The merged Willis Towers Watson will be able to target C-suite individuals with a unique blend of risk management and people management, says incoming GB head Nicolas Aubert
Few mergers are as equally balanced as the one between Willis and Towers Watson – two global giants of consultancy nearly identical in size. For Nicolas Aubert, head of Great Britain at the new Willis Towers Watson entity, creating a single financial advisory, risk management and insurance brokerage is all about the deepening relationship with the customer.
To the person with arguably the biggest task in the UK corporate benefits community, success will be being able to offer clients something different – bringing risk management and people management capabilities under a single umbrella.
“From day one, we have sought to be a unique integrated company. We are going to be a unique value proposition for our clients because we will be the only organisation that has decided to fully integrate its people management capabilities with its risk management capabilities.
“We are humble about this initiative. The fact that we will be the first to do this is probably because it is complex,” he says.
Aubert, a Frenchman who has spent the past six years in London, envisages WTW connecting with C-suite figures within its multinational, national and upper-middle market client base on three of their four key preoccupations.
He says: “Everywhere we go, CEOs and C-suite members are focused on four things: their core business and strategies; the capital they require to execute their strategies; the people they need to implement, direct, develop and deploy their strategies; and then, finally, the risks in managing these three core elements. We think we will be very relevant for the last three of these issues. The core business and strategy will of course be for the client but we can still advise them there.”
For Aubert, this means connecting with the few individuals at the top of big organisations and giving them the information, skills and education to make more informed decisions – while presenting a cross-selling opportunity to existing clients of both legacy businesses.
So what synergies will C-suite figures feel? Aubert says: “You may call it trivial but this is what I see as the nitty-gritty of the issue. This very morning I was with a bank for which we are the broker on the corporate risk and broking [CRB] side, the former Willis world. We are doing some financial advisory and corporate risk transactions for them. We deal with the risk manager and head of procurement.
“But there is a new HR person coming to this company and the head of procurement highlighted how she was not familiar with HR issues and asked us to train her. We are going to do so, and imagine the consequences of that. This person will, of course, maintain the full integrity of the procurement processes but she is going to be familiarised with an area she was not aware of through our capability. So this is not just about selling something but also about the relationship you build with your client.
“Here’s another soft example: four weeks ago we were going to pitch for a prospect that legacy Willis had been trying to get for a year and now, as Willis Towers Watson, we were going to pitch for the CRB business. But this prospect was already a client on the human capital and benefits [HCB] side, which had been driven largely through legacy Towers Watson, although Willis had also made a significant contribution. So the head of sales contacted the person from the HCB side and was told that this client was only interested in dealing with the people who were going to operate his business – not me, the CEO, and not the experts. He wanted to know the people who were going to actually run his business.
“So our CRB team changed the pitching team to be totally aligned with the personality, willingness and objectives, including personal objectives, of this buyer. And we won the deal.”
Aubert describes the two parties as bringing together differentmarket segments, creating further synergies and leveraging opportunities – part of which will mean a greater focus on local business communities for legacy Towers Watson operations in the regions.
“In the US, legacy Willis was essentially a middle-market operator while legacy Towers Watson was serving large corporate clients,” he says.
“In the UK, we have on the CRB side a regional network that is addressing both large accounts and the middle market but which is really focused around managing its local market.
“The Towers Watson legacy is organised across the UK but, from a resourcing standpoint, people are there but are not 100 per cent focused on their region. So we are going to be more focused on building some regional business development and engagement with the client community that lives and operates in these areas.”
Aubert points to WTW’s own human resources and talent attraction challenges as a further area of synergy. “Two years ago, Willis decided to become an analytical broker and made a significant investment in hiring actuarial consultants. On the other side of the fence, Towers Watson was working hard to get some broking licences across the world to develop its networks. Now that we are merged, neither has to continue these very tough efforts because Willis is bringing a global network to Towers Watson and Towers Watson is bringing the best actuarial skills in the world. Think about the acceleration of the development of these strategies that this represents,” says Aubert.
The merger will cause some job losses – the organisation has a cost synergy target of $125m (£90m) globally, although Aubert believes ultimately more jobs will be created than lost.
“This is of course a big number but for an $8.2bn revenue company it is small. Job losses will be in the functional areas. In the business areas we have virtually no overlap. In fact, the overall position is a very significant net hire,” adds Aubert, who foresees growth opportunities for talented people within the organisation.
“On the CRB side, we are developing a lot of products and services that require strong analytical and actuarial skills. We have some fantastic retirement actuaries who may wish to deploy their skills across a wider spectrum of activities, in a different universe,” he says.
Aubert reports that the merger process, which has beenongoing for eight months, has seen enthusiastic participation by employees looking to explore how the two legacy organisations could best operate together.
“We are going to change very little in our organisations,” he says. “The experts in all areas will stay the same. They will continue to report in the same structures because these are based around the various centres of expertise, and where we are making change is only to build connectivity around client engagement.”
The merged WTW will also seek to play more in the upper-middle market, with growth in the workplace pensions area, the move from DB to DC and derisking all key issues in the future.
Aubert also points to a potentially greater focus on employees as customers. “There is a move from pure pensions and benefits towards wealth management. In the past, it was about employees and retirees; now, a typical employee works for much shorter periods with several different employers. So this is where more personalised wealth management will become relevant,” he says.
“There is going to be an evolution from the corporation to the individual. As well as HCB, we have IRR – investment, risk and reinsurance. Within investment we have this capability to manage assets coming from the pension funds of our clients.
“Exchange Solutions is something we have in the US at the moment – a platform that provides access for employees to health and retirement benefit offers. This kind of platform could be an opportunity for us to offer this kind of service. For the moment it is only a US play but it is highly probable we will be able to apply this structure to other countries in the future.”
Aubert rejects the suggestion that the master trust structure – which sees consultants straddle the roles of adviser and provider – presents unmanageable conflicts of interest.
“Our culture and our actions are guided by a single principle – to act in our clients’ best interests. When the potential for a conflict arises, it is about managing that properly.
“We are not worried about any regulatory changes as long as we have the right engagement with the regulators and can explain what we are doing.
“They comprehend how we separate the various activities and, even more importantly, how our customers understand what we do with our different activities. It is about educating each other across this triangle between the client, regulator and ourselves,” he says.
The merger of the London-based Willis and the Arlington, Virginia-based Towers Watson businesses has created a global giant of benefits and risk management.
Competitors will be watching and waiting to see whether bigger does prove to be better when it comes to connecting with the C-suite.
CV: Nicolas Aubert
Previous roles at: Generali, ACE, CIGNA and GAN
2002-10: General manager, France, AIG
2010-11: Managing director, South Europe and Israel, Chartis
2011-14: Managing director, UK and Israel/COO EMEA, AIG
2015-present: CEO, Willis GB
Jan 2016-present: Head of Great Britain, Willis Towers Watson
‘Formula 1, driving my Lotus Elise on tracks, sailing, scuba diving’