Andrew Krasner
Chief Financial Officer at Willis Towers Watson Public
Thanks, Carl. Good morning, everyone. Thanks to all of you for joining us today.
As Carl mentioned, we finished the year on a high note and our outlook for 2023 is positive. Now I'd like to share some further details on our financial results. The fourth quarter was in-line with our expectations with revenue up 5% on an organic basis. For the year, organic revenue growth was 4% and we had solid growth across our portfolio of businesses. For the quarter, adjusted diluted earnings per share were $6.33, an increase of 12% over the prior year. For the year. Adjusted diluted earnings per share were $13.41, representing 16% growth over the prior year.
Now onto our detailed segment results. Note that to provide 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 5% on an organic and constant-currency basis compared to the fourth quarter of last year. Excluding the Year-over-Year headwind from book-of-business settlement activity, HWC's organic revenue grew 6%. Revenue for Health was flat for the fourth-quarter, primarily due to a strong comparative arising from book gains in the prior year.
Excluding this activity, Health revenue grew 6%, primarily driven by portfolio growth and new client appointments in Europe and international, as well as increased project work-in North-America related to helping clients manage increasing costs and implementing legislative changes.
Wealth grew 5% in the fourth quarter. The growth was primarily attributable to higher levels of project work, actuarial valuation activity in new administration clients in North-America, and the combination of regulatory and settlement work in Great Britain. This growth was partially offset by a nominal decrease in our investments business, which was pressured by declines in capital markets and expected headwinds we mentioned during our Third Quarter Earnings Call. The wealth business finished the year with a strong fourth quarter, offsetting declines experienced earlier in 2022.
Career experienced 9% growth in the fourth quarter. This growth was largely driven by strong client demand for Talent and Compensation products, including compensation benchmarking surveys and advisory work as well as employee engagement offerings, which we expect to continue this year.
Benefits Delivery & Outsourcing generated 6% revenue growth in the fourth quarter. The increase was largely driven by individual marketplace, with strong growth from higher volumes in placements in Medicare Advantage falls. As expected TRANZACT delivered double-digit growth in its seasonally strongest quarter and for the full-year, driven by supportive macro-environment and our focus on profitably growing the business. Technology and Administrative Solutions revenue also increased primarily due to new client appointments, and increased project activity.
We continue to see growth opportunities for these businesses and expect that they will continue their growth trajectory into 2023. HWC's operating margin was 39% for the first-quarter, compared to 38.2% in the prior year fourth quarter. Excluding the impact of book-of-business activity, HWC's operating margin was 39% compared to 37.6% in the prior year fourth quarter. For the full year, HWC operating margin was 26.1% compared to 25.6% in the prior year. The 50 basis-point improvement was due to improved operating leverage and transformation related savings.
Risk and Broking revenue was up 5% on an organic basis and 3% on a constant-currency basis compared to the prior year fourth quarter. Excluding the headwind from book-of-business settlement activity, RNB's organic revenue increased 6%. Corporate Risk and Broking, or CRB, organic revenue increased 3%. Excluding book-of-business settlement activity, CRBs organic revenue growth was 5%. The business generated growth across all regions, driven by new business wins in construction, natural resources, and aerospace. Excluding headwinds from prior year book-of-business settlements, North-America revenue increased with notable growth in construction. Europe and International also made strong contributions to CRB's growth with new business in construction and aerospace.
In the Insurance Consulting and Technology business revenue was up 17% over the prior year fourth quarter, benefiting from the timing of software sales, which had originally been expected earlier in the year as well as increased advisory work. For the year, ICT delivered strong growth of 9% in-line with our long-term expectations for this business.
RNB's operating margin was 28.3% for the quarter compared to 30.1% in the prior year fourth quarter. Excluding the impact of book-of-business activity, RNB's operating margin was 27.6% for the quarter compared to 28.3% in the prior year fourth quarter. For the full-year R&D operating margin was 21.2% compared to 23.4% in the prior year. The decline in margin was due to our significant investments in talent. We expect these investments to continue to gain momentum in 2023 as the contributions of these hires become more meaningful.
Now let's turn to the enterprise-level results. Adjusted operating income was $882 million for the quarter, or 32% of revenue, a 20 basis-point improvement over the prior year. For the year, adjusted operating margin was 20.9%, a 100 basis-point improvement over the prior year. Our improved adjusted operating margins primarily reflect the benefits of strategic portfolio management, which were realized at the corporate-level, alongside Transformation Program savings which were realized at the segment level, but in some of our businesses were more than offset by our increased investments in talent during the period.
As Carl mentioned, during the fourth quarter, we realized $49 million of incremental annualized savings. Transformation savings will continue to be a key aspect of our ongoing margin expansion efforts as we're encouraged by the results this year, which exceeded both our original $30 million target for 2022 and our most recent forecast of $110 million for the year. To date, our transformation savings have outpaced our original expectations from a timing perspective, driven by primarily by accelerated workforce savings, technology savings from migrating operations to the cloud and reductions in our overall real-estate footprint.
For 2023, we expect our transformation program to deliver approximately $100 million in incremental run-rate savings by the end-of-the year, with continued contributions from real-estate, technology, and process optimization. Foreign currency was a headwind on adjusted EPS of $0.25 for the year, largely due to the strength of the US dollar. Assuming exchange rates remain at current levels, we expect foreign currency to be a $0.06 headwind in Q1 of 2023, but only a $0.01 headwind for the full-year.
We generated free-cash flow of $674 million for 2022, compared to free-cash flow of $1.9 billion in 2021. This decrease was primarily due to the receipt of a $1 billion termination fee in the comparable period, and the absence of cash generation from the divested treaty reinsurance business. Looking ahead, growing earnings and generating healthy free-cash flow remain our priorities.
Our US GAAP tax-rate for the fourth quarter was 17.7% versus 20.8% in the prior year. Our adjusted tax-rate for the quarter was 22.2% versus 21.1% in the prior year, with the difference primarily due to the geographic distribution of profits. For the year, our US GAAP tax-rate was 15.4% versus 19.9% in the prior year. Our adjusted tax-rate for the full-year was 20.9%, more in-line with the 20.7% rate in the prior year.
In 2022, we returned a significant amount of capital to our shareholders, paying $369 million in dividends and repurchasing 15.7 million shares for $3.5 billion. We will continue to pursue a disciplined capital allocation strategy that balances capital return with internal investments and strategic M&A to deploy our capital in the highest-return opportunities. While we expect share repurchases to remain the primary avenue for capital deployment, we continue to evaluate all our options to create value for shareholders.
Turning to our 2023 guidance. Based on current market conditions, we expect to deliver mid single-digit organic revenue growth alongside adjusted operating margin expansion despite continued investments and long-term growth. We also expect an improvement in free-cash flow now that one-time cash outflows, primarily related to our divested treaty reinsurance business are behind us. As I mentioned earlier, we expect to see $100 million in incremental annualized Transformation Program savings.
With respect to non-cash pension income, we expect to see a decline due to market volatility and interest rate movements. For 2023, we expect about $112 million in pension income as compared to $271 million in 2022. I'd like to note that despite this dynamic, the funded position of our plants has improved.
We remain focused on our long-term targets and recognize that to achieve them we will need to build-on prior momentum continue to accelerate revenue margin and cash-flow growth. Each of these areas remains the subject of significant management attention.
Overall, it was a strong quarter and year for WCW with performance that aligned with our expectations. Our results reflect a lot of hard work which included vigorous hiring efforts, investments in technology, successful transformation initiatives and the unwavering dedication of our colleagues. We ended the year in a solid position and I am confident that we will continue to build momentum in 2023 as we work to achieve our long-term targets.
With that, let's open it up for Q&A.