Q4 2023 Willis Towers Watson PLC at Earnings Call

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Speaker Change: Good morning, welcome to the W. T W fourth quarter and for year 2023 earnings Conference call.

Operator: Good morning. Welcome to the WTW fourth quarter and four-year 2023 earnings conference call. Please refer to WTWCO.com for the press release and supplemental information that were issued earlier today. Today's call is being recorded and will be available for the next three months on WTW's website. Additionally, some of the comments in today's call may constitute forward-looking statements within the meaning of the Private Securities Reform Act of 1995. These forward-looking statements are subject to risk and uncertainty. Actual results may differ materially from those discussed today, and the company undertakes no obligation to update these statements unless required by law.

Speaker Change: Please refer to W. T. W. C O dot com for the press release and supplemental information that were issued earlier today.

Speaker Change: Today's call is being recorded and will be available for the next three months on Wcw's website.

Speaker Change: Some of the comments in today's call may constitute forward looking statements within the meaning of the private Securities Reform Act of 1995.

Speaker Change: These forward looking statements are subject to risks and uncertainties.

Speaker Change: Actual results may differ materially from those discussed today and the company.

Speaker Change: It takes no obligation to update these statements unless required by law.

Operator: For more detailed discussion of these and other risk factors, investors should review the forward-looking statements section in the earnings press release issued this morning, as well as other disclosure in the most recent Form 10-K and other Willis Towers-Watson SEC filings. During the call, certain non-GAAP financial measures may be discussed. For reconciliations of the 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 company's website. I'll now turn the call over to Carl Hess, WTW's Chief Executive Officer. Please go ahead, sir.

Speaker Change: For more detailed discussion of these and other risk factors investors should review the Fort looking statements section in the earnings press release issued this morning as well as other disclosure in our most recent Form 10-K, and other Willis towers Watson's SEC filings.

Speaker Change: During the call certain non-GAAP financial measures may be discussed.

A reconciliation of the non-GAAP measures as well as other information regarding these measures. Please refer to the most recent earnings release and other matures in Nebraska Investor Relations section of the company's website.

Speaker Change: I'll now turn the call over to Carl Hess W. Gw's Chief Executive Officer. Please go ahead Sir.

Carl Hess: Good morning, everyone. Thank you for joining us for WTW's fourth quarter and full year 2023 earnings call. Joining me today is Andrew Krasner, our Chief Financial Officer. WTW ended 2023 on a strong note and has begun 2024 with solid momentum as we continue to execute on our grow, simplify, and transform strategic priorities. In the fourth quarter, our world-class solutions and maturing investments in talent helped generate robust organic revenue growth, and our transformation program and expense discipline drove adjusted operating margin expansion and solid adjusted diluting earnings per share growth. Our performance steadily improved throughout 2023, and today, WTW is stronger, more resilient, and better positioned to achieve our goal. We delivered 6% organic revenue growth in the fourth quarter with an adjusted operating margin of 34.2%, up 180 basis points over the prior year. Adjusted diluted earnings per share were $7.44, an 18% increase year-over-year.

Carl Hess: Good morning, everyone. Thank you for joining us for W. Tw's fourth quarter and full year 2023 earnings call. Joining me today is Andrew Krasner, our Chief Financial Officer.

W. Tw ended 2023 on a strong note and has begun 2024 with solid momentum as we continue to execute on our growth simplify and transform strategic priorities.

Carl Hess: In the fourth quarter, our world class solutions, and maturing investments and talent helped generate robust organic revenue growth in.

Andrew Krasner: And our transformation program and expense discipline drove adjusted operating margin expansion and solid adjusted diluted earnings per share growth.

Andrew Krasner: Our performance steadily improved throughout 2023, and today Ww as stronger more resilient and better positioned to achieve our goals.

Andrew Krasner: We delivered 6% organic revenue growth in the fourth quarter with an adjusted operating margin of 34, 2% up 180 basis points over the prior year.

Andrew Krasner: Adjusted diluted earnings per share were $7 44.

Andrew Krasner: An 18% increase year over year.

Andrew Krasner: For the full year, we had organic revenue growth of 8% above our mid single digit target.

Carl Hess: For the full year, we had organic revenue growth of 8% above our mid-single-digit target. We also drove 110 basis points of year-over-year margin expansion to achieve an adjusted operating margin of 22%, fulfilling our commitment of annual margin, adjusted to diluted earnings per share for $14.49, an 8% increase over the past year. We believe these results are the product of our strong global client model, our strategic investments in talent and technology, and our team's hard work and relentless focus on being best-in-class. The progress we see within WTW and the enthusiastic response we're receiving from clients gives us confidence that our strategies, our people, and our investments are aligned with areas that we believe to be the greatest opportunities to drive sustainable, profitable growth and create shareholder value over the long term.

Andrew Krasner: We also drove 110 basis points of year over year margin expansion to achieve an adjusted operating margin of 22% fulfilling our commitment of annual margin expansion.

Andrew Krasner: Our adjusted diluting earnings per share or $14 49.

Andrew Krasner: An 8% increase over the prior year.

Andrew Krasner: We believe these results are the product of our strong global client model, our strategic investments in talent and technology and our team's hard work and relentless focus on best in class delivery.

Andrew Krasner: The progress we see within W. Tw and the enthusiastic response, we're receiving from clients give us confidence that our strategies our people and our investments are aligned with areas that we believe to be the greatest opportunities to drive sustainable profitable growth.

Andrew Krasner: And create shareholder value over the long term.

Carl Hess: Let me take a few minutes to share the progress we've made and the opportunities ahead of us across our segment. Throughout 2023, our specialization strategy in risk and broking will be a key driver of growth for both the segment and the enterprise. Our specialty businesses continue to have significantly higher growth than the rest. This growth is driven in large part by improved client retention, expansion of existing client relationships, and our strength and ability to attract new clients and win back old ones, as delegated or. As a result, specialization continues to be our primary strategic focus in our engagement. It allows us to create value for clients by tailoring solutions that close gaps in their risk management. Together with digitization, data, and analytics, we can create efficiencies that enable us to provide more timely and effective insurance. Our approach to specialization is tailored to each geography in which we operate.

Andrew Krasner: Let me take a few minutes to share the progress we've made and the opportunities ahead of us across our segments.

Throughout 2023, our specialization strategy and risk and broking was a key driver of growth for both the segment and the enterprise.

Andrew Krasner: Our specialty businesses continue to have significantly higher growth than the rest of the segment.

Andrew Krasner: This growth driven in large part by improved client retention and expansion of existing client relationships and our strength and ability to attract new clients and win back old ones.

Andrew Krasner: Validated our approach.

Andrew Krasner: As a result specialization continues to be our primary strategic focus in RMB.

Andrew Krasner: Allows us to create value for clients by tailoring solutions at close gaps in their risk management profile.

Andrew Krasner: Together with Digitization and data and analytics, we can create efficiencies that enable us to provide more timely and effective insurance services.

Andrew Krasner: Our approach the specialization is tailored to each geography in which we operate in 2023, we built our 12 industry verticals in North America.

Carl Hess: In 2023, we built out 12 industry verticals in North America. That process is now complete with colleagues, processes, and infrastructure supporting that alignment. Given the success we've seen to date, we're in the process of launching this industry model across Western Europe, and we'll build out more industry verticals in our international region in 2024. This model, together with our global reach, has us positioned to win an outsized share of complex mandates, such as our recent win of a multi-year construction project for a key player in the European energy sector, our cutting-edge data analytics, and We're also making good progress expanding into new and differentiated revenue streams, such as our new managing general underwriter, Veritas, which is growing steadily since its initial launch in September. In just the fourth quarter of 2023, we've onboarded brokers, found premiums, and received submissions from both external and our own brokers. In 2024, we'll focus on expanding our MGA and MGU strategy to additional geographies.

Andrew Krasner: Process is now complete with colleagues processes and infrastructure supporting that alignment.

Andrew Krasner: Given the success, we've seen to date, we're in the process of launching this industry model across Western Europe, and we'll build out more industry verticals in our international region in 2024.

Andrew Krasner: This model together with our global reach has us positioned to win an outsized share of complex mandates such as our recent win of a multi year construction project for a key player in the European energy sector.

Andrew Krasner: Our cutting edge data and analytics and our ability to bring together superior industry and product expertise from our specialist teams across several countries set our proposal apart.

Andrew Krasner: We're also making good progress expanding into new and differentiated revenue streams, such as our new managing general underwriter, Erica which is growing steadily since its initial launch in September.

Andrew Krasner: Just in the fourth quarter of 2023, with Onboarding brokers down premiums and receive submissions for both external and our own brokerage clients.

Andrew Krasner: In 2024 will focus on expanding our MGA and MDU strategy to additional geographies.

Carl Hess: In addition to expanding our business platforms and offerings at Risk and Broking, we're continuing to invest in our people to win new business. Our colleagues who joined us during 2022 and 2023 have become increasingly productive and have brought our talent base back to full strength, as evidenced by the segment's strong organic revenue growth in the second half. Accordingly, we're now focused on strategic and opportunistic challenges.

Andrew Krasner: In addition to expanding our business platforms and offerings and rescue broking, we're continuing to invest in our people to win new business.

Andrew Krasner: Our colleagues, who joined US during 2022, and 2023 have become increasingly productive and have brought our talent base back to full strength as evidenced by the segment's strong organic revenue growth in the second half of 2023.

Andrew Krasner: Accordingly, we're now focused on strategic and opportunistic talent investments.

Carl Hess: These investments should enhance our present capabilities in the lines of business and geography that we believe offer the greatest growth and profitability. We expect these efforts to continue throughout 2024 and beyond. Furthermore, we see opportunity for continued strong new business growth as we work closely to help clients manage a complex and challenging risk environment marked by increasingly costly natural disasters, social inflation, and geopolitical. In HWC, we've leveraged the strength of our portfolio, driving growth through and across health, wealth, and career, and BD&O. We've made significant progress by staying focused on our core businesses, by making connections across the organization where it adds value for clients, and by simplifying how we. For example, we maintained or improved client retention rates across all of HWC, including excellent 98% retention for our retirement plans. We have dozens of clients for our signature package solutions, like our LifeSite Master Trust and Global Benefits Management Office. We expanded our relationships with more than 1,500 clients to include at least one new service.

Andrew Krasner: These investments should enhance our capabilities in the lines of business and geography that we believe offer the greatest growth and profitability potential.

Andrew Krasner: We expect these efforts to continue throughout 2024 and beyond.

Andrew Krasner: Furthermore, we see opportunity for continued strong new business growth as we work closely to help clients manage a complex and challenging brisk environment marked by increasingly costly natural disasters, social inflation and geopolitical conflicts.

Andrew Krasner: And each WC, we've leveraged the strength of our portfolio driving growth through it across health wealth and career and bdnf.

Andrew Krasner: We've made significant progress by staying focused on our core businesses by making connections across the organization, where it adds value for clients and by simplifying how we work.

Andrew Krasner: For example, we maintained or improved client retention rates across all of <unk>, including excellent 98% retention rates for our retirement and outsourcing businesses.

Andrew Krasner: We added dozens of clients for our signature package solutions like our lifestyle Master Trust and global benefits management offerings.

Andrew Krasner: We expanded our relationships with more than 1500 clients to include at least one new service offerings.

Andrew Krasner: And we increased the size and scope of our hub teams in key centers around the world to enhance capacity and consistency.

Our intense focus on cross selling and making it simpler to do business with us is paying off.

Andrew Krasner: Across industries and services more clients are coming to Ww for a full suite of solutions just to mention a few of them this quarter.

Andrew Krasner: We had a software development firm move its global benefits consulting and brokerage work to WCW add to point us to support their employee experience through our embark portal and our engage software.

Carl Hess: And we have increased the size and scope of our hub teams in key centers around the world to enhance capacity and consistency. Our intense focus on cross selling and making it simpler to do business with us is paying off, across industries and services. More clients are coming to WTW for a full suite of solutions. Just to mention a few. We had a software development firm move its global benefits consulting and brokerage work to WTW and appoint us to support their employee experience through our Embark portal and our Engage software. A major global financial corporation's simple survey request turned into a multi-year engagement that included supporting the client with attracting and retaining talent and the delivery of a fully integrated total reward solution using one of our portals. And we leveraged our existing pension actuarial and outsourcing relationship with a leading regional health system to support for a rollout of major changes to their health and benefits program, which included the creation of a temporary health and welfare service.

Andrew Krasner: A major global financial Corporation's simple survey request turned it into a multi year engagements for us that includes supporting the client with attracting and retaining talent and the delivery of a fully integrated total reward solution using one of our ports.

Andrew Krasner: And we leveraged our existing pension actuarial and outsourcing relationships with a leading regional health system into swaps support for a rollout of major changes to their health and benefits program, which include the creation of a temporary health and welfare Service Center.

Andrew Krasner: We're confident each WC, we will provide a solid foundation for growth in 2024.

Andrew Krasner: And as we've discussed on prior calls complexity in the human capital landscape continues to increase and finding the right solutions to our clients' unique needs in this environment requires a holistic integrated and consultative approach.

Andrew Krasner: Our ability to move quickly and deliver the right resources at speed helps our clients take advantage of changing conditions and create meaningful opportunities for each of Houston.

Andrew Krasner: I'll highlight two trends, we see a tailwind for 2024.

Andrew Krasner: Our health business.

Andrew Krasner: Clients are continuing to look for ways to address the increasing cost of healthcare around the world.

Andrew Krasner: They are turning to us for help with more effective plant management and specialty solutions that can improve their population's health status.

Andrew Krasner: And in our retirement business clients are increasingly looking to capitalize on the change in the rate environment by Derisking their pension plans through annuity buy ins and buyouts.

Andrew Krasner: With the funded status of the largest U S. Corporate pension plans, having ended 2023 at 100%. We expect this trend will support growth in that business during 2024.

Carl Hess: We're confident HWC will provide a solid foundation for growth in 2020. And, as we've discussed on prior calls, complexity in the human capital landscape continues to increase, and finding the right solutions to our clients' unique needs in this environment requires a holistic, integrated, and consultative approach. Our ability to move quickly and deliver the right resources at speed helps our clients take advantage of changing conditions and create meaningful opportunities for each. I'll highlight two trends we see as tailwinds for 2024 in our health business. Clients are continuing to look for ways to address the increasing cost of health care around the world, and their lawyers turn to us for help with more effective plan management and specialties that can improve their population.

Andrew Krasner: We also expect our growing momentum with smart connections this quarter to continue into 2024 and also extends to cross selling between our two segments.

Andrew Krasner: We continue to arm all of our colleagues with a solid understanding of our full range of services and the tools to identify and facilitate cross segment opportunities.

Andrew Krasner: Two large client wins in the fourth quarter illustrate the power of this approach.

Andrew Krasner: Our P&C insurance solution or a major media company that originated with one of our retirement colleagues and a multi year health benefits design administration and broker engagement that began with the benefits review a range by a CRB column.

Andrew Krasner: The progress we've made in enhancing our growth engine that each WC at RMB over the past two plus years is also enabling us to drive increased margin expansion.

Andrew Krasner: During the fourth quarter, we saw continued improvement in productivity and a tightened focus on cost discipline.

Andrew Krasner: Similarly, our transformation program continues to drive a significant benefit to our bottom line, enabling us to finish the year strong and to lay the foundation for another Europe adjusted operating margin expansion.

We realized $37 million of incremental annualized savings from our transformation program during the fourth quarter, bringing the total to $337 million in cumulative annualized savings since the program's inception.

Carl Hess: And in our retirement business, clients are increasingly looking to capitalize on the change in the rate environment by de-risking their pension plans through annuity buy-ins and buy-outs. With the funded status of the largest U.S. corporate pension plan having ended 2023 at 100%, we expect this trend will support growth in that business. We also expect our growing momentum with smart connections to continue into 2024 and also extend to cross-selling between our colleagues. We continue to arm all our colleagues with a solid understanding of our full range of services and the tools to identify and facilitate cross-segment opportunities. Two large client wins in the fourth quarter illustrate the power of... a P&C insurance solution at a major media company that originated with one of our retirement colleagues and a multi-year health benefits design administration and broking engagement that began with a benefits review arranged by a CRB.

Thanks to the success and momentum of the program, we have been able to identify additional savings and accordingly, our raising our cumulative run rate transformation savings target from 380 million to $425 million by the end of 2024.

Andrew Krasner: Looking ahead, we're confident that we're on the right path to achieve our 2024 targets of continued mid single digit organic revenue growth leading to at least nine 9 billion in total revenue.

Andrew Krasner: Adjusted operating margins of 22, 5% to 43, 5%.

Andrew Krasner: Adjusted diluted earnings per share of $15 $40 to $17 and additional improvement in our free cash flow margin.

Andrew will touch on our 2024 guidance in more detail shortly.

Andrew Krasner: In closing our performance in 2023 reflected our hard work to grow simplify and transform our business over the past two plus years.

Andrew Krasner: I'm proud of the progress we've made and excited about the opportunities ahead.

Andrew Krasner: Based on our momentum and our healthy pipeline I am confident we can deliver continued sustainable and profitable growth in 2024 and beyond.

Andrew Krasner: I want to thank our colleagues for their dedication service and continued commitment to our clients and to <unk> and <unk>.

Andrew Krasner: With that I'll turn the call over to Andrew.

Andrew Krasner: Thanks, Carl Good morning, and thanks for joining us today as Carl mentioned, we finished the year with strong momentum putting us in a solid position to achieve our 2024 targets and I'd like to share. Some further details on our financial results.

Carl Hess: The progress we've made in enhancing our growth engines at HWC and R&B over the past two plus years is also enabling us to drive increased margin. During the fourth quarter, we saw a continuing improvement in productivity and a heightened focus on cost. Similarly, our transformation program continues to drive a significant benefit to our bottom line, enabling us to finish the year strong and to lay the foundation for another year of adjusted operating We realized $37 million of incremental annualized savings from our transformation program during the fourth quarter, bringing the total to $337 million in cumulative annualized savings since the program began. Thanks to the success and momentum of the program, we have been able to identify additional savings, and accordingly are raising our cumulative Looking ahead, we're confident that we're on the right path to achieve our 2024 targets of continued single-digit organic revenue growth, leading to at least $9.9 billion in total revenue and Adjusted operating margins of 22.5% to 23.5%. Adjusted and Diluted.

Andrew Krasner: We delivered organic revenue growth of 6% in the fourth quarter, bringing our full year growth rate to 8%.

Andrew Krasner: Ramp up in productivity of our investment hires our specialization strategy and risk and broking and the ongoing demand for our benefits and human capital services in H WC continue to fuel the strong topline growth.

Andrew Krasner: Alongside this robust growth. We also drove margin expansion for both the quarter and full year at the enterprise level and in each of our segments. The result was adjusted diluted earnings per share of $7 44 for the quarter and $14 49 for the year.

Andrew Krasner: Next I'll spend some time reviewing our segment results.

Andrew Krasner: Note that to provide comparability with prior periods all commentary regarding the results of our segments will be on an organic basis, unless specifically stated otherwise.

Andrew Krasner: Health wealth and career generated revenue growth of 4% compared to the fourth quarter of last year and finished the year with 6% growth.

Andrew Krasner: Going into 2024, we feel confident in the outlook and expect another year of similarly positive results for this segment.

Revenue for health increased 6% for the quarter were 5% when excluding the impact of some modest book of business activity, we delivered solid growth across all regions driven by increased brokerage income and the continued expansion of our global benefits management client portfolio in Europe and international.

Andrew Krasner: Wealth grew 5% in the fourth quarter retirement growth was driven by increased project work related to Derisking activity in North America as well as additional project work and pension brokerage in Europe.

Carl Hess: Earnings per share are $15.40 to $17, and additional improvement is the free cash loan. Andrew will touch on our 2024 guidance and more. In closing.

Andrew Krasner: Investments also contributed significantly to growth for the quarter, reflecting new client acquisitions and higher fees.

Carl Hess: Our performance in 2023 reflected our hard work to grow, simplify, and transform our business over the past two plus years. I'm proud of the progress we've made and excited about the opportunity. Based on our momentum and our healthy pipeline, I'm confident we can deliver continued sustainable and profitable growth in 2024 and beyond. I want to thank our colleagues for their dedication, service, and continued commitment to our clients and to WTW. And with that, I'll turn the call over to Carl. Good morning, and thanks for joining us today.

Andrew Krasner: Career delivered 6% growth in the quarter driven by increased compensation survey sales executive compensation and Board Advisory services and project work related to employee experience.

Andrew Krasner: Benefits delivery and outsourcing generated 3% growth in the quarter. The increase was driven by higher volumes and placements of Medicare advantage and life policies and our individual marketplace business and increased project activity and benefits outsourcing.

Andrew Krasner: <unk> operating margin increased 150 basis points compared to the prior fourth quarter to 45%, primarily driven by transformation savings.

Andrew Krasner: As Carl mentioned, we finished the year with strong momentum, putting us in a solid position to achieve our 2024 targets. And I'd like to share some further details on our financial results. We delivered organic revenue growth of 6% in the fourth quarter, bringing the full-year growth rate to 8%.

Andrew Krasner: For the full year <unk> operating margin increased 190 basis points over prior year to 28%.

Andrew Krasner: Risking broking revenue was up an exceptional 12% on an organic basis for the fourth quarter intra.

Andrew Krasner: Interest income was $27 million for the quarter up $17 million from the fourth quarter last year note that beginning with Q1 2024 results. We plan to include the impact of investment income on organic growth at the segment and enterprise levels in our materials.

Andrew Krasner: The ramp-up in productivity of our investment hires, our specialization strategy and risk and broking, and the ongoing demand for our benefits and human capital services and HWC continue to fuel the strong top line. Alongside this robust growth, we also drove margin expansion for both the quarter and full year at the enterprise level and in each of our segments. The result was adjusted diluted earnings per share of $7.44 for the quarter and $14.49 for the year.

Andrew Krasner: For the full year risk and broken grew 10% organically, we are expecting mid single digit or better organic revenue growth for the segment in 2024 with continued contributions from our investments in talent and platforms as we identify and pursue opportunities in line with our specialization strategy.

Andrew Krasner: Corporate risk and broking had another strong quarter growing 12% and continuing the organic revenue growth trajectory, we have seen in the business over the last couple of quarters.

Andrew Krasner: Next, I'll spend some time reviewing our segment results. Note that to provide comparability with prior periods, all commentary regarding the results of our segments will be on an organic basis unless specifically stated otherwise. Health, Wealth, and Career generated revenue growth of 4% compared to the fourth quarter of last year and finished the year with 6% growth. Going into 2024, we feel confident in the outlook and expect another year of similarly positive results for the segment. Revenue for Health increased 6% for the quarter, or 5% when excluding the impact of some modest book of business activity. We delivered solid growth across all regions, driven by increased brokerage income and the continued expansion of our global benefits management client portfolio in Europe and internationally. Wealth grew five percent in the fourth quarter.

Andrew Krasner: Higher levels of new business activity improved client retention and increase renewable revenue from rate increases drove robust organic revenue growth.

Andrew Krasner: Our specialty lines continued to be major contributors to the strong growth performance led globally by natural resources Facultative Phoenix financial solutions crisis management and construction.

Andrew Krasner: Strong growth across CRB in Europe was led by PNC retail facultative natural resources and Fedex.

Andrew Krasner: North America CRB benefited from strong new business in construction and natural resources Marine Aerospace real estate and hospitality and leisure as we saw strong demand in the industries in which we specialize.

Andrew Krasner: Our international region also contributed with exceptional organic growth, including strong growth across all sub regions led by Latin America.

Andrew Krasner: In the insurance consulting and technology business revenue was up 8% over the prior year period on top of a strong comparable driven by increased sales in technology solutions, including strong new business and higher project activity.

Andrew Krasner: RMB is operating margin was 32, 9% for the fourth quarter, a 460 basis point increase over the prior year fourth quarter, we continued to see our hiring efforts yield strong results and rising productivity driving greater operating leverage.

Andrew Krasner: Retirement growth was driven by increased project work related to de-risking activity in North America, as well as additional project work in pension brokerage in Europe. Investments also contributed significantly to growth for the quarter, reflecting new client acquisitions and higher fees. Career delivered 6% growth in the quarter, driven by increased compensation survey sales, executive compensation and board advisory services, and project work related to the employee experience. Benefits delivery and outsourcing generated 3% growth in the quarter. The increase was driven by higher volumes and placements of Medicare Advantage and life policies in our individual marketplace business and increased project activity and benefits outstanding. HWC's operating margin increased 150 basis points compared to the prior fourth quarter to 40.5%, primarily driven by transformation. For the full year, HWC's operating margin increased 190 basis points over the prior year to 28. Risk and Broking Revenue was up an exceptional 12% on an organic basis for the fourth quarter. Interest income was $27 million for the quarter, up $17 million from the fourth quarter last year.

Andrew Krasner: The margin also benefited from transformation continued expense discipline and tailwind from increased interest income, partially offset by some modest foreign exchange activity and investments in people and technology platforms.

Andrew Krasner: For the full year RMB as operating margin increased 60 basis points over prior year to 21, 8% as Carl mentioned, we plan to continue to Opportunistically invest in talent and strategic initiatives in this segment in line with our previous announcement.

Andrew Krasner: For 2024, we continue to expect margin expansion on a full year basis, given the business seasonality and uncertain pacing of the investments. Please note that the scale of RMB margin expansion may vary from quarter to quarter.

Andrew Krasner: At the enterprise level adjusted operating margin for the quarter was 34, 2% a 180 basis point increase over prior year for the full year, we saw 110 basis points of margin improvement to 22% the.

Andrew Krasner: The benefits of our transformation program drove a large part of our margin expansion for the year, we had $37 million of incremental annualized transformation savings for the fourth quarter, bringing the total to $337 million since the program's inception.

As Carl mentioned, we are raising our transformation savings target to $425 million by the end of 2020 for.

Andrew Krasner: Note that beginning with Q1 2024 results, we plan to include the impact of investment income on organic growth at the segment and enterprise levels in our materials. For the full year, risk and broken grew 10% organically. We are expecting mid single-digit or better organic revenue growth for the segment in 2024 with continued contributions from our investments in talent and platforms as we identify and pursue opportunities in line with our specialization strategy. Corporate risk and broking had another strong quarter, growing 12% and continuing the organic revenue growth trajectory we have seen in the business over the last couple of quarters. Higher levels of new business activity, improved client retention, and increased renewable revenue from rate increases drove robust organic revenue.

Andrew Krasner: The additional savings will primarily come from technology modernization and process optimization, which we expect to further reduce our cost structure and help unlock additional long term growth and cost savings opportunities.

Andrew Krasner: The total amount of cost to achieve is now estimated at $1 <unk> 5 billion.

Andrew Krasner: Along with their direct return on investment these additions through the transformation program will serve as a catalyst for additional improvement by creating an infrastructure from which to drive further efficiencies.

Andrew Krasner: Our unallocated net was $296 million for the full year 2023, an increase of $31 million over prior year, primarily due to a headwind from a onetime favorable items reflected in the prior year balance.

Andrew Krasner: Foreign exchange was a <unk> <unk> tailwind on adjusted EPS for the quarter and a 6% headwind for the year at current spot rates, we expect foreign exchange to have a <unk> <unk> headwind on adjusted EPS for 2024 with no impact in Q1.

Andrew Krasner: We recorded $109 million in pension income for 2023 relatively in line with our expectations for 2024, we expect $88 million in pension income with the decrease driven by market performance and interest rate movements.

Andrew Krasner: Our specialty lines continue to be major contributors to strong growth, led globally by natural resources, facultative, FinEx, financial solutions, crisis management, and construction. Strong growth across CRB in Europe was led by P&C Retail, Facultative, Natural Resources, and Finesse. North America CRB benefited from strong new business in construction, natural resources, marine, aerospace, real estate, and hospitality and leisure, as we saw strong demand in the industries in which we specialize. Our international region also contributed exceptional organic growth, including strong growth across all subregions, led by Latin America.

Andrew Krasner: Our U S GAAP tax rate for the quarter was 15, 7% versus 17, 7% in the prior year, our adjusted tax rate for the quarter was 19, 1% compared to 22, 2% for the fourth quarter of 2022.

Andrew Krasner: Our U S GAAP tax rate for the year was 16, 8% versus 15, 4% in the prior year.

Andrew Krasner: And lastly, our adjusted tax rate for the year was 29% consistent with prior year.

Andrew Krasner: Notably there were nonrecurring items in Q4, which resulted in onetime tax items in our 2023 adjusted tax rate. Excluding these benefits our adjusted tax rate would have been 22, 4% and our adjusted diluted EPS would have been $14 22, we expect our full year adjusted tax rate in 2024%.

Andrew Krasner: In the insurance consulting and technology business, revenue was up 8% over the prior year period on top of a strong comparable, driven by increased sales in technology solutions, including strong new business and higher project equity. R&B's operating margin was 32.9% for the fourth quarter, a 460 basis point increase over the prior year fourth quarter. We continue to see our hiring efforts yield strong results and rising productivity, driving greater operating margin. The margin also benefited from transformation, continued expense discipline, and tailwinds from increased interest income, partially offset by some modest foreign exchange activity and investments in people and technology. For the full year, R&B's operating margin increased 60 basis points over the prior year to 21.8%. As Carl mentioned, we plan to continue to opportunistically invest in talent and strategic initiatives in the segment in line with our previous. For 2024, we continue to expect margin expansion of full year based on. Given the business seasonality and uncertain pacing of the investments, please note that the scale of RMB margin expansion may vary from quarter to quarter. At the enterprise level, adjusted operating margin for the quarter was 34.2%, a 180 basis point

Andrew Krasner: It'd be closer to our 2023 adjusted tax rate, excluding these onetime benefits.

In 2023, we returned nearly $1 4 billion to our shareholders with share repurchases of $1 billion and dividends of $352 million. We continue to execute a disciplined capital allocation strategy and currently view share repurchases as an attractive use of capital to create long term shareholder value. We expect to continue repurchasing our shares.

Andrew Krasner: In 2024 under our current share repurchase authority of which approximately $1 3 billion remains we expect approximately $750 million of share repurchases in 2024 subject to market conditions among other relevant factors.

Andrew Krasner: We generated free cash flow of $1 $2 billion in 2023, representing a free cash flow margin of 12, 6% above our target of 12%.

Andrew Krasner: Prove it from the prior year was driven by the non recurrence of onetime headwinds reflected in the comparable period operating margin expansion and improvement in transact cash flow. These improvements were partially offset by increased transformation program related costs.

Andrew Krasner: Turning to our 2024 financial targets, we continue to expect mid single digit organic revenue growth as we work towards our revenue goal of $9 9 billion plus we expect our adjusted operating margin to expand toward the high end of the $22 five to 23, 5% range. We also expect to deliver on our adjusted diluted earnings.

Andrew Krasner: For the full year, we saw 110 basis points of margin improvement to 22%. The benefits of our transformation program drove a large part of our margin expansion for the year. We had $37 million of incremental annualized transformation savings for the fourth quarter, bringing the total to $337 million since the program's inception.

Andrew Krasner: Per share target of $15 42 to $17.

Andrew Krasner: Finally, we expect incremental improvement in our free cash flow margin.

Andrew Krasner: Our results for the fourth quarter and full year 2023 are Testament to our continued strategic progress our operational execution and our colleagues relentless focus on serving our clients. We are very pleased with our performance and expect our momentum to continue into 2024 as we focus on delivering on our targets.

Andrew Krasner: As Carl mentioned, we are raising our transformation savings target to $425 million by the end of 2024. The additional savings will primarily come from technology modernization and process optimization, which we expect to further reduce our cost structure and help unlock additional long-term growth and cost savings. The total amount of cost savings to achieve is now estimated at $1.125 billion.

With that let's open it up for Q&A.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen to ask a question. Please press star one on your telephone and then wait to hear your name announce.

Speaker Change: To withdraw your question. Please press star one again.

Speaker Change: We ask that you limit yourself to one question and one follow up please.

Speaker Change: Please stand by while we compile the Q&A roster.

Speaker Change: Okay.

Speaker Change: Our first question comes from the line of Gregory Peters with Raymond James Your line is open.

Andrew Krasner: Along with their direct return on investment, these additions to the transformation program will serve as the catalyst for additional improvement by creating an infrastructure from which to drive further efficiency. Our unallocated net was $296 million for the full year 2023, an increase of $31 million over the prior year, primarily due to a headwind from a one-time favorable item reflected in the prior year balance. Foreign exchange was a two cent tailwind on adjusted EPS for the quarter and a six cent headwind for the year.

Greg Peters: Good morning, everyone.

Greg Peters: I'm going to say that it does feel like you finally stabilize the platform last year. So.

It does it should bode well for your future.

Greg Peters: On the mid single digit guidance.

Greg Peters: Outlook for 'twenty four.

Inside risk and broken can you give us a sense of how you think that.

Greg Peters: Fifth on new business.

Greg Peters: Or versus.

Greg Peters: Rate increases is going to run through the.

Greg Peters: The risk and Broking line, and then on the health wealth and career.

Greg Peters: The BDO line was a little weak in the fourth.

Greg Peters: Lower in the fourth quarter can you talk.

Greg Peters: About your outlook there.

Greg Peters: Greg Good morning, and thank you for that.

Andrew Krasner: At current spot rates, we expect foreign exchange to have a two cent headwind on adjusted EPS for 2024 with no impact in Q1. We recorded $109 million in pension income for 2023, relatively in line with our expectations. For 2024, we expect $88 million in pension income with a decrease driven by market performance and interest rates. Our U.S. GAAP tax rate for the quarter was 15.7% versus 17.7% in the prior year.

Greg Peters: So starting with RMB.

Greg Peters:

Greg Peters: Let me begin with the affect our rate.

Greg Peters: We frankly don't view as a significant headwind or tailwind across the portfolio in terms of how it's managed for 2023 and going into 2024.

Greg Peters: The markets remain mixed in terms of what's going on.

<unk>.

Greg Peters: <unk>.

Greg Peters: Effective however, the investment we've made over the last few years and talent and the reorientation of the business towards specialization is what we feel is really made any difference for us and will continue to differentiate us going into 2024, I mean, our approach to specialization.

Andrew Krasner: Our adjusted tax rate for the quarter was 19.1% compared to 22.2% for the fourth quarter of 2022. Our U.S. GAAP tax rate for the year was 16.8% versus 15.4% in the prior year. And lastly, our adjusted tax rate for the year was 20.9%, consistent with the prior year. Notably, there were non-recurring items in Q4 which resulted in one-time tax items in our 2023 adjusted tax rate. Excluding these benefits, our adjusted tax rate would have been 22.4%, and our adjusted diluted EPS would have been $14.22.

Greg Peters: Sets us apart from others in the industry.

Greg Peters: We've constructed this around.

Greg Peters: Specialized businesses.

Greg Peters: Not just practices focused around industry divisions alright.

Greg Peters: These are businesses with matched or even global P&L dedicated personnel directly responsible accountable and that just ties to our specialization approach, which has resulted in our global lines growing much faster than our overall book as we talked about earlier.

Greg Peters: With respect to each WC.

Speaker Change: Looking forward.

Speaker Change: We're very confident in our pipeline and we do anticipate should we choose to have mid single digit revenue growth in 2024.

Andrew Krasner: We expect our full-year adjusted tax rate in 2024 to be closer to our 2023 adjusted tax rate, excluding these one-time benefits. In 2023, we return nearly $1.4 billion to our shareholders through share repurchases of $1 billion and dividends of $352 million. We continue to execute a disciplined capital allocation strategy and currently view share repurchases as an attractive use of capital to create long-term shareholder value. We expect to continue repurchasing our shares in 2024 under our current current share repurchase authority, of which approximately 1.3 billion remains.

Speaker Change: Current human capital landscape is highly complex as a result, rising healthcare costs of changing interest rate environment.

Speaker Change: <unk> engine Derisking activity and we see these trends as tail wins for 'twenty four.

Speaker Change: And as we mentioned in our opening remarks, we expect our growing momentum with our connection strategy to continue in 2024 and needs increased cross selling opportunities will be another HW you'd see revenue tailwind.

Speaker Change: Okay that makes sense.

Speaker Change: Wanted to pivot.

To the free cash flow margin expectations slide 22 of your investor deck.

Speaker Change: And what I'm focused on is that 16% plus long term objectives and.

Andrew Krasner: We expect approximately $750 million of share repurchases in 2024, subject to market conditions, among other relevant facts. We generated free cash flow of $1.2 billion in 2023, representing a free cash flow margin of 12.6%, above our target of 12%. The improvement from the prior year was driven by the non-recurrence of one-time headwinds reflected in the comparable period, operating margin expansion, and improvement in transacts cash flow. These improvements were partially offset by increased transformation program-related costs.

Speaker Change: Just looking for some more color inside some of those comments that you made in the slide about where you're going to get some positive benefits in some negative benefits and.

Speaker Change: When you think about getting to that 16% is that like a five year target of 10 year target or what kind of what kind of parameters are you putting lot management around that objective.

Speaker Change: Yeah, Hey, Greg Thanks for the yes, thanks for the question.

Speaker Change: A 12, 6% margin in 2023.

Speaker Change: That was good progress on a year over year basis, we do expect incremental improvement in 2024, as we work towards the long term free cash flow margin target.

We expect to see that margin improvement in 2024 and beyond really through three main factors. So first of all spending greater profitability as a result of driving margin expansion.

Operator: Turning to our 2024 financial targets, we continue to expect mid-single-digit organic revenue growth as we work towards our revenue goal of $9.9 billion. We expect our adjusted operating margin to expand toward the high end of the 22.5 to 23.5% range. We also expect to deliver on our adjusted diluted earnings per share target of $15.40 to $17. Finally, we expect incremental improvement in our free cash flow. Our results for the fourth quarter and full year 2023 are a testament to our continued strategic progress, our operational execution, and our colleagues' relentless focus on serving our clients. We are very pleased with our performance and expect our momentum to continue into 2024 as we focus on delivering on our targets. With that, let's open it up for Q&A. Thank you. Ladies and gentlemen, to ask a question, please press star 1-1 on your telephone and then wait to hear your name announced.

Speaker Change: We intend to do this not just through transformation and operating leverage but also by improving our business mix.

Speaker Change: For example, deepening our footprint in the area of Mgs <unk> things of that nature.

Speaker Change: Second piece is the abatement of the transformation related spend which we're expecting in the first half of 2025.

Speaker Change: The third piece is an improved cash conversion.

Speaker Change: Transact business.

Speaker Change: Which we expect to be positive.

Speaker Change: Next few years.

Speaker Change: That's going to come as a result of the maturation of the business as well as the remaining changing the product mix.

Speaker Change: Within that business.

Speaker Change: Over the near term progress some of those factors is going to be temporarily offset by cash investments in HW seeing in R&D product development to support future growth.

Speaker Change: Things like our buy side business, where we continue to invest.

Speaker Change: New ICT software and I also mentioned the FJ MCU business as an example.

Speaker Change: Thank you.

Speaker Change: Please standby for Rod next question.

Speaker Change: Okay.

Speaker Change: Our next question comes from the line of Elyse Greenspan Greenspan with Wells Fargo. Your line is open.

Greg Peters: To withdraw your question, please start 1-1 again. We ask that you limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from the line of Gregory Peters, with Raymond James. Your line is open. Good morning, everyone, and I say that it does feel like we stabilized the platform last year. It should bode well for your future on the mid-single-digit guide. I'll look for 24.

Elyse Greenspan: Hi, Thanks.

Elyse Greenspan: My first question is on the EPS guidance you guys reaffirm the guidance that you gave us in July but it sounds like you expect to come in at the high end of the operating margin target.

Elyse Greenspan: And pension I believe is.

Little bit favorable relative to the midpoint of the guide guidance update last summer so why not.

Elyse Greenspan: Our tightened the range towards the upside do you feel like.

Elyse Greenspan: Can you comment could come in towards the upside of the range and maybe.

Elyse Greenspan: Some level of conservatism to start the year.

Speaker Change: Yes, thanks for the thanks for the question the police so we remain confident in.

Carl Hess: Inside Risk and Broken, benefit on new business, and or versus, rate, run, of the Risk and Broking Line, and then on. Health, Wealth, and Career, video line, a lot lower in the fourth, about your... Greg, good morning and thank you. So, starting with R&D, let me begin with the effect of rate, which we frankly don't view as a significant headwind or tailwind across the portfolio in terms of how it's mattered for 2023 and going into. The markets remain a bit mixed in terms of what's going on. However, the investment we've made over the last few years in talent and the reorientation of specialization is what we feel has really made I mean, our approach to specialization sets us apart from others in the industry. We've constructed this around specialized businesses, not just practices, focused around industry divisions. Right. And these are businesses with national or even global P&Ls, dedicated personnel, directly responsible for, and accountable.

Speaker Change: Yes target range of 15 to $17 24 that we had set out.

Speaker Change: As he hasn't been laid out in our supplemental materials.

Speaker Change: You can see the puts and takes there.

Speaker Change: Proportion coming from operating income.

Along with the increase in the share repurchase activity that we mentioned about $750 billion.

Speaker Change: Spectrum there.

The offset there and as you mentioned some of the reduced pension income.

Speaker Change: And sure headwinds as well as the.

Speaker Change: The increase in interest expense and adjusted tax rate when we talked through all of those puts and takes we felt.

Speaker Change: Still very confident about landing within the range there.

Speaker Change: Thanks, and then my second question is on the share repurchase guidance.

Speaker Change: So Andrew I think you said $750 million and 24.

Speaker Change: It sounds like you guys bought back 23, yet.

Speaker Change: Your free cash flow conversion should improve right.

Speaker Change: From the 23 level and then I guess, even though it's not a 24 of that late in the first half of 'twenty five guys I believe should receive $750 million from the Willis re earn out so why would it.

Carl Hess: And that just ties to our specialization approach, which has resulted in our global lines growing much faster than our overall book, as we talked about earlier. With respect to HWC, looking forward, we're very confident in our pipeline, and we do anticipate HWC is going to have mid-single-digit revenue growth. You know, the current human capital landscape is highly complex as a result of rising health care costs and a changing interest rate environment that affects pension de-risking activity.

Speaker Change: Buybacks be more that $750 million and 24.

Speaker Change: Is M&A part of the equation.

Speaker Change: Just trying to square the free cash flow improvement at the lower level of buyback in 'twenty four.

Speaker Change: Sure.

Speaker Change: $750 million raises our expectation for the year.

Speaker Change: The debt level is lower.

Speaker Change: And at 23, where we.

Speaker Change: We did 1 billion do you have to keep in mind that throughout 2003, we took on some incremental leverage in may.

Carl Hess: And we see these trends as tailwinds for 2024. And as we mentioned in our opening remarks, we expect our growing momentum with our Spark Connection strategy to continue in 2024. And these increased cross-selling opportunities will be another HWC revenue tailwind.

Speaker Change: Throughout the year capitalized on the opportunity to buy more shares when there is pressure on the.

Speaker Change: Stock price, so $750 billion is not necessarily static.

Speaker Change: <unk> monitor cash levels market conditions, and if the opportunity presents itself to accelerate our share repurchases will take advantage of it just like we did last year.

Andrew Krasner: Cash Flow Margin Expectations, fight. And what I'm focused on is that percent plus long-term objective. Bye bye. Bye bye, more color inside some of those comments that you made in the slide about where... Positive Benefits, think about getting... Is that like a 5-year target, a 10-year target, or? New York. Yeah. Hey, Greg, it's Andrew.

Speaker Change: We continue as you might expect to evaluate all options for capital allocation as we always have which does include share buybacks internal investments and carefully considered strategic M&A as part of that to ensure that we're maximizing value creation for our shareholders.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Robert Cox with Goldman Sachs. Your line is open.

Andrew Krasner: Thanks for the question. You know, the 12.6% margin in 2023, you know, that was good progress on a year-over-year basis. We do expect incremental improvement in 2024 as we work towards the long-term free cash flow margin target. You know, we expect to see that margin improvement in 2024 and beyond through three main factors. So the first one's going to be greater profitability as a result of driving margin expansion. You know, we intend to do this not just through a transformation in operating leverage but also by improving our business mix. You know, for example, deepening our footprint in the area of MGAs, MGUs, things of that nature.

Robert Cox: Hey, Thanks for taking my question, maybe a similar question.

Robert Cox: <unk> received on free cash flow in some ways, but.

Robert Cox: If I exclude the $430 million or so cash restructuring charges. This year I get to a free cash flow margin over 17% in 2023.

Robert Cox: Is that correct and when you think ahead to a future where restructuring spend of zero.

Robert Cox: On the track transact free cash flow drag has improved.

Robert Cox: Could there be meaningful upside to the 16% long term free cash flow margin target I am I thinking about that correctly or are there any headwinds I'm not considering.

Speaker Change: Yes, I think generally over a long term I think youre thinking about the math correctly, there Rob I would focus you on the <unk>.

Andrew Krasner: The second piece is the abatement of transformation-related spend, which we're expecting through the first half of 2025. The third piece is improved cash conversion in the transact business, which we expect to be positive within the next few years. You know, that's going to come as a result of the, you know, maturation of the business as well as the improvement and changing of the product mix within that business.

Speaker Change: Simple after the 16% that we've got are materials that are in our long term objective there.

Speaker Change: It does take time for some of those headwinds to abate.

Speaker Change: Think about transact for example of that.

Speaker Change: When that turns free cash flow positive.

Speaker Change: It's still a drag on free cash flow margin right, because it's not necessarily converting at the same rate as the rest of the business.

Speaker Change: And of course the revenue there.

Speaker Change: We will continue to grow as well. So there is other dynamics that factor into the to the margin calculation.

Speaker Change: Okay. Thanks, and just a follow up on expenses and they're asking broking business.

Andrew Krasner: Over the near term, progress on some of those factors is going to be temporarily offset by cash investments in HWC and R&B for product development to support future growth. Things like our Lifesize business, where we continue to invest in new ICT software, and I also mentioned the MGA and MGU business as an example. Thank you.

Speaker Change: Could you talk about the incremental expense savings in the quarter versus last quarter. Some of the things that you started to enact.

Speaker Change: Last quarter, and then just some more color on how sustainable are those savings are outside of the transformation program.

Speaker Change: Yes.

Speaker Change: We talked about I think ongoing expense discipline across across the platform thats not just specific to the RMB, but we balance.

Operator: Please stand by for our next question. Our next question comes from the line of Elyse Greenspan. Greenspan with Wells Fargo.

Elyse Greenspan: Your line is open. Hi, thanks. My first question is on the EPS guidance. You guys reaffirmed the guidance that you gave us in July, but it sounds like you expect to come in at the high end of the operating margin target. And, you know, the pension, I believe, is, you know, a little bit favorable relative to the midpoint of the guidance update last summer. So why not, you know, increase it, you know, or tighten the range towards the upside? Do you feel like, you know, you could come in towards the upside of the range and maybe achieve some level of conservation stars?

Speaker Change: The focus on expenses with the revenue growth to make sure of that.

Speaker Change: We're looking to generate.

Speaker Change: Operating leverage.

Top of the transformation savings across across the platform.

Speaker Change: And obviously.

Speaker Change: Heavily investing in that business, which has weighed on that for certain parts during the year.

Speaker Change: Karla.

Karla: Yes, I guess.

Karla: As we've highlighted in prior quarters, we have.

Karla: Our substantial investment in that business principally in tapped.

Karla: Now that our talent basis back to full strength right, we're concentrating on strategic and opportunistic hires to capitalize on the opportunities. We see ahead in the geographies that we are.

Andrew Krasner: Yeah, thanks for the thanks for the question, Elyse. So we remain confident in the EPS target range of $1540 to $17 for 24 that we had set out. You know, as we laid out our supplemental materials, you can see the puts and takes there, a meaningful portion coming from operating income, you know, along with the increase in the share repurchase activity that we mentioned, about $750 million expected there. The offset there, as you mentioned.

Karla: Offer the greatest potential for profitable growth alright, So I think it's just a.

Karla: Momentum story at this point as opposed to a rebuilt story, which leads to a smoother pattern expense growth.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Our next question comes from the line of Michael <unk> with BMO. Your line is open.

Michael: Great Good morning.

Michael: Now back to the free cash flow and thanks for all the color.

Michael: I believe you guys had one of the offsets.

Michael: No.

Michael: Cash investments in product development, So I guess should we be looking at.

Elyse Greenspan: Those will be about a 14 percent share headwind, as well as the increase in interest expense and adjusted tax rate. And when we thought through all of those puts and takes, we felt still very confident about landing within the. Thanks, and then my second question is on the Sherry purchase guidance. So, Andrew, I think you said $750 million in 24.

Michael: Your historical Capex ratio divided by revenues.

Michael: I guess are you alluding to maybe now it would be maybe you kind of rise to two.

Michael: A bit of a higher level.

Michael: And then it is currently one of the offsets that I want to or am I splitting hairs in terms of some of your commentary.

Michael: Yes.

Speaker Change: It's a good question just just on the.

Andrew Krasner: That's lower than what you guys bought back in 23, yet, you know, your free cash flow conversion should improve, right, from the 23 level. And then, I guess, even though it's not a 24 event, right, in the first half of 25, you guys, I believe, should receive $750 million from the Willis re-earnout. So, why would buybacks be more than $750 million in 24, or, you know, is M&A part of the equation? trying to square the free cash flow improvement with a lower level of buybacks. Sure. The $750 million rise is our expectation for the year. That level is lower than at $23 million.

Speaker Change: I'd say on the margin rate, we would expect it to incur.

Speaker Change: Increase.

Speaker Change: A little bit and just recall that Brian it's been somewhat depressed.

Speaker Change: A spend ratio perspective over the last couple of years, obviously there has been.

Speaker Change: A meaningful uptake as it relates to transformation spend in Capex.

Speaker Change: But <unk> capex as we continue to build out the platform and invest for the future.

Speaker Change: With me.

Speaker Change: Modest temporary offset to some of the <unk>.

Speaker Change: And as I mentioned earlier.

Speaker Change: Okay that makes sense.

Really good color on the AWP segment, specifically I was it was it was interesting to hear.

Speaker Change: Retirement I know.

Andrew Krasner: We did $1 billion. You have to keep in mind that for $23 million, we took on some incremental leverage in May and throughout the year capitalized on the opportunity to buy more shares when there was pressure on the stock price. So the $750 is not necessarily static. We continuously monitor cash levels and market conditions, and if the opportunity presents itself to accelerate share repurchases, we'll take advantage of it just like we did last year. We continue, as you might expect, to evaluate all of our options for capital allocation, as we always have, which does include share buybacks, internal investment, and carefully considered strategic M&A as part of that to ensure that we're maximizing value creation for our shareholders. Thank you.

Speaker Change: Lewis has a leading defined benefit.

Speaker Change: Retirement solutions segments.

Speaker Change: I think historically you guys have talked about that being kind of a.

Speaker Change: Not not as high of a growth rate or maybe not.

Speaker Change: Much of a long term grower, but it sounded like you said in the near term.

Because of the environment that it is a growing business, which is kind of a tailwind to 'twenty four I just want to make sure I'm understanding that.

Speaker Change: Those comments correctly.

Speaker Change: Yes, I think you've got that right right. We see several factors working for us going forward and we do have the market leading.

Speaker Change: Retirement business alright.

Speaker Change: Given the economic environment, we find ourselves in.

Speaker Change: And the funded status of our pension clients enjoy alright, there still remains a substantial appetite for de risking strategies and with funded positions are better right.

Operator: Please stand by for our next question. Our next question comes from the line of Robert Cox with Goldman Sachs. Your line is open.

Speaker Change: <unk> going to do that it's increasing.

Speaker Change: We're well equipped to help our clients that journey. In addition, the investments we've made in growing areas.

Robert Cox: Hey, thanks for taking my question. Maybe a similar question to one you've already received on free cash flow in some ways, but if I exclude the $430 million or so cash restructuring charges this year, I get to a free cash flow margin of over 17% in 2023. Is that correct? And when you think ahead to a future where restructuring spend is zero and the transact free cash flow drag has improved, wouldn't there be meaningful upside to the 16% long-term free cash flow margin target? Am I thinking about that correctly, or are there any headwinds I'm not considering? I think, you know, generally, you know, over the long term, I think you're thinking about the math correctly there, Rob, and focusing on the, you know, plus symbol after the 16% that we've got, you know, in our materials and in our long-term objective there. You know, it does take time for some of those headwinds to blow through.

Speaker Change: <unk> landscape such as the lifestyle business, Andrew talked about just earlier.

Speaker Change: Our growth.

Speaker Change: Number of economies, where these strategies master trusts are an attractive place.

Speaker Change: Our corporate.

Speaker Change: Corporate clients to gain efficiencies to retirement.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Okay.

Speaker Change: Our next question comes from the line of Mark Hughes with tourists Securities. Your line is open.

Mark Douglas Hughes: Yeah. Thanks, Good morning, I Wonder if you could just talk a little bit about the train back what's your experience those this quarter. The BDO business organic growth was below average for the business as a whole did you see any.

Mark Douglas Hughes: Change in that market.

Mark Douglas Hughes: And does it influence your long term outlook for the business.

Speaker Change: Well I guess the way we look at it.

Speaker Change: We run transact for our growth opportunities if they are profitable growth opportunities.

And if the spend we're seeing that necessary to generate.

Speaker Change: Our policy Commission.

Speaker Change: It is an economically sensible, we just don't do it so we manage that business I think that one thing.

Andrew Krasner: You know, think about Transact, for example, that when that turns free cash flow positive, it's still a drag on free cash flow and margin, right because it's not necessarily converting at the same rate as the rest of the business. And of course, you know, the revenue there can grow as well, so there's other dynamics that factor into the margin. Okay, thanks.

Speaker Change: And profits in this year found ourselves in a place where we've.

Speaker Change: We've made I think very sensible choice given the conditions.

Speaker Change: And just to add one thing to that if you recall we had.

Speaker Change: So.

Speaker Change: Revenue time into Q3 from that business, which I think we had mentioned on the last call. So that did factor into the quarterly growth rate within that component of HW C.

Andrew Krasner: And just to follow up on expenses and the risk in the broking business, could you talk about the incremental expense savings in the quarter versus last quarter, some of the things that you started to enact last quarter, and then, you know, just some more color on how sustainable those savings are outside of the transformation program. Yeah, there's, you know, we talked about, I think, ongoing expense discipline across the platform. That's not just specific to R&B, but, you know, we balance, you know, the focus on expenses with revenue growth to make sure that, you know, we're looking to generate operating leverage on top of, you know, the transformation savings across the platform. And obviously, you know, we've been heavily investing in that business, which has, you know, weighed on that for certain parts during the year. Carly, can you add to that?

Speaker Change: So I think the best way to think about it is if you look at the full year growth rate really representative of where we expect the business to head in the future.

Understood.

Speaker Change: Strategic client engagement.

Speaker Change: What was the motivation for that and are there any particular verticals that you think are most promising.

Speaker Change: Okay.

Speaker Change: Yes, I think youre, referring to the large complex account.

Speaker Change: Is that right.

Speaker Change: Yes, that's right.

Speaker Change: Yes.

Speaker Change: We think the combination of our global footprint, our specialization approach and our industry, leading analytics offer a compelling proposition to clients facing.

Speaker Change: Is that this macroeconomic environment and leaving two alright. So the extent, we can help our clients manage things like natural disaster social inflation geopolitical.

Speaker Change: Conflicts right our customized tools, our specialist approach can help ensure that clients get the best return for their premium dollar across their entire portfolio of risks that's what that's all about.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of David Mcmahon with Evercore ISI. Your line is open.

Carl Hess: Yeah, I guess, you know, as we've highlighted in prior quarters, we have made a substantial investment in that business, principally in talent, right? And now that our talent base is back to full strength, right? We're concentrating on strategic opportunistic higher growth to capitalize on the opportunities we see ahead and the geographies that we offer the greatest potential for profitable growth. So I think it's just a momentum story at this point, as opposed to a rebuild that leads to a smooth pattern. Thank you.

David Mcmahon: Hi, Thanks, Good morning, I had a car.

David Mcmahon: Question.

David Mcmahon: You guys had called out I think it was about a 200 basis points adverse impact to free cash flow margins from transact in 2022.

David Mcmahon: Could you just level set us on.

David Mcmahon: How much of a drag that was in 2023.

David Mcmahon: And then it sounds like you guys are expecting.

David Mcmahon: You know it to be free cash flow positive in the near term, which is a little sooner than I had expected so.

Operator: Please stand by for our next question. Our next question comes from the line of Michael Zarensky with BMO. Your line is open.

David Mcmahon: If you could just talk about what's driving that it would be helpful.

Speaker Change: Yes, sure we had about.

Speaker Change: 16 basis point.

Year over year improvement in the free cash flow.

Michael Zarensky: Great, good morning. Now, just back to the free cash flow, and thanks for all the color. You know, I believe, you said one of the offsets was, you know, cash investments and product development. So I guess we should be looking at, you know, your historical CapEx ratio divided by revenues? And, you know, I guess, are you alluding to maybe, you know, it'll maybe kind of rise to a bit of a higher level than it is currently, one of the offsets that I wanna, or my splitting hairs in terms of some of your commentary. Yeah, yeah, no, it's a good question.

Speaker Change: Margin drag.

Speaker Change: From that business.

Speaker Change: So quite pleased with the progress that we've made there as that business matures and as we think through.

Speaker Change: The portfolio of products within within transact.

Speaker Change: B.

Speaker Change: Drivers of getting to free cash flow positive within that business over the next few years as is more focus on.

Speaker Change: The product portfolio different products have different cash conversion profiles. So we seek to balance that appropriately as Carl mentioned, we bought that business from profitable growth. So we're always making trade off decisions there.

Andrew Krasner: You know, just on the margin, uh, a little bit. You just recall that, from a Spend ratio perspective over the last couple of years, obviously, there's been a meaningful uptick as it relates to transformation spend and CapEx, but BAU, CapEx, as we continue to build out the platform and invest in the future, would be a modest off, temporary offset to some of the tailwinds that I mentioned. Okay, that makes sense. A really good color on the HWC segment.

Speaker Change: As part of that.

Speaker Change: And the business will continue to mature.

Speaker Change: So we think.

Speaker Change: That will be a contributor to getting us to free cash flow positive within that business as well.

Speaker Change: Got it that's helpful. Thank you.

Speaker Change: And then maybe.

Speaker Change: Just Carl you had mentioned.

Speaker Change: The specialty businesses.

Speaker Change: Higher growth.

Speaker Change: Then the rest of the RMB segment could you just put some numbers around that in size, how big your specialty businesses are.

Carl Hess: Specifically, it was interesting to hear about retirement. I know Willis has a leading defined benefit retirement solutions segment, which I think, you know, historically, you guys have talked about that being kind of a, you know, not as high of a growth rate or maybe not, you know, much of a long-term grower. But it sounds like you said, in the near term, because of the environment, it is a growing business, which is kind of a tailwind for 24. I just want to make sure I'm understanding those comments correctly. Yeah, yeah, I think you've got that right, right?

Speaker Change: And what sort of growth rate.

Speaker Change: They're growing at organically.

Speaker Change: Yes, so I mean.

Speaker Change: What we classify as our specialized businesses, our global lines of amount to about half of the.

Speaker Change: Portfolio.

Speaker Change: The CRB business.

Speaker Change: And I think we've used.

Speaker Change: Nearly twice the growth rate.

Speaker Change: Our way of looking at it. So I think you can back into the relative map.

Speaker Change: Thank you.

Speaker Change: Ladies standby around next question.

Our next question comes from the line of Andrew <unk> with TD <unk> TD Cowen Your line is open.

Speaker Change: Okay.

Andrew Krasner: Good morning.

Andrew Krasner: So that R&D growth was an exceptional number at 12% so im kind of curious going forward.

Carl Hess: We see several factors for us going forward. And we do have a market-leading retirement business. All right.

Andrew Krasner: Looking at new hires.

Speaker Change: I think you said that.

Speaker Change: You'd be strategic and opportunistic.

Operator: Given the economic environment we find ourselves in and the funded status our pension clients enjoy, right, there still remains a substantial appetite for de-risking strategies, and with funded positions, they are better able to do that. We're well-equipped to help our clients. In addition, the investments we've made in growing your landscape, such as LifeSite, have enabled our growth in a number of economies where these strategies, you know, master trusts are an attractive place for corporate clients to gain efficiency. Thank you.

Speaker Change: How should we think about new hires next year in terms of.

Speaker Change: Is it going to be flat up a little down a little and then just on the strategic client engagement that you just touched on again.

Speaker Change:

Speaker Change: It's still not quite clear on how that helps the specialty groups I mean does it does it slow them down because now you've got new people involved in the in the process or.

Speaker Change: Just wanted to make sure that.

Speaker Change: Our understand how that's going to help boost the specialty as opposed to make it a little more complicated.

Speaker Change: Sure. Thanks, Ed Good question.

Mark Douglas Hughes: Please stand by for our next question. Our next question comes from the line of Mark Hughes with Truist Securities. Your line is open. Yeah, thanks. Good morning.

Speaker Change: Questions, maybe I should say first of all with respect to.

Speaker Change: Talent acquisition plans.

Speaker Change: You're correct I said, we're focusing on strategic and opportunistic hiring.

Carl Hess: I wonder if you could just talk a little bit about the Transact business, what your experience was this quarter, and the BDO business. Organic growth was below average for the business as a whole. Did you see any kind of change in that market? And does it influence your long-term outlook for the business? Well, I guess the way we look at it is, you know, we run transactions for growth opportunities if they're profitable growth opportunities. And, you know, if the spend we're seeing that's necessary to generate, you know, a policy commission is economically sensible, we just don't do it.

Speaker Change: We don't I think Adam Garden has done a fabulous job over the last couple of years.

Speaker Change: Of building back this business to both strength.

Speaker Change: But we're always going to be across all of our talent.

Speaker Change: If we can find people who are attracted to our proposition you can add value.

Speaker Change: Revenue, we're going to be and continue to invest in that talent base.

Speaker Change: <unk>.

Speaker Change: With regarding to.

Speaker Change: The bias would be sorry.

Speaker Change: The bias would be slightly up in new hires then said how I should take the strategic the opportunistic approach.

Speaker Change: I think that.

Speaker Change: I would anticipate that we're going to continue to be on look out for talent in the way we have over.

Carl Hess: So, you know, we manage that business, balancing growth and profits. This year, we found ourselves in a place where we made, I think, a very sensible choice given, And just to add one thing to that, if you recall, we had some revenue time in Q3 from that business, which I think we had mentioned on the last call. So that did factor into the quarterly growth rate within that component of HWC. So I think the best way to think about it is if you look at the full year growth rate, which is really representative of where we expect the business to head in the future. understood. Then the strategic client engagement. What was the motivation for that?

Speaker Change: The last several quarters right and so.

Speaker Change: We don't hire just for the sake of hiring.

Speaker Change: Got it.

Speaker Change: With regard to our strategic client engagement I think I'd look at it this way.

Speaker Change: We're trying to deliver best in class service to our client base and that involves making sure we understand their risks better than anybody else and that is a specialization and then it's fulfilling their needs right. This client engagement, which is equally important.

I view this as an and not a button.

Speaker Change: And what are the primary focuses of of the.

Speaker Change: Strategic client engagement concept is really going to be a focus of the industry vertical but in particular think about fortune 1000 type clients, where risk profiles may be more expensive and more complex than other organizations.

Carl Hess: And are there any particular verticals that you think are most promising? Yeah, I think you're referring to the large, complex account, team, is that right? Yeah. Yeah, I mean, we think the combination of our global footprint, our specialization approach, and our industry-leading analytics offers a compelling proposition to clients facing the challenges that this macroeconomic environment can lead them to. All right, so to the extent that we can help our clients manage things like natural disasters, social inflation, geopolitical conflicts, our customized tools, our specialist approach can help ensure that clients get the best return for their premium dollar across their entire portfolio. That's what that does.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of you Raj <unk> with Jefferies. Your line is open.

Raj: Thank you good morning, everybody.

Raj: I guess my first question actually goes back to <unk> question earlier on the call.

Raj: When when we see guidance and we see some of the underlying pieces move a bit, namely we're seeing higher expectation of.

Raj: Cost saves from from restructuring and at the same time, we see the EPS and margin guidance essentially remain unchanged.

Raj: I just wanted to make sure and again going back to Lisa's question is there a degree of conservatism in there or are you seeing some offsets potentially that are keeping you at the <unk>.

Carl Hess: Thank you. Please stand by for our next question. Our next question comes from the line of David Mote-Madden with Abercore SI. Your line is open. Hi, thanks. Good morning.

Raj: The unchanged EPS guidance.

Speaker Change: Yes, I think it's probably a little bit of both.

Speaker Change: There.

David Mote-Madden: I had a question. You guys had called out, I think it was about a 200 basis points adverse impact on free cash flow margins from Transact in 2022. Could you just level set us on how much of a drag that was in 2023?

Speaker Change: We want to make sure that we are focused on delivering on our commitments for 2024.

Speaker Change: And we talked about some of the puts and takes that we expect to play through.

Speaker Change: Through 2020 as well.

Speaker Change: Okay and can you.

Speaker Change: Maybe elaborate a little bit on what the variables would be that would get you to the upper end versus the lower end of that guidance, what the main variables that you foresee today.

Andrew Krasner: And then, you know, it sounds like you guys are expecting it to be free cash flow positive in the near term, which is a little sooner than I'd expected. So if you could just talk about what's driving that, it would be helpful. Yeah, sure.

Speaker Change: Yes, I think the biggest driver there is going to be organic growth rate that will drive incremental operating leverage above maybe what our card expectations might be.

Andrew Krasner: We had about, you know, 60 basis points of year-over-year improvement in the free cash flow margin drag from that business. So, you know, quite pleased with the progress that we've made there as that business matures and as we think through, you know, the portfolio of products within Transact. You know, the drivers of getting to free cash flow positive within that business in the next few years are more focused on the product portfolio. Different products have different cash conversion profiles.

Speaker Change: So I think that will be the biggest the biggest factor there.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Mark Marcon with Baird. Your line is open.

Mark Douglas Hughes: Good morning, Thanks for taking my questions.

Mark Douglas Hughes: Two questions first on.

Mark Douglas Hughes: On the specialty lines.

Mark Douglas Hughes: You said, you're basically generating two extra growth.

Mark Douglas Hughes: The general lines.

Mark Douglas Hughes: To what extent or how long do you think you can keep up that higher level of growth on the specialty lines. In other words are they still relatively new in the market.

Andrew Krasner: So we seek to balance that appropriately. As Carl mentioned, you know, we run that business from profitable grounds. So we're always making trade-off decisions there as part of that. And, you know, the business will continue to mature. So we think, you know, that will be a contributor to getting us to free cash flow positive within that business as well.

Mark Douglas Hughes: This is truly differentiated and it's going to enable you to continue to gain a lot of share.

Mark Douglas Hughes: Or did we have a boost because of the talent additions and things will settle out so how should we think about that from a longer term perspective.

So part of this is strategic and that we are focusing on these businesses and that's where we are continuing to invest and we see a return there.

Andrew Kligerman: That's helpful. Thank you. And then maybe, you know, Carl, you had mentioned the specialty businesses had higher growth than the rest of the R&B segment. Could you just put some numbers around that and size how big your specialty businesses are and what sort of growth rate they're growing at organically? Yeah, so I mean, what we classify as our specialized businesses, our global lines, amount to about half of the portfolio for the CRB business. And I think we've used nearly twice the growth rate, their way of looking, you can back into the relative math. Thank you.

Mark Douglas Hughes: We've been a specialist broker for nearly 200 years.

Mark Douglas Hughes: So I would argue that it's not likely to play itself out over the next couple we've been doing it very successfully for a very long time at.

Mark Douglas Hughes: The differentiator for us to remember is that we're actually organizing the business around this as opposed to on the side of someone's desk and that enables us to focus on delivering enhanced value through superior analytics and client engagement.

Mark Douglas Hughes: We think has a very attractive proposition, we don't see that abating.

Speaker Change: Great and then can you just talk a little bit about.

Speaker Change: The pension and retirement business.

Carl Hess: Please stand by for our next question. Our next question comes from the line of Andrew Kligerman with TD Cohen. Your line is open. Hey, good morning.

Speaker Change: How much of a boost could we ended up getting with <unk>.

Speaker Change: The change in rates and the ability to Derisk and then to what extent does the are you getting any additional engagements just in terms of the news that IBM made with regards to.

Carl Hess: So that R&D growth was an exceptional number at 12%. So I'm kind of curious, going forward, looking at new hires. Carl, I think you said that you'd be strategic and opportunistic. How should we think about new hires next year in terms of, is it going to be flat, up, a little down, and then just on the strategic client engagement that you just touched on again? Um, still not quite clear on how that helps the specialty groups. I mean, does it slow them down because now you've got new people involved in the process?

Speaker Change: A shift in policy.

Speaker Change: So I mean, we do see the.

Speaker Change: The macro economic environment, and where the funded position of pension plans are as stimulating demand.

Speaker Change: For buy ins and buyouts that we've talked about and not just necessarily transacting on them, but the analysis that goes into them and the preparation. So that we do think that is.

Carl Hess: You just want to make sure that or understand how that's going to help boost the specialty as opposed to making it a little more complicated. Sure. Thanks, Peter.

Speaker Change: Helpful for us and our clients going into 2024.

Speaker Change: We.

Speaker Change: And some of that will be episodic right.

Carl Hess: Good question, questions. First of all, with respect to talent acquisition plans, you're correct. I said we're focusing on strategic and opportunistic hiring. You know, we've done, I think Adam Gerard has done a fabulous job over the last few months of building back this business to full strength, but we're always going to be on the prowl. If we can find people who are attracted to our proposition, who can add value and revenue, we're going to continue to invest in that talent pool. With regard to, The bias would be slightly higher in new hires. Then, is that how I should take the strategic, the opportunistic approach? I think that I would anticipate that we are going to continue to be on the lookout for talent in the way we have, right? Thank you, and Shlomo Rosenbaum.

Speaker Change: As clients.

Speaker Change: Take out de risking transaction, so its not going to be a one pattern throughout throughout the year and.

Speaker Change: With respect to the B.

Speaker Change: The client Youre alluding to who as you know Mike has reopened their defined benefit plan.

Speaker Change: So.

There is interest out there at least examining this on behalf of other plan sponsors who may be similarly, situated.

Speaker Change: We are well poised and well positioned.

Speaker Change: With that evaluation.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of my Shields with Keefe Bruyette <unk> Woods. Your line is open.

My Shields: Great. Thanks, two quick questions first.

My Shields: I can tell you talked about having 12 vertical I was hoping you could sort of outline how much of the fortune 1000.

My Shields: That 12 vertical represent.

My Shields: So I don't think that maps quite right for instance, one of our industry verticals focuses around alternative capital with your private equity Brian. So this isn't necessarily a public equity strategy nor is it confined to the large market right.

Carl Hess: Thank you. Thank you. We don't hire just for the sake of it.

Carl Hess: Got it, with regard to our strategic plan. I think I'd look at it this way: We're trying to deliver best-in-class service to our client base, and that involves making sure we understand their risks better than anybody else, and that is special. And then it's fulfilling their needs, right? There's clients, which is equally important. So I view this as an and, not a but.

My Shields: The industry verticals stretch down to smaller organizations as well.

My Shields: And the answer is there a significant coverage across.

My Shields: Corporate America with our industry verticals.

My Shields: Some of them are quite broad and some of them are quite focused on areas, where we think we can deliver particular value say hospitality.

Carl Hess: And what are the primary focuses of the strategic client engagement concept is really going to be a focus on the industry verticals, but in particular, you know, think about, you know, Fortune 1000 type clients where the risk profiles may be more expansive and more complex than other organizations. Thank you. Please stand by for our next question, which comes from the line of Yaron Kinar with Jeffries. Your line is open. Thank you. Good morning, everybody.

My Shields: Okay.

Speaker Change: Okay, No fair enough.

Speaker Change: Second and I'm not really sure how to ask this question, but can you talk about how Adams brought back.

Speaker Change: The.

Speaker Change: The staffing to full levels could we see full productivity from from that group overall in either the fourth quarter of 2003 over the course of 2023 or is there still some momentum for for the newest.

Speaker Change: Cadre.

Speaker Change: <unk>.

Speaker Change: Expand productivity with that margin.

Speaker Change: Very much the latter we do see.

Speaker Change: We're very happy with the progress that both are.

Speaker Change: <unk> colleagues and our new colleagues have made.

Yaron Kinar: I guess my first question actually goes back to Elyse's question earlier in the call. You know, when we see guidance, and we see some of the underlying pieces move a bit, namely, where we're seeing higher expectations of cost savings from restructuring, and at the same time, we see the EPS and margin guidance essentially remain unchanged, I just want to make sure, and again, going back to Elyse's question, is there a degree of conservatism in there, or are you seeing some offsets potentially that are keeping Yeah, I think it's probably a little bit of both.

Speaker Change: We do see increased productivity as being part of the picture for our last cohort suppliers, yes.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Josh Shanker with Bank of America. Your line is open.

Josh Shanker: Yes. Thank you very much for fitting me again.

I'll get back to a question Greg was asking me at the beginning about the difference in the growth rates of the various segments in aggregate the growth seems pretty orderly, but by segments. There seems to be a lot of volatility should we expect in the coming quarters.

Andrew Krasner: There, you know, we want to make sure that we are focused on delivering on our commitments for 2024. And, you know, we talked about some of the puts and takes that we expect to play through through 2024, as well. Okay, and can you maybe elaborate a little bit on what the variables would be that would get you to the upper end versus the lower end of that guidance? What are the main variables that you foresee today? Yeah, I think the biggest driver there is going to be organic growth, right?

Josh Shanker: <unk> segment.

Josh Shanker: Organic growth rate will be volatile so that the right way to think about how your business operates or should we expect there to be a general run rate, where theres a trend from the previous quarter that might influence the next quarter.

Speaker Change: Yes, I think you're I think you're asking about sequential growth rates. There are parts of our business are seasonal and we do have timing things would play out.

Speaker Change: Periodically between quarters.

Speaker Change: Year to year, so that is something to keep in mind and that is why we tend to focus on full year full year growth rates for our businesses.

Speaker Change: Does the seasonality is shown in 2023 represent a seasonality that we should consider in the 'twenty 'twenty four year.

Andrew Krasner: That that'll drive incremental operating leverage above maybe what our current expectations might be. So I think that will be the biggest factor there. Thank you. Please stand by for our next question. Our next question comes from the line of Mark McComb with Bayer. Your line is open.

Speaker Change: But for the most part I think throughout the year, we did call out a couple of.

Speaker Change: Unusual things for example.

Speaker Change: Timing of BDO between Q4, Q3 revenue and I think there were a couple of other things.

Speaker Change: Out the year and of course, you got to think about the impact of the.

Mark Douglas Hughes: Good morning. Thanks for taking my questions. Two questions. First, on the specialty lines, you said you're basically generating 2x the growth of the general lines. How, to what extent or how long do you think you can keep up that higher level of growth on the specialty lines? In other words, are they still relatively new in the market, and this is truly differentiated, and this can enable you to continue to gain a lot of share? Or did we have a boost because of the talent additions, and things will settle out?

Speaker Change: Book sales, where we had so swings in some of the quarters they were larger about space, but.

Speaker Change: Expect to be through that largely going forward.

Speaker Change: Thank you.

Please standby for our next question.

Speaker Change: Our next question comes from the line of Mike Ward with Citi. Your line is open.

Mike Ward: Hey, guys. Thanks, good morning.

Mike Ward: I was just curious.

Mike Ward: The margin guide.

Relatively consistent but you've spoken to some incremental savings.

Mike Ward: So just wondering if we should think about those savings maybe being offset by some costs.

Mike Ward: Could that actually benefit.

Carl Hess: So how should we think about that from a longer-term perspective? So part of this is strategic, right, in that, you know, we are focusing on these. That's, return there.

Mike Ward: Five margins.

Speaker Change: Yes, so as I had mentioned as it regards with regards to the 24 margin target, we do expect to be.

Speaker Change: The higher end of that range.

Carl Hess: You know, we've been a specialist broker for nearly 200 years. Right, so I would argue that it's not likely to play itself out over the next couple. The differentiator for us, remember, is that we're actually organizing the business around this as opposed to on the side of someone's desk. And that enables us to focus on delivering, you know, enhanced value through superior analytics, which we think has a very attractive proposition. We don't see that.

Speaker Change: There is obviously some benefit from incremental savings that we talked about.

Speaker Change: With the investments that we're making are really for.

Speaker Change: Future future growth opportunities, but also will help us unlock additional.

Speaker Change: Operating leverage opportunities in the future. So we do think it will.

Speaker Change: Be continued tailwind beyond 2024 for some of the investments we're making.

Speaker Change: Now this year.

Speaker Change: Okay. Thanks.

Speaker Change: And then you have spoken to some of the bookings in the quarter.

Carl Hess: Right. And then could you just talk a little bit about, you know, the pension and retirement business? You know, how much of a boost could we end up getting with, you know, the change in rates and the ability to de-risk? And then to what extent do you get any additional engagements just in terms of the news that IBM made with regard to their shift? So, I mean, we do see the macroeconomic environment and, you know, where the funded position of pension plans is stimulating demand for buy-ins and buy-outs, as we've talked about, and not just necessarily transacting on them, but the analysis that goes into them and the preparation, so we do think that is helpful for us and our clients going into 2024. And some of that, you know, will be episodic, as clients, you So it's not going to be, you know, any one pattern throughout the year.

Speaker Change: I'm wondering if you could talk about where attrition is running.

Speaker Change: 'twenty 'twenty four is kind of a normal year.

Speaker Change: Just curious how much of a headwind we should expect this year for bookings.

Speaker Change: No we expect to return.

Speaker Change: Back towards our historical normal levels. So we don't expect any significant headwinds or tailwind from.

Speaker Change: From bookings going forward.

Speaker Change: I would just add sort of thinking about attrition overall level for the company, we are back down to well within the range we've had historically.

Speaker Change: So a very manageable situation for us.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Brian Meredith with UBS. Your line is open.

Brian Meredith: Yes. Thank you.

Brian Meredith: Carl I'm just curious.

On the 10% organic growth for the year and RMB, you mentioned that was new business and it was retentions as a way to kind of parse that out and how much of the kind of growth was with client retention.

Brian Meredith: Back to kind of your historical client retention levels or is there more room for that to improve.

Carl Hess: Yeah, and with respect to the client you were alluding to, who has, you know, I guess, reopened their defined benefit plan, you know, this is, say, where there's interest out there in at least examining this on behalf of other plan sponsors who may be similar, are well-poised, and well-positioned. Thank you. Please stand by for our next question, which comes from the line of Maya Shields with Keith, Brett, and Woods.

Brian Meredith: We are back which is great to see and that is the result of superior client service I think on behalf of many many many colleagues.

Brian Meredith: I do not lever rest on our laurels, but it's very nice to be where we are.

Brian Meredith: Our performance New business has been just really first rate and.

Brian Meredith: Very proud of the effort. The team has made representing what we can do with gws.

Great. Thank you and then second question I'm, just curious with your 2024 outlook. What are your kind of baseline assumption with respect to economic growth and inflation as you kind of look out do you expect things to continue the way they are any type of change.

Maya Shields: Your line is open. Great, thanks. Two quick questions. First, Kyle, you talked about having 12 verticals, and I was hoping you could sort of outline how much of the Fortune 1000 those 12 verticals represent. So I don't think that maps quite right.

Speaker Change: I think continue the way they are operating.

Speaker Change: Not looking too far back in the mirror on that one, but we're not sort of anticipating incredible economic dislocation.

Carl Hess: For instance, one of our industry verticals focuses on alternative capital, which is private equity. It is not necessarily a public equity strategy, nor is it confined to the large market. We see industry verticals stretch down to smaller organizations as well. So the answer is there's significant coverage across corporate America with their industry verticals. Some of them are quite broad, and some of them are quite focused on areas where we think particular value is added, you know, say hospitality. Okay, no, fair enough.

Speaker Change: Nor are we sort of looking towards the incredible geopolitical dislocation, but we do recognize there's a lot of volatility out there.

Speaker Change: That is not.

Speaker Change: Not necessarily great for our clients, but it does mean that.

Speaker Change: There is more opportunities for us to help them manage that volatility.

Speaker Change: Thank you.

Speaker Change: I am showing no further questions in the queue I would now like to turn the call back over to Carl Hess for closing remarks.

Carl Hess: So thank you all again for joining us I appreciate all of our WT W colleagues globally, who work tirelessly to help us and the year on such a strong note I am proud of everything we've achieved in 2023, I look forward to us keeping up the momentum into 2024.

Carl Hess: Second, and I'm not really sure how to ask this question, but you talked about how Adams brought back the staffing to full levels. Did we see full productivity from that group overall in either the fourth quarter of 2023 or over the course of 2023? Is there still some momentum for this newest cadre to expand productivity or expand margin? Very much the latter.

Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: [music].

Carl Hess: We do see, while we're very happy with the changes both our existing colleagues and our newer colleagues have made, we do see increased productivity as being part of the picture for our last cohorts of hires. Thank you.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Josh Hanker: Please stand by for our next question. Our next question comes from the line of Josh Hanker with Bank of America. Your line is open.

Speaker Change: Okay.

Speaker Change: <unk>.

Speaker Change: [music].

Andrew Krasner: Thank you very much for putting me on the end. I just want to go back to a question Greg was asking at the beginning about the difference in the growth rates of the various segments. In aggregate, the growth seems pretty orderly, but by segment, there seems to be a lot of volatility. Should we expect in the coming quarters that the segment organic growth rate will be volatile? Is that the right way to think about how your business operates? Or should we expect there to be a general run rate where there's a trend from the previous quarter that might influence the next quarter?

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Okay.

Yes.

Speaker Change: Yes.

Andrew Krasner: Yeah, I think you're asking about sequential growth rates. You know, parts of our business are seasonal, and we do have timing things which play out periodically between quarters, year to year. So that is something to keep in mind.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Andrew Krasner: And, you know, that is why we tend to focus on full year, full year growth rates for our. Does the seasonality shown in 2023 represent a seasonality that we should consider in the 2024 year? But for the most part, I think throughout the year, we did call out a couple of unusual things. For example, the timing of the between Q4 and Q3 revenue. And I think there were a couple of other things, you know, throughout the year.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

[music].

Speaker Change: Yeah.

Speaker Change: [music].

Andrew Krasner: And of course, you got to think about the impact of book sales where we had some swings in some of the quarters where there were larger amounts of those, but you know we expect to be through that largely going forward. Thank you. Please stand by for our next question. Our next question comes from the line of Mike Ward with Citi. Your line is open. Hey, guys. Thanks. Good morning.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: [music].

Mike Ward: I was just curious, the margin guide, relatively consistent, but you know, you've spoken to some incremental savings. So I was wondering if we should think about those savings maybe being offset by some costs. Could that actually benefit 2025 margins? Yeah, so as I had mentioned, with regard to the 24 margin target, we do expect to be, you know, toward the higher end of that range. You know, there's obviously some benefits from the incremental savings that we talked about. And, you know, the investments that we're making are really for future growth opportunities but will also help us, you know, unlock additional operating leverage opportunities in the future. So we do think there'll be continual tailwinds beyond 2024 for some of the investments we're making now this year. Okay, thanks. And then you spoke to some of the book games in the quarter.

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Andrew Krasner: I'm wondering if you could talk about where attrition is running, you know, if 2024 is kind of a normal year. Just curious how much of a headwind we should expect this year for bookends. No, we expect to return back to our historical normal level, so we don't expect any significant headwinds or tailwinds from bookends going forward. I would just add sort of thinking about attrition at the overall level for the company. You know, we are back down to, you know, well within the. So it's very manageable. Thank you.

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Andrew Krasner: Please stand by for our next question. Our next question comes from the line of Brian Meredith with UBS. Your line is open.

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Speaker Change: Okay.

Brian Meredith: Yeah, thank you, for me and Carl. I'm just curious, on the 10% organic growth you had for the year in R&D, you mentioned that it was new business and it was retention. Is there a way to kind of parse that out, and how much of that kind of growth was client retention? Are you back to kind of your historical client retention levels, or is there more room for that to improve?

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Carl Hess: We are back. Great to see you, and many, many more. I do not want to rest on our performance in new business. I'm very proud of the effort that has been made to represent what we can do as a community. Great, thank you.

Speaker Change: Yes.

Carl Hess: And then second question, I'm just curious, with your 2024 outlook, what is the baseline assumption with respect to, you know, economic growth and inflation as you kind of look out? Do you expect things to continue the way they are, any type of change? I think things will continue the way they are over the long term, but not looking too far back in the mirror. We're not sort of antisocial.

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Carl Hess: The opinions voiced in this material are for general information only and are not intended to, All of these are locations, but we do recognize that there's a lot of volatility out there that is not, you know, not necessarily great for our clients, but does mean that there are more opportunities for us to help them navigate. Thank you. I am showing no further questions in the queue.

Speaker Change: Yes.

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Operator: I would now like to turn the call back over to Carl Hess for closing remarks. So, thank you all again for joining us. I appreciate all of our WTW colleagues globally who have worked tirelessly to help us end the year on such a strong note. I am proud of everything we've achieved in 2023. I look forward to us keeping up the momentum. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

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Operator: Phone Ringing, Phone Ringing, Welcome to the WTW fourth quarter and four year 2023 earnings conference call; please refer to WTWCO.com for the press release and supplemental information that were issued earlier today. Today's call is being recorded and will be available for the next three months on WTW's website. Some of the comments in today's call may constitute forward-looking statements within the meaning of the Private Securities Reform Act of 1995. These forward-looking statements are subject to risk and uncertainty. Actual results may differ materially from those discussed today, and the company undertakes no obligation to update these statements unless required by law.

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Speaker Change: Good morning, welcome to the W. T W fourth quarter and full year 2023 earnings conference call.

Speaker Change: Please refer to W. TWC O dot com for the press release and supplemental information that were issued earlier today.

Speaker Change: Today's call is being recorded and will be available for the next three months on Wdw's website.

Carl Hess: For more detailed discussion of these and other risk factors, investors should review the forward-looking statements section in the earnings press release issued this morning, as well as other disclosure in the most recent form, 10-K, and other Willis Towers-Watson SEC files. During the call, certain non-GAAP financial measures may be discussed. For reconciliations of the 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 company's website. I'll now turn the call over to Carl Hess, WTW's Chief Executive Officer. Please go ahead, sir.

Speaker Change: Some of the comments in today's call may constitute forward looking statements within the meaning of the private Securities Reform Act of $19 95.

Speaker Change: These forward looking statements are subject to risks and uncertainties.

Speaker Change: Actual results may differ materially from those discussed today and the company undertakes no obligation to update these statements unless required by law.

Speaker Change: For more detailed discussion of these and other risk factors investors should review the forward looking statements section in the earnings press release issued this morning as well as other disclosure in our most recent Form 10-K, and other Willis towers Watson's SEC filings.

Carl Hess: Good morning, everyone. Thank you for joining us for WTW's fourth quarter and full year 2023 earnings call. Joining me today is Andrew Krasner, our Chief Financial Officer. WTW ended 2023 on a strong note and has begun 2024 with solid momentum as we continue to execute on our grow, simplify, and transform strategic priorities. In the fourth quarter, our world-class solutions and maturing investments in talent helped generate robust organic revenue growth, and our transformation program and expense discipline drove adjusted operating margin expansion and solid adjusted diluting earnings per share growth. Our performance steadily improved throughout 2023, and today WTW is stronger, more resilient, and better positioned to achieve our goals. We delivered 6% organic revenue growth in the fourth quarter with an adjusted operating margin of 34.2%, up 180 basis points over the prior year. Adjusted diluted earnings per share were $7.44, an 18% increase year-over-year.

Speaker Change: During the call certain non-GAAP financial measures may be discussed.

For reconciliations of the non-GAAP measures as well as other information regarding these measures. Please refer to the most recent earnings release and other materials and the risks Investor Relations section of the company's website.

Speaker Change: I'll now turn the call over to Carl Hess, Wcw's, Chief Executive Officer.

Carl Hess: Go ahead Sir.

Carl Hess: Good morning, everyone. Thank you for joining us for <unk> fourth quarter and full year 2023 earnings call. Joining me today is Andrew Krasner, our Chief Financial Officer.

Carl Hess: W. Tw ended 2023 on a strong note and has begun 2024 with solid momentum as we continue to execute on our growth simplify and transform strategic priorities.

Carl Hess: In the fourth quarter, our world class solutions, and maturing investments and talent helped generate robust organic revenue growth.

Carl Hess: Our transformation program and expense discipline drove adjusted operating margin expansion and solid adjusted diluting earnings per share growth.

Carl Hess: Our performance steadily improved throughout 2023, and today Ww as stronger more resilient and better positioned to achieve our goals.

Carl Hess: We delivered 6% organic revenue growth in the fourth quarter with an adjusted operating margin of 34, 2% up 180 basis points over the prior year.

Carl Hess: For the full year, we had organic revenue growth of 8% above our mid-single-digit target. We also drove 110 basis points of year-over-year margin expansion to achieve an adjusted operating margin of 22%, fulfilling our commitment of annual margin, adjusted to diluted earnings per share for $14.49, an 8% increase over the past year. We believe these results are the product of our strong global client model, our strategic investments in talent and technology, and our team's hard work and relentless focus on being best-in-class. The progress we see within WTW and the enthusiastic response we're receiving from clients gives us confidence that our strategies, our people, and our investments are aligned with areas that we believe to be the greatest opportunities to drive sustainable, profitable growth and create shareholder value over the long term.

Carl Hess: Adjusted diluted earnings per share were $7 44 and.

Carl Hess: An 18% increase year over year.

Carl Hess: For the full year, we had organic revenue growth of 8% above our mid single digit target.

Carl Hess: We also drove 110 basis points of year over year margin expansion to achieve an adjusted operating margin of 22% fulfilling our commitment of annual margin expansion.

Carl Hess: Our adjusted Diluting earnings per share were $14 49 and.

Carl Hess: An 8% increase over the prior year.

Carl Hess: We believe these results are the product of our strong global client model, our strategic investments in talent and technology and our team's hard work and relentless focus on best in class delivery.

Carl Hess: The progress we see within Wdw and the enthusiastic response, we're receiving from clients give us confidence that our strategies our people and our investments are aligned with areas that we believe to be the greatest opportunities to drive sustainable profitable growth.

Carl Hess: And create shareholder value over the long term.

Carl Hess: Let me take a few minutes to share the progress we've made and the opportunities ahead of us across our segment. Throughout 2023, our specialization strategy in risk and broking will be a key driver of growth for both the segment and the enterprise. Our specialty businesses continue to have significantly higher growth than the rest. This growth is driven in large part by improved client retention, expansion of existing client relationships, and our strength and ability to attract new clients and win back old ones, as validated or As a result, specialization continues to be our primary strategic focus in our administration. It allows us to create value for clients by tailoring solutions that close gaps in their risk management. Together with digitization, data, and analytics, we can create efficiencies that enable us to provide more timely and effective insurance. Our approach to specialization is tailored to each geography in which we operate.

Carl Hess: Let me take a few minutes to share the progress we've made and the opportunities ahead of us across our segments.

Carl Hess: Throughout 2023, our specialization strategy and risk and broking was a key driver of growth for both the segment and the enterprise.

Carl Hess: Our specialty businesses continue to have significantly higher growth than the rest of the segment.

Carl Hess: This growth driven in large part by improved client retention expansion of existing client relationships and our strength and ability to attract new clients and win back old ones as validated our approach.

Carl Hess: As a result specialization continues to be our primary strategic focus in RMB.

Carl Hess: It allows us to create value for clients by tailoring solutions that closed gaps in their risk management profile.

Carl Hess: Either with Digitization and data and analytics, we can create efficiencies that enable us to provide more timely and effective insurance services.

Carl Hess: Our approach the specialization is tailored to each geography in which we operate in 2023, we built our 12 industry verticals in North America.

Carl Hess: In 2023, we built out 12 industry verticals in North America. That process is now complete with colleagues, processes, and infrastructure supporting that alignment. Given the success we've seen to date, we're in the process of launching this industry model across Western Europe, and we'll build out more industry verticals in our international region in 2024. This model, together with our global reach, has us positioned to win an outsized share of complex mandates, such as our recent win of a multi-year construction project for a key player in the European energy sector, our cutting-edge data analytics, and We're also making good progress expanding into new and differentiated revenue streams, such as our new managing general underwriter, Veritas, which is growing steadily since its initial launch in September. In just the fourth quarter of 2023, we've onboarded brokers, found premiums, and received submissions from both external and our own brokers. 2024.

Carl Hess: That process is now complete with colleagues processes and infrastructure supporting that alignment.

Carl Hess: Given the success, we've seen to date, we're in the process of launching this industry model across Western Europe, and we'll build out more industry verticals in our international region in 2024.

Carl Hess: This model together with our global reach has us positioned to win an outsized share of complex mandates such as our recent win of a multi year construction project for a key player in the European energy sector.

Carl Hess: Our cutting edge data and analytics and our ability to bring together superior industry and product expertise from our specialist teams across several countries set our proposal.

Carl Hess: We're also making good progress expanding into new differentiated revenue streams, such as our new managing general underwriter, Erica which is growing steadily since its initial launch in September.

Carl Hess: Just in the fourth quarter of 2023, with Onboarding brokers down premiums and receive submissions for both external and our own brokerage clients in.

Carl Hess: 2024, we will focus on expanding our MGA and MDU strategy to additional geographies.

Carl Hess: We'll focus on expanding our MGA and MGU strategy to additional geography. In addition to expanding our business platforms and offerings at Risk and Broking, we're continuing to invest in our people to win new business. Our colleagues who joined us during 2022 and 2023 have become increasingly productive and have brought our talent base back to full strength, as evidenced by the segment's strong organic revenue growth in the second half. Accordingly, we're now focused on strategic and opportunistic challenges. These investments should enhance our present capabilities in the lines of business and geography that we believe offer the greatest growth and profitability. We expect these efforts to continue throughout 2024 and beyond.

Carl Hess: In addition to expanding our business platforms and offerings at risk and broking, we're continuing to invest in our people to win new business.

Carl Hess: Our colleagues, who joined US during 2022, and 2023 have become increasingly productive and have brought our talent base back to full strength as evidenced by the segment's strong organic revenue growth in the second half of 2023.

Carl Hess: Accordingly, we are now focused on strategic and opportunistic talent investments.

Carl Hess: These investments should enhance our capabilities in the lines of business and geography that we believe offer the greatest growth and profitability potential.

Carl Hess: We expect these efforts to continue throughout 2024 and beyond.

Carl Hess: Furthermore, we see opportunity for continued strong new business growth as we work closely to help clients manage a complex and challenging risk environment marked by increasingly costly natural disasters, social inflation, and geopolitical. In HWC, we've leveraged the strength of our portfolio, driving growth through and across health, wealth, and career, and DDNO. We've made significant progress by staying focused on our core businesses, by making connections across the organization where it adds value for clients, and by simplifying how we. For example, we maintained or improved client retention rates across all of HWC, including excellent 98% retention for our retirement plans. We have dozens of clients for our signature package solutions, like our LifeSite Master Trust and Global Benefits Management Office. We expanded our relationships with more than 1,500 clients to include at least one new service.

Carl Hess: Furthermore, we see opportunity for continued strong new business growth as we work closely to help clients manage a complex and challenging risk environment marked by increasingly costly natural disasters, social inflation and geopolitical conflicts.

And each WC, we've leveraged the strength of our portfolio driving growth through it across health wealth and career and bdnf.

Carl Hess: We've made significant progress by staying focused on our core businesses by making connections across the organization, where it adds value for clients and by simplifying how we work.

Carl Hess: For example, we maintained or improved client retention rates across all of <unk>, WC, including excellent 98% retention rates for our retirement and outsourcing businesses.

Carl Hess: We added dozens of clients for our signature package solutions like our lifestyle Master Trust and global benefits management offerings.

Carl Hess: We expanded our relationships with more than 500 clients to include at least one new service offerings.

Carl Hess: And we have increased the size and scope of our hub teams in key centers around the world to enhance capacity and consistency. Our intense focus on cross-selling and making it simpler to do business with us is paying off, across industries and services. More clients are coming to WTW for a full suite of solutions. Just to mention a few. We had a software development firm move its global benefits consulting and brokerage work to WTW and appoint us to support their employee experience through our Embark portal and our Engage software. A major global financial corporation's simple survey request turned into a multi-year engagement that included supporting the client with attracting and retaining talent and the delivery of a fully integrated total reward solution using one of our portals.

Carl Hess: And we increased the size and scope of our hub teams in key centers around the world to enhance capacity and consistency.

Carl Hess: Our intense focus on cross selling and making it simpler to do business with us is paying off.

Carl Hess: Across industries and services more clients are coming to <unk> for a full suite of solutions just to mention a few from this quarter we.

Carl Hess: We had a software development firm move its global benefits consulting and brokerage work to WCW and to point us to support their employee experience through our embark portal and our engage software.

Carl Hess: A major global financial Corporation's simple survey request turned it into a multi year engagements for us that includes supporting the client with attracting and retaining talent and the delivery of a fully integrated total reward solution using one of our port.

Carl Hess: And we leveraged our existing pension actuarial and outsourcing relationship with a leading regional health system into support for a rollout of major changes to their health and benefits program, which included the creation of a temporary health and welfare service. We're confident HWC will provide a solid foundation for growth in 2020. And as we've discussed on prior calls, complexity in the human capital landscape continues to increase, and finding the right solutions to our clients' unique needs in this environment requires a holistic, integrated,

Carl Hess: And we leveraged our existing pension actuarial and outsourcing relationships with a leading regional health system interest will support for a rollout of major changes to their health and benefits program, which include the creation of a temporary health and welfare Service Center.

Carl Hess: We're confident each WC, we will provide a solid foundation for growth in 2024.

Carl Hess: And as we've discussed on prior calls complexity in the human capital landscape continues to increase and finding the right solutions to our clients' unique needs in this environment requires a holistic integrate.