MMC - Earnings call transcript Q4 2019 | Marsh & McLennan Companies, Inc.

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Operator

Welcome to Marsh & McLennan’s Companies Conference Call. Today’s conference is being recorded. Fourth quarter 2019 financial results and supplemental information were issued earlier this morning. They are available on the company’s website at www.mmc.com.

Please note that remarks made today may include forward-looking statements.

to cause uncertainties materially actual contemplated such subject of a from are by may factors results statements. statements risk and and variety those Forward-looking to differ

to of to the and most MMC available XX-K, recent our factors, discussion all this including our detailed filings, website. recent more Release for a please For on refer most our SEC of Earnings quarter are those Form which

may also discuss non-GAAP During call today, we the financial certain measures.

closely comparable those the of a most refer earnings to For measures, measures to GAAP the schedule release. reconciliation please today’s in

I will & Dan CEO now McLennan turn President Marsh to the conference of ahead. Glaser, over Companies. go Please and

Dan Glaser

Glaser, Good fourth of Marsh President to Thanks, and for you & discuss McLennan. morning quarter joining earlier our reported us Dan and Holly. results CEO thank I’m today.

on of Wyman. the of John businesses, CFO; Head Martine Ferland and is of Sarah is Mark of of Carpenter; of today us Doyle CEOs the DeWitt, Investor call Guy Oliver McGivney, Relations. Mercer; and Also, McDonald Joining with our this our morning Marsh; Hearn Peter me Scott

Marsh MMC a history, McLennan. financial year and strong while for global in of & largest positioned. was XXXX acquisition delivering We completed our the managing results is JLT. The well remarkable integration. the deal

never expertise capabilities, and stronger. talent Our leadership been have

work together. In coming class to are have compliments and do, addition about teams feel the JLT we of cultures in while we world our at still best class talented McLennan, Marsh & how good

growth years I’m our over annual On up step Nearly now pleased together change finished we represents that as rate midst billion the one. with growth the and an integration for We X%. $XX.X generated revenue. revenue This highest of is $XX run of year we of excellent we a year underlying had a in annual it us. XX all basis, more working XX%. our market We have are and the are teams now sitting billion, in more and in the topline and of

XX% growth. The the a basis EPS met NOI modest and deal. of year adjusted our with we of the reduce points and digits. We efficiencies. savings. expect underlying where by ahead additional was our operating And guidance adjusted our X% to row rate capital least cost management in our expansion related will year We of our run in growth objectives drive to first XXX dividend of count the X% in consistent are on increase at for growth margin tenth range. X% to dilution continue share million savings we and acquisition double XXX of schedule running now adjusted

Overall, I today, to even in positioning delivering our with pleased for ourselves an like We while performance XXXX. XXXX. challenge in growth the balance sustained am year for future in exceptional consistently

our U.S. completing McLennan of billion in We & continue fast-growing five market current to and business in invest a brokers have Agency, XXXX, pipeline acquisitions for rate resulting X.X robust we XXXX. revenue in Marsh middle run

our to business. expand investments in technology, commercial, as automate as streamline in and digital, We well small We leverage opportunity made further see additional to and analytics. technology

relationships business increasing the leverage our enhanced We in drive to also see strength, opportunity clients expertise to to collective value deliver growth. and across

streamline efficiency workforce critical create Mercer seamless the and key saw execution. to taking at as more the better XXXX leadership Martine implement CEO. new enables and with changes the energized Martine of areas, model, over Lastly, transition operating in was leaderships install that

record operating stronger income out than and revenue emerge As we adjusted record adjusted year share. started conclude the XXXX, with per earnings we record firm a we

trusted by these weather As our rates, risk, We people. the support to areas and geopolitical into in pandemic by cyber clients trade we is current change, there given global extreme climate and interest risk. the strategy, providing friction, world in of four significant look future, risk, the come in risk, to and issues negative the dynamic uncertainty times

risk Marsh provided report key Davos. and this climate global created together Davos, This greatest World both Forum issues risk glowing issues Economic prominent Forum. the change weather-related the with was global report and year Climate the leadership was in top risk the World discussed the The urgency the Economic some the year at at and we mitigation thought at there on is and most ranked global produced adaptation. & annual McLennan of concern. XXth recognition consecutive

helping readiness. general leader of all for implications Mercer and all growth near quality, optimistic. across climate. world, longer-term assess investment, fears change client our had term of the session of about with climate Oliver responsible and engaged on longevity, despite investment on push impact the them our in uncertainty and are in the We businesses AI I and a Business am change. the Despite continued to risk Wyman

these The perspectives MMC of to provide uniqueness value the and bring and reminder insights of are our clients. we on topics a we the

insurance of the quarter, across P&C the range is X% and in trends. wide in in an a Insurance firming and fourth pricing Global spend Marsh index me lines. geographies with Let second, the X% of in X% Market Pricing a quarter, on XX% nearly current the The compared saw first. moment increase third

XX% risks, while and the versus and XX% workers see rates auto seeing are higher middle-market average, that to although quarter. index in property on we the insurance small cash comp are X% and insurance lines Global excess slightly third average up larger Commercial commercial to rising increases, highest saw renewal professional respectively. and rate Marsh continues rates up at up to the see rates which Note certain are geographies. and financial rates increases Casualty skews continue decline.

rose property X% approximately the X by capital radar All by global the January at renewals. increased index reinsurance, those dedicated Carpenter year-end. reinsurance Guy line at X% catastrophe to Turning

classes professional, capacity tightened widely liability. D&O, like Although general renewal vary stress outcomes commercial across individual auto, programs, medical in and some is

challenging insurance solutions and capital overall best hard entrants and to to like party in The and alternative continues P&C to shine. new these work market expertise part the deliver our our continued continue rate third in at by is we X, where capabilities redemption for lack retrocessional times increases a In from January capital, meaningful clients. of The track see investors. driven global market

Turning fourth to with our pleased are we results. quarter, the

for Our overall quarter both due of on in revenue X% X% was Marsh growth the fourth an expected XX%. a XXXX. headwind business underlying slower the prior comparison and grew grew the in on which quarter peak solid, in revenue segments. than quarter new quarter tough Underlying with as but growth to the a basis, is

of finished Wyman as declined growth points operating with of first saw income quarter adjusted growth adjusted we strong The in strong overall Guy and by revenue underlying growth year fourth revenue basis and delivered XX% strongest XXXX, underlying expected. X% Oliver Carpenter expansion XX%. of X% XXX the the since the the operating quarter Mercer with quarter. margin in quarter growth

time. rather we quarter over of As say, consistently is at longer a emphasize it periods and look not single performance important to over

Looking at X% the we initial demonstrated results. growth. achieving topline with XX% strength across We We benefits revenue while full-year, the businesses, overall our full-year our are integration. generated with the strong of underlying pleased for growth of the

year, pull and solid had the the year. X% On the Mercer growth X% with the Oliver X% growth grew strong Wyman an Carpenter back for a Marsh for quarter. of in fourth despite growth. X% underlying year Guy second had consecutive basis, delivered

Adjusted of basis on acquisition. year of expansion. the consecutive consistent year year, grew marking JLT Our XXX the we points the adjusted modest for adjusted XXth the dilution NOI X% guidance margin currency EPS with constant grew reported first overall expansion or XX% basis our a margin EPS have with X% in of

example an was XXXX execution multiple of sum, In levels. on strong overall

addition JLT As XXXX position. and we future enhances of is our competitive The look at beyond, bright. our

to we growth are bringing X% the We and adjusted expect investments underlying EPS revenue technology. expect and growth. in X% our increasingly benefits to XXXX, clients our to Margin collective from we and In digital range. in expansion strength strong see

more turn With Mark over that, me a let review our detailed to results. it of for

Mark McGivney

morning. Good Dan. Thank

We fourth income adjusted a XXXX. results, and growth X% from to the billion, quarter reflecting Operating increased the Consolidated strong revenue continued income are operating underlying JLT. to pleased $X.X of was XX% in our million. $XXX while year million, quarter in which rose contribution XX% $XXX that capped

operating $X.XX. and XX% to basis adjusted XXX rose GAAP increased $X.XX EPS EPS to XX.X%. increased Our points margin to adjusted

that the the in was basis X.X seasonally insurance XX.X%. to quarter. operating fourth fact Adjusted an XXXX Looking comparison basis. and income considering margin at adjusted Good increased the QX and underlying and its result services, quarter risk XX% was billion on tough X% quarter JLT’s XXX up to million, fourth grew largest revenue strong Marsh to $XXX points and expanded faced XX% to

XX.X%. U.S. At margin XX% increased For was billion, Adjusted up revenue $X.X the and for the billion Canada U.S. the our X% XX rose in underlying This quarter X% of an operating and on income an higher adjusted $X.X X% XX% impressive and solid growth revenue year, for RIS increase to year Canada. for underlying X%. an points was The basis in division the growth of operating of underlined for or Marsh, X% increasing consecutive underlying XX% to seventh growth the basis. the quarter quarter of marks full-year.

division international underlying growth of down up the with up Pacific quarter, X%. Asia EMEA X%, America had the In and X%, X% Latin

increase well million, revenue of benefited a in results full-year, strong at an from an active revenue quarter on North growth in as for of retrocessional an for X% underlying quarter, outstanding as growth underlying to Security. Carpenter’s Marsh XX% XX% basis. Guy in finish GC representing basis XXX year. $X an billion, was and the increase The quarter an America, strong the or For an was on the

of billion, XX% basis. For the an $X.X X% increase year revenue on an underlying was or

X% year-over-year fourth XX.X% basis the is margin operating ago, looking increased operating segment, but quarter XXX to X%. versus adjusted full-year and expansion million income Consulting margin underlying the In solid. Consulting flat was to X.X with XX of declined revenue points adjusted of billion year at a growth

X% of revenue growth X.X of with an For increase the underlying year, was billion, X%.

for income to of basis underlying our Wealth adjusted digits Mercer’s benefits XX.X%. and investment operating billion increased XX X% X.X operating with to increased underlying the quarter the define high to and up in X% increased margin points revenue X.X X% single management was billion single growth download up digits. on X%. with basis Adjusted year an

the access implementation. under on U.S., year-end, growth strong and in X% in underlying an to and basis At in products the year-over-year. quarter, exceeded growth grew reflecting digital Health X% Career management on sequentially an international revenue serving up with both underlying basis continue grew grow. billion, overall XX% Our and XXX fourth strong in X%

X% year, million, an or increase Oliver an For $X the in Mercer $XXX fourth basis. billion, of at decline on was a revenue the of X% X% on an quarter underlying was revenue Wyman’s

underlying basis.

full last fourth quarter. we on As backing in the a we said our expected call,

schedule of of strong integration growth ahead full and in We the on made the on milestones. on underlying For great key JLT X%. year, Wyman progress revenue plan are Oliver produced XXXX or

expect to the diluted mutual we continue We in and year adjusted modestly in the year first quarter, three. accretive EPS in to transaction when two,

now and We are ahead We savings on XXX least of savings at restructuring schedule rate of estimate run million. cost actions.

We expect statements. those approximately million to cash incur of cost to $XXX generate

In print. of XXXX. addition, property-related estate savings real XXXX there will our the consolidate non-cash we year-end million approximately charges, be achieved of to balance from XXX cost by of XX mostly achieve and million approximately end as expect foot We the

encouraged million JLT XXXX and achieve also in integration to We XXX these restructuring of savings. cost

possibility update more to It there to we plans remaining XXXX. today, into costs that with as have more continue we incurred a a This into integration the the the get amount the bulk expectation extending emerge. is modest deeper in savings will of opportunities is our and XXXX for be reflects

JLT. As XXXX, in is Remembering our keep JLT. the first quarter year-over-year mind seasonally is quarter first that the were look RIS to quarter last by for impacted we of small the comparison

relatively will Consulting employee along in quarter are In benefits quarterly low result the and in in expect some margin. first addition, JLT’s volatility we decline margins this first with quarter

growth we earnings for the adjusted expansion. margin operating consolidated Dan year, mentioned, full However, as expect strong

million to back XX JLT XXX which recorded Included this XX the expense largest was acquisition. quarter, the million quarter, Fourth The Turning of to the severance, million corporate are costs, XX million and which cost, true-ups total costs, JLT integration XXX items. in fourth adjusted related earnout we majority JLT restricting in acquisition. categories million quarter. million XX acquisition-related noteworthy to of prior other of relating are of is of of

million retirement our we our from defined we plans update benefit do brief to global typically XXX XXXX, global in contributions call, As million in Cash up XXX on on were quarter a give our XXXX. will slightly the plan. fourth

cash roughly XXXX expect million. contribution XXX We in will be

for lower XXX For XXXX. other million XXXX, expectations benefit anticipate credit this we Based be roughly assume XXXX. on our net we to would than in slightly item current in

the in adjusted million quarter Investment both income was fourth X results. for GAAP and

million. GAAP income was XX XX the and our For investment was adjusted approximately XXXX, full-year investment income million

XXXX, on adjusted basis. expect an For only modest investment income we

slight Foreign year up $X.XX in EPS headwind exchange negative for is impact and the full a per was the adjusted for quarter share XXXX.

at [Assuming] EPS exchange be headwind expect for FX rates current at XXXX. we to slight from remain levels; adjusted

compared effective last Our tax was quarter fourth in year. with adjusted quarter rate XX.X% XX.X%, the in fourth the

the our adjusted was For tax full-year XX.X%. XXXX, rate

XX%. was discrete Excluding items, rate tax for adjusted approximately the our full-year

When million give repurchased our tax assume between XX% million. XXX for and X.X the rate, is be do In negative. project we and we Based items, of reasonable for XXXX. environment not forward quarter, we stock on the XX% current our guidance can have which rate to it positive discrete a tax shares or fourth

full the shares repurchased we XXX million. million year For XXXX, X.X for

March the compared Net in XXX million will XX.X third of billion, XX was of at XXXX end senior mature. of end the at the maturities to quarter. billion XXXX, debt debt notes Total

quarter, incurred million the expense, quarter in During expect XXX or the interest approximately same we fourth of the amount XXXX. first we

to look three approximately of broad frame is share X.X a we of annually, track. currently for year, categories. still capital management on of across expect X.X with we line deploy This the increases double As objective dividends stages to discussed and Debt combination billion our the XXXX, reduction, digit of early capital JLT in work billion repurchases. in to acquisitions in we

commitments capital objective when laid across roughly plan the allows to Directionally, we deleveraging deployed we categories. these maintain dividend we our to the currently growth three announced for amount meet out us expect JLT. be This and of equivalent

flexibility the the high long-term. also consistently and we acquisitions favor over view We’ve share M&A. the we repurchases company as attractive We provide that better value for acquisitions as for stated quality over shareholders creator

is Our last capital over our record by XX% three of good, years. nearly track as the return evident on invested

year in and first developed. the depend pipeline our do of deleveraging we half expect the Ultimately, later the any would our not repurchases share on plan repurchases how pipeline, XXXX. Given currently acquisition share in M&A

deleveraging by should and in capital terms be expect flexibility the and to end largely we Our substantial complete beyond. XXXX in this of have of year deployment

and cash the $XXX position quarter of $XXX at acquisitions, cash repurchases. $X.X Our Uses $XXX end million and billion. million included quarter for the totaled million million was in fourth four the $XX for of share dividends for

and $XXX for share For for included the year billion full for $X.X $XXX acquisitions, XXXX, dividends $X.X totaled uses and cash billion, million million of repurchases.

proud of in In XXXX. summary, we’ve we are accomplished what

XXXX, of the objectives we very when another JLT set outlook We’re if track performance. is announced you much year the with And we on acquisition. our look strong forward for to

happy With that, it turn back to I’m Dan. to

Dan Glaser

Operator to Q&A. Mark. begin Thanks we are ready

Operator

Thank Wells Greenspan [Operator today ahead. Please our first from question take will Instructions] of go We Fargo. Elyse you.

Elyse Greenspan

Good thanks. morning. Hi,

had good are program first than So, seems savings the my a It you question, for JLT guys intangibles like you toady. also coming in amount updated lower this guys deal. when announced

you get accretive guess trying still XXXX. deal have and numbers are, that in will I’m reaffirming be XXXX your know, from you to I you that tailwinds and to, guess two in the breakeven these just So, that I

relative deal, initial So, you to this might your be accretive offset had than what's expected? sooner that expectations not the

Dan Glaser

least it’s Thanks. be to Well, you our actually original accretive consistent expectations. know, going with at

that also needed deal lower, a so, we revenue to that also the some size like know, of we're you are puts businesses in in we business grappling had we have did and businesses, into Those issues described anticipate, transaction. number and think always going are staff before but headwinds that the this pipeline the some think inspections. with. in of a some we also or takes. from U.S., new mentioned, interest aerospace, we things here has CRP amortization higher, we not whether then other And was principally the cost which And savings as And some divest you minority

level it’s a going is Marsh it you company. we you to a strong about you So, transaction. everybody, be a was our deal our tracking strategic how things always year line That it’s financial to in And put dilution, know, so us. was solid when we’re expect be good EPS know, all very with expectations, the McLennan means nature also just original to together & and breakeven were know, that’s good. original in expectations, really It I’ll for and and you like as a and adjusted XXXX growth, of what accretion – we talk in growing, remind

Elyse Greenspan

trying year-to-date Okay, that’s the little It for came my second in expanding guys in quarter’s bit a And the the margin that consulting kind overall the expectations. to more know, just we had then like question, improvement than last Just alluded bit fourth level the to quarter margin of Was helpful. below on call, seems weaker be, you forward. happened level. as fourth company may about quarter understand little you going margin? a what think the your of

Dan Glaser

quarter focused was year We were. in other on versus going of do not certainly up one single expectations margin much in XXX our growth businesses, pretty at our much the a short really pay earnings with any of you were so, the any the the for one growth on year. We quarter. we satisfied attention know, what as we and way that very for and coming topline and bips lot There’s to don't much and the we look more consistent fourth always all it’s than

go is expansion margin go I be so, for and and quarter to you as look general XXXX the at you years, XXth go at by and margin back you I periods a know, XXX When mean of time. you indicative, in but significant bips know, bips, year look we’re nearly decade to up, expansion. going being plus longer up our you one look levels when consecutive to need company, wouldn’t in just five of and back, we’re as segments company, I a at any XXXX of margins back both

outcome we revenue some business, margin driving And growth margin & and adjust which RIS margin that time. had growth only is of margin Marsh as Carpenter in expansion the normally almost in needed JLT we we what been year run for areas this And the more an really the to in that felt was particularly, portfolio, levels for us is exceed expansion of will were give expense we we within over how that similar always to in operating McLennan. parts Guy us

please. question Next

Operator

Our line is Please Credit Mike next your open. Suisse. go from comes Zaremski ahead, of question

Mike Zaremski

morning. Good

First year, Risk EMEA pace that you know, years. [that thinking growth also expect also kind the and should we question of second know color, guess the of a low-single a very the let’s growth of – into and the going Is then, a a looking I in is year? that just segment, out regarding till thinking this you on half we it, call should and of Insurance for at past bit maybe, has anything patient], LatAm segment, couple there just XXXX? sort the weaker very, been, digits there little it about any

Dan Glaser

little I’ll a and to John. to I'll hand over bit you then Yes, take

a includes been know while. well even You both in future EMEA growth only overlap for in going but a overall, knew of to not believe the beyond. we’re area Latin Honestly, bit set biggest choppy we not UK, with and which up XXXX, JLT was be where has for our EMEA it in – America

of we do John, at that? the And so, to you that’s add we look EMEA. parts want business, different more the component to But, when essentially unpack

John Doyle

year, year, growth underlying the Sure, growth. X% quarter, the picture, very very, GAAP results. know, I the XX% was for Dan, you big with full growth full so the XX% thanks. for pleased Big in

headwinds challenges will UK As underlying the by some I Dan impacted as integration performance the but, by UK. I’m growth underlying we first related and encouraged expected, quarter remain, in say, know, and in improvements was the you noted, the in

but growth region ago as call, first made and We Latin for challenges setting America, now a forward. Latin will remains in quarter, for And America some in XX persist in as the through they're leadership UK, last going stronger related changes the months the about Dan, I us. noted growth really foundation integration high the

on, to I the for overall improved quarter So, I team. second there. again, pleased And expect quite I’m the proud results say, of I’m growth. with want the

did our throughout is you a challenging a change maintained a States more XXXX entering through stronger managed big well. our United Dan you serving through as year. obviously on lot part a of know and in on the all XXXX increasingly team We in market than XXX but, of last more we two clients JLT in and And we’re focus And as know, and we work of added firms noted, an also as what's M&A we that, Top of of the integration had well. late lot XXXX

So, positioned the we’re I’m and quite excited XXXX. we team about how as enter

Dan Glaser

one, another Mike. have You

Mike Zaremski

Yes. helpful. that’s helpful, That’s

you’re in Lastly sticking – space, what’s, correct can and you you said me ‘a know, brokerage challenging was I maybe you if on the to I hard a it marketplace. market’ prepared think referring you you I’m your remarks wrong. assume Dan, know,

pressure Just curious little you a also marketplace? – challenging are harder bit their represent put potentially working, this does does this your market know, you in even clients expense space given, employees Marsh’s to on know, the

Dan Glaser

market, entire and across a But I well cycles. necessarily that in challenging pockets built know to – market classify and the the hard we to mean, its work, Guy order conditions. in get as to true things a had as its hard to noted lot are run certainly in And, you you hard Carpenter have serve market really I know, clients wouldn't Marsh harder operate certainly done and to you brokers creatively and

we so, recognize And that.

harder than by you on that are client, so, know, our and know, any their them what levels, reward over teams, people for it, appreciate know, are we before is. and expense our that We ever and you we that’s we pressure more the serving focus than don’t you believe that that driven that fact recognized working our but puts

that It’s the hustling, delivering their they’re for going or belief You clients. that know, so somehow change. out is actually in focused compensation they're to anything not else there on their

please. question Next

Operator

from Our of Autonomous ahead. Ryan Please Tunis next go today Research. comes question

Ryan Tunis

integration guess able right perhaps that growth was drags I Yes, thanks. Dan, I say, disruption, failing revenue quantify morning. Good organic it total hoping is maybe you you – worse? Is because that you because might third getting quarter? know, want of, the JLT is is of to Or, And was the still the but now the process. that I going be that of this rate than worse forward? you to think the quarter know magnitude lessening in

Dan Glaser

talk I Well, that think a it’s good let me broadly question. because about

fourth you, new also were the pleased quarter, last line. last First we of quarter fourth Carpenter all, for JLT’s as the a I'm the I’d and both big solid had quarter, the quarter and with the X%, for then, and And they and comps X% a the with Wyman, year, start expected, with quarter performance in underlying nearly a told the look X% strong with relative tough performance as X% and the top had from growth, in the in for sequentially business for hurdle, at basis, quarter year. year was there very I'm but Oliver a the year, I our year. new improving pleased terrific when some again throughout JLT the pleased fourth year. quarter with business tough which I’m given, quarter. Marsh, X% Marsh’s to bottom And Mercer,

talked issues had about the We to the throughout year. pipeline

underlying levels. the our quite I’m acquisition of context in largest the know, history, with And so, in growth you happy the

way another because to to talk understand bit the – about growth I Although it. take the looking minute like just a you're I not more look way at, it’s I at I little

You In talent, the our outgrown a have know revenue number capabilities. our all this we headcount people year XX,XXX competitors year. our had of in last from and with competitors. multiple tremendous clients on it from We've GAAP. and outgrown our and my outgrown starts levels perspective; and significantly we up growth We’ve competitors is time have

revenue our there I year and know certain times where of total quarter. than the XX% is GAAP in fourth this those You one was XXXX important and think is underlying more up XX% is time in and

RIS, a the allow come year, [XXX fourth in of been RIS in and and better was ours Marsh. year EMEA firm we the If to grow in like America alluding a as base remarkable for to something you at XXXX something, specifically Asia-Pacific quarter as grew in XX% Do before, have We've years in our be XX% to and growth you will look in at Latin XX% and XX%, had Ryan? a years to grew years], it result for the and the John was we up quarter. basis. our all XX% XXXX trajectory is on else,

Ryan Tunis

the – just Yes. I'm I about conditions And I’m little like just there. XXXX. on have market of your to bit into a deceleration guess just tailwind. thinking U.S. organic, for those Canada curious perspective seem be a

thinking comes together? you that about know, are all how You how

Dan Glaser

terrific couple John, a want to been mean but, of more? little U.S. performance talk about last I years, has do the Canada that Yes. you

John Doyle

know, MMA remind pleased in Marsh I’m this you fourth terrific the terrific the underlying year had had growth Yes, X% Ryan, and year. growth quite year with the a quarter. and Both you U.S. in I in, also our Canada because organic team, we years. we last that had would

and a had good also very there in finish the to We strong quite year Canada as a year well.

operations performing as quite the well. MGA in well U.S. Our are

specialty couple that cyber, specialty are business in going the in a risk products perspective. of and Our quite front, good And the our nicely from growth on in we well. the well well a credit business, had private are did aviation as transaction private did client growth

Dan Glaser

Thank you.

Next please. question

Operator

The Mike next comes from Phillips question with go Morgan Please ahead. Stanley.

Mike Phillips

a time room environment that this of to maybe is Do going for was grow to level, of on think go a very there’s your at thoughts much more I peak on curious, for mean pricing? peak? guess say room I think you. legs just high the maybe morning Or how Dan, on I Good end the is overall the PNC year? the how overall much Yes, I on to price environment? guess you thank everybody. do you much, do how more there

Dan Glaser

that just who That’s question. over the you’ve companies financially got satisfied years. I got think last $XX the things results end many a achieved mean insurance you’ve I with the are different at several work, have they

in was so, at a blood eye impact back to factor the there little to get in position. looking many the And better companies they're then they’ve and a same got time a

impacting the, that You how real is and it's book also know inflation and it will prior around have you thoughts social slower. as how their

pressures on bit and I’ll to throughout carriers. which go side, reinsurance primary little minute year. the side, the may John the more, to a on in put on have a You will reinsurance This but, there’s give pressure some pressure know, then Peter build you

it’s And a environment ultimately, whether the one. it’s so, time it's you of what’s reflect, the matter or know, levels benign activity a premium will a and harsh over you loss know,

John? mean If I you out year, some cat a I is window when in certainly earlier, the a at into look of a and maybe Southeast, the if level tough it’s potential, broadly about this we’re go of develops, catastrophe the to year, conditions John think primary reinsurance I of we’ll I year, well, particularly, has ride. know, don’t a but quite lot a we talk about it’s any the if benign we casualty with and think to but have why maybe in don’t do prognosis, cell, but to the how and with just more then market start

John Doyle

clients. challenging about but consider there very sure. in is outcomes it Dan first it trends of world. the driven some the continuing quarter, becomes although built into the talked wide to earnings continues certainly it me, a range markets market for be around a hard market change our For don’t of more an I for

In in it’s UK about Continental Asia, high Latin increase increases. You the U.S., going for rate know, Europe, base and the U.S., Australia, more are Australia. seeing digit geography largest Middle and In America, UK the teens increases. is price average retail XX% wholesale East, mid-single

classes there. look You see from couple stressed States up meaningful challenging. continues that the you be quite to line property is globally. mix, most Dan, P&L, increases are moment. are up Australia, comp certain at down. where classes real a product up business Financial at the it their perspective, United Causality XX% particularly in are where particularly we X% know, liability, And and the XX%, though, Excess a in is public of

would index I You skews the about know, going this Dan is our accounts. talk large to but note, again,

you flat noted from single-digit about is throughout world, The They're the cost, the or to middle but, underwriters. litigation funding the of know, in continuing claim environment. market hear low loss concerned markets, on markets impact as rising inflation Dan many to we're most social

You with and in verdicts auto chemicals and challenging in some know, settlements pharma clients P&L. and through we’re and large in also our observing commercial working

head, loss some know, its difficult environment to some you know, markets underwriting. storms you the question. where and – know, stress, So, the where the but no in there’s predict you will There’s on are there

Dan Glaser

Peter?

Peter Hearn

Thank you.

insurance primary with – been standpoint, and very market largely were pricing think I you experience, a alternative a X-X. responsible, is to renewals new and the environment from lack The regard a factors, function shaped really of challenges by, capital responding retrocessional it's in reinsurance of couple and the and the a markets. deterioration at know, increasing loss

a flat spend there’s wide significantly. geographies, know, some it of pricing, down to others in down was certain in was You

I of is but we retrocessional between increases XX% the market the saw In reinsurance XX%, believe the don't business – and market, hard.

think as we hard but define isn’t which generate you I market, certainly it can't a at traction. expensive, more price, any it’s

Mike Phillips

Thanks.

Dan Glaser

you have follow-up? Mike, do

Mike Phillips

all color. No. your thank appreciate I you for the thoughts.

Dan Glaser

Okay. Thank you.

please. question Next

Operator

Please Our of Shields KBW. ahead. next question Meyer go comes from

Meyer Shields

and had you've fact left any to XXXX if that wondering worked when the about the because very upfront Dan thanks. I’m you had some look is forward been there XXXX, you with outflow that in revenues Great, firm? anticipated margin client you simplistically, people associated level of the pressure merger, and on you overly producer

Dan Glaser

– of a we puts good know, a mentioned in takes always as and Marsh geographic & but, I lot to mean as before, it it’s expect expand I there’s a and our transaction this margins look anticipation as question, Yes, XXXX, we you to and McLennan. size breadth,

in be adjusted so, we’re we and year it think know, EPS. that margin we think You strong of year will consecutive XXth on expansion our the and

I you of say, people went some when defections. we the business look, level would combination, transaction, expected know, big we know, You into

who And have leave firm, we today look the firm are some who when here people would though are, we’re – preferred sit so, in we when to shape. not even we we left I there the good and where

well, would stronger were market London. of levers by you strong a let’s more are London, are stayed we we and be, You wide know, in in significant where levels in most the majority we’ve say the strong had We people in know, UK and London, today very, very than rather left.

from we're shape so, in great perspective. And that

JLT people, market value in hard-working places to future, amongst us a in] addition, London is mentioned ourselves going existing place you the talented know, additional London people regenerate the using into world. and lot place are left, ability headcount, have of I will and of a and like deliver which then who regenerating the for and the highest our ability so, XX,XXX And to in half smart, the capability, [talents our of our into the the these

you anything it’s that’s than And not so, – know, something more they short-term.

John Doyle

also that been. Marsh collected data. turnover we voluntary it's legacy was Since rate at would note And I the the best

So, perspective. from from stable that perspective, you know, talent year quite it’s

Dan Glaser

follow-up? Meyer, do a you have

Meyer Shields

just quick a one. Yes,

down break X%, going was to for a the So, hit that from few segment, guess Guy the in there revenues to Carpenter’s by an persist quarters? Is divesture. next I

Dan Glaser

Mark, you why that? take don’t

Mark McGivney

schedule, Meyer, and others. positions see column and that that you'll acquisitions it's heading, on

in things we’ll is mapping do to magnified base time-to-time, apples-to-apples. the adjustments and use for ongoing the other divestiture we businesses year-over-year to from just adjust have really in that you from that in are, column changes So, There no impact quarter, Guy was comparison the that Guy know, it be There expenditure, no was small or Carpenter fact revenue Carpenter. that. It the so comparability them. was just should

Dan Glaser

please. question Next

Operator

is coming Morgan. of from next go JP Bhullar Please Jimmy ahead. Our question

Jimmy Bhullar

Hi, good morning.

I think, Oliver question in the last much of shifts is there, volatility So, in just weakness and the couple on first quarters, slowed organic of just of your part growth clients? a versus maybe normal on how that Wyman the business spending the

Dan Glaser

Yes.

Wyman of a revenue, recurring So, strong because the in quarter, slowdown the has and through I've give than less the do want detail? but anticipated on – that had volatility to business they they our in nine mentioned other fourth months have couple you Oliver but past more more topline a had year Scott some the things. they actually

Scott McDonald

significant had and things. really Sure. We the nothing a three that weak happened by there result was was but definitely driven QX,

regularly first We The happens project could pull call. quarter-to-quarter, back we coming and of us on some QX last was which the see movement and signaled volatility. drive that in a our with from a bit little

feels like was thing a and much slowdown last QX. a temporary thing modest, but X% of did in see a did second very grew we a solid we third was, year have the The where we what couple in markets QX

financial that across broadly, and haven’t So the business they weakness, results it it term expectations. the Asia business, like on primarily in but Europe but the sectors, medium and temporary, strong changed was both services showed feels QX was some

to single-digit the as growth purposes sectors said, continue mid-to-high for demand for and across feels we plan regions. revenue across time. We for time being, consulting over And solid

Jimmy Bhullar

business the the into base year? and Thanks, How of had and obviously of better those quarters, base. potentially the on maybe driven are year and that this of quarters versus double in is each – of could Carpenter terms the digit growth much carry this the [indiscernible] Guy by of in couple second momentum this the past you’ve just lowest

Dan Glaser

you Thanks. to… want Peter, do

Peter Hearn

smaller retrocession business but driven business. good combination Jim, of United Asia-Pacific by in it business are third for our us, of record States year quarters the new in are We’ve really being wins both. They had our is growth. also our a and they new

business, very facultative grown which rarely significantly. we about, talk Our has

very a and X, and quarter to it growth. Q’s else of it’s you’ve approach a more those disciplined can small of as but function anything is seen a X All phasing and in sales impact than

Dan Glaser

We pleased for very progress with year. growth the were and the

Next question please.

Operator

of Yaron comes question from Goldman Kinar ahead. next Our Sachs. Please go

Yaron Kinar

initiatives much XXX on have actually integration programs, reinvested versus to question million first of the the My will do morning. cost platform? sense how the line any bottom that greater you good the or in back from is Hi, fall

Dan Glaser

I majority things how fall right it well. projected together. mean, of and that we originally will we will general sense line bottom through go is earnings that when is Obviously, the put the

go the & over that investments a of some bonus them that we will efficiency sort the of So, Marsh pools but lot and developed of McLennan thing, of number that of made have because into is a gains years.

things financial Workday like where when systems know, in world. the you everywhere in HR You world. XX, the everywhere systems, think we’re about Oracle

I and us do gives really by controls a and client functions lot to an lot sales the of our benefit that use adding able reasonably people force should and impact that, extensively existing cost facing that a the our not of organization and We and much. so JLT frontline base we integrate and all in throughout order to seamlessly are take world systems without to

So most drop. and it why reasons – will the that’s one of of

Yaron Kinar

Okay, talked understood. the some And of growth, X% organic from target then to to could questions X% past. in around going back this the be about there growth

guidance do a those higher number? now integration once got to the in conservative to is on you your it been Just the of that talking differences kind two there just guidance, X digit are more or with other near-term looking – through growth that or part? just have structural one of maybe your to – the that to peers X mid-single long-term step-up that organizations Are trying kind about between with a just there and headwinds just square I’m you of or organic better

Dan Glaser

people last are do that in I’m mean, organic had X% range. one you of believe results, to you like, not been I years your XX I say the many we’ve the competitors. are with growth are who we those from X%

have the We’re businesses across but do the we of the that things Oliver of the and across Wyman we strong Mercer. within do. a all breadth certainly some pretty business, competitors unique parts things company including of have formidable and Clearly, we of we our

and direct growth with reason our exchange performance be anybody capabilities many revenue or the over but believe than competitive there our landscape, any no not I We as is time. better wouldn’t where culture I anybody, wouldn’t look I don’t would at our absolutely the to strategic of have our when change competitors competitors, I with or under good positioning our sun

Next question please.

Operator

comes Our Larry ahead. of Please next question Janney. go Greenberg from

Larry Greenberg

for I Thank is much guess Mark. Not ask, you. left to but this

you when that? earlier looked from saves of if initially your and saved am percentage mean, accelerated a you is initially correct? the you bit of expense total than a guidance you walked just little gave this like has so a what think if Just what XXXX from it as I wondering you bit I into you, is wondering know maybe on the in of higher period how now that trajectory

Mark McGivney

the in I guess the by savings, on bit of maybe to this actions expect a the a said, XXXX. charges, full by XXXX, going but the said I come I two full as of year, end of of just the just said XXXX. savings XXX what further to bit over more with Probably that most end little is have the remainder we the the expect impact Larry we realize earlier, to in than generate savings to take the years. XXXX Then the as I little of

Larry Greenberg

That’s it. Thanks.

Mark McGivney

Thank you.

Operator

you. Thank

David Styblo Jefferies. Our go of comes from ahead. next question Please

David Styblo

there. for Thanks the Hi questions.

that modest how with for ask think debt to to keep that want JLT? continue you Just capital Does integrate after to as thinking inclined are XXXX, little a done you on M&A year? I your something are a your guys just paydown a bit or about little after basis bit pretty that, much open plans, on this larger deployment guys more curious effects you things possibly up doing

Dan Glaser

plus should deploy and balance a roughly it between company. share acquisitions We going years of XXXX which double at sake repurchase. like billion put we beyond, since be XXX grow have and to our – look in for out to of year that XXXX we of and acquisitions is most sacrosanct. the number be We part It's a We’ve digit long-term to a and are for dividend that January dollars When circle $X tend that, billion looking to we strategy. the acquisitions core every first. something of about our want couple done X, argument leave

etcetera. very showed over a building said for able we’ve repurchase no that, as Marsh growing terrific the zero revenue favor our reason we’re $X.X share in acquisition EBITDA the margin Agency as with time company a focus And and billion have XXXX we well, got over position at McLennan and we’ve do and to good great & platform, been we in we’ve past, you now look

future. have not just and building in firm was but company to the do with in Marsh, That way across we across strong all the to in kinds order in to continuing we a are We’re a be of enterprise company not that better acquire opportunities called a otherwise business to more our that committed the been. would formidable

we And our in the so, X you [low will and be needed that as to. EBITDA at to billion would when look debt to that so X’s] level and flex the probably at have ability we

in strategy one of you make the to nothing deploy world. So, larger know know you terms companies will that over finding this going to how for year is develops having, certainly we’re of us we there is It’s or great a time. see the mega of $X after after billion certainly acquisition year year

David Styblo

heard for And I be so quick were comment it. heard expected down I a don’t to think the I I business consulting got and forth, margins first house-keeping, about quarter just mix given the Alright, know year-over-year, if a the RIS?

Dan Glaser

has We consulting about make its We specifically wanted recognize visibility because to point and we attributes. that to RIS. a it Yes. own out of did comment our consulting

to give view just our XX is of and full-year it wanted of for we different margin XXth year our the for look You expectation be year so RIS first decline in of had a improvement expect bips declined you that XXXX, as the firm. when business for a and heads-up we expansion quarter, consolidated is the reasons a quarter our know a we a different and kind entire temporary which know the fourth we is variety even for consulting though at margins so the in consulting for the to

Operator

Meredith next ahead. Our comes of question UBS. from go Please Brian

Brian Meredith

quick Hi, thanks. here. Two ones

this on? should the continued we XXXX that the growth, the it curious I kind from slow go fourth had of of know first in quarter, is First, on it, the changes just half EMEA organic expect revenue into down leadership we explained

Dan Glaser

want that? take John, you to

John Doyle

cut sure, there we growth as through think integration that first the well. for results on underlying the good performance or as headwinds works but improved in rest Yes, some with east, the Europe through I some year I way for the year. I way, the think performance see still of middle quarter think, in continental level headwinds, the solid earlier Brian the By in is terrific I drop year, will of last noted

number will I’m factors to So, that quite now leading it was team through certainty somewhat we obviously a all economy so more Brexit, encouraged up hopeful of U.K. ultimately will is determine this that the pick around our are and change. where different continue by there

Dan Glaser

he mind, Marsh in a in bear the to just veteran. leader new also, And was UK,

knows we the previous the years business short like know, more for – he when well mid-term, and than as job, for big You another somebody having XX is had for so worked in mentioned He has not Canada and it coming us, firm ran and in and learn Britain. to we the think that roles. calls, very about we about are the optimistic

great radar third small many sort there the the around of to from different business in believe Britain of new over we a has and be the account is we last businesses have it and years, for we commercial got large in are over us been leadership UK a through going but stretch and now is of to clarity Brexit couple where time.

Brian Meredith

in here. think hopefully your all? Asia quarter the just in any have quick my coronavirus the growth second your Great. Could you fourth business then just in at question, a And one impact Pacific

Dan Glaser

our possible business, be like can clients their we otherwise. any Yes. business, families see is impact doing impact as definitely are the is scenarios there that our the to concern I as situation and mean sure to to and everything early it’s can but to they we’re think that and going through primary our whether or colleagues just Asia assist we too I’m of everybody their monitoring health closely is on

to weeks. just the You plays know, we have in see out this how coming

Operator

Marsh CEO I turn the back to McLennan Glaser, call to Thank would Dan like remarks. of & closing you. any now Companies President and for

Dan Glaser

our for as a Hope this and to joining has their their clients as like on for I and certainly support. day. thank you very us everybody Thank well dedication, much. work good hard thank our morning everybody colleagues for the call

Operator

conference now call. your will ladies today’s participation you conclude That you. Thank Thank now and for may gentlemen, you disconnect.

Marsh & McLennan Companies (MMC) 30 Jan 202019 Q4 Earnings call transcript