our fourth quarter results, I want to take a moment to directly address our talented and valued colleagues.

Before we discuss our fourth quarter results I want to take a moment to directly address our talented and valued colleagues.

Speaker 2: We have an exciting future ahead filled with opportunity, and I'm delighted you're here to be part of it. Thank you for your hard work and dedication, and most of all, thank you for your commitment. I'm truly appreciative of your efforts to drive our vision to be the best company in the business and achieve our full potential as one WTW. I'm proud of the company we've built, and I'm excited to be leading us through the next phase of our journey. So now let's...

The exciting future ahead filled with opportunity and I am delighted youre here to be part of it. Thank you for your hard work and dedication and most of all thank you for your commitment I'm truly appreciative of your efforts to drive our vision to be the best company in the business and achieve our full potential as one wdw I'm proud of the company we built.

And I'm excited to be leading us through the next phase of our journey.

So now, let's turn to our financial results.

Speaker 2: Please note that all metrics referenced are on a continuing operations basis except where state is otherwise. As a reminder, we substantially completed the sale of Willis Ree on December 1, 2021. We recorded a gain of 2.3 billion in connection with the disposal of Willis Ree. That gain is included in many of our gap profitability measures, which will point out as we move through the commentary.

Please note that all metrics referenced are on a continuing operations basis, except where stages otherwise as a reminder, we substantially completed the sale of Willis re on December one 2021.

Recorded a gain of $2 3 billion in connection with the disposal bolus rate that gain is included in many of our GAAP profitability measures, which will point out as we move through the commentary.

Speaker 2: Overall, our results aligned with our expectations. But to be crystal clear, they do not reflect the near and long-term potential of this company to drive organic growth and margin expansion.

Overall, our result line aligned with our expectations, but to be crystal clear they do not reflect the near and long term potential of this company to drive organic growth and margin expansion.

Speaker 2: As mentioned earlier, our hiring levels are on highest in recent history, and we're confident that the piece of colleague to purchase is behind.

As mentioned earlier, our hiring levels are among the highest.

History, and we're confident that the peak of colleague departures is behind us.

Speaker 2: For the four year, we posted 6% organic revenue growth and our adjusted operating margin was 19.9%. While the results reflect the expected delay, impact, disruptions, experience earlier in 2021, the underlying strength of our business and our early progress on executing our strategy gives me confidence that we remain on track to deliver strong, sureholder value over the longer term.

For the full year, we posted 6% organic revenue growth in our adjusted operating margin was 19, 9%.

While the results reflect the expected delay impact of disruptions experienced earlier in 2021, the underlying strength of our business and our early progress on executing our strategy gives me confidence that we remain on track to deliver strong shareholder value over the longer term.

Speaker 2: Reported revenue for the fourth quarter was 2.7 billion up 1% as compared to the prior year fourth quarter, up 2% of the constant currency basis and up 4% on an organic.

Reported revenue for the fourth quarter was $2 7 billion up 1% as compared to the prior year fourth quarter up 2% on a constant currency basis and up 4% on an organic basis.

Speaker 2: Income from operations with 690 million or 25.5% of revenue for the fourth quarter has compared to 579 million or 21.7% of revenue in the prior year fourth quarter.

Income from operations was $690 million or 25, 5% of revenue for the fourth quarter as compared to $579 million or 21, 7% of revenue in the prior year fourth quarter.

Speaker 2: Adjusted operating income was 868 million or 32.1% of revenues for the quarter, up 170 basis points from 812 million or 30.4% of revenue in the same period last year.

Adjusted operating income was $868 million or 32% 32, 1% of revenue for the quarter up 170 basis points from $812 million or 34% of revenue in the same period last year.

Speaker 2: For the quarter, the Looted earnings per share, which include discontinued operations, were $19.19, as compared to $3.56 in the fourth quarter of prior year.

For the quarter diluted earnings per share, which include discontinued operations were $19 19 as.

As compared to $3 66.

In the fourth quarter of prior year.

Speaker 2: Adjusted the looting earnings per share were $5.67 for the fourth quarter, reflecting an increase of 9% and compared to $5.19 in the prior year.

Adjusted Diluting earnings per share were $5 67 for the fourth quarter, reflecting an increase of 9% and compared to $5 19 in the prior year.

Speaker 2: Now let's take a look at each of our segments in more detail. To provide clear comparability with prior periods, all commentary regarding the results of our segments will be on an organic basis unless specifically stated otherwise.

Now, let's take a look at each of our segments in more detail to provide clear comparability with prior periods. All commentary regarding the results of our segments will be on an organic basis, unless specifically stated otherwise.

Speaker 2: Segment margins are calculated using segment revenue and exclude unallocated corporate costs such as amortization of intangibles, certain transaction and integration expenses resulting from mergers and acquisitions, as well as other items which we consider to be non-corrored to our operating results.

Segment margins are calculated using segment revenue and exclude unallocated corporate costs, such as amortization of intangibles certain transaction and integration expenses, resulting from mergers and acquisitions as well as other items, which we considered to be noncore to our operating results.

Speaker 2: The segment results include discretionary competition.

<unk> results include discretionary compensation.

Yes.

The human capital and benefits our HCV segment revenue was up 3% on an organic basis and constant currency basis compared to the fourth quarter of the prior year for.

Speaker 2: The human capital and benefits or HCD, segment revenue was up 3% on an organic basis and tons to currency basis compared to the fourth quarter of the prior year.

Speaker 2: For the fall year of 2021, HCB revenue grew 3% organic.

For the full year of 2021, HCV revenue grew 3% organically.

Speaker 2: Technology and administration solutions revenue grew 11% in the fourth quarter primarily due to increased project work in Great Britain and Western Europe .

Technology and administration solutions revenue grew 11% in the fourth quarter, primarily due to increased project work in Great Britain and Western Europe .

Speaker 2: Our health and benefits revenue increased 6% for the quarter. The increased reflects rural bus demand in H&B consulting and a gain recorded in the connection with a one-off book of business settlement offset by slower growth in brokerage. The settlement relates to an isolated incident of senior staff departures earlier in 2021.

Our health and benefits revenue increased 6% for the quarter the.

The increase reflects robust demand in each and be consulting and a gain recorded in the connection with a one off book of business settlement offset by slower growth in brokerage the settlement relates to an isolated incident of senior staff departures earlier in 2021.

Speaker 2: Talboton rewards Revitow increased 3% in the quarter, following growth of 17% in Q3 and 22% in Q2. Throughout the year, this growth is represented in rebounds from the 2020 slowdown in discretionary projects, plus increasing market demand, particularly for products like Compensation, ventrar dean rates on friendly carbon using additional sub- profitess.

Talent and rewards revenue increased 3% in the quarter following growth of 17% in Q3 and 22% in Q2.

Throughout the year. This growth is represented a rebound from the 2020 slowdown in discretionary projects plus increasing market demand, particularly for products like compensation benchmarking survey.

Speaker 2: The lower growth in Q4 relative to the prior two quarters reflects the typical seasonality of compensation survey sales, which peak in Q2 and Q3, as well as some capacity constraints for advisory service.

The lower growth in Q4 relative to the prior two quarters reflects the typical seasonality of compensation survey sales, which peaked in Q2 and Q3 as well as some capacity constraints for advisory services with expectations for continued strong demand in product in advisory services, and having ramped up hiring in the fourth quarter we.

Speaker 2: With expectations for continued strong demand and product and advisory services and having ramped up hiring in the fourth quarter, we are well positioned.

Our well positioned.

Retirement revenue was down 1% compared to the prior year fourth quarter with increased funding and guaranteed minimum pension equalization work in Great Britain offset by declines in North America due to a reduction in work in Canada to implement regulatory changes and lower demand for bulk lump sum projects.

Speaker 2: Retirement revenue was down 1% compared to the prior year fourth quarter, with increased funding and guaranteed minimum pension equalization work in Great Britain, offset by declines in North America, due to a reduction in work in Canada to implement regulatory changes, and lower demand for bulk lump sum projects.

Speaker 2: HCB's operating margin was 31.2% for the fourth quarter compared to 31.3% in the prior year fourth quarter.

Hcp's operating margin was 31, 2% for the fourth quarter compared to 31, 3% in the prior year fourth quarter.

Speaker 2: On a four-year basis, HCV's operating margin improved to 27.0% from 26.0% in the prior year.

On a full year basis, Hcv's operating margin improved to 27.0% from 26.0% in the prior year.

Speaker 2: You're over a year, excluding the impact of currency and gains from book of business settlements, HCVs margin declined by 150 basis points for the fourth quarter, but increased by 90 basis points for the full year.

Year over year, excluding the impact of currency and gains from book of business settlements Hcp's margin declined by 150 basis points for the fourth quarter, but increased by 90 basis points for the full year.

Speaker 2: The fourth quarter margin declined as a result of higher expense growth driven by hiring to meet expected strong market demand as we build fast-me for robust revenue growth. The four-year margin increase reflects continued sustainable expense reduction F.

Fourth quarter margin declined as a result of higher expense growth driven by hiring to meet the expected strong market demand as we build capacity for robust revenue growth. The full year margin increase reflects continued sustainable as expense reduction efforts historically HCV.

Speaker 2: Historically, HCV has had industry-leading margins and we believe that trend will continue. HCV's overall market tailwind should continue to drive organic growth momentum bridge.

HCV has had industry, leading margins and we believe that trend will continue hcp's overall market tailwind should continue to drive organic growth momentum for HCP, both our near term and long term outlook on the segment remain positive and our expectations for revenue growth are unchanged from what we community cadence at Investor Day.

Speaker 2: Prove our near term and long term outlook on the segment remain positive, and our expectations for revenue growth are unchanged from what we communicated at investor day mid single digit growth.

Mid single digit growth.

Speaker 2: Now, let's look at corporate risk and broken or CRB, which had a revenue increase of 1% on an organic and constant currency basis as compared to the prior year fourth quarter.

Now, let's look at corporate risk and broking, or CRB, which had a revenue increase of 1% on an organic and constant currency basis as compared to the prior year fourth quarter.

Speaker 2: For the full year of 2021, HCRV revenue grew 5% organic.

For the full year of 2021, HC CRB revenue grew 5% organically.

Speaker 2: Our hiring levels are the highest in recent history and colleague departure levels at

Our hiring levels are the highest in recent history and colleague departure levels have decreased.

Speaker 2: North America's revenue was up by 4% in the fourth quarter, including gains recorded in connection with book of business sales and settlements. The book sales and settlements relate to producer departures occurring earlier in 2021.

North America's revenue was up by 4% in the fourth quarter, including gains recorded in connection with book of business sales and settlements.

Book sales and settlements related to producer departures occurring earlier in 2021.

Speaker 2: International revenue increased 10% compared to prior year. There was strong performance in M&A in Asia and Australia and natural resources in Eastern Europe . Latin America also contributed to international revenue growth with new business wins in Brazil and Central America.

Internationals revenue increased 10% compared to prior year. There was strong performance in M&A in Asia, and Australasia and natural resources in Eastern Europe .

In America also contributed to international revenue growth with new business wins in Brazil, and Central America.

Speaker 2: Great Britain's revenue declined 5% as a result of loss business and timing. The decline reflects the delayed impact of disruption from earlier in 2021.

Great Britain's revenue declined 5% as a result of loss business and timing.

The decline reflects the delayed impact of disruption from earlier in 2021.

Speaker 2: Revenue for Western Europe was down 5% due to the departure of senior staff prior to the deal termination, which continued to pressure the business in certain geographies.

Revenue for Western Europe was down 5% due to the departure of senior staff prior to the deal termination, which continued to pressure the business in certain geographies.

Although earlier departures have hindered our growth for several quarters. We are seeing some positive momentum new client wins include one of the largest commercial and retail bank in the region.

Speaker 2: Although earlier departures have hindered our growth for several quarters, we are seeing some positive momentum. New client wins include one of the largest commercial and retail banks in the region.

<unk> operating margin was 31, 2% for the fourth quarter compared to 32, 3% in the prior year fourth quarter.

Speaker 2: CRB's operating margin was 31.2% for the fourth quarter compared to 32.3% in the prior year fourth quarter.

Speaker 2: On a four-year basis, CRB's operating margin improved to 23.0% from 21.2% in the prior year.

On a full year basis, <unk> operating margin improved to 23, 8% from 21, 2% in the prior year.

Speaker 2: excluding the impact of currency and the benefit of book and business sales and settlements, the margin to climb 240 basis points for the fourth quarter, but increased by 80 basis points for the four years.

Excluding the impact of currency and the benefit of book and business sales and settlements the margin declined 240 basis points for the fourth quarter, but increased by 80 basis points for the full year.

The fourth quarter decline was mostly due to investments to support future growth.

Speaker 2: The fourth order to climb was mostly due to investments to support future growth.

Speaker 2: The full year margin expansion reflects the continuation of effective cost management.

The full year margin expansion reflects the continuation of effective cost management.

Crb's organic growth trailed industry expected averages for the last three quarters of 21% primarily as a result of elevated colleague departures and reduced hiring during the period when the business combination with pending two trends that we believe are now behind us.

Speaker 2: CRB's organic growth trailed industry expected averages for the last three quarters of 21. Primarily as a result of elevated colleague departures and reduced hiring during the period when the business combination was pending. Two trends that we believe are now behind

Speaker 2: Currently, we expect to see lower growth in the first half of 2022, compared to the second half of 2022 as the gap versus industry expected averages narrow.

Currently we expect to see lower growth in the first half of 2022 compared to the second half of 2022 as the gap versus industry expected averages narrows.

Speaker 2: While events in previous quarters have challenged us and temporary headwinds from those events remain, our outlook for CRB remains positive with mid-single digit revenue growth over the longer term.

While events in previous quarters have challenged us and temporary headwinds from those events remain our outlook for CRB remains positive with mid single digit revenue growth over the longer term.

Turning to investment risk and reinsurance or IRR revenue for the fourth quarter was $199 million, an increase of 32% on an organic basis and a decrease of 2% on a constant currency basis as compared to the prior year fourth quarter.

Speaker 2: Turning the investment risk and reinsurance or IRR, revenue for the fourth order was $199 million and increased of 32% on an organic basis and a decrease of 2% on a constant currency basis as compared to the prior year of fourth quarter.

Speaker 2: IOR revenue includes a game from a book of business settlement which relates to re-insurance assets that did not transfer in connection with the sale of Willis ring.

Our revenue includes a gain from a book of business settlement, which relates to reinsurance assets that did not transfer in connection with the sale of Willis re.

Speaker 2: IRR excludes all other revenue associated with the reassurance line of business, which has been reported as discontinued operation.

IRR excludes all other revenue associated with the reinsurance line of business, which has been reported as discontinued operations.

Speaker 2: It also excludes revenue from Max Matysen, which was sold in September of 2020, and Miller WTW wholesale, broking subsidiary sold in March of 2021. These sales accounts for the wide disparity between organic and constant current.

It also excludes revenue from <unk>, which was sold in September of 2020, and Miller Wdw's wholesale broking subsidiary sold in March of 2021.

These sales accounts for the wide disparity between organic and constant currency.

Okay.

Speaker 2: The insurance consulting and technology or ICT business where revenue was up 5%.

The insurance consulting and technology or ICT business, where revenue was up 5%.

Speaker 2: Blood dissegnets growth with increased demand for advisory work alongside technology sales.

Lead the segment's growth with increased demand for advisory work alongside technology sales.

Speaker 2: Our investment businesses grew revenue by 11 percent from new business, growth and delegated assets under management and to a lesser extent increased performance.

Our investment businesses grew revenue by 11% from new business growth in delegated asset under management and to a lesser extent increased performance fees.

Speaker 2: ILR's operating margin was 25.3% for the fourth quarter compared to 12.5% for the prior year fourth quarter.

Irr's operating margin was 25, 3% for the fourth quarter compared to 12, 5% in the prior year fourth quarter.

Speaker 2: On a four-year basis, IRR is operating margin improved to 19.5% from 14.5% in the prior year.

On a full year basis, Irr's operating margin improved to 19, 5% from 14, 5% in the prior year.

Speaker 2: Excuting the impact of currency and the benefit of book of business elements, the margin of client 240 basis points for the quarter, but increased by 220 basis points for the full year.

Excluding the impact of currency and the benefit of book of business settlement. The margin declined 240 basis points for the quarter, but increased by 220 basis points for the full year.

Speaker 2: The fourth quarter decline was primarily caused by the headwind created between the vestitures. The prior year fourth quarter margin includes the contribution of the now divested Miller subsidiary while the current year fourth quarter margin does not, which distorts comparability.

The fourth quarter decline was primarily caused by the headwind created from divestitures. The prior year fourth quarter margin includes the contribution of the now divested Miller subsidiary, while the current year fourth quarter margin does not which distorts comparability.

Speaker 2: Middle subsidiary was sold in March of 2021.

Miller subsidiary was sold in March of 2021.

Speaker 2: Before your emerging expansion was the result of careful cost management efforts combined with strong top-line growth from the two businesses that remain in IRR, ICT and industrial.

The full year margin expansion was the result of careful cost management efforts combined with strong topline growth from the two businesses that remain an IRR ICT and investments.

Turning to the benefits delivery and administration segment or BDA revenue increased by 5% on an organic and constant currency basis from the prior year fourth quarter the.

Speaker 2: Turning to the Benefits Delivery Administration segment or BDA, revenue increased by 5% on the organic and constant currency basis from the prior year-of-fourth quarter.

Speaker 2: The growth in revenue was largely driven by individual marketplace due to a favorable shift in the revenue timing for our B2B Medicare exchange business along with continued strength in our direct consumer business.

The growth in revenue was largely driven by individual marketplace due to a favorable shift in the revenue timing for our B to B Medicare exchange business, along with continued strength in our direct to consumer business.

Speaker 2: The benefits outsourcing business also contributed significantly to BDA's revenue growth with increased project work driven by temporary federal policy changes expecting group healthcare plans.

Our benefits outsourcing business also contributed significantly to Bda's revenue growth with increased project work driven by temporary federal policy changes expecting group health care plans.

Speaker 2: BDA's operating margin was 49.2% in the fourth quarter and 22.4% in the full year. Having declined year over year by 110 basis points and 150 basis points for respect.

Bda's operating margin was 49, 2% in the fourth quarter and 22, 4% for the full year, having declined year over year by 110 basis points and 150 basis points respectively.

The year over year margin decline for both the fourth quarter and the full year was the result of increased investing in resources for the 2022 annual enrollment period, coupled with headwinds on lead conversion.

Speaker 2: The year-over-year margin declined for both the fourth quarter and the fourth year was the result of increased investing in resources for the 2022 annual enrollment period coupled with headwinds on lead converts.

Speaker 2: The BDA segment has posted 10% organic growth for two consecutive years, and we continue to feel positive a lot of the momentum of this segment.

The BDA segment has posted 10% organic growth for two consecutive years and we continue to feel positive about the momentum of this segment.

Speaker 2: Overall, our financial results for 2021 are in line with our expectations, reflecting the complexity of navigating a significant strategic shift along with some bright spots, highlighting our path commitment to profitable growth.

Overall, our financial results for 2021 are in line with our expectations, reflecting the complexity of navigating a significant strategic shift along with some bright spots highlighting our commitment to profitable growth.

Speaker 2: I'm pleased to be effectively manage our cost and delivered margin expansion and adjusted EPS growth despite top line growth price.

I am pleased we effectively managed our cost and delivered margin expansion and adjusted EPS growth Despite topline growth crushers.

Speaker 2: In closing, I want to reiterate my gratitude to our colleagues and also thank our clients and shareholders for their support. I believe the company's wealth is issued to capitalize on the opportunities to play ahead. I look forward to reinvigorating growth and to successfully executing our transformation plans. I am confident the best is yet to come as we boldly look to lead and shape our industry going forward and with that I'll turn the call over to Andrew.

In closing I want to reiterate my gratitude to our colleagues and also thank our clients and shareholders for their support I believe the company is well positioned to capitalize on the opportunities ahead, I look forward to reinvigorating growth and to successfully executing our transformation plan I am confident the best is yet to come as we bolt.

Look to lead and shape, our industry going forward and with that I'll turn the call over to Andrew.

Speaker 2: Thanks Carl, good morning everyone. Thanks to all of you for joining us.

Thanks, Paul Good morning, everyone. Thanks to all of you for joining us as expected the fourth quarter performance faced headwinds from the delayed impact of disruptions from earlier in the year.

Speaker 2: As expected, the fourth quarter performance faced headwinds from the delayed impact of disruptions from earlier in the year.

Speaker 2: They reflect the challenges we've previously identified and are actively working to address. To that end, we continue to push forward with our strategic goals as we finished up the year and made some early progress on our transformation efforts. In the fourth quarter, we incurred restructuring charges totaling $26 million. From the actions taken in 2021, we expect to have annualized savings of 20 million, primarily from the reduction of real estate costs, the benefits of which will be recognized in 2022.

They reflect the challenges we've previously identified and are actively working to address to that end, we continue to push forward with our strategic goals as we finished up the year and made some early progress on our transformation efforts in the fourth quarter, we incurred restructuring charges totaling $26 million from the actions taken in 2021.

We expect to have annualized savings of $20 million, primarily from the reduction of real estate cost the benefits of which will be recognized in 2022.

Speaker 2: The 20 million gets us two thirds of the way towards our $30 million annualized run rate savings goal for 2022.

The $20 million gets us two thirds of the way towards our $30 million annualized run rate savings goal for 2022.

Speaker 2: For the full year of 2021, we generated profitable growth, increasing adjusted operating margins in 19.9% from 18% in the prior year.

For the full year of 2021, we generated profitable growth increasing adjusted operating margin to 19, 9% from 18% in the prior year.

Speaker 2: The adjusted operating margin expansion was comprised of 150 basis points of underlying growth stemming from financial discipline. This was coupled with around 100 basis points of growth from gains on book of business sales and settlement.

The adjusted operating margin expansion was comprised of 150 basis points of underlying growth stemming from financial discipline.

This was coupled with around 100 basis points of growth from gains on book of business sales and settlements par.

Speaker 2: partially offset by around 60 basis point headwind from prior to vestitures and effects.

Partially offset by around 60 basis point headwind from prior divestitures and FX.

Speaker 2: The expansion of our adjusted operating margin, despite top line growth pressures, highlights our dual commitment to growing profitably and focusing on cost management. As a result, we continue to expect margin improvement each year as we deliver on our 2024 margin goals. Now, I'll turn to the overall detailed financial results.

The expansion of our adjusted operating margin despite topline growth pressures highlights our dual commitments to growing profitably and focusing on cost management. As a result, we continue to expect margin improvement each year as we deliver on our 2024 margin goals now I'll turn to the overall detailed financial results.

Income from operations for the fourth quarter was $687 million or 25, 4% of revenue up from the prior year fourth quarter income from operations of $579 million or 21, 7% of revenue.

Speaker 2: Income from operations for the fourth quarter was $687 million or 25.4% of revenue up from the prior year fourth quarter income from operations of $579 million or 21.7% of revenue. Adjusted operating income for the fourth quarter with $868 million or 32.1% of revenue up 170 basis points from 812 million or 30.4% of revenue in the prior year fourth quarter.

Adjusted operating income for the fourth quarter was $868 million or 32, 1% of revenue up 170 basis points from $812 million or <unk>, 34% of revenue in the prior year fourth quarter.

For the fourth quarters of 2021, and 2020, our diluted EPS from continuing operations were $4 54, and $3 62, respectively for.

Speaker 2: For the four quarters of 2021 and 2020, our diluted EPS from continuing operations were $4.54 and $3.62, respectively.

Speaker 2: For the fourth quarter of 2021, our adjusted EPS was up 9% to $5.67 per share as compared to $5.19 per share in the prior year for the quarter.

For the fourth quarter of 2021, our adjusted EPS was up 9% to $5 67 per share as compared to $5 19 per share in the prior year fourth quarter.

Speaker 2: Further, discontinued operations represented a $14.64 cent loss on a deluded EPS basis for the fourth quarter of 2021, and a 4 cent on deluded EPS basis for the fourth quarter of 2020. Total deluded EPS, including both continuing and discontinued operations, increased to $19.19 for the fourth quarter of 2021, compared to the prior year fourth quarter of $3.66.

Further discontinued operations represented a $14.64 loss on a diluted EPS basis for the fourth quarter of 2021 and a four cent.

Diluted EPS basis for the fourth quarter of 2020 total diluted EPS, including both continuing and discontinued operations increased to $19 19 for the fourth quarter of 2021 compared to the prior year fourth quarter of $3 66.

Speaker 2: Foreign currency rate changes cause a decrease in our consolidated revenue of 19 million or 1% of revenue for the quarter compared to the prior year fourth quarter with a six-cent headwind to adjust the diluted earnings for share of this quarter.

Foreign currency rate changes caused a decrease in our consolidated revenue of $19 million or 1% of revenue for the quarter compared to the prior year fourth quarter with a <unk> <unk> headwind to adjusted diluted earnings per share this quarter.

Our U S GAAP tax rate for the fourth quarter was 28% versus 19, 5% in the prior year, our adjusted tax rate for the fourth quarter was 21, 1% up from the 17, 6% rate in the prior year. The increase was due to the geographic distribution of profits.

Speaker 2: Our US gap tax rate for the fourth quarter was 20.8% versus 19.5% in the prior year. Our adjusted tax rate for the fourth quarter was 21.1% up from the 17.6% rate in the prior year. The increase was due to the geographic distribution of profits.

Speaker 2: Turning to the ballot sheet, we ended the fourth quarter with a strong capital and liquidity position with cash and cash equivalents of $4.7 billion and full capacity on our undrawn $1.5 billion revolving credit facility. WTW remains well positioned from a liquidity perspective. We continue to have significant financial flexibility, which allows us to invest in transforming the company's operations to unlock growth potential while simultaneously returning capital to shareholders.

Turning to the balance sheet, we ended the fourth quarter with a strong capital and liquidity position with cash and cash equivalents of $4 7 billion and full capacity on our Undrawn $1 5 billion revolving credit facility.

<unk> remains well positioned from a liquidity perspective, we continue to have significant financial flexibility, which allows us to invest in transforming the company's operations to unlock growth potential while simultaneously returning capital to shareholders free cash flow, which includes discontinued operations was $1 9 billion in the year ended 2021.

Speaker 2: free cash flow, which includes discontinued operations, with 1.9 billion in a year ended, 2021 compared to 1.6 billion in the prior year.

Impaired to $1 6 billion in the prior year the.

Speaker 2: The increase in year over year free cash flow was due to the receipt of the termination fee, net of increased transaction immigration fees of $948 million. This was partially offset by net legal settlement payments of approximately $185 million for the previously announced Stanford and Willis-Tarris Watson merger settlements and higher compensation and benefit payments of approximately $250 million.

The increase in year over year free cash flow was due to the receipt of the termination fee net of increased transaction integration fees of $948 million. This was partially offset by net legal settlement payments of approximately $185 million for the previously announced Stanford and Willis towers, Watson merger settlements and higher compensation and benefit payment.

<unk> of approximately $250 million and $383 million of tax payments, primarily related to the disposal of Willis re absent. These items free cash flow would have been $1 8 billion up 15% versus the prior year.

Speaker 2: And 383 million attack payments primarily related to the disposal of village.

Speaker 2: Absent these items, free cash flow would have been 1.8 billion up 15% versus the prior year.

I want to point out that we made some changes to our statement of cash flows to reflect new guidance unrestricted cash presentation and FASB ASC 230.

Speaker 2: I want to point out that we made some changes to our state of cash flows to reflect new guidance on restricted cash presentation and FASB ASC 230. These changes consisted of revising the classification of WTW's for your Sure Fun balances on a consolidated statement of cash flows for the last three years. These revisions had no impact to our cash flow for operating activities or free cash flow metrics.

These changes consisted of revising the classification of Ww use fiduciary fund balances on our consolidated statement of cash flows for the last three years. These revisions had no impact to our cash flow from operating activities or free cash flow metrics in.

Speaker 2: In terms of capital allocation, we paid $374 million in dividends for the year ended December 31st, 2021, and repurchased $7.2 million shares for $1.6 billion.

In terms of capital allocation, we paid 374 million in dividends for the year ended December 31, 2021, and repurchased seven 2 million shares for $1 6 billion.

Speaker 2: We remain committed to deploying Active Capital and cash flow into share repurchases. As part of our in-depth investor day discussion, we communicated approximately 4 billion of near-term share repurchases and a willingness to fund further share repurchases using our free cash flow unless other investment opportunities with superior return potential arise.

We remain committed to deploying excess capital and cash flow into share repurchases as part of our in depth Investor day discussion, we communicated approximately 4 billion of near term share repurchases and a willingness to fund further share repurchases using our free cash flow unless other investment opportunities with superior return potential arise.

Speaker 2: At current price levels, we believe that repurchasing WTW stock continues to be our highest return opportunity, and we have significant resources to capitalize upon that. With 1.6 billion completed in 2021, and another 1 billion completed through today, the pace of our share repurchases highlights the conviction we have in the future of WTW and the plans we laid out at an investor day, despite the current headwind.

At current price levels, we believe that repurchasing Ww stock continues to be our highest return opportunity and we have significant resources to capitalize upon that with $1 6 billion completed in 2021, and another 1 billion completed through today the pace of our share repurchases highlights the conviction we have in the future of Ww.

And the plans we laid out at Investor day. Despite the current headwinds we expect to conclude the remainder of the roughly 4 billion of repurchases as expeditiously as practical depending on market conditions and other factors at.

Speaker 2: We expect to conclude the remainder of the roughly 4 billion of repurchases as expeditiously as practical, depending on market conditions and other facts.

Speaker 2: At our investor day, we also announced our plan to streamline the structure of our organization by changing from four segments to two segments, effective January 1st, 2022. We are now operating under that new structure with just two segments, risk and broken, and help wealth and career. Accordingly, going forward our financial reports, supplemental disclosures, and related commentary will reflect our new structure.

At our Investor Day, we also announced our plans to streamline the structure of our organization by changing from four segments to two segments effective January one 2022.

We are now operating under that new structure with just two segments risk and broking and health wealth and career accordingly going forward, our financial reports supplemental disclosures and related commentary will reflect our new structure.

Our 2021 financial results are a reflection of our resilience and our focus on strategic priorities. Although we have had near term business challenges, we have undeniably strong assets, which gives me confidence in our ability to continue driving value for our stakeholders. There is a lot of opportunity ahead, and we remain focused on executing our strategy and setting the path for sustainable success.

Speaker 2: Our 2021 financial results are a reflection of our resilience and our focus on strategic priorities. Although we have had near-term business challenges, we have undeniably strong assets, which gives me confidence in our ability to continue driving value for our stakeholders. There is a lot of opportunity ahead, and we remain focused on executing our strategy and setting the path for sustainable success. And now I'll turn the call back to Carl. Thanks, Andrew. And now we'll take your questions.

Yes.

And now I'll turn the call back to Karl Thanks, Andrew.

Now we will take your questions.

Speaker 1: At this moment to ask a question, please press star one on your telephone and to withdraw your question. Just press the pound key. Once again, that's the star one for questions. Star one.

At this moment to ask a question. Please press star one on your telephone to withdraw your question press pound key once again Thats Star one quick questions number one.

One more quick questions.

Speaker 1: Our first question will come from line of Greg Peters from Raymond James. You may begin.

Our first question will come from the line of Greg Peters from Raymond James You May begin.

Good morning, everyone.

Speaker 2: I want to first focus in on the organic revenue result. And more importantly, I am looking at your slide deck slide 11.

I wanted to first focus in on the organic revenue.

<unk> and more importantly, I'm looking at your slide deck Slide 11, where you talk about your expectation of delivering mid single digit organic revenue growth for <unk>.

Speaker 2: We talk about the expectation of delivering mid-single-digit organic revenue growth for 22. If I were to read the TLE's, getting the most pushback on the results for last year driven by the unusual book sales and other anomalies going through it. So...

'twenty two.

If I were to read the tea leaves getting the most pushback on the results for last year, driven by the unusual book sales and other anomalies going through it so Carl and Andrew maybe you could give us a little bit more color on why you think youre going to be able to produce.

Speaker 2: Carl and Andrew, maybe you could give us a little bit more color on why you think you're going to be able to produce, you know, a mid-single digit organic revenue result for the full year and it certainly seems like.

Mid single digit organic revenue results for the full year and it certainly seems like.

Speaker 2: The risk and broken will have some headwinds at least in the first half of the year. So Some additional color that would be helpful

The risk and broking will have some headwinds at least in the first half of the year. So.

Some additional color there would be helpful.

Speaker 2: Sure Greg, and thank you and good morning. So a couple points, I guess, we're expecting, as we said, mid-singles, digit, organic, revenue growth for the company. And we're not giving segment level guidance on that. There are a few clarifying points I think we can.

Sure, Greg and thank you and good morning.

A couple of points I guess, we're expecting as we said right mid single digit organic revenue growth for the company and we're not giving segment level guidance on that.

Clarifying point I think we can be.

Speaker 2: We do think CRB is going to continue to gain traction throughout the year. I mean events in prior quarters have challenged us and there are definitely temporary headwinds from those events that remain. We're highly competent in our hiring strategy. We've indicated before that hiring proceeds revenue when it comes to people. With that in mind, when we look at what's required, we think the broken business during the next two quarters will build the acceleration and we'll be seeing the gap narrow with CRB peers in the second half of the year.

We do think CRB is going to continue to gain traction throughout the year right I mean events in prior quarters have challenged us and they are definitely temporary headwinds from those events that remain we're highly confident in our hiring strategy. We've indicated before that hiring precedes revenue when it comes to people and with that in mind, when we look at whats.

<unk>, we think the broking business during the next two quarters will build building acceleration and we'll be seeing the gap narrow with CRB peers in the second half of the year.

Speaker 2: And for the remaining two thirds of the company, we think a little performed, but peer levels are better. Right? I think the comments about CRB, which, you know, it is a major part of our business, does leave out the two thirds or so of the rest of the company. And though we're not providing detailed by segment, overall market tailwind should continue to drive organic growth momentum in the HCB, soon to be former, as we'll talk about, right? HCB and BDA businesses.

And for the remaining two thirds of the company, we think <unk> performed with peer levels are better right the comments.

Both CRB, which it is a major part of our business does leave out the two thirds or so for the rest of the company and we're not providing detailed by segment overall market tailwind should continue to drive organic growth momentum in the HCP. The soon to be former as we'll talk about Wright HCP and BDA businesses, where we have.

Speaker 2: where we have a terrific portfolio for related businesses helping organizations and individuals in the most important areas of health, wealth and career.

Terrific portfolio of related businesses, helping organizations and individuals in the most.

Important areas of health wealth and career.

Speaker 2: So, yeah, I think our strategy remains very much in line with the strategy and financial perspective of the we outlined that our investor day in the fall.

Yes, I think our strategy remains very much in line with the strict.

And financial perspective that we outlined at our Investor day in the fall.

Carl on that and then answer you highlighted hires maybe you could just give us some additional color on the hires versus.

Speaker 2: Carl, in an answer, you highlighted hires. Maybe you could just give us some additional color on the hires versus what we had transpired last year, which was a lot of departures.

What had transpired last year, which is a lot of departures.

Speaker 2: Yeah, so I'll focus in on CRB MX, because I think that's where a lot of the focus and the questions were from the prior quarter on that.

Yes, so ill.

Focusing on CRB on that because I think that's where a lot of the focus and the questions were.

Higher quarter on that so we are keeping a very close eye on those areas and we acknowledge that we have a lot of work before us but here are some things, we say about our view that things are going into right direction.

Speaker 2: So we are keeping a very close eye on those areas and we acknowledge that we have a lot of work before us, but here are some things we say about our view that things are going in the right direction.

Speaker 2: Our incentive plan activity regarding retention, completed in Q4 was very well received, and we are very encouraged by what we can say. We've seen colleague departures trend downwards since Q3 in CRB.

Our incentive plan activity regarding retention completed in Q4 was very well received and we are very encouraged by what we can say we have seen colleague departures trend downwards since Q3 and CRB.

Speaker 2: You know, we do see that colleagues departures and we are closely monitoring this data, right? Our have been slowing down since Q3 for CRB and that trend makes us optimistic we are heading in the right direction. And joiners are positive.

We do see that colleague departures and we are closely monitoring this data radars have been slowing down since Q3 for CRB and that trend makes us optimistic we are higher heading in the right direction and joiners are positive as I mentioned in our prepared remarks, we've been hiring we've built an investment headroom to continue to execute on our hiring.

Speaker 2: As I mentioned, our prepared remarks we've been hiring. We built an investment headroom to continue to execute on our hiring strategy into 22.

Strategy into 'twenty two.

Speaker 2: In CRB specifically in Q4 we had the highest net positive rate in terms of joiners outnumbering levers amongst all of our segments.

CRB specifically in Q4, we had the highest net positive right in terms of joiners outnumbering leavers amongst all of our segments and then looking at the data. That's just come out January is our biggest hiring month in CRB over the last two years at all levels, including senior hires.

Speaker 2: And then looking at the data that's just come out January's our biggest hiring month and CRB over the last two years at all levels including senior hire

Okay. Thanks for that color I guess the final question would be just as you're hiring bringing.

Speaker 2: Thanks for that color. I guess the final question would be just as you're hiring, you're bringing in new people, there's a lag between...

Bringing in new people, there's a lag between.

Speaker 2: you know, the time they hit the books and hit the P&L statement from an extents standpoint to the time they're actually producing and generating revenue. And you know, depending on the situation that lag can be up to over a year.

At the time, they hit the books and hit the P&L statement from an expense standpoint to the time, they are actually producing and generating revenue.

And depending on the situation that lag can be up to over a year. So I guess, what I'm ultimately getting at is you're making these investments and yet you're also forecasting adjusted margin expansion for the full year 'twenty. Two so I'm just trying to reconcile the investment piece, which seems to be <unk>.

Speaker 2: So I guess what I'm ultimately getting at is you're making these investments in yet easier, you're also forecasting adjusted margin expansion for the full year, 22. So I'm just trying to reconcile the investment piece which seems to be necessary versus your expectation for adjusted margin.

As Gerry versus your expectation for adjusted margin improvement.

Speaker 2: We agree with the fact that revenue trails hiring. And we've allowed for that in what we think is the timing of how this is gonna work out, right? I mean, we think that if we're successful, it's gonna show in the financial results that the paths were on. And that's one of the reasons we expect to see lower growth in CRB in the first half compared to the second half of the gap to industry, you know, narrow.

And we agree with the fact revenue trails hiring and we've allowed for that in what we think of the <unk>.

<unk>.

It's going to work out right I mean, we think that if we're successful it's going to show in the financial results. That's the path we're on.

And that's one of the reason, we expect to see lower growth in CRB in the first half compared to the second half as the gap to industry.

Narrows.

Speaker 2: Yeah, Gregus Andrew. And on the margin point, or at the margin expansion, is for the entire company, right? And the revenue, I think that you've been asking about and the investment hiring is particular or more focused on one segment. Got it.

Greg It's Andrew.

On the margin point or the margin expansion for the entire company right and the revenue I think that you've been asking about it and the investment hiring has been a particular to or more focused on one segment.

Got it I'll, let others ask questions. Thanks.

Thanks, Greg Thanks, Greg.

Speaker 1: Our next question is offline, Mike Zorantzky from Wolf Research. Give it a go.

Our next question comes from the line of Mike Zaremski from Wolfe Research you may begin.

Speaker 3: Hey, good morning. Question on the HCB segment. I, you know, last quarter, I think this quarter to you talked about continued momentum expected there. I think, you know, revenue growth is a little bit light. Maybe you can talk through maybe unpack. I know you called out some capacity constraints and I see that you also called out retirement.

Hey, good morning.

Question on the.

The HCP segments.

Last quarter I think this quarter too you talked about.

<unk> momentum expected there.

I think revenue growth is a little bit light maybe you can.

Talk through maybe unpack I know you called out some.

Some capacity constraints and I see that you also called out retirement.

Speaker 3: being slightly negative. Is there any kind of one-time-ish items or anything we should be thinking about?

Being <unk>.

Slightly negative.

Are there any any kind of onetime ish items or anything we should be thinking about thank you.

Yes, So let me start with retirement that will back up to the capacity issues and the other businesses.

Speaker 2: Yeah, so let me show you the retirement that will back up to the capacity issues and the other businesses. So, our look for retirement, which is a large business for us, right? It's positive. I mean, healthy pension funding positions, as a result of interest and equity market movements during 2021, provide good opportunities for a de-risking and bulk lump sum work in North America.

So our outlook for retirement.

Which is a large business for us right.

I mean healthy pension funding positions.

<unk> interest and equity market movements during 2021 provide good opportunities for de risking in bulk lump sum work in North America.

Speaker 2: With respect to GB, which is a big business for us as well, right? The trend for risk transfer from company sponsored pension schemes to the insurance sector is expected to continue. And our view is that 2022 is going to be a good year for de-risking because of the healthy funding that there's already alluded to. It also depends on pricing. There's more activity when bulk annuity or longevity pricing is particularly good.

With respect to GB right, which is.

A big business for us as well right the trend for risk transfer from company sponsored pension schemes to the insurance sector is expected to continue and our view is that 2022 is going to be a good year for de risking because of the healthy funding decisions I've already alluded to.

It also depends on pricing there is more activity when bulk annuity or longevity pricing is particularly good.

Speaker 2: and availability of assets that offer decent yield and then that insurance sale can back in the way we'll also sort of get all that 2021 so about 43 billion sterling of bulk in the and longevity swap transactions completed We think that the number is going to increase to exceed 55 billion for 2022 that would be the biggest year ever and we are well positioned to capture the significant share of this market increase activity

And availability of assets that offer a decent yield and then that insurance deal can back annuity will also sort of get all that 2021 to about 43 billion Sterling of bulk annuity and longevity swap transactions completed we think that number is going to increase to exceed 55 billion for 2022 that would be.

The biggest year ever and we are well positioned to capture significant share of this market increased activity.

Speaker 2: On the other hand, when he had an environment like this, we give less advice on funding issues, because there's fewer funding issues to be had when pension schemes are well funded. And then we have some initiatives going. So our need to work to address guaranteed minimum pensions continued as does momentum for our lifestyle product. We discussed in September at our 1DB office.

On the other hand, when you haven't environment like this we give less advice on funding issues, because there's fewer funding issues to be headwinds pension schemes are well funded.

And then we have some initiatives going to our.

Need to work to address guaranteed minimum pensions continued as does momentum for our lifestyle product, we discussed in September and our <unk> offering.

In North America.

Bulk lump sum activity has been more muted the last several years and as a result of the activity. We've had there is probably less potential volume going forward. We do expect an increase in Pos activity over 2021, but this is really dependent on what happens with interest rates over the next few months.

So we will see but there are there are definitely opportunities and the derisking marketplace, where we have a very good position.

Speaker 2: With respect to some of the fantastic constraints I was alluding to before, these are most pronounced in our talent and rewards business, which has a large share of project-oriented revenue, although we have a nice mix of revenue when it comes to things like comps surveys as well. We have just as we have been for hiring in CRB, addressing the T and R hiring issue as well, and we think that will give us the opportunity to capture market.

With respect to some of the.

Pasty constraints I was alluding to before these are most pronounced in our talent and rewards business.

Each has a large share of project oriented revenue, although we have a nice mix of revenue when it comes to things like comp surveys as well we have just as we have been for hiring.

CRB.

Dressing the T and our hiring issue as well and we think that will give us the opportunity to capture market as we go forward.

That's helpful and maybe as my follow up switching gears to free cash flow levels.

Speaker 3: That's helpful. Maybe as my follow-up switching gears to free cash flow levels.

Speaker 3: you broke out uh... 250 million of incentives and benefit related items negatively impacted free free cash flow for the year that that kind of group quarter of a quarter are are those

You broke out $250 million of incentives and benefit related items negatively impacted free cash flow for the year.

<unk> grew quarter over quarter.

Are those.

Speaker 3: Those items can fall off in 22 and have you broken out the free cash impact of maybe one time items related to the cost-cutting measures you're taking. Thank you.

Those items going to fall off in 'twenty, two and have you broken out the free cash flow impact of maybe one time items related to the cost cutting measures you are taking thank you.

Speaker 2: Yep, we do expect those numbers to evade going forward. And I think the second part of your question was around the transformation spend. Is that correct? Iraqi. Yeah, so that didn't catch.

Yes, we do expect those numbers to abate going forward.

And I think the second part of your question it was around the.

Congrats formation spend is that correct.

Yes.

Cash.

Yes, yes, it will impact cash and Thats something that we.

Speaker 2: Yes, it will impact cash and that's something that, you know, will be broken out as we continue to report on that program separately.

Will be broken out as we continue to report on that.

Program separately.

Yes.

Thank you.

Okay.

Our next question comes from Brian .

Speaker 1: The product's special afternoon of Michael Phillips from Morgan Stanley . You may begin.

Michael Phillips from Morgan Stanley you may begin.

Speaker 4: Thanks, good morning. Carl, I want to go back to, I guess the first couple of questions on recruiting if I could on CRB. Could you say how close you are today with kind of where you want to be with just the absolute level of producers in that segment?

Thanks, Good morning call I want to go back to I guess, the first couple of questions on recruiting if I could on CRB could you can you say how close you are today with kind of where you want to be with just the absolute level of producers.

In that segment.

Speaker 2: We've made good progress, but we continue to search for good talent around the world. We think can be great fits for the organization and can help us grow. So to the extent we can find those, whether it's in one-offs or in bigger chunks, we're definitely on the look. So as I said, happy with the progress, but it is a journey.

We've made good progress, but we continue to search for good talent around the world. We think can be great fits for the organization and can help us grow.

So to the extent, we can find those so whether it's in one offs or bigger chunks.

Definitely.

Look.

So as I said happy with the progress, but it is a journey and.

Speaker 2: Yeah, part of this is getting us back to where we were and part of this is sort of looking toward our growth ambitions for our company over the next several years.

Part of this is getting us back to where we were in part of this is to some looking toward our growth ambitions for our company over the next several years. So we're definitely continuing to remain in the market.

Speaker 2: So we're definitely continuing to remain in the market.

Speaker 4: Okay, thanks. I mean, I kind of follow up on that. I'm excusing follow up on that. Then I guess is, you know, recruiting efforts are difficult across the board and the industry. So, you know, you're not alone there, but it seems like it might be more difficult for a company that's gone through some turmoil. So anything you can share on me, for me, you might have to pay or you pay in 20, 30, 40%, 30% for you to get people in the door versus what you normally would have to pay.

Okay. Thanks, I mean kind of a follow up on that excuse me follow up on that then I guess as recruiting efforts are difficult across the board in the industry. So.

That alone there but.

It seems like it might be more difficult for a company that's gone through some turmoil. So anything you can share on any premium might have to pay are you paying 2030, 40% premium to get people in the door versus what you'd normally would have to pay.

I don't think we pay any premium compared to what anybody else does if anything I think.

Speaker 2: I don't think that we pay any premium compared to what anybody else does. If anything, I think our new strategy is resonating with people in the market. They're actually excited about the fact that WTW is considered an independent company with very determined ambitions in the marketplace going forward. So the conversations we've been having with the talent we're attempting to put in very positive in nature.

Our new strategy is resonating with people in the market. They are actually excited about that.

WWE <unk> independent.

Company with a very very determined.

And ambitions in the marketplace going forward.

So the conversations we've been having.

With talent, we're attempting has been very positive in nature.

Speaker 2: And we're delighted our clients and our carrier partners and the talent out there. She's be voting for the strength and viability of us as an employer of choice.

And.

We're delighted our clients and our carrier partners and the talent out there seems to be voting for.

Strength and viability of us as an employer of choice.

Okay. Thank you I appreciate it.

Speaker 1: Our next question will come from Lionel Lee's Green Spin from World's Fargo. You may begin.

Our next question comes from the line.

Elyse Greenspan from Wells Fargo, you may begin.

Hi, Thanks, Good morning, My first question.

Speaker 5: I think good morning. My first question goes back to some of your opening comments. You said the results aligned with your expectations. And it does seem I want to focus first on CRB. It does seem like the slowdown in revenue right got worse this quarter. So I just, you know,

It goes back to some of your opening comments you said the results align with your expectations.

And it does seem I wanted to focus on.

First on CRD does seem like the slowdown in revenue right.

Worse this quarter.

<unk>.

Speaker 5: I realize that I guess that was in line with your expectations. Could you help us think through your expectations from here? How do we think about the growth trending in the first half of the year, relative to the 1% that I imagined was lower, right? F-thousand book of business gains. And you just help us think about the stress between the growth within us.

Realizing that I guess that was in line with your expectations could you help us think through your expectation from here, how do we think about the growth.

Trending.

First half of the year relative to the 1% that I imagine with the lower right ex out the book of business gains.

Can you just help us think about the growth within that segment.

Yes, so I mean, the flip side of <unk>.

Speaker 2: Yeah, I so I mean the flip side of you know, revenue increases lagging higher. As we discussed a couple of questions ago is that revenue decreases from people leaving right don't occur immediately either, right dude.

Revenue increases lagging hiring.

As we discussed.

A couple questions ago is that revenue decreases from people, leaving right don't occur immediately either due to the renewal cycle et cetera. So it wasn't it wasn't the numbers for the fourth quarter Workday surprised to Andrew being in fact, I think we discussed when we thought they were going to be.

Speaker 2: renewal cycle, etc. So it wasn't, you know, the numbers for the fourth quarter were they surprised to enter me. And in fact, I think we discussed from, we thought they were going to be for the company. And, you know, I think we definitely had our

For the company.

We definitely had our.

Speaker 4: Fingers on the pulse and we think we've got our fingers on the pulse going forward as well in terms of the fact that the people we've been bringing in over the past few months will indeed take some time to ramp up.

Fingers on the pulse and.

We think we've got our fingers on the pulse going forward as well in terms of the fact that the people we've been bringing in over these past few months, we will indeed take some time to ramp up.

Speaker 2: We've built that into how we view our financial model going forward and We think we can continue to grow this business while maintaining our path on margins to get to our 2024 targets, right? We we are trying to balance a set of competing objectives and we very much have all those objectives in mind as we look how to build this

Built that into how we view, our financial model and going forward.

And we think we can continue to grow this business, while maintaining our path on margins to get to our 2024 targets very well.

<unk>.

We are trying to balance a set of competing objectives and we very much have all of those objectives in mind as we look to how to build the business.

And then in terms of the book of business gains on a calculated that was probably around two 5% on revenue in the quarter. If you can confirm that.

Speaker 5: And then in terms of the book of business gains, I calculated that was probably around two and a half percent on revenue in the quarter. If you can confirm that, assuming that it's all 100% margin. And then my second question would be, when you guys say mid single digital greater or data for 2022, does that assume any further gains on book of business?

Assuming that it's all 100% margin and then my second question would be when you guys say mid single digit or greater organic for 2022 does that assume any any further gains on book of business.

Yes, sure. So your math on the revenue calculation is about right.

Speaker 2: Yep, sure. So your math on the review calculation is about right. And in terms of expectations around book of business sales, I think was your second question.

And in terms of expectations around book of business sales I think was your second question.

Yes is that right, yes, yes.

Speaker 2: Yes. Is that right? At least. Sorry. Yes. Yeah. So, you know, we expect to be, you know, over time, reverting to more normalized levels. And if you look back over the last couple of years, you can see what that looks like. We don't anticipate or expect anything, you know, near the level from 2021.

Yes so.

We expect to be overtime reverting to more normalized levels and if you look back over the last couple of years, you can see with that with that looks like.

We don't anticipate or expect anything near the level from 2021.

Speaker 5: And then, this is a tension in come for 2022. I know you gave us a year-to-year decline, but what's the overall pattern that you guys expect in 2022?

And then.

Thanks, Jim.

For 2022, I know you gave us year over year decline, what's the overall.

Are you guys expecting on Youtube.

Okay.

Speaker 2: Yeah, I don't think we're getting into that level of granularity on the direction, on the quantum of changes in the pension income.

Yes, I don't think were going to get into that level of granularity on the direction on the quantum.

Of changes in the pension income.

Yes.

Okay.

And then you've got the $20 million.

Oh, sorry.

Sorry.

Go ahead.

Sorry, I was just referring at least to slide 11, which which.

Speaker 2: Sorry, I was just referring at least to slide 11, which talks about the 20 million year of year decline in pension and not cash pension income for 2022.

Talking about the $20 million year over year decline in pension and noncash pension income for 2022.

Speaker 1: And in the interest of time, please them yourself to one question. That way all our participants can ask a question. Our next question will be from the line of Paul Newsom from Piper Sandler. You may begin.

In the interest of time, please limit yourself to one question that went on our participants can ask the question. Our next question will be from the line.

Newsome from Piper Sandler you may begin.

Speaker 6: I go one very quick and maybe a real question. But the follow up to at least the book of business elements is that pure profit? Is there any really the expenses? And I just want to see if you had any update view on the debt structure perspective given how much to stock your problem.

Okay.

One very quick.

The real question.

The follow up to lease the book of business settlements is that pure profit is there any expenses.

I just wanted to see if you had any updated view on.

The debt structure.

Just given how much.

Thank you probably going to be repurchasing.

Speaker 2: Yeah, so I think the first part of your question was around the folk of business margin, essentially, yes. There are some expenses that do get put against that, but it is relatively, relatively high margin.

Yes, So I think the first part of your question was around the book of business margin essentially yes. There are some expenses that do get put against that but it is relatively relatively.

A relatively high margin.

Speaker 2: And your second question was on debt structure and share repurchases in the line of the share rep. Yeah, yeah. So in terms of leverage, I think we're very comfortable with where we are. It's in line with the discussions we've had with the rating agencies. And we think it allows us to maintain appropriate financial flexibility to be able to take advantage of anything that may come our way, whether it's peer repurchases or something strategic.

And your second question was on <unk>.

Debt structure and share repurchases in the lineup sure yeah, yeah. So in terms of leverage right I think we're very comfortable with where we are.

In line with the discussions we've had with the rating agencies and we think.

It allows us to maintain appropriate financial flexibility to be advantaged to be able to take advantage of anything that may come our way, whether its share repurchases or something strategic.

Yeah.

Speaker 1: Thank you. Our next question will come to line of David Motomatton from Evercore ISI. You may begin.

Thank you. Our next question comes from the line of David Maura Madden from Evercore ISI you may begin.

Hi, Thanks.

Speaker 7: Hi, thanks. Carl, I had a follow up just on head count. I think in the last quarter, you talked about the core CRB head count was down 100 people, 3Q21 versus 3Q20. What was that in the fourth quarter? And I guess how has that been trending in the first part of the first quarter this year?

I had a follow up just on <unk>.

Just on on head Count I think in the last quarter, you talked about the core CRB.

Head count was down 100 people through.

<unk> 21 versus <unk> 20.

What was that in the fourth quarter and I guess, how how has that been trending in the first half or first first part of the first quarter of this year.

Speaker 2: Yeah, so from the fourth quarter, joiners exceeded levers by a decent margin. So headcount is now up. And as I look to January writes, our best but for hiring in, you know.

Yes, so for the fourth quarter head joiners exceeded leavers.

By a decent margin so head count is now up and as I alluded to in January rates, our best booked for hiring.

Quite a while a couple of years alright. So.

Speaker 2: So we're making back for lost time and opportunity, I think, in terms of the overall head cut.

We're making back.

For lost time, an opportunity I think in terms of the overall head count.

Thank you. Our next question will come from the line of Ryan Tunis from.

Speaker 1: Thank you. Our next question on conflina, Ryan Tunex from Automat, Economist Research. You may begin.

Economists research you may begin.

Hey, Thanks, good morning.

Speaker 6: Hey, thanks. Good morning. One on BDA, growth of total solar and expected there, this quarter trans act was only up about 2, 3%.

One on BDA growth of total a slower than expected there this quarter transact was only up about two 3%.

Speaker 6: Do you think that the structural growth rate of that business has changed at all as we approach 2022 and just curious if you could talk to some of the trenders?

Do you think that the structural growth rate of that business has changed at all as we.

Approach 2022, and just curious if you could talk to some of the trends you're seeing.

Speaker 2: I mean, the overall market transact operation is big and keeps increasing as people keep turning 65. So we're very happy about the overall market and transactability to expand within it.

Yes, I mean, the overall market transact operates in is big and keeps increasing as people keep turning 65.

So we're very happy about the overall market and transact <unk> ability to expand within it.

Neil.

If you look at our performance during.

Speaker 2: If you look at our performance during 2021, it's low in the reuse to see, but we're still really just excited about trans-ex products. I mean, if you take a step back, I look at trans-ex on a full-year basis when, you know, they...

2021.

There are slower than we're used to seeing but were still really just excited about <unk> prospects. I mean, if you take a step back and look at transact on a full year basis.

Speaker 2: 661 million of revenue and 17% organic growth. And if you look at our original projections, we supplied when Trans Act first joined WTW. Their current revenue figures are a full year ahead of what we anticipated. And by no means does a growth and light performance here in the EF bottled still get an income income tax.

$661 million of revenue and 17% organic growth and if you look at our original projections, we would supply when transact first joined Ww.

Their current revenue figures or a full year ahead of what we anticipated and by no means does.

Both with light performance in Q4 change that.

Speaker 2: Yeah, to speak to Q4 specifically, it is true that it was a lower court than we anticipated. And this was largely due to some advertising and programs generating lower leads and diversions than planned. Obviously, these are investments that were made so we didn't realize the results that were expecting. It did impact the bottom line in the margin.

To speak to Q4, specifically it is true that it was a lower quarter than we anticipated and this was largely due to some advertising and programs generating lower leads and diversion and planned.

Obviously these are investments that were made that suites, we didn't realize the results. They were expecting it did impact the bottom line and the margin.

Speaker 2: As we head into 2022, the team is conducted a review and we're implementing strategies across all our carrier partners to improve member experience, which will help maintain membership. And therefore, we continue to remain confident in transactions, do have high expectations.

As we head into 2022. The team has conducted a review and we're implementing strategies across all of our carrier partners to improve member experience, which will help maintain membership and therefore, we continue to remain.

Then in transact and do have high expectations for this business.

Yeah.

Speaker 1: Our next question will come from Ryan at Mark Hughes from Truist. You may begin.

Our next question will come from the line of Mark Hughes from <unk> you may begin.

Speaker 4: Yeah, thank you. I'm sticking with the transact. Anything you just saw in terms of lapse rates, just turn over in terms of your...

Yes. Thank you Ed sticking with the transact anything that you saw in terms of lapse rates turnover in <unk>.

Terms of.

Your customer base.

Yeah.

I think everything that we saw in that business.

Speaker 2: I think everything that we saw in that business, yeah, it's Andrew, sorry. I think everything that we saw in that business was consistent with our expectations and nothing there that was a real outlier. But of course, it's something that we always keep an eye on as we watch the book develop.

Yes, it's Andrew sorry, I think everything that we saw in that business was consistent with our expectations and nothing there that was a real outlier but of course, it's something that we always keep an eye on as we as we watch the book.

<unk>.

Yeah.

Our next question comes from the line of your own Qunar from Jefferies. You may begin.

Speaker 1: Our next question on the line of your own canar from Jeffries may begin.

Speaker 4: Hi, good morning, thanks for taking my questions. My first question is around the combat benefit ratio, which improved about 400 races points here over here. Can we maybe talk about the main drivers for that improvement? And how you see that ratio develop into 22 as the hires come in?

Hi, Good morning, Thanks for taking my questions. My first question is around the comp and benefit ratio improved about 400 basis points year over year can you maybe talk about the main drivers for that improvement and how you see that ratio develop into 'twenty two is the highest.

Yes, I think a part of the trend that youre seeing there in comp and Ben might be related to the impact of some attrition right.

Speaker 2: yep i think i part of the trend that you're seeing their income and then you know might be related to uh... the impact of some attrition uh... right and colleague retention over time uh... and you know i think the other the other thing we point out is just the

Colleague retention over time.

And I think the other the other thing we pointed out is just the.

Speaker 2: you know the the mix of pay that we have with regard to discretionary compensation right provides us uh... you know with the appropriate tools to make sure that uh... you know employees and and everybody else are compensated you know along with the for the firm performance

The mix of pay that we have with regard to discretionary compensation rate provides us.

With the appropriate tools to make sure that.

<unk> and everybody else are compensated along with the.

Firm performance.

Yeah.

Yeah.

Our next question comes from the line of Meyer Shields from <unk> you may begin.

Speaker 4: Next question, Councilor Lyon of Myersheelbs from KBW. You may begin. Oh, great. Thanks. Two quick ones if I can. First, I'd like to appreciate all of the disclosure you've given us on the book sales and settlement. If I take any comments about 100 basis point impact for the full year, then it applies about 13 million. What's a normal runway? In other words, what do you budget for that?

Great. Thanks, two quick ones, if I can first.

I appreciate all of the disclosure you've given us on the book sales and settlements.

I take Andrew's comments about 100 basis point impact for the full year that implies about $113 million, what's a normal run rate in other words, what do you budget for that.

For a typical year.

Speaker 2: Yeah, I walk it into the specifics around budgeting, but if you go back and take a look over recent history and go back a couple of years or quarters, you can see some of that in the disaggregation of revenue footnotes that are provided. You know, more normalized levels are significantly less than what we experienced in 2021.

Yes.

I'll get into the specifics around budgeting, but if you go back and take a look over.

Recent history and go back a couple of years or quarters, you can see some of that and the disaggregation of revenue footnotes that are provided.

More normalized levels are significantly less.

And what we experienced in 2021.

Okay.

Speaker 4: We think that the retention measures we put in should be effective in getting it.

And we think that the retention measures we put in.

It should be effective in getting us to those normalized levels.

Thank you.

Speaker 1: Thank you. And our next question on Confilign of Brian Meredith from UBS, you may begin.

Next question comes from the line of Brian Meredith from UBS, you may begin.

Speaker 8: Yeah, thanks. Take a call just quickly here. Just curious, how are you balancing the cost saves that are going through versus the need for you guys to really invest in your business, particularly CRB, not only hiring, but just invest to get this organic growth going. And then also what impact is wage inflation potential you're gonna have on kind of offsetting maybe some of those cost saving.

Yeah. Thanks, Hey, just quickly here I was just curious how are you balancing the cost saves that are going through versus the need for you guys to really invest in your business, particularly CRB not only hiring but just invest against organic growth going and then also what impact is wage inflation potentially going to have.

Offsetting maybe some of those cost savings.

Speaker 2: All right, so we expect a wage inflation, right? I mean, we have built a compensation program that is a bit more weighted towards variable than others. And I think that does help us with the able to manage this effectively as a business.

All right so with respect to wage inflation right. I mean, we have built a compensation program that is a bit more weighted towards variable.

Than others, and I think that does help us be able to manage this effectively as a business.

Speaker 2: I also point to one of the pillars of our program is capitalizing our scale to move back office work to centers excellence that we think will improve client and colleague experience and outcomes, but it should also allow for relief on the cost pressures that we might have in an inflationary market. So there's a good deal of alignment, I think, between the transformation strategy and our ability to respond flexibilities of business to inflationary pressure.

I'd also point to.

One of the.

The pillars of our program is <unk>.

Capitalizing our scale to new move back office work to centers of excellence that we think will improve client and colleague experience and outcomes, but should also allow for relief on the cost pressures that we might have an inflationary market.

So there's a good deal of alignment I think between the transformation strategy and our ability to respond flexibility as a business to inflationary pressures.

Speaker 1: My next question comes from Linda Mark Marken. From there, you may begin.

Our next question it sounds line of Mark Marcon from Baird you may begin.

Speaker 7: Good morning and thanks for taking my question. With regards to this, the comp and benefit.

Good morning, and thanks for taking my question.

With regards to this.

Comp and benefits.

Speaker 7: Can you just discuss how we should think about that on a more normalized basis? Obviously, the last half of 2021 was impacted by the departures. If you're implementing the plan and assuming that variable compensation is roughly in line with your revenue expectations for the year, how should we think about that comp and benefit?

Can you just discuss how we should think about that on a more normalized basis. Obviously the last half of 2021 was impacted by the departures if youre implementing the plan and assuming that.

Variable compensation is roughly in line with your revenue expectations for the year, how should we think about that comp and benefits.

Speaker 7: Number trending over the year and, you know, what sort of...

Number trending over the year and.

What sort of <unk>.

Speaker 7: leverage or or De-leverage we would end up getting on that particular line and then my follow-up is It's basically just a general commentary

Leverage or deleverage, we would end up getting on that particular line and then my follow up is is basically just a general commentary with regards to engagement scores.

Speaker 2: engagement scores as they progress through the year and how you think they'll end up, you know, six.

As they progress through the year and how you think they're they'll go end up.

You know six months to a year from now.

Yes, it's Andrew I'll start with the.

Speaker 2: Yeah, it's Andrew. I'll start with the compensation question. I think what we expect is compensation percentages to return towards more historical levels.

The compensation question I think what we expect is compensation.

Percentages to return towards more.

Historical levels. So I think if you go back and look at that right sort of pre the last two years Youll get a good picture and of course as hiring continues right.

Speaker 2: So I think if you go back and look at that, right, sort of pre the last two years, you'll get a good picture. And of course, as hiring, you know, continues, right, you know, from an absolute dollar perspective, there would be some impact there, but from a percentage perspective.

From an absolute dollar perspective, there would be some impact there, but from a percentage perspective.

Speaker 2: would expect that to remain relatively, relatively consistent.

Expect that to me remain.

Relatively relatively consistent.

Speaker 2: And the other thing to think about here is the prior year, was on an as reported basis and inclusive of some divestitures like Miller and Inavis and some other things. And also the current year has lower up X rates and some timing on a cruel and certain discretionary compensation and benefit expenses in there as well. Yeah, we'd expect to engage with it. We actually ran a all colleague survey.

And the other thing to think about here is the prior year on an as reported basis and inclusive of some divestitures like Miller and <unk> and some other things and also the current year has lower FX rates and such.

Some timing on accrual and certain discretionary compensation and benefit expenses in there as well.

With respect to engagement, we actually ran a all colleagues survey.

Speaker 2: At the during the fourth quarter and.

During the fourth quarter.

<unk>.

Speaker 2: The results we got actually show engagement is up over the last couple of times we measured it with two years and four years ago, which is I think a great result to the dedication of our colleagues.

The results, we got actually show engagement is up.

Over the last couple of times, we measured it.

Two years and four years ago, which is I think.

Great result to the dedication of our colleagues.

Speaker 2: to the success of WTW going forward. We do this for a living with our clients, and so we try to apply the lessons of what we learn to ourselves as well. And so we'll continue to monitor this across the organization. But we think we understand what creates sustainable engagement with our colleagues and makes this a great place to work.

The success of Ww going forward.

We do this for a living with our clients and so we try to apply the lessons of what we learned to ourselves as well and so we'll continue to monitor this across the organization.

But we think we understand what creates sustainable engagement with our colleagues.

It makes this a great place to work and we will be looking to demonstrate that not just to the people. We have today, but the people are looking to bring on board as well.

Speaker 2: and we'll be looking to demonstrate that not just for the people we have today but the people are looking to bring on forward as well.

Speaker 1: It's far from the line of David Motomatin from over core ISI. Your line is open.

Okay follow up from the line of David momentum from Evercore ISI. Your line is open.

Hi, Thanks for taking my follow up.

Speaker 7: Hi, thanks for taking my follow up. I guess if I sort of back into it, it looks like the book of business settlements for the full year were about 90 to 100 million.

I guess, if I sort of back into it it looks like the.

Our book of business settlements for the full year were about $90 million to $100 million.

Speaker 7: for full year of 21. Is that a good level to think about the future lost revenue? I guess some of that might have been, has already reflected in results, but is that sort of a good baseline, as I think about the drag that that may result in, as we had throughout 2022?

For full year of 'twenty one.

Is that a good level to think about the future of lost revenue.

I guess some of that may have been.

Already reflected in our results, but is that sort of a good baseline as I think about.

The drag that that May result in as we had throughout 2022.

Speaker 2: No, I know, hey, it's Andrew. I think, you know, the book of business settlement right, are typically a multiple, right, of the revenue amount, right? So I think if you would have bought- Multiple exceeds one, right? Right, my margin. Right, so I think you'd have to temper that back a bit by, you know, thinking about what industry transaction multiples might look like on a revenue base.

Yes.

No.

Andrew I think.

The book of business settlement tried are typically a multiple right of of the revenue amount right. So I think if you.

Multiple exceeds one right right right.

Alright, so so so I think you'd have to temper that back a bit by thinking about what industry transaction multiples might look like on a revenue basis.

Speaker 1: We have another follow up from the line of your own canar from Jeffries. He may begin.

Okay.

Follow up from the line of your own Qunar from Jefferies. You may begin.

Thanks, I was cut off earlier.

Speaker 9: Thanks. I was cut off earlier. My second question was gonna be around the...

My second question was going to be around <unk>.

Speaker 9: commentary around timing of the revenue gap being closed to peers. I just wanted to better understand how 2022 is a year where you can close that gap when some of your peers, large peers, have also been engaged in poor-lific hiring over the last several quarters.

Commentary around timing of the revenue.

GAAP being closed to peers.

I just wanted to better understand how 2022 is a year, where you can close that gap when some of your peers large periods have also been engaged in <unk>.

Prolific hiring over the last several quarters.

Speaker 9: And to your earlier point, you still see a bit of a lag from...

And to your earlier point, you still see a bit of a lag from.

Speaker 9: revenue perspective from earlier departures. So can you maybe explain how even with those issues, you can still close that gap.

Revenue perspective from earlier departures so.

Maybe explain how even with those issues you can still close that gap.

Speaker 2: Well, we said narrow. I mean, I said we'll narrow that gap. We see we will continue to see that gap narrow as well. Right. We think we were made an attractive desk dishes to talent and we think we can hire along with the industry as we continue to get ourselves back to where we need to be. So that should do. In a steady state environment, get us to be approaching where we think the industry can be.

Well, we said narrow I mean to be clear.

Narrowed that gap, we see we'll continue to see that gap.

GAAP narrow as well alright.

We think we remain an attractive destination for talent and we think we can hire along with the industry.

As we continue to.

Get ourselves back to where we need debate so that should in a steady state environment get us to the.

Approaching where we think the industry can be.

Yes.

Speaker 1: And our next follow up will be from the line on Miter Shields from KBW. You may begin.

And our next follow up will be from the line of minor shields from K B W.

May begin.

Speaker 4: Thanks. I was just hoping to get the impact of foreign exchange on fourth quarter EPS and margins.

I was just hoping to get the impact of foreign exchange on fourth quarter EPS and margins.

Yes.

<unk>.

Yeah.

Speaker 2: So, in fourth quarter, FX was a headwind of about 19 million on revenue, so about six cents on adjusted EPS, the main component of that was the weakness of the dollar against the euro. Okay. Okay. Thank you, Andrew.

So.

Fourth quarter FX was a headwind of about $19 million on revenue so about six.

On an adjusted EPS. The main component of that was the weakness of the dollar against the euro.

Okay. Okay.

Thank you Andrew.

Okay.

So I would like to thank everyone for joining us this morning.

Speaker 2: We look forward to updating you on our first quarter earnings call in the spring.

We look forward to updating you on our first quarter earnings call in the spring.

Okay.

Speaker 1: And this work includes today's conference call. Thank you for participating. You may now disconnect everyone and have a great.

And this will conclude today's conference call. Thank you for participating you may now disconnect everyone have a great.

[music].

Speaker 10: So

[music].

Speaker 10: Really.

[music].

Good morning.

Speaker 1: Good morning, welcome to the WTW 4th quarter 2021 earnings conference call. Please refer to wtwco.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 WTW's website.

W. T W fourth quarter 2021 earnings conference call.

You can refer to W. TWC.

Comp or the press release and supplemental information that was issued earlier today.

This call is being recorded and will be available for the next three months, Ontario, Tw News website.

Speaker 1: Some of the comments in today's call may constipate for looking statements within the meaning of the private security reform act of 1990.

Some of the comments in today's call may constitute forward looking statements.

And the meaning of the private Securities Reform Act of 1984.

Speaker 1: These forward looking statements are subject to risk and uncertainties. As far as I'll say different, but surely from those discussed today, and the company undertakes no obligation to update these statements unless required by law. For a more detailed discussion of the other risk factors, investors should review the forward looking statement section of the earnings.

These forward looking statements are subject to risks and uncertainties actual results may differ materially from those discussed today and the company undertakes no obligation to update these statements unless required by law.

For a more detailed discussion of the debate.

Risk factors.

Listeners should review the forward looking statements section of the earnings press.

Speaker 1: released issued this morning as well as other disclosures in the most recent form. 10K and another Willis Powers Watson SEC fund.

The release issued this morning as well other disclosures in the most recent Form 10-K and in other Willis towers Watson SEC filings.

Speaker 1: During the call, certain mono GAAP financial measures may be discussed while reconcilations of the mono GAAP measures as well as other information regarding these measures pretty referred to the most recent earnings release and other materials in the investor relations section of the company's website. I will now turn the call over to Carl Hess, WTW Chief Executive Officer. Please go ahead.

During the call certain non.

GAAP financial measures may be just discussed while reconciliations.

non-GAAP measures as well as other information regarding these measures.

Please refer to the most recent earnings release and other materials in the Investor Relations section of the <unk>.

Company's website I will now turn the call over to Carl Hess That'd be agreed that his chief Executive Officer. Please go ahead.

Yes.

Speaker 2: Good morning everyone and thank you for joining us for WTW's fourth quarter 2021 earnings call. Joining me today is Andrew Krasner, our Chief Financial Officer.

Good morning, everyone and thank you for joining us for Ww's fourth quarter 2021 earnings call. Joining me today is Andrew <unk>, our Chief Financial Officer.

I am pleased to be here today for my first earnings call as Wdw's CDO.

Speaker 2: I'm pleased to be here today for my first earnings call at WTWCVO. I've officially been on the job for about six weeks and it is truly an honor to lead this company.

<unk> been on the job for about six weeks and it is truly an honor to lead this company.

Speaker 2: WTW looks very different than it did over 30 years ago when I first joined the company and it's been an extraordinary journey. One defined by continuous innovation and change.

W. Tw looks very different than it did over 30 years ago. When I first joined the company and it's been an extraordinary journey, one defined by continuous innovation and change.

Speaker 2: As we move forward as an independent company, we recognize the need to grow, simplify and transform. Our recently refreshed brand and new matching stock ticker, WTW, are key signals of this new era.

As we move forward as an independent company, we recognize the need to grow simplify and transform our recently refreshed brand a new matching stock ticker Wdw are key signals of this new era.

Speaker 2: Our new brand evolves our identity to both reflect our rich history and also inspire our

Our new brand evolves or identity to both reflect our rich history and also inspire our future.

Speaker 2: We may have a new brand, a new ticker, and a new leadership team to set us on a bolder path, but certain things will never change. Our client-focused teamwork, integrity, respect, and excellence. These are our values. They're in our DNA and at the core of everything we do. WCW Leadership and colleagues are excited about this bold new approach, and we hope you are too.

May have a new brand a new ticker a new leadership team to set us on a bolder path, but certain things will never change our client focused teamwork integrity respect index. Amongst these are our values there in our DNA and at the core of everything we do.

WCW leadership and colleagues are excited about this bold new approach and we hope you are too.

Speaker 2: I'm pleased to report that we continue to see progress in our independent path forward. As we mentioned back in October , we executed on our intensive plans, which provide both short-term and long-term retention benefits, and these have been well received.

I am pleased to report that we continue to see progress in our independent path forward as we mentioned back in October we executed on a rate incentive plans, which provide both short term and long term retention benefits and these have been well received.

Speaker 2: We've also seen significant measurable improvements in colleague engagement.

We've also seen significant measurable improvements in colleague engagement.

Speaker 2: Meanwhile, the pace at which we've been attracting new talent to fuel our path forward has been truly impressive. We hired more people in the second half of 2021 than we hired during the entire year in 2020. And the elevated attrition levels we saw in 2021 are behind us.

Meanwhile, the pace at which we've been attracting new talent to fuel our path forward has been truly impressive we hired more people in the second half of 2021 that we hired during the entire year in 2020 and the elevated attrition levels. We saw in 'twenty one are behind us.

Speaker 2: We also made some early progress in our transformation program, which Andrew will expand upon later in the call. Last, but not least, we've been steadfast in applying financial discipline, as illustrated by our full year margin, a year over year margin improvement. As crude stewards of our financial assets, we plan to continue our emphasis on returning capital to shareholders through share repurchases, which we believe provide the highest return opportunity.

We also made some early progress on our transformation program, which Andrew will expand expand upon later in the call last but not least we have been steadfast in applying financial discipline as illustrated by our full year margin of year over year margin improvement.

As prudent stewards of our financial assets, we plan to continue our emphasis on returning capital to shareholders through share repurchases, which we believe provide the highest return opportunity.

Speaker 2: We're encouraged by the progress we're making on our strategic initiatives. While we have hard work ahead of us in 2022, we're kicking things off with renewed energy and conviction. Our talented colleagues will strive to meet and exceed the expectations of the clients and individuals we are privileged to serve.

We're encouraged by the progress we're making on our strategic initiatives. While we have hard work ahead of us in 2022, we're kicking things off with renewed energy and conviction our talented colleagues will strive to meet and exceed the expectations of the clients and individuals we are privileged to serve.

In the current environment, our clients are striving to create continuity and clarity in an environment of ongoing disruption.

Speaker 2: In the current environment, our clients are striving to create continuity and clarity in an environment of ongoing disruptions.

Speaker 9: Future-focused leaders acknowledge that risk has become a mainstream element of business decisions and will remain so. Today, the frequency and complexity of threats continue to increase due to factors including geopolitics, economic volatility, population health, climate change, supply chain, talent and technology.

Future focused leaders acknowledge that risk has become a mainstream element of business decisions and will remain so.

Today, the frequency and complexity of threats continue to increase due to factors, including geopolitics economic volatility population health climate change supply chain talent and technology.

Speaker 9: To combat threats and create opportunity, organizations must connect current and future risks, act on environmental, social, and governance and sustainability commitments, and build organizational resilience. The time to act is now. WTW's unique perspective connect solutions, strengthen organization, and helps clients better prepare for it, and thrive in an uncertain future.

To combat threats and create opportunity organizations must connect current and future risks.

On environmental social and governance, and sustainability commitments and build organizational resilience. The time to act is now W. TWC unique perspective connect solutions strengthens organization and helps clients better prepare for and thrive in an uncertain future.

Speaker 9: For example, WTW designed the world's first parametric insurance solution for Belize's sovereign debt restructuring.

For example, <unk> tw designing the world's first parametric insurance solution for believers sovereign debt restructuring this.

Speaker 9: This unique transaction includes targeted insurance protection to cover Belize's loan servicing obligation in the event of certain natural catastrophes such as Herrick.

This unique transaction includes targeted insurance protection to cover believes as loan servicing obligation in the event of certain natural catastrophes such as Hurricanes.

Speaker 9: Hurricanes can create large-scale devastation and disruption to economic activity, thereby halting development. The custom solution allows believes to focus scarce financial resources on recovery rather than debt servicing and reflects WTW's commitment to using our expertise to shape and fortify resilience in the communities we serve.

Hurricanes can create large scale devastation and disruption to economic activity, thereby halting development. The custom solution allows believes the focus scarce financial resources on recovery rather than debt servicing and reflects the WWF commitment to using our expertise to shape and fortify resilient in the communities.

We serve.

Before we discuss our fourth quarter results I want to take a moment to directly address our talented and valued colleagues.

Speaker 9: Before we discuss our fourth quarter results, I want to take a moment to directly address our talented and valued colleague.

Speaker 9: We have an exciting future ahead, filled with opportunity, and I'm delighted you're here to be part of it. Thank you for your hard work and dedication, and most of all, thank you for your commitment. I'm truly appreciative of your efforts to drive our vision to be the best company in the business and achieve our full potential as one WTW. I'm proud of the company we've built, and I'm excited to be leading us through the next phase of our journey. So now let's...

We have an exciting future ahead filled with opportunity and I am delighted youre here to be part of it. Thank you for your hard work and dedication and most of all thank you for your commitment I'm truly appreciative of your efforts to drive our vision to be the best company in the business and achieve our full potential as one W. Tw.

Out of the company, we've built and Im excited to be leading us through the next phase of our journey.

So now, let's turn to our financial results.

Speaker 9: Please note that all metrics referenced are on a continuing operations basis except where stage is otherwise. As a reminder, we substantially completed the sale of Willis Ree on December 1, 2021. We recorded a gain of 2.3 billion in connection with the disposal of Willis Ree. That gain is included in many of our gap profitability measures, which will point out as we move through the commentary.

Please note that all metrics referenced are on a continuing operations basis, except where stated otherwise as a reminder, we substantially completed the sale of Willis re on December one 2021, we recorded a gain of $2 3 billion in connection with the disposal well. It's right that gain is included in many of our GAAP profitability measures, which.

I'll point out as we move through the commentary.

Speaker 9: Overall, our results aligned with our expectations. But to be crystal clear, they do not reflect the near and long-term potential of this company to drive organic growth and margin expansion.

Overall, our results line aligned with our expectations, but to be crystal clear they do not reflect the near and long term potential of this company to drive organic growth and margin expansion.

Speaker 9: As mentioned earlier, our hiring levels are on highest in recent history and we're competent that the peak of college departures is behind us.

I mentioned earlier, our hiring levels are among the highest in history and we're confident that the peak of colleague departures is behind us.

Speaker 9: For the four year, we posted 6% organic revenue growth and our adjusted operating margin was 19.9%. While the results reflect the expected delay, impact, disruptions, experience earlier in 2021, the underlying strength of our business and our early progress on executing our strategy gives me confidence that we remain on track to deliver strong, sureholder value over the longer term.

For the full year, we posted 6% organic revenue growth in our adjusted operating margin was 19, 9%.

While the results reflect the expected delay impact of disruption experienced earlier in 2021, the underlying strength of our business and our early progress on executing our strategy gives me confidence that we remain on track to deliver strong shareholder value over the longer term.

Reported revenue for the fourth quarter was $2 7 billion up 1% as compared to the prior year fourth quarter up 2% on a constant currency basis and up 4% on an organic basis.

Speaker 9: Reported revenue for the fourth quarter was 2.7 billion up 1% as compared to the prior year fourth quarter, up 2% of the constant currency basis and up 4% on an organic.

Income from operations was $690 million or 25, 5% of revenue for the fourth quarter as compared to $579 million or 21, 7% of revenue in the prior year fourth quarter.

Speaker 9: Income from operations with 690 million or 25.5% of revenue with a fourth quarter has compared to 579 million or 21.7% of revenue in the prior year fourth quarter.

Speaker 9: Adjusted operating income was 868 million or 32.1% of revenues for the quarter, up 170 basis points from 812 million or 30.4% of revenue in the same period last year.

Adjusted operating income was $868 million or 32% 32, 1% of revenues for the quarter up 170 basis points from $812 million or 34% of revenue in the same period last year.

For the quarter diluted earnings per share, which include discontinued operations were $19 19 as.

Speaker 9: For the quarter, the Looted earnings per share, which include discontinued operations, were $19.19, as compared to $3.56 in the fourth quarter of prior year.

As compared to $3 66.

In the fourth quarter of prior year.

Speaker 9: Adjusted the looting earnings per share were $5.67 for the fourth quarter, reflecting an increase in 9% and compared to $5.19 in the prior year.

Adjusted Diluting earnings per share were $5 67 per the fourth quarter, reflecting an increase of 9% when compared to $5 19 in the prior year.

Speaker 9: Now let's take a look at each of our segments in more detail. To provide clear comparability with prior periods, all commentary regarding the results of our segments will be on an organic basis unless specifically stated otherwise.

Now, let's take a look at each of our segments in more detail to provide clear comparability with prior periods. All commentary regarding the results of our segments will be on an organic basis, unless specifically stated otherwise.

Segment margins are calculated using segment revenue and exclude unallocated corporate costs, such as amortization of intangibles certain transaction and integration expenses, resulting from mergers and acquisitions as well as other items, which we considered to be non core to our operating results. The segment results include discretionary compensation.

Speaker 9: Segment margins are calculated using segment revenue and exclude unallocated corporate costs such as amortization of intangibles, certain transaction and integration expenses resulting from mergers and acquisitions, as well as other items which we consider to be non-corrored to our operating results. The segment results include discretionary compensation.

Asia.

Speaker 9: The human capital and benefits or HCB segment revenue was up 3% on an organic basis and tons to currency basis compared to the fourth quarter of the prior year. For the full year of 2021, HCB revenue grew 3% organic.

The human capital and benefits our HCV segment revenue was up 3% on an organic basis and constant currency basis compared to the fourth quarter of the prior year for.

For the full year of 2021, HCV revenue grew 3% organically.

Speaker 9: Technology and administration solutions revenue grew 11% in the fourth quarter, primarily due to increased project work in Great Britain and Western Europe .

Technology and administration solutions revenue grew 11% in the fourth quarter, primarily due to increased project work in Great Britain and Western Europe are.

Speaker 9: Our health and benefits revenue increased 6% for the quarter. The increased reflects rural dust demand in H&B consulting, and a gain recorded in the connection with a one-off book of business settlement offset by slower growth in brokerage. The settlement relates to an isolated incident of senior staff departures earlier in 2021.

Our health and benefits revenue increased 6% for the quarter the increase.

It reflects robust demand and <unk> consulting and a gain recorded in the connection with a one off book of business settlement offset by slower growth in brokerage the settlement relates to an isolated incident of senior staff departures from earlier in 2021.

Talent and rewards revenue increased 3% in the quarter following growth of 17% in Q3 and 22% in Q2.

Speaker 9: Talboton rewards Revitow increased 3% in the quarter, following growth of 17% in Q3 and 22% in Q2. Throughout the year, this growth is represented or rebound from the 2020 slowdown in discretionary projects, plus increasing market demand, particularly for products like Compensation Benchmarking Survey.

Throughout the year. This growth is represented a rebound from the 2020 slowdown in discretionary projects plus increasing market demand, particularly for products like compensation benchmarking survey.

Speaker 9: The lower growth in Q4 relative to the prior two quarters reflects the typical seasonality of compensation survey sales, which peak in Q2 and Q3, as well as some capacity constraints for advisory service.

The lower growth in Q4 relative to the prior two quarters reflects the typical seasonality of compensation survey sales, which peaked in Q2 and Q3 as well as some capacity constraints for advisory services with expectations for continued strong demand in product and in advisory services, and having ramped up hiring in the fourth quarter we.

Speaker 9: With expectations for continued strong demand and product and advisory services and having ramped up hiring in the fourth quarter, we are well positioned.

Our well positioned.

Speaker 9: Retirement revenue was down 1% compared to the prior year fourth quarter, with increased funding and guaranteed minimum pension equalization work in Great Britain, offset by declines in North America, due to a reduction in work in Canada to implement regulatory changes, and lower demand from bulk lump sum projects.

Retirement revenue was down 1% compared to the prior year fourth quarter with increased funding and guaranteed minimum pension equalization work in Great Britain offset by declines in North America due to a reduction in work in Canada to implement regulatory changes and lower demand for bulk lump sum projects.

Speaker 9: HCB's operating margin was 31.2% for the fourth quarter compared to 31.3% in the prior year fourth quarter.

Hcp's operating margin was 31, 2% for the fourth quarter compared to 31, 3% in the prior year fourth quarter.

Speaker 9: On a four-year basis, HCV's operating margin improved to 27.0% from 26.0% in the prior year.

On a full year basis, Hcv's operating margin improved to 27.0% from 26.0% in the prior year.

Speaker 9: You're over a year, excluding the impact of currency and games from book of business settlements, HCP's margin declined by 150 basis points for the fourth quarter, but increased by 90 basis points for the whole year.

Year over year, excluding the impact of currency and gains from book of business settlements Hcp's margin declined by 150 basis points for the fourth quarter, but increased by 90 basis points for the full year.

Speaker 9: The fourth quarter margin declined as a result of higher expense growth driven by hiring to meet expected strong market demand as we build Batsme for robust revenue growth. The four-year margin increase reflects continued to seatable expense reduction F.

Fourth quarter margin declined as a result of higher expense growth driven by hiring to meet the expected strong market demand as we build capacity for robust revenue growth. The full year margin increase reflects continued sustainable as expense reduction efforts historically Hs HCV has had industry leading margins and we believe.

Speaker 9: Historically, HCV has had industry-leading margins and we believe that trend will continue. HCV's overall market tailwind should continue to drive organic growth momentum bridge.

That trend will continue.

<unk> overall market tailwind should continue to drive organic growth momentum for HCP.

Speaker 9: Prove our near term and long term outlook on the segment remain positive and our expectations for revenue growth are unchanged from what we commuted at investor day mid single digit growth.

Both our near term and long term outlook on this segment remained positive and our expectations for revenue growth are unchanged from what we commuted a cadence at Investor day mid single digit growth.

Speaker 9: Now, let's look at corporate risk and broken or CRB, which had a revenue increase of 1% on an organic and constant currency basis as compared to the prior year fourth quarter.

Now, let's look at corporate risk and broking, or CRB, which had a revenue increase of 1% on an organic and constant currency basis as compared to the prior year fourth quarter.

Speaker 9: For the four year of 2021, HCRV revenue grew 5% organic.

For the full year of 2021, HC CRB revenue grew 5% organically.

Speaker 9: Our hiring levels are the highest in recent history and colleague departure levels have

Our hiring levels are the highest in recent history and colleague departure levels have decreased.

Speaker 9: North America's revenue was up by 4% in the fourth quarter, including games recorded in connection with book of business sales and settlements. The book sales and settlements relate to producer departures occurring earlier in 2021.

North America's revenue was up by 4% in the fourth quarter, including gains recorded in connection with book of business sales and settlements the book sales and settlements related to producer departures occurring earlier in 2021.

Internationals revenue increased 10% compared to prior year. There was strong performance in M&A in Asia, and Australasia and natural resources in Eastern Europe .

Speaker 9: Internationals revenue increased 10% compared to prior year. There was strong performance in M&A and Asia and Australia and natural resources in Eastern Europe . Latin America also contributed to international revenue growth with new business wins in Brazil and Central America.

Latin America also contributed to international revenue growth with new business wins in Brazil, and Central America.

Speaker 9: Great Britain's revenue declined 5% as a result of loss business and timing. The decline reflects the delayed impact of disruption from earlier in 2021.

Great Britain's revenue declined 5% as a result of lost business and timing the decline reflects the delayed impact of disruption from earlier in 2021.

Speaker 9: Revenue for Western Europe was down 5% due to the departure of senior staff prior to the deal termination, which continued to pressure the business in certain geographies.

Revenue for Western Europe was down 5% due to the departure of senior staff prior to the deal termination, which continued to pressure the business in certain geographies.

Although the earlier departures have hindered our growth for several quarters. We are seeing some positive momentum new client wins include one of the largest commercial and retail bank in the region.

Speaker 9: Although earlier departures have hindered our growth for several quarters, we are seeing some positive momentum. New client wins include one of the largest commercial and retail banks in the region.

<unk> operating margin was 31, 2% for the fourth quarter compared to 32, 3% in the prior year fourth quarter.

Speaker 9: CRB's operating margin was 31.2% for the fourth quarter compared to 32.3% in the prior year fourth quarter.

Speaker 9: On a full year basis CRB is operating margin improved to 23.0% from 21.2% in the prior year.

On a full year basis, <unk> operating margin improved to 23, 8% from 21, 2% in the prior year.

Speaker 9: excluding the impact of currency and the benefit of book and business sales and settlements, the margin to climb 240 basis points for the fourth quarter, but increased by 80 basis points for the four years.

Excluding the impact of currency and the benefit of book and business sales and settlements the margin declined 240 basis points for the fourth quarter, but increased by 80 basis points for the full year.

Speaker 9: The fourth order to climb was mostly due to investments to support future growth.

The fourth quarter decline was mostly due to investments to support future growth.

Speaker 9: The full year margin expansion reflects the continuation of effective cost management.

The full year margin expansion reflects the continuation of effective cost management.

Crb's organic growth trailed industry expected averages for the last three quarters of 'twenty, one primarily as a result of elevated colleague departures and reduced hiring during the period when the business combination with pending two trends that we believe are now behind us.

Speaker 9: CRB's organic growth, trailed industry expected averages for the last three quarters of 21. Primarily as a result of elevated colleague departures and reduced hiring during the period when the business combination was pending. Two trends that we believe are now behind.

Speaker 9: Currently, we expect to see lower growth in the first half of 2022, compared to the second half of 2022 as the gap versus industry expected averages narrow.

Currently we expect to see lower growth in the first half of 2022 compared to the second half of 2022 as the gap versus industry expected averages narrows.

Speaker 9: While events in previous quarters have challenged us and temporary headwinds from those events remain, our outlook for CRB remains positive with mid-single digit revenue growth over the longer term.

While events in previous quarters have challenged us and temporary headwinds from those events remain our outlook for CRB remains positive with mid single digit revenue growth over the longer term.

Turning to investment risk and reinsurance or IRR revenue for the fourth quarter was $199 million, an increase of 32% on an organic basis and a decrease of 2% on a constant currency basis as compared to the prior year fourth quarter.

Speaker 9: Turning the investment risk and reinsurance or IRR, revenue for the fourth quarter was 199 million and increased 32% on an organic basis and a decrease of 2% on a constant currency basis as compared to the prior year fourth quarter. IRR revenue includes a game made book of business element which relates to reinsurance assets that did not transfer in connection with the sale of Willis rates.

IRR revenue includes a gain from a book of business settlement, which relates to reinsurance assets that did not transfer in connection with the sale of Willis right.

Speaker 9: IRR excludes all other revenue associated with the reassurance line of business, which has been reported as discontinued operation.

<unk> excludes all other revenue associated with the reinsurance line of business, which has been reported as discontinued operations.

It also excludes revenue from Max <unk>, <unk>, which was sold in September of 2020, and Miller Wcw's wholesale broking subsidiary sold in March of 2021.

Speaker 9: It also excludes revenue from Max Matieson, which was sold in September of 2020, and Miller WTW wholesale, broken subsidiary sold in March of 2021. These sales account for the wide disparity between organic and constant current.

These sales accounts for the wide disparity between organic and constant currency.

Speaker 9: The insurance consulting and technology or ICT business where revenue was up 5%

The insurance consulting and technology or ICT business, where revenue was up 5%.

Speaker 9: That's the segments growth, with increased demand for advisory work alongside technology sales.

Let the segment's growth with increased demand for advisory work alongside technology sales.

Speaker 9: Our investment businesses grew revenue by 11% from new business, growth and delegated assets under management, and to a lesser extent, increased performance.

Our investment businesses grew revenue by 11% from new business growth in delegated assets under management and to a lesser extent increased performance fees.

Speaker 9: ILR's operating margin was 25.3% to the fourth quarter compared to 12.5% to the prior year fourth quarter.

Irr's operating margin was 25, 3% for the fourth quarter compared to 12, 5% in the prior year fourth quarter.

Speaker 9: On a four-year basis, IRR is operating margin improved to 19.5% from 14.5% in the prior year.

On a full year basis, Irr's operating margin improved to 19, 5% from 14, 5% in the prior year.

Speaker 9: Excuting the impact of currency and the benefit of book of business settlement, the margin of client 240 basis points for the quarter, but increased by 220 basis points for the full year.

Excluding the impact of currency and the benefit of book of business settlement. The margin declined 240 basis points for the quarter, but increased by 220 basis points for the full year.

The fourth quarter decline was primarily caused by the headwind created from divestitures. The prior year fourth quarter margin includes the contribution of the now divested Miller subsidiary, while the current year fourth quarter margin does not which distorts comparability.

Speaker 9: The fourth quarter decline was primarily caused by the headwind creators from the vestitures. The prior year fourth quarter margin includes the contribution of the now-devested Miller subsidiary while the current year fourth quarter margin does not, which distorts comparability.

Speaker 9: Villa subsidiary was sold in March of 2021.

Miller subsidiary was sold in March of 2021.

Speaker 9: Before your emerging expansion was the result of careful cost management efforts combined with strong top-line growth from the two businesses that remain in IRR, ICT and industrial.

The full year margin expansion was the result of careful cost management efforts combined with strong topline growth from the two businesses that remain an IRR ICT and investments.

Speaker 9: Turning to the Benefit Delivery and Administration segment or BDA, revenue increased by 5% on the organic and constant currency basis from the prior year-fourth quarter.

Turning to the benefits delivery and administration segment or BDA revenue increased by 5% on an organic and constant currency basis from the prior year fourth quarter the.

Speaker 9: The growth in revenue was largely driven by individual marketplace due to a favorable shift in the revenue timing for our B2B Medicare exchange business along with continued strength in our direct consumer business.

The growth in revenue was largely driven by individual marketplace due to a favorable shift in the revenue timing for our B to B Medicare exchange business, along with continued strength in our direct to consumer business.

Speaker 9: The benefits outsourcing business also contributed significantly to BDA's revenue growth with increased project work driven by temporary federal policy changes affecting group healthcare plans.

Our benefits outsourcing business also contributed significantly to Bda's revenue growth with increased project work driven by temporary federal policy changes expecting group health care plans.

Speaker 9: BDA's operating margin was 49.2% in the fourth quarter and 22.4% in the full year. Having declined year over year by 110 basis points and 150 basis points for respect.

Bda's operating margin was 49, 2% in the fourth quarter and 22, 4% for the full year, having declined year over year by 110 basis points and 150 basis points respectively.

Speaker 9: The year-over-year margin declined for both the fourth quarter and the fourth year was the result of increased investing and resources for the 2022 annual enrollment period coupled with headwinds on lead converts.

The year over year margin decline for both the fourth quarter and the full year was the result of increased investing in resources for the 2022 annual enrollment period, coupled with headwinds on lead conversion.

Speaker 9: The BDA segment has posted 10% organic growth for two consecutive years, and we continue to feel positive a lot the momentum of this segment.

The BDA segment has posted 10% organic growth for two consecutive years and we continue to feel positive about the momentum of this segment.

Speaker 9: Overall, our financial result for 2021 are in line with our expectations, reflected the complexity of navigating a significant strategic shift along with some bright spots, highlighting our commitment to profitable growth.

Overall, our financial results for 2021 are in line with our expectations, reflecting the complexity of navigating a significant strategic shift along with some bright spots highlighting our commitment to profitable growth.

Speaker 9: I'm pleased we effectively manage our cost and delivered margin expansion and adjusted EPS growth despite top line growth price.

I am pleased we effectively managed our costs and delivered margin expansion and adjusted EPS growth despite topline growth crushers.

Speaker 9: In closing, I want to reiterate my gratitude to our colleagues and also thank our clients and shareholders for their support. I believe the company's wealth is issued to capitalize on the opportunities to play ahead. I look forward to reinvigorating growth and to successfully executing our transformation plans. I am confident the best is yet to come as we boldly look to lead and shape our industry going forward. And with that, I'll turn the call over to Andrew.

In closing I want to reiterate my gratitude to our colleagues and also thank our clients and shareholders for their support I believe the company is well positioned to capitalize on the opportunities that lie ahead, I look forward to reinvigorating growth and are successfully executing our transformation plan I am confident the best is yet to come as we boldly look.

To lead and shape, our industry going forward and with that I'll turn the call over to Andrew.

Speaker 2: Hey, thanks Carl. Good morning everyone. Thanks to all of you for joining us.

Thanks, Paul Good morning, everyone. Thanks to all of you for joining us as expected the fourth quarter performance faced headwinds from the delayed impact of disruptions from earlier in the year.

Speaker 2: As expected, the fourth quarter performance faced headwinds from the delayed impact of disruptions from earlier in the year.

Speaker 2: They reflect the challenges we've previously identified and are actively working to address. To that end, we continue to push forward with our strategic goals as we finished up the year and made some early progress on our transformation efforts. In the fourth quarter, we incurred restructuring charges totaling $26 million. From the actions taken in 2021, we expect to have analyzed savings of 20 million, primarily from the reduction of real estate costs, the benefits of which will be recognized in 2022.

They reflect the challenges we've previously identified and are actively working to address to that end, we continue to push forward with our strategic goals as we finished up the year and made some early progress on our transformation efforts in the fourth quarter, we incurred restructuring charges totaling $26 million from the actions taken in 2021.

We expect to have annualized savings of $20 million, primarily from the reduction of real estate cost the benefits of which will be recognized in 2022.

Speaker 2: The 20 million gets us two thirds of the wage towards our 30 million dollar annualized run rate savings goal for 2022.

The $20 million gets us two thirds of the way towards our $30 million annualized run rate savings goal for 2022.

Speaker 2: For the full year of 2021, we generated profitable growth, increasing adjusted operating margin to 19.9% from 18% in the prior year.

For the full year 2021, we generated profitable growth, increasing adjusted operating margin to 19, 9% from 18% in the prior year.

Speaker 2: The adjusted operating margin expansion was comprised of 150 basis points of underlying growth stemming from financial discipline. This was coupled with around 100 basis points of growth from gains on book of business sales and settlement.

The adjusted operating margin expansion was comprised of 150 basis points of underlying growth stemming from financial discipline.

This was coupled with around 100 basis points of growth from gains on book of business sales and settlements <unk>.

Speaker 2: partially offset by around 60 basis point headwind from prior to vestitures and FX.

Partially offset by around 60 basis point headwind from prior divestitures and FX.

Speaker 2: The expansion of our adjusted operating margin, despite top-line growth pressures, highlights our dual commitments to growing profitably and focusing on cost management. As a result, we continue to expect margin improvement each year as we deliver on our 2024 margin goals. Now, I'll turn to the overall detailed financial results.

The expansion of our adjusted operating margin despite topline growth pressures highlights our dual commitments to growing profitably and focusing on cost management. As a result, we continue to expect margin improvement each year as we deliver on our 2024 margin goals.

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

Speaker 2: Income from operations for the fourth quarter was $687 million or 25.4% of revenue. Up from the prior year fourth quarter income from operations of $579 million or 21.7% of revenue. Adjusted operating income for the fourth quarter with $868 million or 32.1% of revenue up 170 basis points from 812 million or 30.4% of revenue in the prior year fourth quarter.

Income from operations for the fourth quarter was $687 million or 25, 4% of revenue up from the prior year fourth quarter income from operations of $579 million or 21, 7% of revenue.

Adjusted operating income for the fourth quarter was $868 million or 32, 1% of revenue up 170 basis points from $812 million or <unk>, 34% of revenue in the prior year fourth quarter.

Speaker 2: For the four quarters of 2021 and 2020, our diluted EPS from continuing operations were $4.54 and $3.62 respectively.

For the fourth quarters of 2021, and 2020, our diluted EPS from continuing operations were $4 54, and $3 62, respectively for.

Speaker 2: For the fourth quarter of 2021, our adjusted EPS was up 9% to $5.67 per share as compared to $5.19 per share in the prior year for the quarter.

For the fourth quarter of 2021, our adjusted EPS was up 9% to $5 67 per share as compared to $5 19 per share in the prior year fourth quarter.

Speaker 2: Further, discontinued operations represented a $14.64 cent loss on a deluded EPS basis for the fourth quarter of 2021, and a 4 cent on deluded EPS basis for the fourth quarter of 2020. Total deluded EPS, including both continuing and discontinued operations, increased to $19.19 for the fourth quarter of 2021 compared to the prior year fourth quarter of $3.66.

Further discontinued operations represented a $14.64 loss on a diluted EPS basis for the fourth quarter of 2021 and a four cent.

On diluted EPS basis for the fourth quarter of 2020 total diluted EPS, including both continuing and discontinued operations increased to $19 19 for the fourth quarter of 2021 compared to the prior year fourth quarter of $3 66.

Speaker 2: Foreign currency rate changes cause a decrease in our consolidated revenue of 19 million or 1% of revenue for the quarter compared to the prior year fourth quarter with a six cent headwind to adjust the diluted earnings for share of this quarter.

Foreign currency rate changes caused a decrease in our consolidated revenue of $19 million or 1% of revenue for the quarter compared to the prior year fourth quarter with a <unk> <unk> headwind to adjusted diluted earnings per share this quarter.

Speaker 2: Our US gap tax rate for the fourth quarter was 20.8% versus 19.5% in the prior year. Our adjusted tax rate for the fourth quarter was 21.1% up from the 17.6% rate in the prior year. The increase was due to the geographic distribution of profits.

Our U S GAAP tax rate for the fourth quarter was 28% versus 19, 5% in the prior year, our adjusted tax rate for the fourth quarter was 21, 1% up from the 17, 6% rate in the prior year. The increase was due to the geographic distribution of profits.

Speaker 2: Turning to the ballot sheet, we ended the fourth quarter with a strong capital and liquidity position with cash and cash equivalents of $4.7 billion and full capacity on our undrawn $1.5 billion revolving credit facility. WTW remains well positioned from a liquidity perspective. We continue to have significant financial flexibility, which allows us to invest in transforming the company's operations to unlock growth potential while simultaneously returning capital to shareholders.

Turning to the balance sheet, we ended the fourth quarter with a strong capital and liquidity position with cash and cash equivalents of $4 7 billion and full capacity on our Undrawn $1 5 billion revolving credit facility WCW remains well positioned from a liquidity perspective, we continue to have significant financial flexibility, which allows us to invest in trans.

For me the Companys operations to unlock growth potential while simultaneously returning capital to shareholders free cash flow, which includes discontinued operations was $1 9 billion in the year ended 2021 compared to $1 6 billion in the prior year the.

Speaker 2: Free cash flow, which includes discontinued operations, was 1.9 billion in a year ended, 2021 compared to 1.6 billion in the prior year.

Speaker 2: The increase in year over year free cash flow was due to the receipt of the termination fee, net of increased transaction integration fees of $948 million. This was partially off-set by net legal settlement payments of approximately $185 million for the previously announced Danford and Willis-Carris Watson merger settlements and higher compensation and benefit payments of approximately $250 million.

The increase in year over year free cash flow was due to the receipt of the termination fee net of increased transaction integration fees of $948 million. This was partially offset by net legal settlement payments of approximately $185 million for the previously announced Stanford and Willis towers, Watson merger settlements and higher compensation and benefit.

<unk> of approximately $250 million.

Speaker 2: And 383 million attack payments primarily related to the disposal of Willich.

$383 million of tax payments, primarily related to the disposal of Willis re absent. These items free cash flow would have been $1 8 billion up 15% versus the prior year.

Speaker 2: Absent these items, free cash flow would have been 1.8 billion up 15% versus the prior year.

Speaker 2: I want to point out that we made some changes to our state of cash flows to reflect new guidance on restricted cash presentation and FASB ASC 230. These changes consisted of revising the classification of WTWs for your Sure Fun balances on a consolidated statement of cash flows for the last three years. These revisions had no impact to our cash flow for operating activities or free cash flow metrics.

I want to point out that we made some changes to our statement of cash flows to reflect new guidance on restricted cash presentations and FASB ASC 230.

These changes consisted of revising the classification of Ww's fiduciary fund balances on our consolidated statement of cash flows for the last three years. These revisions had no impact to our cash flow from operating activities or free cash flow metrics.

Speaker 2: In terms of capital allocation, we paid $374 million in dividends for the year ended December 31st, 2021, and repurchased $7.2 million shares for $1.6 billion.

In terms of capital allocation, we paid 374 million in dividends for the year ended December 31, 2021, and repurchased seven 2 million shares for $1 6 billion.

Speaker 2: We remain committed to deploying Active Capital and cash flow into share purchases. As part of our in-depth investor day discussion, we communicated approximately 4 billion of near-term share purchases and a willingness to fund further share purchases using our free cash flow unless other investment opportunities with superior return potential arise.

We remain committed to deploying excess capital and cash flow into share repurchases as part of our in depth Investor day discussion, we communicated approximately $4 billion of near term share repurchases and a willingness to fund further share repurchases using our free cash flow unless other investment opportunities with superior return potential arise.

Speaker 2: At current price levels, we believe that repurchasing WTW stock continues to be our highest return opportunity, and we have significant resources to capitalize upon that. With 1.6 billion completed in 2021, and another 1 billion completed through today, the pace of our share repurchases highlights the conviction we have in the future of WTW, and the plans we laid out at an investor day, despite the current headwind.

At current price levels, we believe that repurchasing wdw stock continues to be our highest return opportunity and we have significant resources to capitalize upon that with $1 6 billion completed in 2021, and another 1 billion completed through today the pace of our share repurchases highlights the conviction we have in the future of Ww.

And the plans we laid out at Investor day. Despite the current headwinds we expect to conclude the remainder of the roughly 4 billion of repurchases as expeditiously as practical depending on market conditions and other factors at.

Speaker 2: We expect to conclude the remainder of the roughly 4 billion of repurchases as expeditiously as practical, depending on market conditions and other facts.

Speaker 2: At our investor day, we also announced our plan to streamline the structure of our organization by changing from four segments to two segments, effective January 1st, 2022. We are now operating under that new structure with just two segments, risk and broken and help wealth and career. Accordingly, going forward our financial reports, supplemental disclosures, and related commentary will reflect our new structure.

At our Investor Day, we also announced our plans to streamline the structure of our organization by changing from four segments to two segments effective January one 2022.

We are now operating under that new structure with just two segments risk and broking and health wealth and career accordingly going forward, our financial reports supplemental disclosures and related commentary will reflect our new structure.

Speaker 2: Our 2021 financial results are a reflection of our resilience and our focus on strategic priorities. Although we have had near-term business challenges, we have undeniably strong assets, which gives me confidence in our ability to continue driving value for our stakeholders. There's a lot of opportunity ahead, and we remain focused on executing our strategy and setting the path for sustainable success. And now I'll turn the call back to Carl. Thanks, Fanger. And now we'll take your questions.

Our 2021 financial results are a reflection of our resilience and our focus on strategic priorities. Although we have had near term business challenges, we have undeniably strong assets, which gives me confidence in our ability to continue driving value for our stakeholders. There is a lot of opportunity ahead, and we remain focused on executing our strategy and setting the path for sustainable success.

Yes.

And now I'll turn the call back to Karl Thanks, Andrew.

Now we will take your questions.

At this moment to ask a question. Please press star one on your telephone to withdraw your question press pound key once again Thats Star one quick questions number one.

Speaker 1: At this moment to ask a question, please press star one on your telephone and to withdraw your question. Just press the pound key. Once again, that's the star one for questions. Star one.

One more quick questions.

Our first question will come from the line of Greg Peters from Raymond James You May begin.

Speaker 1: Our first question will come from line of Greg Peters from Raymond James. You may begin.

Good morning, everyone.

Speaker 2: I want to first focus in on the organic revenue result. And more importantly, I am looking at your slide deck, slide 11.

I wanted to first focus in on the organic revenue results.

Results and more importantly, I am looking at your slide deck slide 11.

Speaker 2: We talk about the expectation of delivering mid-single digit organic revenue growth for 22. If I were to read the TLE's, getting the most pushback on the results for last year driven by the unusual book sales and other anomalies going through it.

When you talk about your expectation of delivering mid single digit organic revenue growth for.

'twenty two.

If.

I were to read the tea leaves getting the most pushback on the results for last year, driven by the unusual book sales and other anomalies going through it so Carl and Andrew maybe you could give us a little bit more color on why you think youre going to be able to produce.

Speaker 2: Carl and Andrew, maybe you could give us a little bit more color on why you think you're going to be able to produce a mid-single digit organic revenue result for the full year and it certainly seems like

Mid single digit organic revenue result for the full year and it certainly seems like.

Speaker 2: The risk and broken will have some headwinds at least in the first half of the year. So some additional color that would be helpful

The risks and broken we will have some headwinds at least in the first half of the year. So.

Some additional color there would be helpful.

Speaker 9: Sure Greg, and thank you and good morning. So, a couple of points, I guess, we're expecting, you know, as we said, right, mid-singles, digit, organic, revenue growth for the company. And we're not giving segment level guidance on that. We are, there are a few clarifying points I think we can.

Sure, Greg and thank you and good morning.

So a couple of points I guess, we're expecting as we said right mid single digit organic revenue growth for the company and though we're not giving segment level guidance on that we.

Clarifying point I think we can be.

Speaker 9: We do think CRB is going to continue to gain traction throughout the year. I mean events in prior quarters have challenged us, and they're definitely temporary headwinds from those events that remain. We're highly competent in our hiring strategy. We've indicated before that hiring proceeds revenue when it comes to people. And with that in mind, when we look at what's required, we think the broken business during the next two quarters will build the acceleration, and we'll be seeing the gap narrow with CRB peers in the second half of the year.

We do think CRB is going to continue to gain traction throughout the year right I mean events in prior quarters have challenged us and there are definitely temporary headwinds from those events that remain we're highly confident in our hiring strategy. We've indicated before that hiring precedes revenue when it comes to people and with that in mind. When we look at what's required we think the broker.

<unk> business during the next two quarters will build building acceleration and we will be seeing the gap narrow with CRB periods in the second half of the year.

Speaker 9: And for the remaining two thirds of the company, we think a little performed, but peer levels are better. Right, I think the comments about CRB, which it is a major part of our business, does leave out the two thirds or so of the rest of the company. And though we're not providing detailed by segment, overall, market tailwind should continue to drive organic growth momentum in the HCB, soon to be former, as we'll talk about, HCB and BDA businesses.

And for the remaining two thirds the company, we think <unk> performed with peer levels or better alright. Thank the comments.

Both CRB, which is a major part of our business does leave out the two thirds or so for the rest of the company and we are not providing detailed by segment overall market tailwind should continue to drive organic growth momentum and the HCP. The soon to be former as we'll talk about Wright HCP and BDA businesses, where we have.

Speaker 9: where we have a terrific portfolio for related businesses helping organizations and individuals in the most important areas of health, wealth and career.

A terrific portfolio of related businesses, helping organizations and individuals in the most.

Important areas of health wealth and career.

Speaker 9: So, yeah, I think our strategy remains very much in line with the strategy and financial perspective of the we outlined that our investor day in the fall.

Yes, I think our strategy remains very much in line with the trends.

And financial perspective that we outlined at our Investor day in the fall.

Speaker 2: Carl, in an answer you highlighted hires. Maybe you could just give us some additional color on the hires versus what we had transpired last year, which was a lot of departures.

Carl on that and then answer you highlighted hires maybe you could just give us some additional color on the hires versus.

What had transpired last year, which was a lot of departures.

Speaker 9: Yeah, so I'll focus in on CRB and X, because I think that's where a lot of the focus and the questions were from the prior quarter on that.

Yes.

Focusing on CRB on that because I think thats, where in a lot of the focus on the questions were.

Higher quarter on that so we are keeping a very close eye on those areas and we acknowledge that we have a lot of work before us but here are some things we say about our view that things are going in the right direction.

Speaker 9: So we are keeping a very close eye on those areas and we acknowledge that we have a lot of work before us, but here are some things we say about our view that things are going in the right direction.

Speaker 9: Our incentive plan activity regarding retention, completed in Q4 was very well received, and we are very encouraged by what we can say. We've seen colleague departures trend downwards since Q3 in CRB.

Our incentive plan activity regarding retention completed in Q4 was very well received and we are very encouraged by what we can say we have seen colleague departures trend downwards since Q3 and CRB.

Speaker 9: We do see that colleagues departures and we are closely monitoring this data, right? Our have been slowing down since Q3 for CRB and that trend makes us optimistic we are heading in the right direction. And joiners are positive.

We do see that colleague departures and we are closely monitoring this data right ours have been slowing down since Q3 for CRB and that trend makes us optimistic we are higher heading in the right direction and joiners are positive as I mentioned in our prepared remarks, we've been hiring we've built an investment headroom to continue to execute on our hiring.

Speaker 9: As I mentioned, our prepared remarks with an hiring, we built an investment headroom to continue to execute on our hiring strategy into 22.

Strategy into 'twenty two.

Speaker 9: In CRB specifically in Q4 we have the highest net positive rate in terms of joiners outnumbering levers amongst all of our segments.

CRB specifically in Q4, we had the highest net positive right in terms of joiners outnumbering leavers amongst all of our segments and then looking at the data. That's just come out January is our biggest hiring month in CRB over the last two years at all levels, including senior hires.

Speaker 9: And then looking at the data that's just come out January's our biggest hiring month and CRB over the last two years at all levels including senior hire

Speaker 2: Thanks for that color. I guess the final question would be just as you're hiring, bringing in new people, there's a lag between...

Alright, thanks for that color I guess the final question would be just as youre hiring bringing.

Bringing in new people there is a lag between.

Speaker 2: you know, the time they hit the books and hit the P&L statement from an extent standpoint to the time they're actually producing and generating revenue and you know, depending on the situation that lag can be up to over a year.

At the time, they hit the books and hit the P&L statement from an expense standpoint to the time, they are actually producing and generating revenue.

And depending on the situation that lag can be up to over a year.

Speaker 2: So I guess what I'm ultimately getting at is you're making these investments in the year. You're also forecasting adjusted margin expansion for the full year, 22. So I'm just trying to reconcile the investment piece which seems to be necessary versus your expectation for adjusted margin.

So I guess, what I'm ultimately getting at is you're making these investments and yet you're also forecasting adjusted margin expansion for the full year 'twenty. Two so I'm just trying to reconcile the investment piece, which seems to be necessary versus your expectation for adjusted margin improvement.

And we agree with the fact that revenue trails hiring and we've allowed for that in what we think of the timing of how this is going to work out right. I mean, we think that if we're successful it's going to show in the financial results. That's the path we're on.

Speaker 9: We agree with the fact that revenue trails hiring. And we've allowed for that in what we think of the timing of how this is gonna work out, right? We think that if we're successful, it's gonna show in the financial results that's the path we're on. And that's one of the reasons we expect to see lower growth in CRB in the first half compared to the second half of the gap to industry, narrow.

And Thats one of the reasons, we expect to see lower growth in CRB in the first half compared to the second half of the gap to industry.

Narrows.

Speaker 2: Yeah, Gregus Andrew. And on the margin point, or the margin expansion, is for the entire company, right? And the revenue, I think that you've been asking about and the investment hiring is particular or more focused on one segment. Got it.

Greg It's Andrew on the on the margin point or the margin expansion for the entire company right and the revenue I think that you have been asking about it and the investment hiring has been a particular to or more focused on one segment.

Yes.

Got it I'll, let others ask questions. Thanks.

Thanks, Greg Thanks, Greg.

Speaker 1: Our next question will come from Linda Mike Zorantzki from Wolf Research. You may be.

Our next question comes from the line of Mike Zaremski from Wolfe Research you may begin.

Hey, good morning.

Speaker 3: Hey, good morning. Question on the HCB segment. I, you know, last quarter, I think this quarter, till you talked about continued momentum expected there. I think, you know, revenue growth is a little bit light. Maybe you can talk through, maybe unpack. I know you called out some capacity constraints and I see that you also called out retirement.

Question on the HCP segment last quarter I think this quarter. So you had talked about.

Continued momentum expected there.

I think revenue growth is a little bit light maybe you can.

But talk through maybe unpack I know you called out.

Some capacity constraints and I see that you also called out retirement.

Being <unk>.

Speaker 3: being slightly negative. If there are any kind of one-time-ish items or anything we should be thinking about.

Slightly negative.

Are there any any kind of onetime ish items or anything we should be thinking about thank you.

Speaker 9: Yeah, so let me show you the retirement that will back up to the capacity issues and the other businesses. So, our look for retirement, which is a large business for us, right? It's healthy, I mean, healthy pension funding positions as the result of interest and equity market movements during 2021 provide good opportunities for a de-resking and bulk lump sum work in North America.

Yes, So let me start with retirement that will back up to the capacity issues and the other businesses.

So our outlook for retirement.

Which is a large business for us is.

It is positive.

Healthy pension funding positions as the result of <unk>.

Interest and equity market movements during 2021 provide good opportunities for de risking in bulk lump sum work in North America.

Speaker 9: With respect to GB, which is a big business for us as well, right, the trend for risk transfer from company sponsored pension schemes to the insurance sector is expected to continue. And our view is that 2022 is going to be a good year for de-risking because of the healthy funding that there's never already alluded to. It also depends on pricing. There's more activity when bulk annuity or longevity pricing is particularly good.

With respect to GB right.

A big business for us as well right the trend for risk transfer from company sponsored pension schemes to the insurance sector is expected to continue and our view is that 2022 is going to be a good year for de risking because of the healthy funding decisions that already alluded to.

It also depends on pricing there is more activity when bulk annuity our longevity pricing is particularly good.

Speaker 9: and availability of assets that offer decent yield and then that insurance sale can back in the way we'll also sort of get all that 2021 so about 43 billion sterling of bulk in the Indian and longevity swap transactions completed We think that number is going to increase to exceed 55 billion for 2022 That would be the biggest year ever and we are well positioned to capture the significant share of this market increase activity

And availability of assets that offer a decent yield and then that insurance deal can back annuity will also sort of get all that 2021. So about 43 billion sterling of bulk annuity and longevity swap transactions completed we think that number is going to increase to exceed 55 billion for 2022 that would be.

The biggest year ever and we are well positioned to capture a significant share of this market increased activity.

Speaker 9: On the other hand, when you have a development like this, we give less advice on funding issues because there's fewer funding issues to be had when pension schemes are well funded. And then we have some initiatives going on. So our need to work to address guaranteed minimum pensions continued as does momentum for our lifestyle product we discussed in September at our 1-Db office.

On the other hand, when you have an environment like this we give less advice on funding issues, because there's fewer funding issues to be headwinds wins engine schemes are well funded.

And then we have some initiatives going ISR need to work to address guaranteed minimum pensions continued as does momentum for our lifestyle product. We discussed in September at our one DB offering.

Speaker 9: In North America, both Lump sum activities been more muted the last several years, and as a result of the activity we've had, there's probably less potential volume going forward. We do expect an increase in DOS activity over 2021, but this is really dependent on what happens with interest rates over the next few months, and so we will say. But there are definitely opportunities in the de-risking marketplace where we have a very good position.

In North America.

Bulk lump sum activity has been more muted the last several years and as a result of the activity. We've had there is probably less potential volume going forward. We do expect an increase in Pos activity over 2021, but this is really dependent on what happens with interest rates over the next few months.

So we will see but there are there are definitely opportunities and the derisking marketplace, where we have a very good position.

Speaker 9: With respect to some of the fantastic constraints I was alluding to before, these are most pronounced in our talent or awards business, which has a large share of project-oriented revenue, although we have a nice mix of revenue when it comes to things like comps, surveys as well. We have just as we have been for hiring in CRB addressing the T&R hiring issue as well, and we think that will give us the opportunity to capture markets.

With respect to some of the protests.

Capacity constraints I was alluding to before these are most pronounced in our talent and rewards business.

Which has a large share of project oriented revenue, although we have a nice mix of revenue when it comes to things like comp surveys as well we have just as we have been for hiring.

CRB.

Addressing the T and our hiring issue as well and we think that will give us the opportunity to capture market as we go forward.

That's helpful.

Speaker 3: that's helpful. Maybe as my follow up, switching gears to free cashflow levels.

My follow up switching gears to free cash flow levels.

You broke out $250 million of incentives and benefit related items negatively impacted free cash flow for the year.

Speaker 3: you broke out uh... 250 million of incentives and benefit-related items negatively impacted free cash flow for the year that that kind of group quarter of a quarter are are those

<unk> grew quarter over quarter are those.

Speaker 3: Those items can fall off in 22 and have you broken out the free cash impact of maybe one time items related to the cost-cutting measures you're taking. Thank you.

Are those items going to fall off in 'twenty, two and have you broken out the free cash flow impact of maybe one time items related to the the cost cutting measures youre, taking thank you.

Speaker 2: Yep, we do expect those numbers to evade going forward. And I think the second part of your question was around the transformation spend. Is that correct? Right. It's, yeah, so that's the idea.

Yes, we do expect those numbers to abate going forward.

And I think the second part of your question it was around the.

Congrats formation spend is that correct.

Yes.

Cash.

Speaker 2: Yeah, yeah, that will impact cash and that's something that, you know, will be broken out as we continue to report on that program separately.

Yes, yes, it will impact cash and that's something that.

It will be broken out as we continue to report on that.

Program separately.

Thank you.

Okay great.

Speaker 1: the next special afternoon of Michael Phillips from Morgan Stanley . He may begin.

Our next question comes from Brian .

Michael Phillips from Morgan Stanley you may begin.

Thanks, Good morning, Collin when I go back to I guess, the first couple of questions on recruiting.

Speaker 4: Thanks, good morning. Carl, I wanna go back to, I guess the first couple of questions on recruiting if I could on CRB. Could you say how close you are today with kind of where you wanna be with just the absolute level of producers in that segment?

On CRB could you can you say how close you are today with kind of where you want to be which is the absolute level of producers.

In that segment.

Speaker 9: We've made good progress, but we continue to search for good talent around the world. We think can be great fit for the organization and can help us grow. So to the extent we can find those, whether it's in one-offs or in bigger chunks, we're definitely on the look. So as I said, happy with the progress, but it is a journey.

We've made good progress, but we continue to search for good talent around the world. We think can be great fits for the organization and can help us grow.

So to the extent, we can find those so whether it's in one officer bigger chunks, we are definitely on the <unk>.

Look so as I said happy with the progress.

But it is a journey and.

Speaker 9: You know, part of this is getting us back to where we were and part of this is sort of looking toward our growth ambitions for our company over the next several years.

Part of this is getting us back to where we were in part of this is sort of looking toward our growth ambitions for our company over the next several years. So we're definitely continuing to remain in the market.

Speaker 9: So we're definitely continue to remain in the market.

Okay. Thanks.

Speaker 4: Okay, thanks. I mean, I kind of fall upon that. I'm excusing. Fall upon that. Then I guess is, you know, recruiting efforts are difficult across the board and the industry. So, you know, you're not alone there, but it seems like it might be more difficult for a company that's gone through some turmoil. So anything you can share on any premium might have to pay or you pay in 20, 30, 40% for you to get people in the door versus what you normally would have to pay.

Follow up on that excuse me follow up on that then I guess as well.

Recruiting efforts are difficult across the board in the industry, So you're not alone there.

It seems like it might be more difficult for companies going through some turmoil. So anything you can cherilyn.

The Permian might have to pay are you paying 2030, 40% premium to get people in the door versus what you'd normally would have to pay.

I don't think that we pay any premium compared to what anybody else does if anything I think.

Speaker 9: I don't think that we pay any premium compared to what anybody else does. If anything, I think our new strategy is resonating with people in the market. They're actually excited about the fact that WTW is participating in an independent company with a very determined ambitions in the marketplace going forward. So the conversations we've been having with with Talentware Tempest, who have been very positive in nature.

Our new strategy is resonating with people in the market. They are actually excited about.

Ww is <unk> independent.

Company with a very.

Very determined ambitions in the marketplace going forward.

So the conversations we've been having.

With talent, we're attempting have been very positive in nature.

Speaker 9: And we're delighted our clients and our carrier partners and the talent out there seems to be voting for the strength and viability of us as an employer of choice.

And we are.

We're delighted our clients and our carrier partners and the talent out there seems to be voting for.

Strength and viability of us as an employer of choice.

Okay. Thank you I appreciate it.

Our next question comes from the line.

Speaker 1: Our next question comes from Lionel Lee's Green Spin from Wells Fargo. You may begin.

Elyse Greenspan from Wells Fargo.

Yes.

Speaker 5: I think good morning. My first question goes back to some of your opening comments. You said the results aligned with your expectations. And it does seem I want to focus on, you know, first on CRB. Does seem like, you know, the slowdown in revenue right got worse this quarter. So I just, you know,

Hi, Thanks, Good morning, My first question.

Goes back to some of your opening comments you said the results align with your expectations.

And it does seem I want to focus.

First on CRB does seem like the slowdown in revenue right got worse this quarter.

Speaker 5: I realize that I guess that was in line with your expectations. Could you help us think through your expectations from here? How do we think about the growth trending in the first half of the year relative to the 1% that I imagine was lower, right? We asked out the book of business gains. Let me just help us think about the stress between the growth within us.

Realizing that I guess that was in line with your expectations could you help us think through your expectation from here, how do we think about the growth.

Trending in the first half of the year relative to the 1%.

I imagine with lower right ex out the book of business gains.

Can you just help us think about the restructuring and the growth within that segment.

Speaker 9: Yeah, I mean the flip side of, you know, revenue increases lagging higher. As we discussed a couple of questions ago is that revenue decreases from people leaving right don't occur immediately either, right, dude.

Yes, so I mean.

The flip side of.

Revenue increases lagging hiring.

<unk>.

As we discussed.

A couple questions ago is that revenue decreases from people, leaving right don't occur immediately either right due to the renewal cycle et cetera. So it wasn't it wasn't the numbers for the fourth quarter Workday surprised to Andrew being in fact, I think we discussed when we thought they were going to be.

Speaker 9: renewal cycle, et cetera. So it wasn't, you know, the numbers for the fourth quarter weren't a surprise to Andrew B. And in fact, I think we discussed from what we thought they were gonna see while for the company. And, you know, I think we definitely had our...

For the company and I think we definitely had our.

Speaker 9: Fingers on the pulse and we think we've got our fingers on the pulse going forward as well in terms of the fact that the people we've been bringing in over the past few months will indeed take some time to ramp up.

Fingers on the pulse and.

We think we've got our fingers on the pulse going forward as well in terms of the fact that the people we've been bringing in over the past few months, we will indeed take some time to ramp up.

Speaker 9: We've built that into how we view our financial model going forward and We think we can continue to grow this business while maintaining our path on margins to get to our 2024 targets, right? We we are trying to balance a set of competing objectives and we very much have all those objectives in mind as we look how to build this

<unk> built that into how we view our financial model going forward.

And we think we can continue to grow this business, while maintaining our path on margins to get to our 2024 targets right.

We are trying to balance a set of competing objectives and we.

Very much have all of those objectives in mind as we look to how to build the business.

Speaker 5: And then in terms of the book of business gains, I calculated that was probably around two and a half percent on revenue in the quarter. If you can confirm that, assuming that it's all 100% margin. And then my second question would be, when you guys say mid single digital greater or data for 2022, does that assume any further gains on book of business?

And then in terms of the book of business gains.

Academy that that was probably around two 5% on revenue in the quarter. If you can confirm that.

Assuming that it's all 100% margin and then my second question would be when you guys say mid single digit or greater organic for 2022 does that assume any any further gains on book of business.

Speaker 2: Yep, sure. So your math on the review calculation is about right. And in terms of expectations around book of business sales, I think was your second question.

Yes, sure. So your math on the revenue calculation is about right.

And in terms of expectations around book of business sales I think was your second question.

Yes is that right sorry, yes, yes.

Speaker 2: Yes. Is that right? Sorry. Yes. Yeah. So, you know, we expect to be, you know, over time reverting to more normalized levels. And if you look back over the last couple of years, you can see what that looks like. We don't anticipate or expect anything, you know, near the level from 2021.

Yes so.

We expect to be overtime reverting to more normalized levels and if you look back over the last couple of years, you can see with that with that looks like.

We don't anticipate or expect.

Anything near the level from 2021.

And then.

Speaker 5: And then suspension income for 2022. I know you gave us a year-to-year decline. So what's the overall pattern that you guys expect? 22.

Pension income for 2022, I know you gave us year over year decline to whats the overall.

Are you guys expecting on Youtube.

Okay.

Yes, I don't think were going to get into that level of granularity on the direction on the quantum.

Speaker 2: Yeah, I don't think we're getting into that level of granularity on the direction on the quantum of changes in the pension income.

Of of changes in the pension income.

Yes.

Okay.

And then you've got the $20 million.

Oh, sorry.

Go ahead.

Speaker 2: Sorry, I was just referring at least to slide 11, which talks about the 20 million year of year decline in pension and not cash pension income for 2022.

Sorry, I was just referring at least to slide 11, which which.

It talks about the $20 million year over year decline in pension and non cash pension income for 2022.

Speaker 1: Thank you. And in the interest of time, please send yourself to one question. That way all our participants can ask a question. Our next question will be from the line of Paul Newsom from Piper Sandler. You may begin.

Okay.

Interest of time, please limit yourself to one question.

Participants can ask the question. Our next question will be from the line pond.

Paul Newsome from Piper Sandler you may begin.

Speaker 6: I go one very quick and maybe a real question. But the follow up to at least, the book of business elements, is that pure profit? Is there any really the expenses? And I just want to see if you had any update view on the debt structure perspective, given how much stockier problem.

Yes.

One very quick.

Maybe a question.

A follow up to lease the book of business settlements is that pure profit is there any expenses.

I just wanted to see if you had any updated view on.

The debt structure.

Just given how much.

Thank you.

Are we going to be repurchasing.

Yes, So I think the first part of your question was around the book of business margin essentially yes. There are some expenses that do get put against that but it is relatively <unk>.

Speaker 2: Yeah, so I think the first part of your question was around the folk of business margin, essentially, yes. There are some expenses that do get put against that, but it is relatively high margin.

Relatively high margin.

Speaker 2: And your second question was on debt structure and share repurchases in the line of the share rep. Yeah, yeah. So in terms of leverage, I think we're very comfortable with where we are. It's in line with the discussions we've had with the rating agencies. And we think it allows us to maintain appropriate financial flexibility to be able to take advantage of anything that may come our way, whether it's the peer repurchases or something strategic.

And your second question was on.

That structure and share repurchases in the lineup sure yeah, yeah. So in terms of leverage right I think we're very comfortable with where we are.

In line with the discussions we've had with the rating agencies and we think.

It allows us to maintain appropriate financial flexibility to be advantaged to be able to take advantage of anything that may come our way, whether its share repurchases or something strategic.

Speaker 1: Thank you. Our next question comes from the line of David Motomatton from Evercore ISI. You may begin.

Thank you. Our next question comes from the line of David Maura Madden from Evercore ISI.

To begin.

Hi, Thanks.

Speaker 7: Hi, thanks. Carl, I had a follow up just on head count. I think in the last quarter, you talked about the core CRB head count was down 100 people, 3Q21 versus 3Q20. What was that in the fourth quarter? And I guess how has that been trending in the first part of the first quarter this year?

Carl I had a follow up just on.

Just on on head Count I think in the last quarter, you talked about the core CRB head count was down 100 people.

<unk> 21 versus <unk> 20.

What was that in the fourth quarter and I guess, how how has that been trending in the first half or first first part of the first quarter of this year.

Yes, so for the fourth quarter head joiners exceeded leavers.

Speaker 9: Yeah, so from the fourth quarter, joiners exceeded levers by a decent margin. So headcount is now up. And as I look to in January , right, so our best months are hiring in, you know.

By a decent margin so head count is now up and as I alluded to in January rates are best left for hiring.

Quite a while a couple of years alright, so we're making back.

Speaker 9: We're making back for a lost time and opportunity, I think, in terms of the overall headcut.

For loss time, an opportunity I think in terms of the overall head count.

Thank you. Our next question will come from the line of Ryan Tunis from autonomous.

Speaker 1: Thank you. Our next question on conflina, Ryan Tunex from Automot, Economist Research, you may begin.

Economists research you may begin.

Speaker 6: Hey, thanks. Good morning. One on BDA, growth of total solar and expected there, this quarter trans act was only up about 2, 3%.

Hey, Thanks, good morning.

One on BDA growth of total a slower than expected there this quarter transact was only up about 3%.

Speaker 6: Do you think that the structural growth rate of that business has changed at all as we approach 2022 and just curious if you could talk to some of the trenders?

You think that the structural growth rate of that business has changed at all as we are.

Approach 2022, and just curious if you could talk to some of the trends you're seeing.

Speaker 9: I mean, the overall market transact operating is big and keeps increasing as people keep turning 65. So, we're very happy about the overall market and transactability to expand within it.

Yes, I mean, the overall market transact operates in is big and keeps increasing as people keep turning 65.

So we're very happy about the the overall market and transact <unk> ability to expand within it.

Neil.

If you look at our performance during.

2021.

There are it's lower than we're used to seeing but were still really just excited about <unk> prospects. I mean, if you take a step back and look at transact on a full year basis.

Speaker 9: 661 million of revenue and 17% organic growth. And if you look at our original projections, we supplied when Trans Act first joined WTW. Their current revenue figures are a full year ahead of what we anticipated. And by no means does a growth in life performance in Q4 change that.

$661 million of revenue in the 17% organic growth and if you look at our original projections, we supplied when transact first joined Ww.

Current revenue figures or a full year ahead of what we anticipated and by no means does.

Both with light performance in Q4 change that.

Speaker 9: Yeah, to speak to Q4 specifically, it is true that it was a lower court than we anticipated. And this was largely due to some advertising and programs generating lower leads and diversions than planned. Obviously, these are investments that were made. So we didn't realize the results that were expecting. It did impact the bottom line and the margin.

To speak to Q4, specifically it is true that it was a lower quarter than we anticipated and this was largely due to some advertising and programs generating lower leads and diversion and plan.

Obviously these are investments that were made suites, we didn't realize the results they were expecting it did impact the bottom line and the margin.

Speaker 9: As we head into 2022, the team is conducted a review and we're implementing strategies across all our carrier partners to improve member experience, which will help maintain membership. And therefore, we continue to remain confident in transactions, do have high expectations.

As we head into 2022. The team has conducted a review and we're implementing strategies across all our carrier partners to improve member experience, which will help maintain membership and therefore, we continue to remain.

Then in transact and do have high expectations for this business.

Our next question will come from the line of Mark Hughes from <unk> you may begin.

Speaker 1: Our next question will come from Ryan Mark Hughes from Truist. You may begin.

Speaker 4: Yeah, thank you. I'm sticking with the Trans Act. Anything you'd just saw in terms of lapse rates, this turnover in terms of your

Yes. Thank you just sticking with the transact anything that you saw in terms of lapse rates.

Turnover.

In terms of.

Your customer base.

Okay.

Speaker 2: I think everything that we saw in that business, yeah, it's Andrew, sorry. I think everything that we saw in that business was consistent with our expectations and nothing there that was a real outlier. But of course, it's something that we always keep an eye on as we watch the book develop.

I think everything that we saw in that business.

Yes, it's Andrew sorry, I think everything that we saw in that business was consistent with our expectations and nothing there that was a real outlier but of course, it's something that we always keep an eye on as we as we watch the book develop.

Speaker 1: Our next question on the land of your own canar from Jeffries, may begin.

Our next question will come from line of your own Qunar from Jefferies. You may begin.

Hi, Good morning, Thanks for taking my questions. My first question is around the comp and benefit ratio to improve to about 400 basis points year over year can you maybe talk about the main drivers for that improvement and how you see that ratio develop into 'twenty two is the highest.

Speaker 9: Hi, good morning, thanks for taking my questions. My first question is around the Combin Benefit ratio, which improved about 400 races points here over here. Can you maybe talk about the main drivers for that improvement and how you see that ratio develop into 22 as the hires come in?

Yes.

Speaker 2: yep i think i part of the trend that you're seeing their income and then you know might be related to uh... the impact of some attrition uh... right and colleague retention over time uh... and you know i think the other the other thing we point out is just the

Yes, I think part of the trend that youre seeing there in comp and Ben might be related to the impact of some attrition.

Colleague retention over time.

And I think the other the other thing we pointed out is just the.

Speaker 2: you know the the mix of pay that we have with regard to discretionary compensation right provides us uh... you know with the appropriate tools to make sure that uh... you know employees and and everybody else are compensated you know along with the for the firm performance

The mix of pay that we have with regard to discretionary compensation rate provides us.

With the appropriate tools to make sure that.

Employees and everybody else are compensated along with them.

Firm performance.

Okay.

Our next question comes from the line of Meyer Shields from <unk> you may begin.

Speaker 4: Next question, Councilor Lyon of Myersheelbs from KBW. You may begin. Oh, great. Thanks. Two quick ones if I can. First, I'd like to appreciate all of the disclosure you've given us on the book sales and settlement. If I take any comments about 100 base point impact for the full year, then it applies about 13 million. What's the normal run rate? In other words, what do you budget for that?

Great. Thanks.

Quick ones, if I can first call I appreciate all of the disclosure you've given us on the book sales and settlement.

If I take Andrew's comments about 100 basis point impact for the full year that implies about $113 million, what's a normal run rate in other words, what do you budget for that.

For a typical year.

Speaker 2: Yeah, I walk it into the specifics around budgeting, but if you go back and take a look over recent history and go back a couple of years or quarters, you can see some of that in the disaggregation of revenue footnotes that are provided. You know, more normalized levels are significantly less than what we experienced in 2021.

Yes.

Get into the specifics around budgeting, but if you go back and take a look over.

Recent history and go back a couple of years or quarters, you can see some of that and the disaggregation of revenue footnotes that are provided.

More normalized levels are significantly less than what we experienced in 2021.

Okay.

Speaker 9: We think that the retention measures we put in should be effective in getting us.

We think that the retention measures we put in.

Should be effective in getting us to those normalized levels.

Thank you and our.

Speaker 1: Thank you. And our next question on Confilina Brian Meredith from UBS, maybe again.

Our next question comes from the line of Brian Meredith from UBS you may begin.

Speaker 8: Yes, thanks. Take a call just quickly here. Just curious, how are you balancing the cost saves that are going through versus the need for you guys to really invest in your business, particularly the CRB, not only hiring, but just invest to get this organic growth going. And then also what impact is wage inflation potential they're gonna have on kind of offsetting maybe some of those cost saving.

Yeah. Thanks, Hey, just quickly here I'm just curious how are you balancing the cost saves that are going through versus the need for you guys to really invest in your business, particularly the CRB not only hiring which is invest to get that organic growth going and then also would impact just wage inflation potentially going to have on kind of offsetting maybe some of those cost savings.

Speaker 9: All right, so we expect a wage inflation, right? I mean, we have built a compensation program that is a bit more weighted towards variable than others. And I think that does help us with being able to manage this effectively as a business.

All right so with respect to wage inflation right. I mean, we have built a compensation program that is a bit more weighted towards variable.

Than others, and I think that does help us would be able to manage this effectively as a business.

Speaker 9: I also point to one of the pillars of our program is capitalizing our scale to move back office work to centers excellence that we think will improve client and colleague experience and outcomes, but it should also allow for relief on the cost pressures that we might have in an inflationary market. So there's a good deal of alignment, I think, between the transformation strategy and our ability to respond flexibility to business to inflationary pressure.

I'd also point to.

One of the.

Pillars of our program is <unk>.

Capitalizing our scale to new move back office work to centers of excellence that we think will improve client and colleague experience and outcomes, but should also allow for relief on the cost pressures that we might have an inflationary market.

There's a good deal of alignment I think between the transformation strategy and our ability to respond flexibility as a business to inflationary pressures.

Our next question will come from the line of Mark Marcon from Baird you may begin.

Speaker 1: My next question on front land of Mark Marken from there, you may begin.

Speaker 7: Good morning and thanks for taking my question. With regards to this, the comp and benefit.

Good morning, and thanks for taking my question.

With regards to this.

Comp and benefits.

Speaker 7: Can you just discuss how we should think about that on a more normalized basis? Obviously, the last half of 2021 was impacted by the departures. If you're implementing the plan and assuming that, variable compensation is roughly in line with your revenue expectations for the year, how should we think about that comp and benefit?

Can you just discuss how we should think about that on a more normalized basis. Obviously the last half of 2021 was impacted by the departures if youre implementing the plan and assuming that.

Variable compensation is roughly in line with your revenue expectations for the year, how should we think about that comp and benefits.

Speaker 7: number trending over the year and, you know, what sort of

Number trending over the year and.

What sort of.

Speaker 7: leverage or or de-leverage we would end up getting on that particular line and then my follow-up is is basically just a general commentary

Leverage or deleverage, we would end up getting on that particular line and then my follow up is is basically just a general commentary with regards to engagement scores.

Speaker 2: engagement scores as they progress through the year and how you think they'll end up, you know, six.

As they progress through the year and how are you.

They'll go end up.

Six months to a year from now.

Speaker 2: Yeah, it's Andrew. I'll start with the compensation question. I think what we expect is compensation percentages to return towards more historical levels.

Yes, it's Andrew I'll start with the.

The compensation question I think what we expect is.

Compensation.

Percentages to return towards more.

Historical levels. So I think if you go back and look at that right sort of pre the last two years Youll get a good picture and of course as hiring continues right.

Speaker 2: So I think if you go back and look at that, right, sort of pre the last two years, you'll get a good picture. And of course, as hiring, you know, continues, right, you know, they, from an absolute dollar perspective, there would be some impact there, but from a percentage perspective.

From an absolute dollar perspective, there would be some impact there, but from a percentage perspective.

Speaker 2: would expect that to remain relatively consistent.

Would expect that to me remain.

Relatively relatively consistent.

Speaker 2: And the other thing to think about here is the prior year, was on an as reported basis and inclusive of some of the vestitures like Miller and Inavisk and some other things. And also the current year has lower up X rates and some timing on a cruel and certain discretionary compensation and benefit expenses in there as well. Yeah, I mean, we'd expect to engagements. We actually ran a all colleague survey.

And the other thing to think about here is the.

The prior year on an as reported basis and inclusive of some divestitures like Miller.

And some other things and also the current year has lower FX rates.

There was some timing on accrual and certain discretionary compensation and benefit expenses in there as well.

With respect to engagement, we actually ran a all colleagues survey at the during the fourth quarter.

Speaker 9: at or under the fourth quarter, and uh...

And.

Speaker 9: The results we got actually show engagement is up over the last couple of times we measured it with two years and four years ago, which is I think a great result to the dedication of our colleagues.

The results, we got actually show engagement is up over the last couple of times, we measured it.

Two years and four years ago, which is I think a great result to the dedication of our colleagues.

Speaker 9: to the success of WTW going forward. Yeah, we do this for a living with our clients, and so we try to apply the lessons of what we learn to ourselves as well. And so we'll continue to monitor this across the organization. But we think we understand what creates sustainable engagement with our colleagues and makes this a great place to work.

To the success of Ww going forward.

We do this for a living with our clients and so we try to apply the lessons of what we learned to ourselves as well and so we will continue to monitor this across the organization.

We think we understand what creates sustainable engagement with our colleagues and.

Makes this a great place to work and we'll be looking to demonstrate that not just to the people. We have today, but the people are looking to bring onboard as well.

Speaker 9: and we'll be looking to demonstrate that not just for the people we have today but the people looking to bring on forward as well.

Sure.

Okay follow up.

Speaker 1: It's far from the line of David Motomatin from overcore ISI. Your line is open.

On the line of David <unk> from Evercore ISI. Your line is open.

Hi, Thanks for taking my follow up.

Speaker 7: Hi, thanks for taking my follow up. I get to fly sort of back into it. It looks like the book of business settlements for the full year were about 90 to 100 million.

I guess, if I sort of back into it it looks like.

The book of business settlements for the full year were about $90 million to $100 million.

Speaker 7: for full year of 21. Is that a good level to think about the future lost revenue? I guess some of that might have been as already reflected in results, but is that sort of a good baseline as I think about the drag that that may result in as we had throughout 2022?

For full year of 'twenty one.

Is that a good level to think about the future of lost revenue.

Yes, some of that may have been.

Already reflected in our results, but is that sort of a good baseline as I think about.

The drag that that May result in as we had throughout 2022.

Yes.

Speaker 2: No, hey, it's Andrew. I think the book of business settlement right are typically a multiple of the revenue amount. So I think if you would have bought multiple exceeds one. Right, right, my margins. So I think you'd have to temper that back a bit by thinking about what industry transaction multiples look like on a revenue base.

No.

It's Andrew I think.

The book of business settlements right are typically a multiple right of of the revenue amount right. So I think if you were to multiple exceeds one right right margins right. So so so I think you'd have to temper that back a bit by thinking about what the industry.

<unk> multiples might look like on a revenue basis.

And then as a follow up from the line of your own Qunar from Jefferies. You may begin.

Speaker 1: We have another follow up from the line of your own canar from Jeffries. You may begin.

Speaker 9: Thanks, I was cut off earlier. My second question was gonna be around the...

Thanks, I was cut off earlier.

My second question was going to be around <unk>.

Speaker 9: commentary around timing of the revenue gap being closed to peers. I just wanted to better understand how 2022 is a year where you can close that gap when some of your peers, large peers, have also been engaged in prolific hiring over the last several quarters.

Commentary around timing of the revenue.

GAAP being closed to peers.

I just wanted to better understand how 2022 is a year, where you can close that gap.

Some of your peers large periods have also been engaged in.

Prolific hiring over the last several quarters.

Speaker 9: And to your earlier point, you still see a bit of a lag from...

And to your earlier point, you still see a bit of a lag from.

Speaker 9: revenue perspective from earlier departures. So maybe explain how even with those issues, you can still close that gap.

Revenue perspective from earlier departures so.

Maybe explain how even with those issues you can still close that gap.

Well, we said narrow I mean to be clear.

Speaker 9: Well, we said narrow. I mean, we said we'll narrow that gap. We'll continue to see that gap narrow as well. Right. We think we were made in a tract of dust dishes to talent and we think we can hire along with the industry as we continue to get ourselves back to where we need to be. So that should do. In a steady state environment, get us to be approaching where we think the industry can be.

Alright.

We'll narrow that gap, we see we will continue to see that gap.

GAAP narrow as well alright.

We think we remain an attractive destination for talent and we think we can hire along with the industry.

As we continue to.

Get ourselves back to where we need debate so that should in a steady state environment get us to the.

Approaching where we think the industry can be.

Yes.

And our next follow up will be from the line of minor shields from K B W.

Speaker 1: And our next follow up will be from the line of Miter Shields from KBW. You may begin.

To begin.

Speaker 4: Thanks. I was just hoping to get the impact of foreign exchange on fourth quarter EPS and margins.

I was just hoping to get the impact of foreign exchange on fourth quarter EPS and margins.

Yes.

<unk>.

Okay.

So.

Speaker 2: So, fourth quarter, FX was a headwind of about 19 million on revenue, so about six cents on adjusted EPS, the main component of that was the weakness of the dollar against the euro. Okay, thank you, Andrew.

And fourth quarter.

<unk> was a headwind of about $19 million on revenue so about six.

On an adjusted EPS. The main component of that was the weakness of the dollar against the euro.

Okay.

Thank you Andrew.

Okay.

So I would like to thank everyone for joining us this morning.

Speaker 9: We look forward to updating you on our first quarter earnings call in the spring.

We look forward to updating you on our first quarter earnings call in the spring.

Okay.

And this will conclude today's conference call. Thank you for participating you may.

Speaker 1: And this work includes today's conference call. Thank you for participating. You may now disconnect. Everyone have a great.

Now disconnect everyone have a great.