Willis Towers Watson (WTW) risk factors, 2025 10-K

Strategic and Operational Risks

1. 01We may not be able to fully realize the anticipated benefits of our strategy or our expected product, service and transaction pipelines
2. 02Our ability to successfully manage ongoing organizational changes could impact our business results and may involve significant or evolving costs and/or disruption to the management and/or operations of our business and generate fewer benefits than originally expected
3. 10Our success largely depends on our ability to achieve our global business strategy as it evolves, and our results of operations and financial condition could suffer if the Company were unable to successfully establish and execute on its strategy and generate anticipated revenue growth and cost savings and efficiencies

Business Environment Risks

1. 03Demand for our services could decrease for various reasons, including a general economic downturn, increased competition, or a decline in a client’s or an industry’s financial condition or prospects, all of which could substantially and negatively affect us
2. 11Demand for our services could decrease for various reasons, including a general economic downturn, increased competition, or a decline in a client’s or an industry’s financial condition or prospects, all of which could substantially and negatively affect us
3. 12The demand for our services may not grow or be maintained, and we may not be able to compete successfully with our existing competitors, new competitors or our clients’ internal capabilities. Client demand for our services may change based on the clients’ needs and financial conditions, among other factors
4. 13Damage to our business, including to our reputation, arising from, among other things, the failure of third parties on whom we rely to perform services or maintain positive public perceptions, could adversely affect our business, operations and results
5. 14Our business may be harmed by any negative developments that may occur in the insurance industry or if we fail to maintain good relationships with insurance carriers

Human Capital Risks

1. 04Data and cybersecurity breaches or improper disclosure of confidential company or personal data could result in material financial loss, regulatory actions, reputational harm and/or legal liability
2. 05Material interruption to or loss of our information processing capabilities or failure to effectively maintain and upgrade our information processing hardware or systems could cause material financial loss, regulatory actions, reputational harm and/or legal liability
3. 15We depend on the continued services of our executive officers, senior management team, and skilled individual contributors, and any changes in our management structure and in senior leadership could affect our business and financial results
4. 16The loss of key colleagues or a large number of colleagues could damage or result in the loss of client relationships and could result in such colleagues competing against us
5. 17Failure to maintain our corporate culture, including in a remote or hybrid work environment, could damage our reputation
6. 18The market for such qualified individuals is competitive and we may be unable to hire the talent needed to mitigate the foregoing risks
7. 19Limited protection of our intellectual property could harm our business and our ability to compete effectively, and we face the risk that our services or products may infringe upon the intellectual property rights of others

Legal, Non-Financial/Regulatory and Compliance Risks

1. 06From time to time, we receive claims and are party to lawsuits arising from our work, which could materially adversely affect our reputation, business, financial condition or results of operations
2. 07Our business will be negatively affected if we are not able to anticipate and keep pace with rapid changes in government laws or regulations, or if government laws or regulations decrease the need for our services, increase our costs or limit our compensation
3. 08Our global operations expose us to increasing, and sometimes conflicting, legal and regulatory requirements in environmental, social and governance (‘ESG’) matters, and violation of these regulations could harm our business
4. 20From time to time, we receive claims and are party to lawsuits arising from our work, which could materially adversely affect our reputation, business, financial condition or results of operations
5. 21in pension scheme liabilities, such a client may seek to bring a claim against us which could materially adversely affect our reputation, business or financial condition
6. 22We are subject from time to time to inquiries or investigations by governmental agencies or regulators that could have a material adverse effect on our business, financial condition or results of operations
7. 23difficulties in controlling operations and monitoring colleagues in geographically dispersed and culturally diverse locations; and
8. 24and Hamas, and subsequently Hezbollah and Iran. Sanctions issued in response to these Middle East conflicts could have an adverse impact on our operations
9. 25causing insurance carriers to reduce the amount they pay for our services or change our relationship with them in other ways
10. 26chain such as suppliers and other counterparties; and the availability and reliability of information upon which we determine our commitments, goals, and achievements
11. 27Increasing scrutiny and changing or competing expectations from governmental authorities, investors, clients and our colleagues with respect to our sustainability practices can impose additional costs on us or expose us to reputational, litigation or other risks
12. 28New government regulations could also result in new or more stringent forms of sustainability oversight and new mandatory and voluntary reporting, diligence and disclosure and related assurance. These new laws, rules and regulations could affect our operations or require significant expenditures
13. 29The economic, regulatory and political impact of the United Kingdom’s exit from the European Union, which occurred on January 31, 2020, could adversely affect us
14. 30These Brexit-related changes may adversely affect our operations and financial results

Financial and Related Regulatory Risks

1. 09Our outstanding debt could adversely affect our cash flows and financial flexibility, and we may not be able to obtain financing on favorable terms or at all
2. 31We have material pension liabilities that can fluctuate significantly and adversely affect our financial position or net income or result in other financial impacts
3. 32WTW had total consolidated debt outstanding of approximately $5.3 billion as of December 31, 2024, and our related interest expense was $259 million for the year ended December 31, 2024
4. 33put us at a competitive disadvantage against competitors who have less indebtedness or are in a more favorable position to access additional capital resources
5. 34A downgrade to our corporate credit rating, the credit ratings of our outstanding debt or other market speculation may adversely affect our borrowing costs and financial flexibility and, under certain circumstances, may require us to offer to buy back some of our outstanding debt
6. 35Our significant non-U.S. operations, particularly our London market operations, expose us to exchange rate fluctuations and various other risks that could impact our business
7. 36Changes in accounting principles or in our accounting estimates and assumptions could negatively affect our financial position and results of operations
8. 37Our quarterly revenue and cash flow could fluctuate, including as a result of factors outside of our control, while our expenses may remain relatively fixed or be higher than expected
9. 38We are a holding company and therefore, may not be able to receive dividends or other distributions in needed amounts from our subsidiaries

Tax Risks

1. 39Legislative or regulatory action or developments in case law in the U.S. or elsewhere could have a material adverse impact on our worldwide effective corporate tax rate
2. 40We cannot give any assurance as to what our effective tax rate will be in the future, because of, among other things, uncertainty regarding the tax laws and policies of the jurisdictions where we operate. Our actual effective tax rate may vary from expectations, and that variance may be material

Risks Related to Being an Irish-Incorporated Company

1. 41The laws of Ireland differ from the laws in effect in the United States and may afford less protection to holders of our securities
2. 42As an Irish public limited company, certain decisions related to our capital structure will require the approval of shareholders, which may limit our flexibility to manage our capital structure