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Willis Towers Watson PLC WLTW

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Morningstar’s Analysis

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Willis Towers Watson to Sell Willis Re Operations

Brett Horn, CFA Senior Equity Analyst

Analyst Note

| Brett Horn, CFA |

As part of its proposed merger with Aon, Willis Towers Watson had agreed to sell a portion of its Willis Re business. After the Aon deal fell through, management had announced that it would continue to look at a sale of this business. That has now played out, with Willis Towers Watson agreeing to sell the Willis Re treaty reinsurance brokerage operations to Arthur Gallagher, the original buyer, for $3.25 billion plus potential additional consideration of up to $750 million based on three-year revenue targets. Based on data provided by Arthur Gallagher, the base price equates to 12.3 times EBITDA, which we view as reasonable. We will maintain our $206 fair value estimate and narrow moat rating.

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Company Profile

Business Description

In January 2016, Towers Watson and Willis Group merged to form Willis Towers Watson, a global advisory, insurance brokerage, and solutions company. The company operates in four business segments: corporate risk and brokerage; benefits delivery and administration; human capital and benefits; and investment, risk, and reinsurance. The firm operates under the Willis brand for risk and insurance solutions, while it markets under the Towers Watson brand for consulting services in the areas of employee benefits, exchange solutions, and benefit outsourcing.

C/o Willis Group Limited, 51 Lime Street
London, EC3M 7DQ, United Kingdom
T +44 2031246000
Sector Financial Services
Industry Insurance Brokers
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type
Employees 46,000