Andrew Krasner
Chief Financial Officer at Willis Towers Watson Public
Thanks, Carl. Good morning, everyone. Thanks to all of you for joining us today. Before turning to our results, let me take a minute to expand on Carl's comments about WTW's ability to navigate difficult economic conditions. With interest rate spiking and equities exceptionally volatile in the second quarter, we believe the market is clearly signaling concerns about the near-term future of the economy and corporate profits. As Carl mentioned, during the previous economic downturns, WTW continued to thrive and grow revenues. We have also repeatedly demonstrated our resilient cost structure, which has allowed the business to maintain its earnings power during challenging economic times.
Despite inflationary pressure on labor costs and the post-pandemic normalizing of variable costs such as travel, we remain steadfast in exercising financial discipline, and our outlook on near-term and long-term margin expansion remains unchanged. Turning to our financial results. The second quarter was aligned with our expectations. On an organic basis, revenue was up 3%, reflecting growth across most of our businesses. Adjusted operating income was $314 million or 15.5% of revenue for the quarter up 30 basis points from $318 million or 15.2% of revenue in the same period last year as our growth and expense discipline combined to enhance our profitability. The net result was adjusted diluted earnings per share of $2.32, representing 9% growth over the prior year. Let's turn to our detailed segment results.
Note that to provide clear comparability with prior periods, all commentary regarding the results of our segments will be on an organic basis, unless specifically stated otherwise. The Health, Wealth and Career or HWC segment generated revenue growth of 2% on both an organic and constant currency basis compared to the second quarter of the prior year. Health, which is comprised of our Health and Benefits broking and consulting business, delivered growth of 8%. This includes a gain recorded in connection with book of business settlements related to senior staff departures that occurred in 2021. Excluding the book of business gain, Health's organic growth was 3%, primarily driven by new client appointments and further bolstered by project work. Wealth, which consists of our retirement and investment businesses had a revenue decrease of 7% for the quarter. The decline was primarily due to a headwind from outsized performance fees that were recorded in the prior year quarter in our Investments business, as we've discussed previously. We expect to see significant improvement in the wealth businesses during the second half of the year driven by new client acquisition and strong market demand for specialist work in response to market volatility and legislative change.
Career, which includes our Work and Rewards and Employee Experience businesses also contributed to the revenue growth for the segment increasing 5% in the quarter. This growth was largely driven by strong client demand for advisory work, data products and software licenses. In Benefits Delivery and Outsourcing, which encompasses our Benefits Delivery and Administration and our Technology and Administrative Solutions businesses, revenue increased 7% from the prior year second quarter. The increase was largely driven by individual marketplace and reflected growth in Medicare Advantage revenue in our direct-to-consumer business. Outsourcing revenue also grew with new client appointments and growth across the existing client base. We continue to see a macro environment that supports growth opportunities for this business in 2022. HWC's operating margin was 18.7% this quarter compared to 18.6% in the prior period. Excluding the impact of foreign currency and onetime fees from book of business gains and performance fees, the margin expanded 80 basis points, driven by strong operating leverage and in-year savings from our transformation program.
Our near-term and long-term outlook for HWC remain positive as we expect its market-leading solutions and the ongoing demand drivers in its core businesses to continue to drive organic growth. Looking at Risk and Broking, revenue was up 3% on an organic basis and 1% on a constant currency basis as compared to the prior year second quarter. Excluding a modest headwind from book of business settlement activities, R&B's organic revenue increased 4%. Corporate Risk and Broking, or CRB, revenue increased 3%. Book of business settlement activity, which stemmed from senior colleague departures that occurred in 2021 declined nominally from the prior year but did not meaningfully affect CRB's year-over-year organic growth rate. The business generated growth across all regions, primarily from new business with notable strength in our M&A, Aerospace, Natural Resources and FINEX specialty lines. International led CRB's growth driven by growth in Natural Resources and Construction lines.
Growth in North America and Europe came from both new business and improved client retention driven by the expansion of our teams in those regions and colleague retention rates at senior levels have continued to show improvement. In the Insurance Consulting and Technology business, revenue was up 9% compared to the prior year second quarter, driven by increased technology solutions sales and higher demand for advisory work. R&B's operating margin was 19.7% for the second quarter compared to 23.1% in the prior year second quarter. The margin decline was driven by our significant investment in new revenue-producing and client service talent. In Q2, R&B welcomed new leaders across all geographies. These key hires will deliver their industry expertise and specialty insights to clients across the globe in lines such as Construction, Aerospace, FINEX, Natural Resources and Facultative. Seeing steady improvements in our client pipeline has strengthened our conviction that the work we have done to rebuild our talent base will yield strong results throughout the second half of the year.
We believe these actions will enable us to significantly accelerate organic growth and meet our longer-term goal of mid-single-digit revenue growth for this business. Now let's turn to the enterprise level results. In Q2, we generated profitable growth with adjusted operating margins increasing 30 basis points to 15.5% from 15.2% in the prior year primarily reflecting improved operating leverage and our transformation initiatives, which more than offset our increased investments in talent during the period. We continue to expect margin improvement each year as we work to deliver in our 2024 margin goals. As Carl mentioned, our transformation initiatives will be a key contributor to this ongoing margin expansion. Our early efforts in this area have been very successful. By accelerating shared services and workforce centralization efforts and identifying incremental opportunities to drive collaboration through real estate portfolio optimization we have far surpassed our $30 million annualized run-rate savings goal for the year.
As a result, we raised both our near- and long-term targets. Foreign currency with a headwind on adjusted EPS and of $0.17 through the first half of the year, largely due to the strength of the U.S. dollar against the euro. Assuming today's rates continue for the remainder of the year, we've updated our guidance related to our expected foreign currency headwind on adjusted earnings per share from a range of $0.15 to $0.20 to a range of approximately $0.20 to $0.25. We generated free cash flow of $198 million for the first six months of 2022, an $89 million decrease from free cash flow of $287 million in the prior year. This decrease was due primarily to the absence of cash generation from the now divested Willis Re business as well as additional tax payments resulting from both the Willis Re sale and the deal termination fee received last year. We continue to prioritize returning capital to shareholders and executed aggressively on this commitment.
During the second quarter of 2022, we paid $91 million in dividends and repurchased 2.1 million shares for $471 million. Of that $471 million, $253 million was completed during May and June. We also raised our repurchase authorization by $1 billion to $6.5 billion, of which approximately $2.1 billion remains. We continue to be committed to deploying excess capital and free cash flow into our highest return opportunities and still believe that the return we can achieve from repurchasing shares remains highly attractive. Accordingly, we expect to continue to deploy free cash flow in this manner, subject to market conditions. Overall, we're off to a good start in 2022 with the performance of the business ramping as we expected it would. As we think about the rest of the year, we see macroeconomic challenges that will create demand for our services and opportunities to help clients. We continue to feel positive about the investments we have made in talent, innovation and operational transformation and are confident those investments will drive organic revenue growth and margin expansion we have forecast for the year and position us to achieve our 2024 goals.
With that, let's open it up for Questions and Answers.
