MMC - Earnings call transcript Q3 2020 | Marsh & McLennan Companies, Inc.

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Operator

Welcome to the Marsh & McLennan Companies’ Conference Call. Today’s call is being recorded.

Third quarter 2020 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, including certain expectations related to COVID-19 and other matters.

to cause uncertainties materially actual contemplated such subject of a from are by may factors results statements. statements risks 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 this comparable these the and of a Dan McLennan most & refer earnings to For Companies. Glaser, Marsh measures. measures to GAAP the schedule release. reconciliation Please I’ll over President today’s in of now CEO turn to

Dan Glaser

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

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

in necessary are the & the experts are in This The time. we return our to vaccine third amidst quarter Wyman’s prepared Marsh before the Oliver Nevertheless, more consequences some currently has XX-K. are continued the are developed challenging of and provided societies Marsh and unlikely for scenarios, be these We to pandemic of strong where outcomes. continues McLennan, health execution & us the XXXX. end still therapeutics been and pleased adapting conditions long-haul. not stimulus a or model resilient for year the to swiftly of challenges earlier economic company this even continue and likely XXXX. At The resilience Governments of better as healthcare are normal we results, to the impact a pandemic optimistic which times. drive professionals marathon. and is with sprint to year-to-date with a a available, demonstrate McLennan more is predict that even or navigator It unfold.

one recessions worst diversity our nothing to our of in including in Times are in the like We make history We’ve performance the validate strategies these among risk others. cyber, moments management, enhanced circumstances. to-date outstanding issues transformation, of a done day, purpose clients experiencing helping and resilience, matter. short that with that just digital difference healthcare solutions, the is climate, by of

focus our have than Our and is critical demonstrated always even colleagues pandemic. agility. more the and priority a and dedication on ever critical risk, strategy is and more during incredible our Supporting people colleagues is major

engagement Just last results week, most recent survey. the of our we received calling

support been has results, validated which scores. Our engagement showed by record the

At X%. been period, underlying for year-to-date is growth Carpenter execution impressive. Marsh, strong an underlying the at is it’s months. during nine Guy Looking has impact. of this adverse experienced with having growth Consulting first more X% a our our year

allowed as We during crisis. year-to-date. us EPS expense X% the adjusted to as The across saw pleased are has financial strong the effects and discipline not firm the are expansion achieve margin severe we growth

while acquisitions plans. Our We flow track company to time, solid cash increase all continuing enabling free at for us position firm-wide with driving is on same focused dividend significant our our de-leveraging earnings on the with the working growth long-term. capital coupled complete to remain the a achieved and this largely

consolidation. pursuing strategic to We from benefit opportunity are seeing and hires industry

is seeing acquisition in the through We acquired solid. and with capital since XXXX build out most MMA deployed and XXXX, revenue business pipeline we launched to continue the the

are JLT penetration new efficiency. areas the and higher us, integration, as with the lifting focused increase levels growth, In all growth dimensions. of we of markets, our heavy in addition of achieve from on unified opportunities existing well connected, well from to behind benefit as

are proved with shrink agile to savings our even technology, crisis crisis estate reduce of stronger. but executing emerge our travel, The footprint. This & activity. business increase bring will increase the natural over to real this opportunity every and and cross to for our the to greater a In period McLennan and is not flexibility, some of as situation. I enhance long-term and only and workforce operate see satisfaction there the for ways, use that drive shareholders, from ability best well collaboration We accelerant colleague Marsh was client the acted opportunity

We are increasingly help together bringing our businesses clients. to

firm our cyber profile and in aid nearly hand risk solutions and hand working are insurance holistic For of to response deliver advisory to and in the example, businesses remediation. COVID-XX mitigation, every increased cyber

with was office planning, the operational pandemic. from climate bringing one collaboration the global communication the some a data, Guy initiatives risk. the COVID-XX mitigation utilized to are to strategy with climate of a We their growth Wyman’s on initiatives model, consulting, just continued and models navigator and Mercer, and reviews. to Oliver Oliver together risk. by together of support, address most recognized create recently of Wyman clients consulting bank, examples Marsh’s that these data predictive together businesses and By providing held international fatalities, innovation of cases clients also it’s are pandemic accurate the the the CVC. is face to models came overall return support recently Carpenter Oliver of benefit Marsh’s and Underpinning come analytics help the potential. which we combined the analyze are our These in strategies, assist clients for and continue major Wyman proprietary reopening, financial and as and predictive leveraging

on moment insurance current a spend market me P&C conditions. Let

commercial Keep Market X% index consecutive used year-over-year P&C on the property rates second of rate increases average the Global The Global third insurance XX% was in the up in and period. XX% XXth in The lines and professional account are quarter the while up negative XX% marks remain versus quarter XX%, our large first and pricing global XX% increased global quarter in workers’ insurance mind, Insurance and up compensation to marketplace. Marsh financial in the quarter. business. were Index casualty

middle and U.S. However to continues well. accelerate as market pricing small insurance

renewals loss less by continues is the Although to Pricing of evolve. evidenced external and in impacting increases various COVID-XX price time. will capital capital primarily into traditional capacity in they be a of was constrained were the and alternative In this inflows, the COVID-XX rate be These multiple exacerbated the business. headwinds renewals. reduced law Florida only wind, increases courts increases will January reinsurance, are X/X is losses, complicated driven than which and Carpenter’s the of developing react wildfire U.S. index to large determined and impacted interpretation XX% Guy over than year-over-year in for loss wordings regarding profitability willing continued the exercising to by complex X/X price caution in COVID-XX larger at up online expose XX/X policyholder X, Japan magnitude to reflecting and renewals but July at face amount insurer accounts. continued retrocessional losses. of the reinsurers

near pricing. are of a numerous could they overall with and U.S. with currently the history have thankfully end severe selection of in scrutiny markets aggregate degree storms, level as for heightened and as been. continue most risk P&C showing not landfall hurricane named higher record active losses reinsurance seasons while insurance The push the are We a were of making of one tail

delivers. in challenging remain McLennan advice the deliver at that to As & possible coverage these services Marsh value terms. client, the highest we the the advocates goal conditions highlight quality for steadfast and the our best the And market of

the Now, impact turn X%, global adjusted let me to of delivered of third COVID-XX. financial quarter despite performance. our We EPS growth

in $XXX operating operating Wyman career to and Oliver immerses Consulting Consulting, X% margin quarter versus XX% greatest increase third year billion billion. recessionary on Services, revenue of declined continue $XXX an operating conditions. the adjusted growth In X% from ago year-ago previously adjusted flat Risk quarter third basis Underlying quarter, the X%. down to Underlying RIS quarter. to In adjusted Our the consulting. million. X% period. which revenue ago up of an a in Marsh increased points ago. and in X% discipline. at in Guy business revenue the Carpenter, in XXX million versus unchanged XX in $X X% year and income $X.X declined feel overcame quarter a X% income was the points and year impact RIS growth X% benefit Overall, $X.X reflecting EPS $XX and great at on one-time and a reflects expense the the billion, adjusted the basis. ago. by was disclosed and adjusted revenue execution basis continued expanded versus was a our year versus million was solid revenue underlying expanded growth for Total margin income declined revenue increased operating Underlying of part grew a Insurance colleagues X% by

operating points year-to-date that Our basis margin be is adjusted impact ago from environment. far over, versus increased per earnings though adjusted increased share. this COVID-XX strong performance $X.XX per in our share quarter to Even with to we a may challenging X% year well XXX the third and XX.X% are evidence executing

full-year full-year in XXXX, our in revenue RIS for with Consulting. the expect flat by a improved. to has be performance, roughly quarter decline outlook we third excellent offset now our Given growth underlying

a EPS for me With mid over turn in year. expect In Mark adjusted for of generate it let results. more detailed our review we addition, to to single-digit growth the that, full

Mark McGivney

Dan Thank good you, morning. and

growth, in a we increased basis demonstrate our declined an well $XXX basis. and margin crisis. of adjusted executing the million, Overall quarter an to to earnings on in quarter, revenue third $XXX our strong last We’re Operating increase Despite well operating pleased and points income increased XXX year-to-date XX% X% with and year. was results, underlying income modest adjusted through in as with increased resilience X% and quarter adjusted our business revenue over of GAAP revenue underlying we the growth increased the decline EPS the and and first are EPS total to generated $X.XX in as both third flat quarter X% was free of XXXX, of flows how expansion was solid the segments. to for underlying cash the margin months the X%. $X.XX. X% quarter growth nine XX.X%. in million which

income grew XX%. operating adjusted Our

to Insurance increased served adjusted rates to underlying Canada quarter up and or Canada has underlying billion our driven the revenue X% growth MMA. grew margin XXX increased up led to $X.XX. by the in another growth X%, of considering increased for on the XXX the representing of point X% billion, adjusted adjusted Marsh, and of with months basis operating first growth point million in X% In EMEA $XXX up marks points and with Our was drag income X% growth grew revenue XX.X% growth quarter. basis underlying growth. million. and solid XX first was $XXX Pacific basis basis $X.X billion. fiduciary year billion in on adjusted interest the XXX $X.X flat. X%. third growth underlying margin Latin macroeconomic U.S. and XXth $X.X as representing underlying and lower growth delivered income third operating revenue and EPS quarter, XX% the operating to Asia strong to America X%. X% underlying drag was in the adjusted in was RIS months. quarter decline to U.S. A nine with nine in Risk Services, interest This At XX% of X% headwinds. consecutive higher for XX.X%. $X the quarter international the year, XX% basis an and months growth underlying X% to by The nine of income the the of increased income increased operating points quarter for of X%

continues For and was the Marsh underlying Guy $X.X X%. on revenue great revenue first X%. Canada nine quarter, to $XXX both was was a X% months, basis. was million Guy of up while Carpenter’s year. and in the underlying Carpenter billion have U.s. which reported with up flat was at growth international the

previously, quarter of Guy the Carpenter’s benefited As growth third year a from the multi-year of contract. we true-up last in disclosed

X% was continued growth the Excluding solid results and across reflects this underlying the portfolio. quarter in item,

was the crisis. nine the operating adjusted XX.X%. Carpenter’s in $X.X revenue months the of revenue In increased Guy XX while of X% million points the underlying X% to decreased to reflecting was income down X% quarter year, was impact For underlying current margin quarter, $XXX billion, $X.X growth. Consulting, adjusted basis the the third first revenue billion.

the Wealth to year, underlying X% to quarter, continue decline the underlying down in of $X.X basis. For the the underlying was basis end driven an were impact we approximately we nine is down by first growth growth new crisis. business most quarter, $X.X adjusted CIO and billion, months assets was in in This sequential our underlying on quarter wealth business, however, down discretionary revenue X% DB. and the led the Consulting’s increase was health the an where on underlying and $XXX outsourced revenue management $XXX at career under of Mercer’s see marketing. income operating the seeing the a is more strong flat revenue declined projects have billion. funding revenue within decreased by which million. was XX%. X% in billion Careers, and X% from X%

an decline improvement months Wyman’s year, X% $X.X the sales pace revenue on stronger $XXX was of was Mercer X% the on basis. and reflects quarter, of the quarter, solid in at in delivery projects. For basis. second the of Oliver billion, revenue continued underlying and of first underlying decline from down an the million marks a nine This an

first the on decline year, underlying revenue $X.X basis. billion, the of X% at nine of Wyman was For Oliver months an a

corporate. balance $XX million quarter exchange adjusted approximately EPS our expense a in corporate current On of Forbes. $X remaining income to to investment $XX we expect quarter. on loss continue Turning in an investment adjusted in $X.XX immaterial. a our in had contribution will the headwind million a the million on investment primarily a to quarter. Adjusted in in basis, be and the for quarter. the from GAAP of was value in fourth We income we income the million market was basis investment of expect reflecting the outlook, the the $XX foreign of Alexander was change quarter, Based XXXX

XX.X%. benefit quarter and was year. XX% the our adjusted compared in items last effective in a Assuming XX.X% in adjusted expect year, our our XX% the XX% discrete items, impact last the approximately rate effective of to at slight was fourth rate excluding from be adjusted quarter exchange rate XX.X% levels, be quarter. Through the we and first an current third the to was rates fourth the year, expect with nine remain to we tax compared tax rate in effective FX full-year tax third months the with between discrete due expected quarter. XX.X%, part in

full The year, mid Turning have third full $XX full the underlying largely integration, for a pandemic. well for an targeted year. the million the integration and offset face QX of happy ongoing to Carpenter’s single savings, Consulting. year. vast to quarter, a the fourth behind quarter. schedule. could integration continue consists although difficult report of to bringing single-digit the seasonally total to-date which the the at year activity we majority XXXX. for low decline our at to QX is to the I year to the the in to digits work of Guy take last costs $XXX of quarter in remaining XXXX growth Marsh, growth our the application and this, persist and the RIS that migrations we of the result headwind, is we expect outlook small be JLT a for XXXX. is ahead carpenter, comparisons outlook and I’m generate bulk by rest impacted expect incurred underlying and continue growth assumes of a for underlying JLT solid see achieved through in Guy of in Despite we revenue recessionary of conditions We update this which to by the consolidation want million. restructuring be estate, minute provide will technology primarily further done real to the

fourth decline down in be the the for to Mercer’s and quarter underlying expect continue year. full modestly revenue will We

will weakness Finally, persist revenue quarter. fourth through Oliver in the Wyman

decisions. to As live we virus, more normal business learn course moving with progressively a to the we are for

to expect would raising employee We costs outlook growth. single-digit delayed hiring, be impacted associated the mid of due Despite in by the a the to general uptick EPS with but that of and earnings this, adjusted a was year, our fourth strategic quarter are have loosening due activity sequential taken pandemic. to the expenses adjusted restrictions, spending over for related year place we course will

we will increase, We second overall We repayment sequential a reported based was to XXth reduction ended In to outlook, entirety down Mark saw committed combined addition, from the third our this expect cash, remain available. would the and continue to reduce our year. debt of ahead we term end with quarter margin the billion expansion. consecutive its this billion on of Total expect $XXX million overall one-year of maturity. credit which margin quarter year a debt billion, the of $X.X facilities our in outstanding the the and have of at deleveraging end billion at of quarter, $XX.X $XX.X the schedule loan debt of $X.X of reflecting

Our expense of next the million Based expect in mature. scheduled XXX when of $XXX debt $XXX current million. expense we approximately maturity in our on third forecast, quarter is quarter. in was the million senior December notes fourth interest Interest

remains third have we not third Uses are the cash uncertainty the million million to results. totaled commentary, acquisitions of and from of us positions $XX $XXX dividends. for we the a our year-to-date the environment, to repurchase months, in million our taken perspective. and Overall, for third remainder for for secure to quarter acquisitions, uses in billion dividends. shares pleased strong included $X.X shares for navigate not quarter $XXX for $XXX along actions and and totaled $XXX high quarter XXXX. million included we cash of and million with prior with feel nine repurchase continue and plan line we did the the In to-date any liquidity additional crisis with do well While to our performance flexibility the in current first

are track with and despite growth remain Dan. for on We in delivering a the that, the solid reflect turn focused deliver striking And ongoing the our while solid to our and and back colleagues, continuing global resilience balance invest on I’m of to to future. pandemic. we year, to company between right strength our results results today happy it the

Dan Glaser

to Mark. to the we’re Q&A. you, ready operator, and Thank go

Operator

Mike first Suisse. Zaremski Our comes from question Credit Instructions] [Operator with

is open. line Your

Mike Zaremski

growth getting about of Thanks. segment. morning. to love seems hear area questions higher guess incoming where of investors. uncertainty, I’d we’re Good That consulting from a organic more the our to be the I with parts most of level

segment margins some causing negative talk drove growth. pandemic some organic that can improve Europe, uncertainty there the sustainability; Maybe, in seems shutdowns again be segment to in the clearly or despite that there question. you that given less You’ll in a the going forward, about things so more is broad

Dan Glaser

of we Oliver we’re like then an recurring awful career our Mike. With Yes. which we high with many confidence. business business investment our project-based actuarial lot Marsh’s And as consulting within lucky a start by other retirement has have an parts and degrees parts are conditions and of health as business Wyman, business work & consulting, Marsh revenues, general economic business variety business as of businesses based. we’d Sure, I’d project more of have have example. which an our our McLennan. and example, such saying; to businesses to do have

we smarter natural a they navigate uncertainty, understand businesses. it fantastic us high or there’s well. to it we company where overall company terrific that as businesses, So, in times a times but for are level recession on of and make they feel a and pressure those as total businesses the can businesses, outcome market-leading in of is

on during project businesses continue, – together and will more recurring have more and the and the it’s financial certainly, that we’ll So, most grouping it from we so our are that it perspective, times like is felt crisis less the work under feel that these now. pressure that and revenue matters

that type and would beginning of bounce up. and both return be business mode. crisis. back they back up that out can are than the be in it sure companies of the that Then happens into or else, Now, of soon as we picks because than say very crisis. proved have holding financial those to work swift, the has Anything happy businesses be those to this during better I’m as to the as weren’t financial were because case the turn during crisis, usual, growth whether the more not businesses Mike? that get resilient turned

Mike Zaremski

are of momentum account as into gears increase and much all? work Marsh switch the so clients to and be like more rate the accelerated. doesn’t just double-digit to even McLennan It places weak that as – growth a challenging to just are do exposures. to pain translating I more and seeing top-line self-insure se. into increases offset certain feels mean, impacting of – of clients having I’ll expected, we And property lot your you are guys rate now. kind year-on-year insurance, of is casualty tough guys think Yes. that your having per some market’s seeing your I seem that you’re taking you in to there’s corporates carriers has the of – for some at there are & corporates help

Dan Glaser

It’s and question that a is of of increases persisted Guy a and on advocating question tough some justified and for off upon address because Carpenter in for certain to are to we has the client, more a The side a circumstances, based we’re parts in business, the we’re client the years. I’ll Marsh probably doing hand soft in some in one. Marsh level second than this, market it’s the the the John really great can levels environment best ways, of and the Yes. loss

you doing such to increases, survival, in – certain pressure lot a levels of circumstances. of our don’t being of industries, our environment in then in a don’t the way. real with John, increases, like particularly, clients, that environment, the of times and hit where that? speed or want a do I benefits to large feeling ultimately, add this we’re kind insurance the clients harsh think on best it snaps and benefits the clients, we market and our revenue when And really are in Although back it’s tough in for

John Doyle

think Sure, of Dan. the the outcome our got the for very I That’s atomic very, especially transaction’s for that a clients. mix them, Mike, drive challenging given every market environment. obviously, different factors

what have aside and client. exposure aspect So, price that drives to ultimate the the the putting premium charged we gets of

forced risk; being can’t client it’s where retain are our but to retentions more or it’s would circumstances, to clients fewer, whether would risks. very, some few the level retain or we get are but higher Some like, electing limit we in with through like, that very that of frequency, clients more

it the higher could cases, be stress a in Australia, the retention. It example, U.S., meaningful So, there D&O be is UK bindless in where and in amount for of certain could limit market, a are C particular, in down B C. and where cover, they they A do some and some or where coverage; they limits, do only clients buy side by B to buy take electing the

other as obviously as can I number we and risks we the the best drive to are And to we in dynamic present hard so working would of very captive best mention their work well seeing closely formations possible very, the is are an And well. increase with clients our outcome. as

of So, we obviously the can. clients different best as navigate helping a lot strategies, market our

Mike Zaremski

Thank quarter. Nice you.

John Doyle

Thank you.

Dan Glaser

Thank you.

please. Next question,

Operator

comes Elyse question Wells Fargo. Greenspan from with next Our

is line Your open.

Elyse Greenspan

the to I’m in Dan, the how there, RIS the into zoning seems trough today? My to it’s and given starting that obviously business from know persist about pretty guess, could and and know but outlook question, Good QX QX the end revenue fourth talking on maybe, kind can I you on strong first I when lot opening results QX Hi, conditions there’s thanks. what morning. of the we but into these do you for Marsh you said better like, there, XXXX, and thinking we how COVID. slowdown alluded within just could should the things like I about in, I’m of specifically, of on think based been think and we and think you start that Marsh getting backdrop that the we out think resilient remarks, the a know of that QX the quarter of about uncertainty be XXXX, about represented your trough I do off It the specifically? the business guess

Dan Glaser

Yes.

Okay.

rather X% in make just dropped it’s point, one because fiduciary the year-to-date, million $XX in was mix underlying and within reality RIS’s So, to have here with hand there is is income. saying start you income RIS’s growth, depth. I’d question. tremendously at it’s market X% leading third in and look then often to performance want fiduciary X% to half and fiduciary proved address be thrilled with Peter, John it resilient has if I’ll and ignored exclude attributes the they And the of they quarter, off start can than by it. so a RIS in and year-to-date to I quality and I yes, terrific we’re flight income I’ll and also now more $XX types million.

an our it, but in So, loss through the and growing top-line, overcoming really you the it that of not performance. on income more fiduciary overall terrific performance, just line specifically look at bottom was

get better it, to say all on it’s like we’re to want that and to here really it’s the We depends it’s only to real out getting I government the is over. really of it’s COVID question from say say have to response response so say. much economic to to implications the impossible of early going but that too say worst Now, the and government your woods. is so any impossible and

this who kind Oliver our of advised like next governments, in earliest, cetera et our are Wyman, feels many that what at time mentioned experts As within we year. really this the thinking remarks, normal, model to returned

for prepared and have be to this long we so And is a haul long the haul.

one say, society, only resilient. not the that but as also can I we Marsh we as & think McLennan, are things of a that

basis, better here. are the are macro quarter XXXX. a that from should, you third recession sometime, as We get many learning. XXXX know, from better it adapting And is here. we should get of and in XXXX second, of on prognosis

we is trough. it’s be should power it through so scenario. grind call say any the but to would will very And difficult What better, through and I

revenue our start almost will done why we than XX we’ve don’t you grow faster a as with and over years But will expenses John, XX our continue. we Peter? all for circumstances We row that or grow in then hand to in

John Doyle

a is Yes. our focused our and I’m market. pleased very difficult different very results. folks for also was them personal proud thanks, circumstances insurance level, very, what very I very, of Look, and Dan. in are a but on team highly with

at Mark well. performing Our Dan and growth MMA to U.S. very Canada’s continues mentioned mentioned very that the business grow well. was strong.

largest we’re at MGA Africa as specialties. growth MGA different internationally, I’m the in Asia, Victor’s, a performing and in quite the East well and the Our nicely. operations of good in number middle seeing world

pressure, are very well, I some might grew for quarter exception a us. in expect. and aviation course, to to Some growing one buy under But that construction mentioned nicely are clients well. of in actually, We deciding as good lines as credit Mike, is less insurance, a FINPRO is you earlier cyber. energy, with

very in more our the So, U.S. in growing our there. cyber the buy and we’re business and clients the well limit elect moment at particularly seeing UK, is very, to

our ability to go, as in Dan things So, but where well. I’m to pointed perform relatively project difficult out, confident it’s

last it and our strong at just as and very of JLT lot view. and really change as is bringing nicely been a of of in course, we a most. did The of us I together as very, we’re culture weren’t a pandemic, were coming a We a ever clients doing make a other anticipation point year becoming Marsh was our when work we point together. from talent but team, the we’ve need us and time for of on would deep year big

Peter? has there And teamwork so outstanding. the been anyway,

Dan Glaser

So hard with trough, a you it, Peter? comments a talk is – year-to-date, I'll mean, at I Peter, it potential about trough that’s X% take any but it’s to

Peter Hearn

Yes.

normalized As by be we said that tend And before, and and basis, QX be we to negative I think I’ve I seasonally the built up while had three result nature on Carpenter that to have the And consistent one-time, regardless results produce Guy we and inherently given market years, we’ve XXXX demonstrated of plus true some past fact QX conditions. over volatile. small flat couldn’t would a X%. our pleased grown timing. this with from the multi-year more

degree the I prior operating still environment on and and to fear that where COVID-XX. relative uncertainty in, the when year, years the unknown So, when look I both high at at there’s look a of based we’re

Carpenter I look well new record, think on at And we’re growth. I of growth fourth year business business positioned. our XXXX, Guy as then new is track for for our

So of market. Carpenter the very Guy in overall, where – is I how feel positioned good

Dan Glaser

any Elyse, Thanks. follow-ups?

Elyse Greenspan

as well, that’s basis was to. side, improvement, points That you alluded in to third have this. really My year-to-date. COVID-related very a XXX the some is thanks. margin just on some question function I’m the good overall, XXX headwinds that Yes. thorough. Obviously, JLT guys quarter the savings extrapolate margin given next of saves, trying

have said in QX, So, year. guys margin the you the improvement XXX for

how like quarter. kind So that in could trying that that leaves expense of profile the a some the bit out. about well some were persist, saves, just think how for of third a the the turn about COVID range we – saves to there quarter one-time fourth should items could as JLT the think as

Dan Glaser

the good a well, not going, say, just in sort some I because in it So, the that another And So, QX and a mid quarter? controls to would will says, fair our increase and it’s question, be digit adjusted growth happening single Yes. there saying expense of in basically question. it’s in of we’re fair loosening was we’re and what’s year-to-date X% the year we’re for And QX. fourth is will growth question. at year, of but it’s outlook? EPS

to a that our year. this are getting normal progressively down hiring. business more mean and that Hiring pattern there’ll of will more is be back We

relative expense. as years catch-ups step every the cadence down And back but we some as has over revenue and years, we have company to that this, be is fourth level understand natural you actions if that There’ll and of quarter, a the of demonstrated from turnover just take many position to own employee that. want I there’s as we related Our demand XXXX. to company in some past. happen for a say both some sort pent-up will a ourselves And

And an seeded level And down single results. our upward revenue look so in four X% of I years, you quarter every okay. expense of look five those our basis last at XXXX there and on XXXX underlying, then the Including years, in as of at growth X% our five when the out therefore, of annual expense expense was in underlying typical growth, growth year, X% we’ve first claims.

the first because So, as of we couple results five last this quarter top of growth growth at cadence the having that’s were growth In we underlying good X% of expense we overall X% years, expense on an growth expense could and to in were year, line we really over sort X% of the the were growing in company. why be looked at from at second as quarter. underlying went X% a second and quarter having natural expense minus

in discretionary quarter, So the actually was for and clearly, and we bar expense hold four. high the back would set became on a necessary third that we required. what minus

to to three, continue. whether to it’s going So probably still two, that’s minus, I’m minus going right. say minus going minus not be it’s a one, a

So, we expenses the grow we up in year-over-year. growth expense the second quarter, end But which also up sequentially in quarter, fourth versus versus will go to third the quarter. where – our were going are the not

to it the sound, right at that’s So, my from way perspective. look

Elyse Greenspan

question, Next please.

Operator

from with Phil Deutsche Our next question comes Stefano Bank.

Your open. line is

Phil Stefano

morning. Good Thanks. Yes.

two, the uncertainties the delayed And in remarks, you an think about get throughout start So expense or – Dan, is about or world. were all the and actions thinking expenses we bringing just in think they’re back what to for talked totally the your the unfolding and had over you how I and of thought next we catch-up that the and in we do normal whatever understandable as that think that about potential the your was to it year uptake I gives timeframe? prepared the have year confidence warranted, but

Dan Glaser

we world, the all exist well, right. in Yes.

reflect not they’ve the the our materially adapted, materially the at think getting healthcare regards outcomes to than what’s economic environment. general virus, virus in are virus will have in happening better that I end, doctors I’m learned. the stages because are of regard do were better. to early the So professionals and with they the what’s and with happening performance with part saying that things health

globally so quite oftentimes, think not I the make the It’s are but And severe illness. have virus line-up any more the learning Hospitalizations illness, results world are live mean, I importantly, is generally better. of an quite, with a to fatality not and the an well been bit. down. as illness is

being idea decisions the and after are year The within the that next investment made the is will thoughts rise thought are year about so companies. future, sun being made. the And in that process

thing have may our better. this better, this so XXXX should materially And how we And then of be at not but XXXX. than better where on basis feeling two we look second It performed. other it quarters to our be is a should were is and macro businesses be crisis look now in the

expectations top both Our on and were bottom exceeded line.

expectations. held business better it of up consulting non-recurring parts it Our is than our

is Our both strong. Guy RIS very the well phenomenally done And business, circumstances. and result in have Marsh in year-to-date our Carpenter

fully feel more but adaptability say, progressively normal every still we performance let’s step the all has learning out – year, And as that operations. given largely is little and an won’t okay, to we’re example and bit bit working, from the something return we that the our near of Like towards a year. normal. appraisals little confidence to moving like that So, remote can end us a do

same more or like on not. even or And that it’s track that either off year. do they’re for bit everything maybe Zoom important else of awkward a discussions. having this do and in it’s to be going doing terms a yes, great We’re know, because the over thing. We’ll little to track people But job

areas in across this we that the – the further where I’m but of transformation work, parts digital to second find HR, working and the with continue of on quarter. going we’re pressing delayed so really activities. some piece ahead forward and And than the third going We that, the more out early integration in with more things the

Phil Stefano

of about Got based feared just a larger help think thinking of going And the economic benefits RIS couple at may and implications us months you it. that potential our you. versus the on organic, we Thank versus any expectations from through ago competitors for that could was a I and least have? benefit what your hoping maybe out-performance about, merger two

Dan Glaser

through maybe this that, of, appreciated, to our Yes. my where segment year year mean, been mean, Wyman. Oliver I total and terms performance a well I’m saying the as total I in outstanding. the continuing Consultant line shareholders initial company, for as nothing that has is particular and on remarks, a Mercer and they’re in RIS And of of in indicated remarkable company, top challenged in we’re the and I protection execute in short

overall like So, of I think it’s an I as short company, outstanding. said, nothing

professionals wouldn’t trade and And benefit positioning believe consider that for strategic our we up on competitors colleagues our our other. serving ever anyone. us right. clients of terms consolidation the with we our than each supporting they we’re running industry own, standing we as We need from In that in, clients future. And before focused never their more like before, are will options and in now,

Next question, please.

Operator

comes Bhullar question with from next Jimmy Our JPMorgan.

open. is line Your

Jimmy Bhullar

Hi, good morning.

think couple growth I the organic expect pipeline earlier. a any Wyman? based discussion market? same given but negative of the and hard comments bottomed lines you have have Mercer in businesses in at uncertainty I But already, it’s the project you what you’re questions along So, these of the Oliver on say on the or XQ, to seeing mentioned

Dan Glaser

say That’s in impossible to uncertainty. the

as project is as and work the to Oliver business I Mercer to way add so RIS their details the and environment more more, A related can way, think to exposed economic quite in and a that is career in is. project But to Wyman, the quite related a work, part so has Wyman similar Martine that almost in have we Mercer Wyman terms of Mercer A all mind Oliver of good it. to similar different segment. project client of of bear of are in in not Oliver chunk which work. recurring revenue and it’s Mercer vagaries part

we’re by not Scott, pipeline, let but project environment. the saying off uncertain little me, to I’ll first and and a bit hand start about me So highly outlook let talk Martine, then

to but anything stage or this at here, go therefore, of terms it’s Martine? definitively say we And where so impossible in trough from

Martine Ferland

Thank Absolutely. Yes. you, Dan.

as So, the us discretionary most career said, project. has for that as is the you unit

some clients and reinvention, their reduced So, the we rewards exposed to were demand economic their with very workforce the to same work, the regular but consulting of conditions their work, help able return we’ve and seen a to at It’s though. the model, transformation. there time,

the off voluntary lots level clients. support lay related of our And therefore, mental delights. platform and demand to had the for pivot part will benefit better health If a QX, we from whether that’s as very on wellness our and solution digital But but the lock health, aspects our we’re conditions Darwin example, say what had a counts and business out headwinds of has health seeing way. we’ve see downs because There’s say, the a also be it to to So, see than our in that issues we there’s for of of health, and I health been continuing. as that super we to pleased outcome some resilient. there that health such at it’s of cannot QX, we’re head course, depending related been business, we

regulatory Although for that work been is not large XXXX, it’s business, the severe. is on so finally recurring. of And wealth too business the there’s far a part that wealth

project can it OCIO but QX calmed of work year, as little spot of the had bit is first in less the versus be half bright the resilient. business. down our markets the a So We’ve very

a So and performance market, where when you the strong then our similar market we’ve and had strong during governance, assets, crisis seen to very on a business And very inflows. global wants implemented transaction we uncertainty but financial agility net capital QX, improved see volatility, the of slight pattern client also quality. the asset in

inflows very strong very strong building that seeing in we’re and business. So, pipeline

for that’s So, Mercer.

Dan Glaser

quarters XX%. crisis, financial Wyman a including row, in quarters Thank two Thank six in Oliver decline Then you. you. the at

than So, your been pipeline? financial manageable at want talk the you Scott, the more end, has about but far this during to crisis,

Scott McDonald

you and give I’ll try Jimmy. color, Sure, some

but the the We the good severity our strategic shifted for the throughout, and and it’s improving portfolio like recent We quarter, really Think sales position have operational really pretty us with contraction we in a we’re been challenges just times dealt out they shift been competitive fruitful they’ve bad with revenues, QX faced. a was back a do financial to the crisis, solid. and sometime rates remain focusing severe of I’d to get in track. no to as we pandemic. had our we of business but as on crisis. the And get But most need global can’t second confidence need the growth And strong. back by there’s if reason economy that next our driven clients know, year. historical to very feel about services our clients to and you happens, think, As the say not there it pretty clients, future, on help we manage immediate back our we’ve QX of end as issues emergency stress,

Jimmy Bhullar

Okay. on some that back buy of bought years. Thank share each And you on reluctance stock have year. you you. lot, the several back your a this buybacks but Not just last

have the reason the – and what’s been expected year. So, than results this better actually

macro it Is what’s back? or reasoning that. not valuation like the rationale insight Any So, stocks’ deals? buying the into behind

Dan Glaser

Sure.

Mark over Let, hand to me McGivney.

So, Mark?

Mark McGivney

capital the us. Sure. guidance year gave I great management we in capital actually, deployment. Hey Remember one generation been year the for Jimmy. the back a to whole story this cash has some earlier of about

you for we’re on year, with priority We’re largely into acquisitions track the And the the on of chunk largely dividend, I leveraging, and of plans. all those and track the pandemic the those. said, coming as big remember if with despite

our very but M&A it’s year pandemic, Dan as I year value raised the as for an despite we dividend. a of acquired. actually So, and M&A, remarkable got terms active think in biggest said revenue deal We’ve earlier,

fourth may big more front, that’s activity little year in see debt what a on paid active going down. the M&A been we this bit committed And fourth the to to you’re actually to see was in we’ve So, a de-leveraging And the going and and of M&A really we’re quarter. still a be quarter.

going we’re coming into plans say year. original be So coming into with the very the repurchase in the coming and that year, the cards was we consistent share much didn’t to in

Dan Glaser

to So where, priority, we’ve the ahead that future priority dividend, more for repurchase approach of would as put back of are sheet. into to share repurchase our management, capital bring balanced us building you we share acquisitions dividends ahead we’ve relative the on to balance and put before, said cash

XXXX balanced So, more approach. where a see you be of for a may pattern us more normal

Jimmy Bhullar

Thank you.

Dan Glaser

Next question, please.

Operator

KBW. Shields with Meyer from comes question next Our

is line open. Your

Meyer Shields

the to quarter? be year you’re would don’t Thanks. I��m Good overall, than morning. the fourth this to flat growth full if if expecting be overthinking imply quarter that this, worse I third might know but organic have

Dan Glaser

supplies we’re that I you giving what the The Oliver have saying, under we probably will were basically year pressure. of mean, think the and Wyman our for I remain line, outlook will the amount quarter. on Mercer top

in So And pressure, quarter. category continuing is RIS feel that would negative in and Marsh of In the grow around digit Guy will but growth. as segment a the Carpenter Mercer single low fourth grow. Carpenter more would the total,

point the expense reduction wouldn’t bit what reduction So, the than significant we in second to reduction that quarter. line third less different in we’ve little levels be the that the a I top that expense quarter in jump did all conclusion of we’ve the operating. fourth And expense is sequentially will What quarter. our seen that to been less

negative the rest what our expenses our but be faster growth expect a number. than it pace in fourth a quarter in of at expense so will to rise still than, the year, the has we And

Meyer Shields

that’s No, Understood. helpful. Okay.

talk I’m in what, terms things of the little be hires hoping I bit, perspective of if that that on the terms And us was our whether a of will as of big terms that in outside. of example from it call something the – expenses. an context of in Dan recovering mentioned was about early the for notice One enough in to you strategic sorry, good

Dan Glaser

people XX% to notice going into organization going looking which any X,XXX means you’re people expense coming in got to given mean, be you not in I X,XXX normal you year. that the turnover, to a colleague that nearly our look base. if at be and we’ve enough world, are probably It’s take big around it, at about year, the

significant have strategic So, we space. even would of if regular recruitment we absorb it our hiring, levels strategic in expense

might, you’re expenses up. pop year, over a the but not that. it to you of a course and see result in going of an a quarter, mean, wouldn’t turn I as odd So,

Meyer Shields

Perfect. so Okay. Thanks much.

Operator

you. Thank

Yaron with Goldman Our next from question comes Kinar Sachs.

Your line now is open.

Yaron Kinar

good question you, here. some expenses my some like and this in are year. is XXXX. trying I for down expect in squeezing me just connect to guess It morning, first Thank dots, nicely of revenue the still thanks sounds you pressure

that think still And Just, into year-over-year I expenses environment. some you’ve dealing XXXX. would managed with as very very, the potentially well COVID over we’re expense years. a clearly pressure would create

deal I going year? how year-over-year that you to guess, do So, on particular with pressure next

Dan Glaser

is of first all, all expense revenue mean, growth I function of growth. a

in to margins be expect the up for We consecutive year. our XXXX XXth

general be there should well. decent better year should expect relative better because health economic as environment We and to XXXX outcomes XXXX, a be to the be

that more. And is perspective, from virus the with friend live to learning a were our bit. time mentioned, I as So, little

So, optimistic. I’m

It’s line I line the back strong, positioning. we’re not, at optimistic revenue will and having top amounts on and certainly the we’ve large be early out. a mean, better think and At but all the XXXX strategic optimistic. We great environment, overall come a going it’s expense performance point control look back at overall of of this not our I within is we’re bottom year, in some I we’ll base, XXXX look massive about that gives than great too revenue, Consulting bounce because XXXX, foundation. or company. it’s done whether non-recurring early expected see to we’ve get us RIS

and position to working We’re we’re good it. a get XXXX now ready to for ourselves to

Yaron Kinar

third business offer new If my helpful? it. and quarter, specific rates I in of any seeing improving then improvement the can you is look of sequentially overall second Got to generation? question what terms seeing new you first second that on retention be in quarter, And business, would rates color Are quarter, maybe Marsh. you overall are retention

Dan Glaser

dig to want John, John. to off in there? hand I’ll Sure.

John Doyle

the very better quarter. than had year been strong, is it’s retention business entire very a strong it’s the prior year. new quarter Client strong and in first throughout Sure. a been, We

year-over-year. down board. very it’s start third year, external off to new pleased a in and quarter not again, the given So, environment businesses we and the and But slightly got good very, with the the down across second very to the outcome,

for business the MMA grew example, in So, third quarter. nicely its new

we’re navigating So, the economic I’m challenges. encouraged how by

Yaron Kinar

though And how sequentially? that be, you’re just face it’s I but I’m to I guess as pressures, get year-over-year, specifically some going because on sequential curious it’s to changes, going developing

John Doyle

course of don’t I but me, the numbers quarters even our front of year. those – have there aren’t the throughout in

I risk more and seen recurring type business led think there’s again, slowdown economic left do the quality rep in year-over-year on We’ve pickup an for So, business. would the stress I’m we’ve metric. is a less you more transaction It’s But areas, of a Clearly, to and couple business flight important is think things, opportunity lesser sure warranty output of late. I – the where a expect in as construction, front to related seen us. infrastructure the new right? where

Dan Glaser

year, winning is, not very the it last significant. way that Yaron business It’s at overall to the new that new still is environment, is was companies, is think also of relative but given strong soft. it as just the as Marsh I look to other business amount

I think that’s our…

Operator

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

Dan Glaser

to you these quarter. through joining hard we all our look continued next for dedication call In I you. us you I to for challenging the support. as XX,XXX to closing, thank on times. and with clients want work thank for their Thank forward also want their work this I thank our So colleagues speaking morning.

Operator

today’s your Ladies for and gentlemen, Thank conference. you participation. this concludes

disconnect. You may now

Marsh & McLennan Companies (MMC) 30 Oct 202020 Q3 Earnings call transcript