I’m thrilled to sit down with Simon Glairy, a renowned expert in insurance and Insurtech, with a deep focus on risk management and AI-driven risk assessment. With years of experience analyzing market trends and corporate performance in the insurance brokerage space, Simon offers unparalleled insights into the evolving landscape of global advisory services. Today, we’re diving into the recent third-quarter results of a leading global advisory and broking company, exploring their financial performance, strategic moves, and the broader implications for the industry. Our conversation touches on revenue trends, margin expansion, the impact of divestitures, and the key drivers behind segment-specific growth.
Can you walk us through the standout aspects of the third-quarter performance for this global advisory and broking company in 2025?
Absolutely, Benjamin. The third-quarter results for 2025 were quite impressive, especially given the flat revenue of $2.3 billion. Despite the headwinds from the divestiture of a significant business unit, the company achieved a solid 5% organic growth, which speaks to the strength of their core operations. This growth offset the revenue loss from the sale, showcasing their ability to adapt and focus on high-performing areas. Additionally, the sharp turnaround in net income to $306 million from a massive loss in the prior year highlights a strategic cleanup of one-time charges and a focus on profitability.
How did they manage to maintain flat revenue despite the impact of the divestiture?
It really comes down to their emphasis on organic growth. That 5% increase was driven by strong performance across various segments and regions. They’ve been able to leverage market-leading solutions and execute their strategy with precision, which helped balance out the revenue gap left by the divestiture. It’s a testament to their diversified portfolio and ability to capitalize on existing client relationships and new opportunities in key markets.
Let’s dive into earnings. What enabled the company to boost adjusted diluted earnings per share by 11% to $3.07?
The 11% increase in adjusted diluted earnings per share to $3.07 is a result of focused operational improvements and disciplined cost management. They’ve streamlined processes and invested in areas that yield higher returns, which directly impacted their bottom line. Additionally, margin expansion played a huge role here—when you improve efficiency and reduce unnecessary expenses, the earnings naturally follow. It’s a clear sign that their strategic priorities are aligned with profitability.
The operating margin saw a significant jump to 18.3%, with the adjusted operating margin up by 230 basis points to 20.4%. What’s driving this kind of improvement?
Margin expansion at this level is a combination of several factors. First, there’s been a deliberate push toward operational efficiency—cutting down on redundancies and optimizing resource allocation. Second, the company has likely seen benefits from higher-margin services or segments that are performing exceptionally well. This kind of improvement often comes from a mix of cost-saving initiatives and a focus on premium offerings that command better pricing power. It’s a strong indicator of disciplined execution.
Turning to net income, how did the company achieve such a dramatic shift to $306 million from a substantial loss in the prior year?
The turnaround in net income is striking, and a big part of it is the absence of impairment charges that dragged down last year’s results, particularly related to the divestiture of a business unit. Beyond that, the company has clearly benefited from operational successes and possibly some one-time gains or favorable adjustments. This shift from a $1.67 billion loss to a $306 million profit shows how much cleaner their financials are this year, with a renewed focus on sustainable earnings.
Looking at the Health, Wealth & Career segment, how has the divestiture reshaped their strategy there, given the 5% revenue drop to $1.26 billion?
The divestiture definitely impacted revenue in this segment, leading to that 5% decline. However, it seems to have allowed the company to refocus on core strengths and streamline operations. By shedding a non-core asset, they’ve likely redirected resources toward areas with stronger growth potential, like health and retirement services. This strategic pivot helps them prioritize profitability over sheer top-line growth, which is evident in their improved margins despite the revenue dip.
In the same segment, what’s fueling the 4% organic growth, especially in areas like Health and Retirement?
The 4% organic growth in this segment is largely driven by robust demand for health-related services across all regions and strong retirement work, particularly in markets like Great Britain and North America. These areas are seeing increased client needs, whether it’s for comprehensive health plans or retirement planning solutions. The company’s ability to meet these demands with tailored offerings has been key to sustaining growth, even post-divestiture.
Shifting to the Risk & Broking segment, what’s behind the 7% revenue increase to $1.01 billion?
The 7% revenue growth in Risk & Broking, with 6% of it organic, is primarily driven by new business wins and project-based placements, especially in global specialty businesses. Despite challenges like insurance rate headwinds, the segment has capitalized on demand for specialized risk solutions. This reflects a broader industry trend where clients are seeking more customized broking services to navigate complex risks, and the company has positioned itself well to meet that need.
How sustainable do you think the margin expansions across these segments are in the long term?
Sustainability of margin expansion depends on a few factors. In the short term, the improvements—such as the 390 basis points increase to 28.6% in Health, Wealth & Career and 70 basis points to 18.8% in Risk & Broking—look promising due to operational efficiencies and a focus on high-value services. However, long-term sustainability will hinge on their ability to maintain pricing power, manage cost inflation, and continue innovating in a competitive market. If macro conditions tighten, there could be pressure, but their current trajectory suggests they’re building a solid foundation.
What is your forecast for the future of the insurance brokerage and advisory industry based on these results?
Looking ahead, I believe the insurance brokerage and advisory industry is poised for continued evolution, with a strong emphasis on technology and specialization. Results like these, showing resilience through divestitures and margin growth, indicate that leading players are adapting to client demands for data-driven, tailored solutions. I expect to see more investment in Insurtech, particularly AI for risk assessment, as well as a push toward global expansion in high-growth regions. Despite macroeconomic uncertainties, firms that maintain operational discipline and innovate—like this company appears to be doing—will likely thrive in the coming years.
