Q. Bringing together two organisations of the size and scale of Willis and Towers Watson always carried the risk that there would be cannibisation of business. Did this occur?
“Cannibalisation did not happen at all. This merger was a scope merger not a scale merger. There was virtually no overlap. The only place where there was was in Ireland where Willis had a pensions business and Towers Watson did too.”
Q.How did you go about implementing the integration?
“We paid enormous attention to focusing on the core. We wanted to make sure people were not distracted by the merger. It took a year, but we managed to reassure the clients that the merger was not detracting from delivery.
“We made an effort not to turn into a mad cross-selling machine just because we had a product suite that was twice as big.”
Q. So how did you fully realise the benefits of merger?
Q. “There was no cannibalisation but there was cross-fertilisation. We took some time to connect the business together. I would have hoped for it to go faster but with hindsight it was better not to because we ended up with clients asking us what more we could give them rather than us pushing products to them.”
Q. And what has that meant in real terms for customers?
“We are an intellectual property business. The company has retained the ability for the people who work for it to be the individual trusted adviser in an organisation, and that has translated through to clients. Examples of cross-fertilisation are for example in the world of analytics andin insurance broking, where pensions and insurance consulting has been leveraged. So we have been stronger on the data management.
“There are also connections in risk management. People management is now seen as part of the overall risk management of a company. So there are significant cross-sell opportunities between the risk side and the health and benefits side.”
Q. Where in the market have you managed to increase business?
“Among smaller clients where you have easy contacts because you are talking to the CEO or CFO, there have been hundreds of new customers where cross-selling has been achieved. And also amongst global international large corporates, where we have integrated a global proposition. This has translated to very significant growth. For our Health and Benefits business in Great Britain, for example, growth has been around 9 per cent a year.”
Q. More specifically, where have there been areas of growth?
Willis, premerger, had just bought PMI Health Group. It is a jewel within the business. It is a fantastic organisation full of motivated people. “We also offer concierge services – nurses providing direct advice on return to work – which I am not aware of other organisations doing in the same way.
“And on the pension side, pension freedoms has been significant. DB valuations and transfers in particular has been a big driver of business.
“On one hand you are happy with the growth but the market is at maximum capacity, it can’t serve DB transfer demand.”
Q. So are you having to turn clients away?
“It is a simple fact that the industry is running after demand and there is not enough workforce. The industry does not have the capacity to serve the whole market.”
Q. And what other areas of expansion are there in the area of pensions?
“We have expanded our value proposition – the creation of LifeSight, our DC master trust, is an example of this.”
Q. And how has the merger impacted your global capability?
“There have been developments in our capacity to support global benefit propositions. When I was at AIG I had had a very large client who continued to be a client when I came to Willis and, as it happens, was also a large client of Towers Watson. On the day of the merger I called the CEO to talk to him about it and he asked me very clearly not to change anything for his business. He wanted legacy teams working on their respective areas of his business and he did not want any merging of teams or disciplines to take place in case it caused disruption. But 18 months later he put Willis Towers Watson on a global tender to complete for exactly the kind of integrated brief he had resisted at first and we won this pitch because we were able to demonstrate an ability to connect and leverage our merged propositions in a way that our competitors weren’t. Neither Willis nor Towers Watson wouldn’t have been able to do this on their own and it’s an example, not just of how the company has evolved since the merger, but also how clients’ perception of us and what we can do for them started to shift as our integration progressed.
Q. Has the on/off take-over by Aon been unsettling for the organisation and its staff?
“There is enormous activity going on in the market all the time. M&A is a normal part of our world. It is happening in consulting, advisory and banking. Clearly Aon wants to be vocal about M&A. We are more discreet in these matters.”
Q. In light of the Competition and Markets Authority investigation into Mercer, Aon and Willis Towers Watson, does advising on pensions when you also offer a pension product – LifeSight – create conflict issues?
“We pay attention to making sure we are not going to create conflicts, so we don’t advise clients on the providers they should select and then pitch for that business as a provider. We make sure we do not get dragged into conflicts. We have experience of this across the business. It is part of our business model so we have proper systems in place to manage it.”
Q. When it comes to diversity issues, Willis Towers Watson was, together with other EBCs, shown to have high levels of disparity in pay between men and women. What are you doing to address that?
“We still have much to improve on diversity, gender and ethnicity. We also have to be humble. The gender pay gap horrified us. Our gender pay gap is due to having fewer women in senior, highly paid roles. Our focus is, therefore, to increase the number of women in these roles. We have instituted a number of programmes to address the issue. The only satisfying thing is that we were first to report on the gender pay gap in the second year, publishing last October and we have improved by 3.5 percentage points over the previous year. It is an improvement, but this is still nowhere near where it should be.
Q. What is Willis Towers Watson’s attitude to M&A? Will it join the other consultancies hoovering up smaller firms?
“ We have had three years where we focused on delivering value to our customers through successful integration following the merger.”
Q. And on the perennial question of Brexit, how has it impacted Willis Towers Watson?
“Key for us is to do what is needed for our stakeholders. Since the beginning we had decided to be ready for whatever comes and then planned for the most challenging scenario, a No Deal Brexit. Brexit is impacting on broking, investment, and banking. It has no transactional impact on what we deliver on the human capital management side of the business. We have not seen headcount fall in the UK in our businesses and do not anticipate seeing this shortly. But we have started to see the creation of many entities within the EU 27 to support customers with compliant and relevant structures, such as the ones we have been preparing ourselves for some of our businesses”.”