Towers Watson

Towers Watson
Name	Towers Watson
Type	Public
Fate	Merged into Willis Towers Watson
Founded	2010
Defunct	2016
Headquarters	New York City
Industry	Professional services
Key people	John Haley; Joseph Lacher; Mark Mactas
Products	Consulting; actuarial services; human capital solutions
Revenue	US$6.0 billion (2015)
Employees	~14,000 (2015)

Towers Watson

Towers Watson was a global professional services firm that provided management consulting-oriented employee benefits consulting, insurance broking-related advisory, and actuarial services. Formed by the 2010 combination of two legacy firms with histories tied to Mercer, Willis Group, and prominent actuarial practices, the firm operated across the Americas, Europe, the Middle East, Asia-Pacific, and Africa. Towers Watson served multinational corporations, public institutions, and financial services firms with integrated offerings spanning risk, human capital, and asset management.

History

Towers Watson originated from the 2010 merger of two established consultancies: Towers Perrin and Watson Wyatt Worldwide, each with roots in 19th- and 20th-century actuarial practice associated with firms like Mercer and historical markets such as London Stock Exchange-linked insurance houses. Towers Perrin traced antecedents to firms advising pension schemes in the United Kingdom and United States corporate benefit plans, while Watson Wyatt had expanded through transatlantic growth and advisory roles for Fortune 500 companies and public sector clients. The merger reflected consolidation trends following earlier combinations in the professional services sector involving players such as Aon, Marsh & McLennan Companies, and Willis Group. Post-merger, Towers Watson expanded its geographic footprint with offices in key financial centers including New York City, London, Hong Kong, and Sydney.

Corporate Structure and Operations

Towers Watson was organized into business segments that combined legacy practices: human capital and benefits consulting, risk and actuarial consulting, and investment advisory services. Its global corporate headquarters were in New York City, with regional hubs in London, Chicago, Hong Kong, and Singapore. The firm deployed multidisciplinary teams integrating consultants, actuaries, and data scientists to serve clients such as General Electric, Procter & Gamble, Microsoft, and public pension funds like those in California and Ontario. Towers Watson used a partnership-style governance model with a board and executive committee, coordinating operations across legal entities registered in jurisdictions including Delaware, United Kingdom, and Ireland for tax and regulatory alignment.

Services and Products

Towers Watson offered a portfolio of services: workforce and talent strategy for companies like IBM and Unilever; actuarial valuations for insurers such as AIG and Prudential plc; health and benefits program design for employers across sectors including healthcare providers and retail conglomerates; and investment consulting for institutional investors including endowments and sovereign wealth funds like those of Norway. It provided technology-enabled platforms for rewards benchmarking, workforce analytics, and risk modeling that interfaced with enterprise systems from vendors such as SAP and Oracle Corporation. Products included actuarial software, survey databases, and managed services used by clients in sectors governed by regulators like the Securities and Exchange Commission and the Financial Conduct Authority.

Mergers and Acquisitions

Following its formation, Towers Watson engaged in strategic acquisitions to bolster capabilities and geographic reach, acquiring boutique firms in Asia and specialist consultancies in areas such as mergers and acquisition integration and data analytics. The most consequential transaction was the 2016 combination with Willis Group to form Willis Towers Watson, a transaction reflecting consolidation among brokers and consultancies alongside contemporaneous deals involving Aon and Marsh & McLennan Companies. Earlier inorganic growth included purchases of analytics firms, benefits administration businesses, and regional actuarial boutiques in markets such as India and Brazil. These M&A moves reshaped competitive dynamics with rivals including Mercer and Aon Hewitt.

Financial Performance

Towers Watson reported revenues near US$6.0 billion in its final full year as an independent company, with operating margins typical of high-value professional services firms. Revenue mix combined recurring revenue from consulting retainer arrangements, project-based fees tied to corporate restructuring and pension de-risking engagements, and software-as-a-service subscriptions. Its financial results were influenced by macroeconomic factors affecting client spending in sectors like banking and energy, and by regulatory changes impacting pension accounting in jurisdictions such as United Kingdom and United States accounting standards boards. Debt levels and share performance were watched closely by institutional investors including BlackRock and Vanguard.

Corporate Governance and Leadership

Leadership at Towers Watson included a chief executive officer, chief financial officer, and a board composed of independent directors and partner representatives with backgrounds at firms such as McKinsey & Company, Accenture, and major insurers. Executives navigated governance matters involving shareholder approval for the merger with Willis Group and compliance with listing rules on exchanges like the New York Stock Exchange. The company implemented ethics and compliance programs aligned with international frameworks such as Sarbanes–Oxley Act provisions and anti-corruption statutes like the Foreign Corrupt Practices Act.

Controversies and Legal Issues

Towers Watson faced legal and regulatory scrutiny typical for large consultancies, including disputes over actuarial advice related to pension de-risking deals and lawsuits alleging errors in benefits administration affecting clients and plan members in jurisdictions like California and New Jersey. The firm was subject to regulatory inquiries tied to professional standards enforced by bodies such as the American Academy of Actuaries and the Institute and Faculty of Actuaries. Additionally, the proposed merger with Willis Group drew commentary from competition authorities and shareholder activists concerning strategy and executive compensation, paralleling debates that have surrounded other major industry transactions involving Aon and Marsh & McLennan Companies.

Category:Professional services firms Category:Companies established in 2010 Category:Companies disestablished in 2016