Willis Towers Watson PLC To Acquire Newfront Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Zaremski - Bank of Montreal - Analyst : I had -- my first question, and hopefully, there's time for follow-up is on the earnouts. Maybe you can kind of elaborate on them, including the details on when and how they might get paid out over time?

Question: Michael Zaremski - Bank of Montreal - Analyst : Okay. My follow-up -- that's helpful, probably for you as well, specifically on the $125 million of transaction and integration costs, if we put it in a ratio relative to the $35 million of cost synergies, and we benchmark it to pretty much all your peers now have announced deals in the past, the ratio, $125 million over $35 million, it's much, much higher than peers. So I guess, on one hand, it makes us, at least me, feel comfortable that your synergy guidance is potentially conservative. But on the other hand, just trying to understand why that ratio -- why that $125 million is relatively large. Perhaps there's something you would like to call out and elaborate on that's in that $125 million.

Question: Elyse Greenspan - Wells Fargo Securities LLC - Analyst : I was hoping to start off on organic growth. Just if you could give us a sense of -- I know you gave a longer time period CAGR, but of more recent organic growth trends at Newfront, maybe '25, even if '24 is helpful. And how you're thinking about the outlook? And then, I also want to confirm because there has been some inconsistencies across how companies have done deals that this will be, I guess, within M&A and not organic for 12 months post-close. And then, I know you guys, right, had said on your last quarter's call that maybe the competitive market, right, makes R&D more mid-single digits versus high-single digits. Does this change that view once this business gets within your organic, I'm assuming, one year post-close? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, WTW.OQ - Willis Towers Watson PLC To Acquire Newfront

Question: Paul Newsome - Piper Jaffray Inc - Analyst : Is there any cyclicality that we should note for Newfront's business? Do they tend to have it all, the [PME]? Or is it sort of ratable year over the year?

Question: Paul Newsome - Piper Jaffray Inc - Analyst : That's great. And when we're thinking about the 100 basis point goal for the risky broker business that, margin improvement goal, does this sort of reset the base a little bit for prospectively? Or how should we think about that? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, WTW.OQ - Willis Towers Watson PLC To Acquire Newfront

Question: David Motemaden - Evercore Inc - Analyst : I just had a question on the revenue growth and the organic revenue growth of Newfront. So it looks like -- at least when I'm looking at the historic revenue growth here, it looks like revenue growth slowed to 13% in '24 from like 34% in '23 and further based on the projections to 7% in 2025. And it looks like you guys are now thinking that it will accelerate to 10% in 2026. So I was just hoping to get some detail what's behind the slowdown, and then, the acceleration in revenue growth.

Question: Andrew Andersen - Jefferies LLC - Analyst : I think the current North American middle market business for you is about $1.5 billion of revenue. And I think it's a little bit more casualty weighted. Could you maybe just share a bit about how the business mix is within Newfront? And I imagine a lot of this is commission-weighted business.

Question: Brian Meredith - UBS AG - Analyst : A couple of quick questions here for you. First, Andrew, the $100 million of equity-based retentions, is that going to be expensed through earnings in the next couple of years? Or is that going to go below the line, at least just in the EPS line? How is that going to be accounted for?

Question: Brian Meredith - UBS AG - Analyst : That makes sense. And then the second one, I'm just curious, Newfront had a pretty efficient operating model given all the technology investment they have in the Navigator system. Your $35 million of cost savings, does that include any potential applicability of the Navigator system or whatever on Willis' kind of existing cost base? Or are there additional opportunities for further efficiencies and stuff as you implement Newfront systems into Willis?

Question: Joshua Shanker - Bofa Merrill Lynch Asset Holdings Inc - Analyst : As I was reading the press release, I was pleased to see that the Newfront acquisition is on what you view as the cutting edge of agentic AI. When I talk to a lot of agents and brokers, generally, the conversation is that the agent-customer relationship is sacrosanct and AI is not going to create a big impact had changed that situation, but here's a business you're acquiring that appreciates that future. I'm wondering if you can talk about the scope of what you think the agentic AI proposition is? What kind of policies that will affect? And what the market opportunity and risk is here?

Question: Joshua Shanker - Bofa Merrill Lynch Asset Holdings Inc - Analyst : And do you foresee any risk to the current relationship situation that there will be some business that goes digital and the market share of the relationship sort of oriented business will change?

Question: Mark Hughes - Truist Securities - Analyst : You talked about the Navigator technology. Is that something that you might be able to kind of target a little smaller market strata if it's a little bit more of a direct model perhaps? Does that widen up your kind of aperture for the size of client you might pursue in the broking space?

Question: Mark Hughes - Truist Securities - Analyst : And is that part of the integration strategy with this one? Is it to roll out or make the Navigator accessible to your wider platform? Is that part of the current strategy?

Question: Meyer Shields - Keefe Bruyette & Woods Inc - Analyst : I'm wondering, is it possible that you'd end up paying the $150 million earn-out on revenue growth without maxing out on the $250 million of contingent consideration? Are those co-dependent?

Question: Meyer Shields - Keefe Bruyette & Woods Inc - Analyst : Okay. Understood. And for 2025, I guess, the original $1 billion, now $1.5 billion of capital deployment, that was, as I understand it, intended to cover M&A and repurchases. Since the cash component of this deal is being funded by debt, is that $1.5 billion a good starting point for 2026 capital deployment? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, WTW.OQ - Willis Towers Watson PLC To Acquire Newfront

Question: Katie Sakys - Autonomous Research - Analyst : I just kind of wanted to circle back to the projected pro forma adjusted EBITDA margins for Newfront in 2026. I think two points about that of year-over-year expansion is quite impressive. And I was wondering if you could just kind of walk us through a little bit more detail on where exactly you think the drivers of that expansion are coming from for Newfront? And really what you think are the biggest risks to that expansion over the course of the next year might be?

Question: Katie Sakys - Autonomous Research - Analyst : Okay. And does that also contemplate the producer investments that you had previously mentioned in Newfront made over the course of this year?

Question: Mitchell Rubin - Hill River Capital Inc - Analyst : Could you please provide some color on the step down in valuation for Newfront from its funding round in 2022, which valued the company around $2.2 billion? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, WTW.OQ - Willis Towers Watson PLC To Acquire Newfront

Question: Mitchell Rubin - Hill River Capital Inc - Analyst : All right. And could you give us an idea of the free cash flow conversion on a pro forma basis for the company?