David Motamedi

David Motamedi asked about the expected gross written premium contribution from new underwriting hires in 2026 and 2027, the breakdown of residential versus commercial earthquake growth in Q4 2025 and the outlook for 2026, and the factors contributing to the projected mid- to upper 30s loss ratio for 2026 compared to 2025's 31% accident year loss ratio.

Answer

Mac Armstrong, Chairman and Chief Executive Officer, emphasized a disciplined approach for new hires, with modest gross and net line sizes supported by robust reinsurance, and noted that residential earthquake is expected to grow high single to double digits, offsetting commercial pressure. Chris Uchida, Chief Financial Officer, attributed the higher loss ratio guidance to conservative reserving, the increased retention and growth in the higher-loss-ratio crop business, and expected expense savings, maintaining a mid-70s combined ratio.

David Motamedi inquired about the expected growth contribution from new underwriting hires in 2026 and 2027, the breakdown of residential versus commercial earthquake growth in Q4, and the factors contributing to the projected increase in the loss ratio for 2026.

Answer

Mac Armstrong (CEO) stated that new hires are expected to contribute to production, but growth will be disciplined with robust reinsurance and modest line sizes. He noted residential earthquake is growing high single-digits to double-digits, offsetting commercial pressure (rates down 15%). Chris Uchida (CFO) attributed the higher loss ratio to increased crop retention and growth, which has a higher loss ratio, while overall combined ratio remains in the mid-70s due to expense leverage.

David Motamedi inquired about the R&B organic growth, specifically asking to quantify the benefit of tailwinds such as digital infrastructure and M&A activity in the current quarter, and to provide a rough estimate of WTW's market share within the digital infrastructure market. He also asked Andrew Krasner, CFO, to detail the puts and takes for both margin and adjusted EPS heading into 2026, following the 80 basis points of margin improvement in 2025 (excluding TRANZACT).

Answer

Carl Hess, WTW's Chief Executive Officer, stated that the growth was broad-based, not solely driven by data centers, and attributed it to the hiring and specialization strategy, without providing specific sizing or market share. Andrew Krasner, WTW's Chief Financial Officer, outlined the EPS puts and takes for 2026, including mid-single-digit organic growth, consistent operating margin, an increase in interest expense to approximately $320 million due to Newfront financing, a consistent tax rate of about 21.1%, a $0.30 headwind from the Willis Re joint venture, and an approximate $0.30 foreign exchange tailwind, primarily in Q1.

David Motamedi inquired about quantifying the benefit of tailwinds such as digital infrastructure and M&A activity on Risk and Broking's organic growth this quarter, and asked for an estimate of WTW's market share within the digital infrastructure sector.

Answer

Carl Hess, CEO, stated that the business is performing strongly across many areas, and while pleased with the digital infrastructure profile, the overall success is attributed to the hiring and specialization strategy rather than just data centers. Andrew Krasner, CFO, detailed the drivers of the 80 basis points of margin improvement in 2025 (excluding TRANZACT) as strong segment expansion and prudent expense management, with WEDO contributing significantly. For 2026 adjusted EPS, he projected mid-single-digit organic growth, consistent operating margin, increased interest expense (approx. $320M), a stable tax rate (21.1%), a $0.30 headwind from the Willis Re joint venture, over $1 billion in share repurchases, and a $0.30 foreign exchange tailwind.