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Geopolitical uncertainty is pushing the world's employers to cut and postpone spending, but it's also increasing their hunger for advice about hiring, risk management services and benefits.
Carl Hess, the chief executive officer of Willis Towers Watson, talked about the mixed effects of upheaval on employers' demand WTW's services today, during a conference call the company held to go over results for the first quarter with securities analysts.
Health care cost inflation, regulatory changes, economic uncertainty and technological change combined with the geopolitical uncertainty to create both challenges and opportunities for WTW, Hess reported.
Economically sensitive businesses are pausing the spending they can pause, Hess said.
But, "throughout the quarter, clients sought our counsel to better manage cost and risk," Hess said.
The Health, Wealth & Career unit should achieve "mid-single-digit" growth in revenue, "and continued margin expansion, even with the headwinds from economic uncertainty and geopolitical pressure," Andrew Krasner, the chief financial officer, said.
WTW streamed the call live online and posted a recording on its website.
What it means: WTW executives see the health benefits market as being somewhat sheltered from the storms occurring in some other parts of the economy.
Health care cost inflation: WTW has predicted that health care costs will rise more than 10% all around the world this year.
Rising health benefits costs are increasing revenue related to employers with fully insured coverage, according to Julie Gebauer, president of the Health, Wealth & Career unit.
At self-insured employers, health benefits inflation is "driving greater demand for our technical advisory services," Gebauer said. "We've got a very healthy pipeline there. Momentum is building for specialty solutions and cost-management projects. So, we expect growth to accelerate throughout the year."
The backdrop: Executives at Marsh gave a similar assessment, without saying as much about their health benefits business, April 16.
Brown & Brown also expressed happiness with that firm's benefits business, briefly, during an analyst call that company held Tuesday.
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