Latest news with #WillisTowersWatson
Globe and Mail
14-05-2025
- Business
- Globe and Mail
BRK.B vs. AIG: Which Global Insurance Giant Can Offer Better Returns?
Better pricing, climate change, which exposes insurers to catastrophe losses, and accelerated digitalization are likely to have an impact on the insurance industry. Though the Fed has held the borrowing rate between 4.25% and 4.5% since December, a July or September cut is now more likely, per media reports. Yet Berkshire Hathaway Inc. ( BRK.B ) and American International Group, Inc. AIG — two insurance behemoths — are expected to stay strong. Pricing plays an important part in their profitability. Per a recent analysis by MarketScout's Market Barometer, the commercial insurance sector saw a composite rate increase of 3%. Per the report, the personal lines composite rate increased 4.9% in the first quarter of 2025, up from 4% in the fourth quarter of 2024. Given the increased adoption of technology, merger and acquisition (M&A) activity is projected to witness momentum in 2025, driven by a higher number of technology-driven deals, per a report by Willis Towers Watson's Quarterly Deal Performance Monitor. Yet, as an investment option, which stock, BRK.B or AIG, is more attractive for long-term insurance-focused investors? Let's closely look at the fundamentals of these stocks. Factors to Consider for BRK.B Berkshire Hathaway is a diversified conglomerate with over 90 subsidiaries spanning a wide range of industries, including insurance and consumer products, which helps mitigate concentration risk. Among its various operations, insurance is the most significant, contributing roughly one-fourth of the company's total revenues. This segment is well-positioned for sustained growth, driven by increased market exposure, disciplined underwriting and favorable pricing trends. The continued expansion of its insurance business boosts float, enhances earnings, maximizes return on equity, and provides the financial flexibility for strategic acquisitions. With substantial cash reserves, Berkshire Hathaway regularly acquires companies or increases its holdings in firms with consistent earnings and strong returns on equity. While large-scale acquisitions create new business opportunities, smaller bolt-on deals strengthen existing operations and improve profitability. Warren Buffett has consistently targeted undervalued assets with strong growth potential. His investments in companies like Coca-Cola, American Express, Apple, Bank of America, Chevron, and Occidental Petroleum reflect Berkshire's disciplined and strategic investment approach. Net margin, measuring a company's profitability, expanded 190 basis points in a year. It has strengthened its balance sheet with more than $100 billion in cash reserves, low debt, and a high credit rating. Berkshire's return on equity of 7.2% lags the industry average of 8% but this company has improved the same over time. BRK.B shares have gained 13% year to date. . Factors to Consider for AIG American International Group, better known as AIG, is a leading global insurance organization, providing a wide range of property casualty insurance, life insurance, retirement solutions, and other financial services to customers in more than 80 countries and jurisdictions. The company has been focusing on implementing stricter underwriting discipline, divesting non-core businesses, reducing debt, launching strategic transformation initiatives and modernizing operations and technology infrastructure, as well as investing heavily in data and digital strategies. These have led AIG to generate $2 billion annually in underwriting profit, on average, over the past three years. AIG is also benefiting from reinvesting assets at higher yields, including increasing asset allocation to private credit at attractive spreads. The company stated that the deconsolidation of Corebridge accelerated the AIG Next initiative, resulting in $450 million in exit run-rate savings for 2024. The company also expects to lower its expense ratio to between 1% and 1.5% of net premiums earned by the end of 2025. Net margin is yet to recover. Net margin was -7% in the first quarter of 2025 versus 24% in the first quarter of 2024. A solid capital deployment strategy supports growth and helps return wealth to shareholders. Last month, its board increased the share repurchase authorization to $7.5 billion and approved a 12.5% increase in quarterly dividend. Its return on equity of 7.1% lags the industry average. AIG has gained 14.9% year to date. Estimates for BRK.B and AIG The Zacks Consensus Estimate for BRK.B's 2025 revenues implies a year-over-year increase of 1% while that for EPS implies a year-over-year decrease of 6.9%. EPS estimates have moved 1.7% north over the past 30 days. The Zacks Consensus Estimate for AIG's 2025 revenues implies a year-over-year decrease of 16.3% while that for EPS implies a year-over-year increase of 26.1%. EPS estimates have moved 1.3% north over the past 30 days. Are BRK.B and AIG Shares Expensive? Berkshire is trading at a price-to-book multiple of 1.68, above its median of 1.39 over the last five years. AIG's price-to-book multiple sits at 1.6, above its median of 0.89 over the last five years. Conclusion Holding shares of Berkshire Hathaway adds dynamism to shareholders' portfolios. It gives the feel of investing in mutual funds while rewarding investors with higher returns. Above all, the company has Warren Buffett at its helm, who has been creating tremendous value for shareholders over nearly six decades with his unique skills. However, it remains to be seen how the behemoth fares when Greg Abel succeeds Warren Buffett as CEO of Berkshire, effective Jan. 1, 2026. Buffett will, however, remain the company's executive chairman. Meanwhile, strategic business de-risking, acquisitions, cost-control efforts, investment in digitalization and accelerated capital deployment drive AIG. Though AIG Next initiative is designed to save costs, the net margin is still in the red. However, it has a solid capital deployment strategy that enhances shareholders' value. On the basis of return on equity, which reflects a company's efficiency in generating profit from shareholders' equity as well as gives a clear picture of the company's financial health, BRK.B scores higher than AIG. Though Berkshire Hathaway and AIG carry a Zacks Rank #3 (Hold) each, BRK.B has an edge over AIG. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months. Free: See Our Top Stock And 4 Runners Up Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. American International Group, Inc. (AIG): Free Stock Analysis Report Berkshire Hathaway Inc. (BRK.B): Free Stock Analysis Report
Yahoo
10-05-2025
- Business
- Yahoo
Willis Towers Watson Public Limited Company (WTW): Among Billionaire David Abrams' Stock Picks with Huge Upside Potential
We recently published a list of Billionaire David Abrams' 10 Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Willis Towers Watson Public Limited Company (NASDAQ:WTW) stands against other stock picks with huge upside potential. David Abrams founded Abrams Capital Management in 1999. Before forming the Boston-based investment firm, Abrams worked at Seth Klarman's Baupost Group for 10 years. He graduated from the University of Pennsylvania with a BA degree in History, where he also served on the Board of Advisors of the College of Arts and Sciences. Abrams didn't have a finance background when he got his first job in New York in the early 1980s. He learned all about investing under Seth Klarman before setting out independently after a decade. He is a value investor, and in the ~12 years of his fund, he has achieved an annualized return of around 20%. His firm is like a one-man shop, which employs a small staff. Abrams Capital has 9 clients and discretionary assets under management (AUM) of $10.05 billion, as reported in the firm's Form ADV dated 13 January 2025. The last reported 13F filing for Q4 2024 included $6.22 billion in managed 13F securities and a top 10 holdings concentration of 98.7%. Abrams is known for maintaining a low public profile, but in a conversation on Columbia Business School's 'Value Investing with Legends' Podcast series, he discussed the surface of his foundational principles when it comes to his investment philosophy. He starts by looking at the risks first and foremost, without any consideration of prospective gains. This is a reminder that the future remains unpredictable, which Abrams puts in the following words: 'When you look back, there's one path that happened, but that doesn't mean that going forward there's only one path. In the future, there's multiple paths.' Abrams' portfolio reflects a balanced approach with exposure to growth sectors like Industrials and Consumer Cyclical, while also maintaining moderate allocations in established industries such as Communication Services. He also believes that declining industries can present stability because they attract limited new entrants. This also implies that high-growth sectors are, on the contrary, characterized by intense competition, which necessitates a more detailed analysis of potential competitive threats. Here's what Abrams had to say about this: 'If you have a shrinking industry and it's dying, it's like, people are not dying to get into that.' Abrams serves as a director of several private companies. He is currently on the board of MITMCO, which manages the MIT endowment. Previously, he was a trustee of Berklee College of Music for 15 years, where he chaired the investment committee. He was also the trustee of Milton Academy. Our Methodology To compile the list of billionaire David Abrams' 10 stock picks with huge upside potential, we sifted through Q4 2024 13F filings of Abrams Capital Management from Insider Monkey. From these filings, we checked each stock's upside potential from CNN and ranked the stocks in ascending order of this upside potential. We have also added Abrams Capital Management's stake in each stock as well as the broader hedge fund sentiment for it. Note: All data was sourced on May 8. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). A well-dressed insurance broker presenting a portfolio of investment and risk advice services to a client. Abrams Capital Management's Stake: $225.78 million Number of Hedge Fund Holders: 48 Average Upside Potential as of May 8: 20.91% Willis Towers Watson Public Limited Company (NASDAQ:WTW) is an advisory, broking, and solutions company. It offers a range of services, such as strategy & design consulting and plan management service & support. Some of its group benefit programs include medical, dental, disability, life, voluntary benefits, and other coverages. It also provides advice, data, software, and products to address different client concerns. The company's Risk and Broking (R&B) segment showed a 7% organic growth in Q1 2025, which also marked its 9th consecutive quarter of high single-digit to double-digit growth. This was fueled by R&B's specialization strategy and ongoing investments in talent, tech, and innovation. Within R&B, the Corporate Risk and Broking business also grew by 8%. Willis anticipates mid to high single-digit growth for the full year 2025 for R&B alone. On March 18, UBS analyst Brian Meredith upgraded the stock's rating from Neutral to Buy, while also increasing the price target from $344 to $395 per share. The analyst expects Willis Towers Watson Public Limited Company (NASDAQ:WTW) to sustain an organic revenue growth of 5.9% in 2025, compared to a consensus estimate of 5.2%. Heartland Mid Cap Value Fund has expectations for further margin and cash flow improvement at the company and stated the following regarding Willis Towers Watson Public Limited Company (NASDAQ:WTW) in its Q4 2024 investor letter: 'Another example of a successful self-help story is Willis Towers Watson Public Limited Company (NASDAQ:WTW). This insurance brokerage and consulting firm operates two segments: Health, Wealth, and Career (HWC) accounts for 58% of revenues and includes services such as retirement plan administration, health care plan outsourcing, and executive compensation consulting. The other segment, Risk & Broking (R&B), includes global insurance brokerage and risk management consulting services. Overall, WTW ranks 7th on our list of billionaire David Abrams' stock picks with huge upside potential. While we acknowledge the potential of WTW as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than WTW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
06-05-2025
- Business
- Yahoo
Moody's (NYSE:MCO) Enhances Flood Data Integration With Willis' Risk Management Tools
Moody's recent integration with Willis Towers Watson of its global flood data into risk management tools marks a key development in expanding partnership synergies. Over the past month, Moody's stock experienced a 15% rise, aligning with market trends where indices have generally moved upwards. The company's Q1 earnings report, which showed an increase in sales and net income, along with strategic moves like dividend affirmations and share buybacks, have added weight to this positive movement. Despite a broader market awaiting tariff and Fed updates, Moody's performance reflects resilience amid momentum across sectors. You should learn about the 2 warning signs we've spotted with Moody's. NYSE:MCO Revenue & Expenses Breakdown as at May 2025 The end of cancer? These 23 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's. The recent integration of Moody's flood data into risk management tools with Willis Towers Watson is set to potentially influence the firm's revenue and earnings forecasts positively. This strategic partnership is positioned to enhance Moody's capability in offering precise risk assessments, especially crucial for private credit applications. The successful implementation could fortify revenue streams in Structured Finance and bolster earnings by driving demand for Moody's assessment services. Over the past five years, Moody's shares have provided a total return of 91.55%, which includes dividends. This figure underscores robust long-term growth, contrasting with a more tempered performance trend in the last year. In the context of the broader market, Moody's return over the past year matched the US Capital Markets industry, which recorded a 19.4% increase, while surpassing the US Market's return of 8.2% over the same period. Despite the recent share price rise and analyst consensus price target of US$500.92, representing approximately a 10.8% potential upside from the current US$447.00 price, caution is warranted. The current Price-to-Earnings (PE) Ratio of 39.7x underscores perceived overvaluation compared to industry and peer averages. The news of integration with Willis Towers Watson could help justify such valuations if ensuing revenue and margin enhancements align with forecasts. However, ongoing economic uncertainties present risks to maintaining this trajectory. Take a closer look at Moody's potential here in our financial health report. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
04-05-2025
- Business
- Yahoo
Researchers expose hidden hurdle delaying the future of energy: 'We are committed to understanding the opportunities and obstacles'
A major survey of energy and natural resource company leaders indicated a universal, if self-reported, commitment to the clean energy transition but also identified some key barriers. From November 2024 to January 2025, Willis Towers Watson — a multinational company offering insurance brokerage as well as services like risk, wealth, and benefits management — conducted the Global Clean Energy Survey with partner Coleman Parkes Research. WTW says they received 450 responses from senior decision-makers across the relevant sectors. Perhaps the most promising finding was that 100% of respondents confirmed they had a clean energy strategy, but not all were at the same level of maturity. Leading the way, predictably, were renewable energy companies, with 71% "at the implementing or fully implemented stage." Only 36% of respondents from oil and gas firms were at these stages. Meanwhile, on average, the surveyed firms are expected to increase their investments in clean energy by more than a third in the next year. Primary development priorities appear to include solar energy, increasing battery storage, and carbon capture. Investments in each of these areas have the potential to add future-oriented jobs to the economy while reducing harmful heat-trapping pollution. Amid some positive signs, certain issues are causing concerns among industry leaders. The current geopolitical situation was one of the main problems highlighted in the survey, with 78% naming it as a top risk. Ongoing conflicts, escalating tensions, and an active trade war between the world's two largest economies make long-term planning uncertain. Relatedly, many respondents (79%) expressed serious worries about disruptions to the global supply chain. Notably, Coleman Parkes and WTW, which specializes in insurance and risk management, reported that many companies are having trouble finding the right insurance. A majority (53%) said that excessive exclusions were a stumbling block "to transferring their risks." Another issue was limited duration, with 48% expressing this as a concern and 47% citing a lack of suitable products. WTW said these responses suggest there could be a future opportunity for insurance firms. On a separate note, it would be beneficial to a growing number of individual policyholders if insurance products and services could be adequately evolved to consistently protect homeowners vulnerable to climate disasters. Many have lost their coverage due to living in areas assessed to be at higher risk of extreme-weather damage. Which of these factors is the biggest obstacle preventing you from getting solar panels? The upfront cost The way they look Not sure where to start No concerns here! Click your choice to see results and speak your mind. With the company describing the risk outlook as "more complex and interconnected than ever," Rupert Mackenzie, global head of natural resources at WTW, said in a statement: "We are committed to understanding the opportunities and obstacles that natural resources companies encounter on their decarbonization journey, as we strive to empower these organizations with the insight and support they need to make informed risk decisions today that will shape a sustainable energy future." Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
Reuters
30-04-2025
- Business
- Reuters
Oz vote raises $2.7 trln issue for buyout barons
MELBOURNE, May 1 (Reuters Breakingviews) - Jim Zelter immediately cut to the chase: 'There are 4.1 trillion reasons for me to be here so often', the New York-based Apollo Global Management (APO.N), opens new tab president told some of Australia's leading investors at a conference in Melbourne in March. He was referring to the now-A$4.2 trillion ($2.7 trillion) or so of assets managed by the country's compulsory pension savings system, known as superannuation. That pool of retirement savings is the fourth largest in the world and will by 2030 jump to second place, opens new tab, according to Willis Towers Watson's Thinking Ahead Institute. It's pure nectar for investment managers with long-dated private investment strategies like Apollo and Blackstone (BX.N), opens new tab, whose second-in-command Jonathan Gray graced the Melbourne stage right before Zelter. The trouble is that the outcome of Saturday's federal election could let some wasps into the hive. There are several reasons why buyout barons love the superannuation pension system and the 90-odd funds that manage it, including AustralianSuper, Aware Super and Hostplus, which organised the Melbourne event. Employers must contribute 11.5%, rising to 12% in July, of their staff's pre-tax wages and bonuses. Total assets in the system are growing so fast they dwarf the country's annual GDP and the value of its domestic stock market, explaining why the supers invest so heavily abroad. Savers are relatively young and generally unable to tap their savings, a principle known as preservation. In other words, it's a long-term and internationally mobile pot of money, making it perfect for the buyout, real estate, private credit and infrastructure investment strategies hawked by Zelter and Gray's ilk. That model, however, is under threat if the centre-right Liberal Party comes to power after Saturday's election and implements plans aimed at helping more people buy houses. Led by former policeman Peter Dutton, the right-wing opposition party has recently lost its polling lead but still has a chance of forming a minority government. It wants to let first-time homebuyers and older women raid their pension savings, to the tune of up to A$50,000 per person, to help make a downpayment on a property. There's no doubt that buying a home is increasingly out of reach for many Australians: new builds have failed to keep pace with demand for years. In 2000, the median house cost around 6 times annual income. That has more than doubled to 13 times, per Saul Eslake's research for the Super Members Council. The same economist also points out that a mortgage repayment at standard interest rates rose from roughly half of average disposable income in 1991 to more than four-fifths in 2023. The homeownership rate has been on a downward trend, hitting 66% in 2021 compared with 73% in 1966. The Liberals' plan is bad housing policy: subsidising demand without first constructing new homes will only push up prices. More pertinent for Zelter and Gray, though, are the implications for the pension system. Start with the impact on individuals. The A$50,000 maximum withdrawal equates to around five years of retirement savings contributions for those earning the country's median salary, using data, opens new tab from the Australian Bureau of Statistics. That's a significant dent to long-term returns: over a decade, that cash would more than double in value to A$106,000, based on the 7.8% 10-year investment return on the standard superannuation products. There's also the broader, systemic impact that would stem from undermining the long-cherished principle of preservation. True, the initial effects might seem small. There are roughly 120,000 first-time house purchases a year in the country, according to the Australian Bureau of Statistics. Assume that all buyers withdraw the maximum permissible amount, and that half of the transactions involve two co-buyers who both take out the upper limit. The total cash call on the superannuation system would come to A$9 billion, Breakingviews calculations show, equating to just 7% of employers' overall contributions last year. While modest in size, that's money that would no longer be available for investing. Moreover, the policy risks creating a slippery slope, making it relevant even if the Liberals lose this time. It's hardly a stretch, for instance, to imagine a future administration returning to the idea, and potentially even increasing the amount that could be withdrawn as house prices rise. Other options would be to allow existing homeowners to tap their pensions to move up the housing ladder. And with the genie out of the bottle, anything could in theory be possible: if buying a house represents a valid exemption, why not make the same case for paying an unexpected medical bill or other potentially ruinous financial emergencies? There's precedent. The Liberals were in power as the Covid pandemic erupted in March 2020, and only set up a government-funded safety net for lost wages after first letting Australians tap their pensions for emergency cash. The roughly A$40 billion that was quickly withdrawn prompted concerns from the Reserve Bank of Australia, opens new tab. Of course, well-flagged policy changes ought to cause fewer such short-term fears. But the logical response from the supers, when faced with the possibility of future political raids, is to hold more cash and lower-yielding liquid assets like government bonds just in case. Doing so would, by necessity, come at the expense of longer dated and lumpier products offered by Apollo's Zelter and Blackstone's Gray. Ironically, it's even possible to imagine the supers investing less in funds that end up backing Australian residential real-estate construction projects because of the Liberals' plan – effectively making the local housing crisis worse. The numbers at stake could be huge. The Super Members Council, for example, estimates that managers intend to invest around A$240 billion, opens new tab Of course, private investments' general appeal will endure for the supers, given the promise of higher returns for locking up money for years. And it's possible that the Dutton-led Liberals' pension-withdrawal plan dies alongside its electoral hopes. Still, the policy puts an idea on the table that could one day cause Zelter and Gray to make fewer super-long-haul flights.
