The merger announced this morning between Willis Group, the third-largest insurance broker in the world, and Towers Watson, a professional services company, promised a big impact on the business of managing risk.
Towers Watson spoke about expanding adoption of its analytics platforms to more clients through Willis' distribution network in its announcement of the deal. If that works out, says Mitch Wein, VP of research and consuting for Novarica, the upshot for carriers is that Willis' partner insurance companies will get a much clearer view of the risk they're taking on.
"Both those companies had a risk management organization, and the real synergy is in merging the risk management businesses," Wein says. "When you get a much more comprehensive understanding of the risk, it enhances the broker channel quite a bit."
That more comprehensive understanding comes from the combined company's ability to acquire and analyze big data at a high level, Wein adds.
"You’re now able to collect the data, and one company can help you leverage it better," he explains. "There’s a lot of technological innovation in risk,especially with the emergence of the Internet of Things and big data. The segmentation becomes much more important."
Towers Watson itself was created through the merger of Towers Perrin and Watson Wyatt five years ago, but Wein points out this is a different case. That means insurance companies that choose to work with the combined company can expect a different kind of service.
"This is much more a merger of equals than a merger of competitors," Wein says. "This is a different play where one plus one equals three, so to speak."
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