Earnings call transcript Q2 2023

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Operator

Welcome to Marsh McLennan’s Earnings Conference Call. Today's call is being recorded.

Second quarter 2023 financial results and supplemental information were issued earlier this morning. They are available on the company's website at marshmclennan.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 on and most the are Form recent in website. factors, discussion XX-K, this included our detailed filings Marsh most more release for McLennan a please For available refer our our SEC all earnings quarter which those recent of

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

to Instructions]. the refer measures closely a comparable in please these For reconciliation measures, most to today's GAAP of earnings schedule the release. [Operator

I'll John of CEO this now Marsh turn over Doyle, President to McLennan. and

John Q. Doyle

Marsh Good us earlier McLennan. to morning, results joining Doyle, reported you today. quarter and for discuss I'm our of President thank second John CEO and

Mark of is this Guy Studer Martine and Relations. the CFO, businesses; of Also Joining our Oliver our of Mercer, us Head is and Carpenter, Klisura South morning CEOs me of Dean Wyman. Sarah Investor Nick Martin DeWitt, on McGivney, of Ferland of Marsh, the call with

growth second were over and of adjusted excellent. businesses well our best across the generated extended geographies underlying results McLennan and double-digit decades revenue EPS. growth quarterly quarter two We in performed Marsh in run

of with revenue XX% line of Top continued momentum in growth XX% on the year. operating underlying a income ago. versus year top Adjusted growth last quarter second grew XX%

EPS basis expanded XX%. XXX of to adjusted the and compared margin points operating adjusted Our grew quarter XXXX second

quarterly share our raised XX% $X.XX of repurchases also We quarter. million by completed the to and dividend during $XXX

geopolitical when environment. the with context macroeconomic performance, and of especially pleased the in our I'm viewed current

given central tightening been While economies and resilient, geopolitical the persistent U.S. significant have major uncertainty bank other instability. there continued inflation, and remain

to well. perform However, continue we

supportive in are As the of past, are there we growth. have our that factors discussed

we positioned challenging both to our are than We a perform believe revenues economic cycles. resilience manage grow periods. in good track record to and business We across well also faster and have of expenses

improving business shift and engagement, facing to investments growth And deliberately faster made are contributing to meaningful growth. market sales our our which client mix operations to We've talent in areas. and continue we

the strategy we deliver and is McLennan's while A economy. risk, clients greater and in and macroeconomic Ukraine's So, work environment opportunity to remains example through people. see our value capabilities Marsh good aid to geopolitical leadership to volatile,

Our together I four June, attended mobilizing expertise are future and Prime unique conference UK support reconstruction recovery hosted businesses Ukrainian their In Rishi our Sunak. by the Minister recovery efforts. to

help our hosting of and offices honor of a with Ukraine's at officials where British the have proposals announced We London Ukrainian recovery. to delegation we

over investment GX, the propose ensure this would for may suggest trillion To projects. is be themselves effort. the a from reconstruction protect that risk. risk of end, creation required insurance $X be this not pool war war Yet to insurance available Ukraine forthcoming we estimates investors Some for capital commercial until will can and

and and also project capital. insurance We the the to and McLennan's insurers represents critical first risk information and Marsh create a By step Ukrainian expertise a on This that risks. draws effective and for modeling, we the announced will commercial Ukrainians. platform targeted industry of government war partner assessment unlock leverages to by the enabling provided offer data data for with it

post to consider we a way Oliver the move in leverages government economy partnered At would McLennan, at Marsh Ukrainian it to strategy. strengths to privilege these a endeavors. opportunity. a also colleagues to Our beyond Wyman This Ukraine's resilience with develop transformation reposition that support war national

on initiatives update Now to moment provide to strategic discussed I'd quarter. the we last a like an take

the and the These As region as while same businesses. the through Canada in maintaining client propositions enhanced and a we International driving quarter, McLennan and leaders. are as collaboration, the of country Marsh time appointed reminder, first impact for at leaders leaders U.S. well individual new value

to benefits collective experience. We new and reduce the harness complexity yielding ways finding data, evolving and client rationalized client’s same opportunity our At we operate, approach for is sets we improving estate benefits and where the time, are skill are our possibilities. of The is taking already organize expertise real and This bringing provide scale, footprint. technology, the aim and are colleague and our capabilities also value. insights allows greater our reduce workforce to to impact. realign actions us needs, meet to and to with there challenges This realize our

we quarter, total $XXX savings million $XXX savings to we these cost million. by achieve with million $XXX last said of expect of to As XXXX roughly total

actions Our colleague and value more drive proposition efficient be and the opportunity higher connected. to an are restructuring collaboration go-to-market growth, enhance and

and rate and Global last financial mid-year were quarter. in insurance of insurance conditions Cyber Casualty primary pricing insurance single-digit Marsh XX% low Property rates versus index after to down X% with market the increased Insurance Workers' increases first digits. was renewals. as up single the high reinsurance In market was X% quarter. professional the stabilized several low years range. at down the conditions, persisted increases. in single-digits continued insurance challenging same rates liability overall and up market Turning reinsurance, pricing compensation

than Reinsurers were the firm terms. and improved deploying and increases the rate at although showed January market X, more significant, interest pricing disciplined remained capacity in given

clients mitigated rates rate adjusted of about property impact loss with XX% ceded pricing. higher on average by impacted increases Global The higher retentions. premiums reinsurance seeing increased cat on risk was

continued across loss the prior and social driven casualty lines about development year inflation. pressure most by economic pricing side, concerns and On

We these help manage to clients market conditions. dynamic continue

XX%. $X.XX RIS and On adjusted which underlying Now grew XX% second up basis, let an revenue performance. in XX% a Underlying our in X% from EPS ago. We grew revenue year to consulting. me turn is generated quarter of financial

Guy adjusted growth Overall, of basis versus XX%, year-over-year. quarter XX% points and Oliver Carpenter income was Marsh XXX saw XX%. and grew margin up second Wyman adjusted expanded our operating XX% operating X% the

up points. year ago. our XX% expanded operating XX% XX% grew basis revenue Adjusted the six For margin $X.XX months, and a grew adjusted consolidated XXX basis. an from was EPS underlying income on operating Adjusted

Turning well to are for year in positioned XXXX. outlook, a strong we our

of In This outlook single-digits. reflects out given turn can full-year uncertain to expect a different be but revenue remains macro and our outlook, to high assumptions. we terms momentum, than current the continuation underlying be as of trends, noted, growth our we revenue

to expansion we the As full-year in for outlook, for expect and the continue EPS. margin bottom-line strong growth adjusted

colleagues uncertain initiatives I'm performance, and our to execution delivered demonstrates their strategic which Overall, communities. of second environment. grateful proud our on and business they momentum quarter determination the I'm despite macro clients, our and our across focus shareholders continued value for and our to an

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

Mark McGivney

morning. good and John, you, Thank

results momentum underlying margin in adjusted mid-teens continued EPS outstanding growth and Our were growth, with solid second quarter expansion.

and operating Our to income $X.X income $X.X billion also consolidated with XX%. growth was adjusted revenue up billion increased underlying Operating $X.X X% billion was XX%. of

Our from the raises margin XXX our the as the XXXX, points XX.X% in last adjusted operating and investments we continued annual increased mentioned such headwinds we in made timing quarter. good result the basis T&E to that talent given a of expenses rebound

GAAP was XX% $X.XX EPS adjusted EPS and year. $X.XX was up over last

six first growth of the XX%. was For revenue underlying months XXXX,

XX% adjusted to billion. income $X.X Our operating grew

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

on XX% the higher best underlying nearly and services, X% in and second result $X.X the This consecutive compared in of continues risk an marks ninth two XX% quarter insurance growth RIS underlying ago, up or or stretch at with billion basis. was quarter a growth year decades. Looking revenue of

increased margin income and XX% to operating XX% operating to Adjusted Operating $X.X billion increased to XXX basis our income points billon. $X.X adjusted expanded XX.X%.

margin growth with of and points For RIS underlying revenue the billion was XX% in XX.X%. income increased billion $X.X months the basis year, of to XXX first increased the Adjusted to operating six XX%. $X.X

At the excellent quarter X% the business strong comes year in on quarter on top of last ago new billion retention. growth quarter year. of in the was Marsh, underlying Growth XX% second basis. reflected an a revenue $X up second from and in X% This or

X% U.S. Latin quarter. was In Canada, the In was X%. XX% was XX%, X% America Asia up underlying Pacific and of was growth of in on quarter second international, underlying grew XXXX. up and growth comes the top EMEA and XX% for

was of months underlying was Marsh's year, billion Canada X%. with the international revenue of XX%. U.S. first the and $X.X up For and grew X% six growth

quarter, Guy global by or in all and specialties. strong XX% across growth Carpenter's regions the basis underlying on an revenue was driven $XXX up XX% million

Carpenter six first the billion $X.X of underlying the For Guy of year, generated revenue months and growth. XX%

revenue income XX.X% adjusted of operating year. billion X% $X.X In the year was X% from on up to segment, XX.X% million. in million. compared operating last quarter or quarter second Adjusted $XXX basis. underlying income was was the Consulting The increased X% margin ago second a Consulting an to $XXX operating

in the in X% Mercer's representing to the $X.X six underlying X% Consulting by higher revenue Investment the of XXXX, For X% months quarter, growth. delivered income quarter adjusted growth up Mercer. X% Wealth was management on operating revenue benefits. million. continued $XXX modest driven increased $X.X grew defined of billion consecutive was representing of growth underlying an billion X% or strength also and basis, first ninth in underlying

Our transaction was driven quarter net segments XX% strength assets last all XX% and markets, our up capital sequentially and the and with end and the to growth quarter in regions. under Health $XXX of XX% were rebound was underlying at modest management second Growth in positive the flows of Westpac. billion second compared reflected by year. a

quarter of XX% the increased top second on revenue Career of X% growth in year. last

first talent strategy six transformation growth. advice of and the at see was year, solutions. to rewards, We Mercer months with continue $X.X and With demand revenue workforce X% underlying billion for

the quarter the year, of an increase first business on and Americas. in basis. strength was on revenue Europe rebound of billion, an Middle six $XXX reflected a underlying Oliver months at Oliver in increase an in the and revenue $X.X continued East and Wyman's underlying an million, XX% X% was the Wyman of With

headwind a quarter. Foreign exchange was $X.XX the in second

we a quarter, restructuring current and rates lease in in our costs of and which program quarter benefit FX remain These of at $XX $X.XX be approximately fourth to We levels, relates severance, in million to $XX million the the exchange related to announced technology a charges reported headwind $X.XX expect the the in total fourth costs environment. exits quarter. we third Assuming streamlining include the quarter.

expect to $XXX savings total million. XXXX. the $XXX this in to approximately now We remaining date, continue of costs expect million and we’ve $XXX To most in to roughly currently charges million expect and XXXX, be program of incur realize approximately expect million XXXX. to to still $XXX to of total achieve by under We million charges $XXX incurred

net $XX the in million quarter. benefit Our was other credit

on credit we Investment adjusted GAAP year benefit For basis. quarter the million will million $X other expect $XXX million. the second full basis an a be on about in net was our $X XXXX, and income

forecast, million second in reflects interest This and in XXXX. current quarter quarter million expense our expect on on of quarter Based management. short second in expense term $XXX up the approximately borrowings, interest higher year. capital working the an $XXX the was $XXX debt $XXX in we and third from Interest full increase efficient million for use approximately million we long-term which of rates the for

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

item in discrete Our for the favorable discrete both tax this from periods compensation. largest quarter items. was rate The benefited share-based accounting

Excluding XX% discrete positive items which adjusted tax and guidance XX.X%. was tax reasonable rate on for a our it environment, discrete give do Based assume tax our XXXX. rate rate, can approximately to we between be negative. forward project around items, we or the effective XX% current is When not

management capital $XX.X billion. the quarter we sheet, Turning balance debt of with to total ended and our

notes debt Our maturity is mature. $XXX next of senior XXXX, scheduled when million October

$X level We of continue The develops. will XXXX to capital billion the on deploy depend dividends, approximately across how repurchase share of pipeline to share ultimate repurchases. and expect acquisitions M&A in

marking Last This couple XX% by increase, confidence in largest years, our dividend XXth our we in raised growth growth. our year week, our dividend strong the past consecutive earnings XX outlook. of years the over reflects of quarterly

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

repurchases. cash $XXX $XXX dividends, uses million million totaled and and months, for for billion included acquisitions share for million of $XXX six first $X.X The

now results strong full revenue first the the our half, expect year. for growth high-single-digit in we Given underlying

as margin forward. expect to there continue but the the uncertainty today, strong and mentioned, environment full based be adjusted John our EPS. This in We looking guidance to growth expansion for year continues is in on outlook

current great our XXXX. different another for So outcomes excellent leaves assumptions. be our us start Overall, well-positioned year in than could

I'm And back to with that, John. it turn to, happy

John Q. Doyle

Q&A. Thank you, Mark. Operator, begin we're to ready

Operator

comes now Fargo. will And [Operator we Instructions]. the question Certainly, Greenspan begin session. with from question-and-answer line first the of Elyse Wells our

Elyse Greenspan

to guidance full Hi, high-single-digits. year first your thanks. question, guys the Good morning. you updated organic My growth for

growth organic through strong started-off year first guys at the You six pretty the XX% months.

high-single-digits kind So, about back expect you then to get year? full some think the you get might in investment the of sense, are embedded a right fiduciary guide, the for trying half, as moderation to see in the that within back businesses you what to And half the of what income year? for assuming

John Q. Doyle

out Good Yes, the with growth, non-core morning, as I I remains client of we're environment although my been mix to investing engagement. some our and Elyse. in non-core better the business year-to-date, operations, a pointed markets, pricing, remarks, macro good markets. growth in -- the tailwinds. labor Thanks sold tight and sale We've strong said, the quite shifting question. pleased We've for of of recently prepared growth businesses we've our announced talent, been I’m But, supportive business. sales as volatile inflation,

the our quite hard working been of company. we've So, positive. And, profile the remains growth outlook at very

we year. feel like high-single-digits, terrific well-positioned. guidance to it’s our of I So, again a upped we're the start

is macro going of and we'll second a I very in give likely continue fiduciary the second think executing half well. in in volatile team good as and you have income, the Our marketplace, growth the the well second it guidance We're of not environment, to quarter, growth we looked like that on in to expect half. obviously saw specific meaningful what but spite

Elyse Greenspan

second then on my And question Thanks. margin. is

up this the had expense the stand year, margin pointed year. to other half QX, back right QX throughout come that expect when that see and you the QX the Does than that higher guys and or lower million savings $XXX the higher spread improvement improvement the the those in quarters You the with of all savings does now would do XXXX, in the still in and was year? pick

John Q. Doyle

and Mark ask year-to-date. a improvement expect not primary was the bps and the and restructuring today investing I'll to quarter the bps in but with time, more second objective, margins the year-to-date XXX the expense do in very we to And, everyone, revenue balance the to pleased XXX and outcome Yes, talk margin program, over delivering trying constantly reminder about us, for for than quarter, it's but just for grow we're future. I with

right. getting we're balance think I that

that. less and shows pleased improvement second again, But earnings We remarks where the about I'm Our talked topline of growth behind in his both in drivers to in quite we quarter, with that. prepared did guide some Mark the are.

again you restructuring program. And, margin maybe the can solid talk We expansion year. expect about for the XXth Mark,

Mark McGivney

overall year Yes. the And, It the take And we've Hi, and bad a gotten just bit the how little executing fact say savings Elyse, the assume little be $XXX gotten Elyse, It's you? savings we're last in said comes bit would million I wouldn't quicker. well, a across quicker. a to we've we just quarter, you that that the year. the as see left just are we did up ratably same just thing. $XXX assumption million. outlook the to added reflects for but at that this at

year in would opposed the a over increase half. ratable the all back I the to assume course spreading of coming as just So,

John Q. Doyle

have we bit expense half a from comps do expense -- the on second better And line. the of

Elyse. question? you, thank next So, Operator,

Operator

you. of our question J.P. comes Bhullar line the Thank Morgan. Jimmy And from next with

Jimmy Bhullar

Hey, good morning.

up peers, and I activity First, go you've fully past fast there question that sort years. or couple hiring that revenues of it and part your fully of rate the tailwind more the on and been business, from the the to from at has Is there? quarters benefit of just results your than is might several grown in the reflected over the that done ramped a better last some have generally in larger pretty think a you've of just RIS

John Q. Doyle

Yes. Jimmy. Thanks,

pleased your quite one some we’re pick of said, words a our I hiring. just with growth, from up benefit As

quite business, including As noted, of hard operations, as talent, bringing we've I in engagement, improving shifting been inorganic client in made we working investing at the well. terrific sales mix investments -- our

that's it's much lateral in hiring the so, market. the And than of some more

Culturally, better we we've were they're -- quite were thoughtful as good as those who helping pointed returns from we financial that, the out hiring just been the we only said very with into with not grow, they're in well. us about, just did, organization I we brought pleased past And, Having the we've but not and investments. pleased us the outcome. making not gotten and

So, we're with quite pleased those investments.

Jimmy Bhullar

go just you sorry, And mentioned -- ahead. then

John Q. Doyle

sorry, I'm you do No, follow-up? have a

Jimmy Bhullar

factors and growth GDP Yes, say is tailwinds a I equity the inflation's market was it most strong, just of and to high, going macro geopolitical you of the from than and like times is outside headwinds, they’re held mentioned obviously bunch in. Macro, more understandable. are geopolitical seems the

what elaborate inflation, obviously, is as negative you a the just bit that and higher as side is little is a positive -- macro your could own offset a it's the elevated, on that you it your expenses if that a earnings business? on but your on stays it positive see maybe specifically So, well is overall benefit on it on or growth, just by in

John Q. Doyle

question. a has to but a I needle persistent. bit, economy good quite it's the I again, trying right? was the thread resilient, inflation remains Yes, mean, been

reduce down here, to not impact bank beginning not the just in to their United level obviously central on inflation, other see the You're an to seems be here but that come with market mission have the in States, the that's targeting, it to going at markets. but

recession still is world And the so, recession. of currently. have do meaningful have exposure in And parts other I in we fact, risk a think there we of in where economies,

We're bit say, I I for markets expenses, than well, an real year-over-year, out some the confront better growth you markets, we but think overall, to again inflationary we've not -- -- and nominal think inflation, environment me right, and a GDP pointed a demand rather it's some while benefit. have you perspective. company. improved indicator beneficial think we excuse overall, do in GDP I is to So from in it us would a of of our business but had equity the is And immune a investment headwinds from had our that challenges equity of

pleased year-to-date what's improving we're Mercer growth an with investments. profile Although, in

Operator, question? next you, Thank Jimmy.

Operator

next our question comes Markets. line And you. Michael BMO the Thank Capital of from with Zaremski

Michael Zaremski

great. Hey,

maybe try question, to question ask Jimmy's differently. the First I'll

stronger organic share way expectations, was whether great. stronger excess portion conditions market the offer were which maybe of versus maybe can entire RIS market any on expected? entire just thoughts kind you specifically, than a overall material the that much in for industry growth Any is than of taking segment So, growth some consensus the

John Q. Doyle

It's impacts, of a course. mix of

with So, to it's started say, down come to difficult Mike. real you've see in again, inflation precision, the United But here States.

and quite we a and -- saw pricing to you're XXXX headwinds. in pricing. aggressively at be passive positive again, -- than remain to more or many GDP P&C and slow, we've the well, moderated our tailwinds have growth growth on that improve markets working markets profile labor for to of in as overall, it's And a though XXXX bit least compared quarter matter to the seeing the GDP a factor. tight candidly certainly shift You been the But company just P&C mix index not decade,

risk terrific to we're for we as right? in So well. I risk think the again, thread remains revenue Jimmy the when, well, there's geopolitical a first again, asked trying So obviously second mention what a I between the the too, a and of what's bit, the but growth talked outlook half, macro a to economy as needle the about but half pleased just is forgot year -- been question terrific environment

Michael Zaremski

flow at clip. flow like a I'm big looks look comments, faster on that's helpful. and if math Do pretty growing to follow up of if operations, it a My cash the ups at cash any the it's CapEx, cash step point your than case, That's you Okay. doing from at grow this net take conversion -- will year? expect you if flow free earnings this right,

John Q. Doyle

have out to talk flow lumpier in be in we Mark outlook growth a for could the earnings I'll the ask, past growth. It free about demonstrated and bit as past, maybe pointed but the than cash

Mark McGivney

out that too I cash the growth any even in cash be has quite consistently a terrific Mike. year, But tracked tend period us, free double early long cash flow you last later in I then would we've as in there because for not much we've, up say, free in try a -- volatile. a talked the as earnings of have growth year, what issue, really flow nicely. our our the on outlook to base that be thanks earnings in as the to lower well. time know our we're about, cash emphasize point look, was low digit we we quarter, decade cash free can you growth Yes, or of run quarter it a focusing we've Yes, had flows would confident free growth future and in be it’s as is, pretty second that strong especially year. for our as to double-digit over the and track of flow with to careful closely a year run continued If early bit we flow growth expect in really

John Q. Doyle

Thank Operator, next Mike. you, question?

Operator

our And next line comes Cox you. from the Sachs. of Robert with question Goldman Thank

Robert Cox

my taking question. for thanks Hey,

I look and you those the domestically domestically over But, the been are you if you both at Just years, excited next most look which about? next internationally, thinking year business, has the the and at if about and five Marsh two next growth areas internationally. realize and strong say, those

John Q. Doyle

past this year. But well. well-positioned. as guidance Well, what we're we're said, we've not past, to today given I going performing revenue give We're

you talk and talent believe think market, for to year the maybe of best Martin rest about ask, see do so bit little share, I Martin? the year. the I'll and we have but capturing far what the growth, are I a we this in the

Martin South

Thanks, John.

of ’XX, is which we top second great growth of quarter, we of strong X%, on XX% in of said, which year posted the second growth organic X%. full a had quarter we As in better and the than

growth. really X%, specialties, our it’s XX%, part has balance Canada the risk was was of strong X%. growth strong. across was growth said, energy growth EMEA U.S. As double-digit business, international XX%, and and APAC nice I'd aviation, the you specialties the advisor power a was The geographies. Credit Latin been, strong. XX%, MMB great America Renewal very future, construction, of all advisory say strong. is strong, balance the

both it's business So, board, of renewal. nice the and a new just mix business across

John Q. Doyle

the Martin. has And the growth addition of follow-up, outstanding again, Thanks, just total. been have consistency Yes. in to Rob? you a Do

Robert Cox

thanks. Yes,

maybe so it Wyman, a see came number to And points switching the there reflecting the of last back pipeline Oliver above been And you guided guys late, growth growth is well have from And as you in quarter. in had levels that? of looking positive economic half? data like do the

John Q. Doyle

Yes, we're – thanks Rob.

with about Oliver Wyman. detail. more a I'll very to ask Nick We’re the bit Nick? talk pleased growth in at

Nick Studer

thank When guidance second by on but a quite led end to in aggressively. telco quarter. outcomes. Robert. teams. based say, still saw services on at where Oliver future gave In ticking clients practice, growth the relatively sales. public transformative reflection of and we which quarter, was We we the not strong I sector in led up range what first a, was our you, moments selected It's and nicely, places we a our support our practice, really transportation our see by our being wide the banking would Wyman’s That pipeline, Yes, sales possible of saw

is practice other our of some brand showing strong business, strong also then consulting our economic growth. research growth consulting our nearer businesses, digital our Lippincott and And and showing

say that with So, economic it's uptick. wouldn't correlated yet I

widely quarter their strategy. still well performance for economic term, for expected fairly But growth to in optimistic. need term, the that the outcomes And relatively been transformation better this are as longer have as I'm the use ranged. near the sales than we've in second and Clients

John Q. Doyle

a have you, do Thank Nick. we Operator, follow-up?

Robert Cox

I'm sorry.

that the question Next follow-up. was actually

Operator

the of Motemaden from David ISI. line with comes Question Evercore

David Motemaden

thanks. morning. Hey, Good

another had on outlook for the the single-digit increased question Just high to year.

you've high-level improved has of of outlook your question. at improved the or forward? that going results Was more outlook achieved to-date function sort Just all

John Q. Doyle

growth. again, value and execution the David very, the both, for a clients. by with hard creating very And of parts the year, had It’s terrific the we're pleased question. not a a function that We've start based, just lot Thanks, growth really just of good the for work team again the a to of of business, right? really broad and in reflection

also And geopolitical that remain with again, outlook particularly so, or environment we the volatility there's but macroeconomic outlook. And positive there.

mindful second that, the So, but feel half. we want to we very of be good about

David Motemaden

Got career. on it. And a Mercer just Thanks. maybe question

saw that decelerated, than first quarter. a decelerated wasn't the bit, and much compare I the that little growth the So, harder

So, I'm on that front wondering anything just is just indicate there the on anything would there you're clouds that horizon? or any seeing that the pipeline

John Q. Doyle

thanks what careers. we're at Mercer Yes, love We David. doing

our me here Martine results to-date. to talk Let about ask

Martine Ferland

question. of year. touched Yes. for this Thanks, comparable And David top XX% for The you the it. challenging on the of quarter was quarter on growth quarter second last

strong. the also start X% the remain been fundamentals Our quarter business by delay that at now has projects. the very QX impacted in say of of certain But for would I

for year-to-date. clients. the of labor with with continues, ways shortages, our AI growth still new The wage generative clients We working, inflation, grapple demand workplace. X% discussed in service the have dealing We with tech

the the strong. sales, are pipeline, compliance say macroeconomics. largest very our it's point, and But for right, you're opponent also has So, a watching our sentiments, this business always would us we at at I Mercer the that client discretionary

third give us to continues it for good into visibility So beyond. quarter strength the and

So, I’m will confident the that be rest career. the of for good year

John Q. Doyle

please. David. Thanks, Thanks, Operator, Martine. next question

Operator

Mike with Thank the our Ward line And from next Citi. comes you. of question

Michael Ward

Thanks. Good morning.

Carpenter. out You global called specialty in Guy

some Just those those of wondering and are? you runway can how significant trends impacts and if the maybe discuss

John Q. Doyle

you execution I'll Dean, the very first market been what's maybe in can about with growth ask quite our we're very, half talk pleased question. Sure. of a Maybe Thanks, year. the the for Dean reinsurance challenging But of GC. Mike of this

Dean Klisura

underlying growth pleased year. for the of We're the our XX% first with Sure. XX% very Thanks, half John. the in quarter,

and the As you in market our call and global perform particular inflow despite specialty marketplace. seen London and in Global the some impressively. capital across grow plays and our conditions, we've into capital team in growth internationally some globally Despite seen all been of specialties. retrocession continues we've deeply based But there's global regions capital out, to challenges. market specialties strong that,

New accelerate. continues business Carpenter across to Guy

you talent demand the strong. quality I flight for challenging works to market capital in is is very of marketplace. for Some hired really the a terms Demand and a in seeing still We're in Which seeing analytics best really that from all advice experiencing challenging we marketplace. constrained driving the and where the winning in are best. that's be mean this our we think environment strong marketplace our where with conditions, reinsurers we're the clients are to remains solutions want platform. and

over in deals I think differentiating done new also for the of in first with structuring is half did capital We clients. the marketplace. XX securities of We've coming key the into the cap that some ILS Guy marketplace. Carpenter ILS year bond

And new in just of change to business there's momentum pricing so, think kind of There's tailwind. the trajectory of environment. I the globally. market be the to the a continues of capital enough course, not the real marketplace And kind in

John Q. Doyle

talk you, little Dean. bit about maybe Thank could in you a growth Martin, the specialties?

Martin South

Yes. John. Thank you,

as aviation maybe we've back. and environment. those good in As go specialties, that I internationally. mentioned has been surprising specialty the and energy in the strong given what's power seen credit happening Construction really transition is not growth bounced there areas and Aviation being earlier, where through in very

manage lost as energy hang during growth clients good well about very feeling it to transition increasingly businesses how and -- we We're to the so the a with take business had that forth. cost on advisory advising the little that two so drive So, where together.

how all that's seeing strong differentiate growth really go to lens. So, we areas momentum we ourselves how and specialty we're that and through those market. That's of

John Q. Doyle

to point at new different multiline lot bring side MGA our our driving what to a to to our market clients difficult also world as of fast on risk where a of that of for point years Mike. several solutions after value, a efforts at at then a to it's risk track escalate a and clients. also that clients on reinsurance Marsh. late. And is for quite call market. a pricing would the really I we trying out, the quarter, continuing to role Victor, particularly And of Marsh But And in a We as obviously market announced we want in is cost inside course, things reciprocal are the seriously. consulting well. our London important of couple been as in created maker well of of a our out increases, It's facility take I difficult operations

you a Mike? Do follow-up, have

Michael Ward

Yes, wondering you. about if that a quarter was that. last I’m counter share helpful. Maybe Wyman. super you developing just spoke you Thank cyclical products little examples Oliver on in some bit can

John Q. Doyle

been want Oliver Nick, capabilities the about building Yes, some you inside talk of Wyman? we've to of

Nick Studer

the I are less cycles. of sectors various there mean, to are Yes, which our exposed perhaps

an we you which the last and aerospace excellent saw So, defence Avascent specialist example. business, year as is acquired

we amount downturn-oriented our a not some to So, of solely sectors transformation. either And we've very on do side, or capabilities solution needed squeeze a are the trying ourselves the work the it's performance in cycle. through large bottom through And the that's position when on going been top then carefully line. margin now but of line clients

a build but ago, we've years we very nascent, of practice, seen as strong still restructuring that couple very to in a it's started well. area growth then And

that's different a examples. So few just

we've make different onwards, really point from is pandemic reduction correlation in the the between think that a seen I our the final I'd industries.

have quite own note through some for activity which private post their feel. up four slowed over the considerably long last has quarters equity and working three our practice, private And sometimes both capital but obviously or there pick crises, and Some we're are advisory a quite which to time, sort started support. pre that then some seeing requires downturn in cyclical, mini of been I'd are

So bit a business. across of sort picture a that's the of

John Q. Doyle

Thank the please? Nick. you, you, questions. next question Operator, Mike, Thank for

Operator

next Thank from Meredith our question Brian you. And UBS. with of line the comes

Weston Bloomer

a turmoil follow-up think the could the strong for a that saw in banking, the out you there. the that or too. And first Oliver Wyman, growth the Is the driven guess subsectors any earlier curious I'm year services given more is Bloomer Brian. year on that play saw just Weston this opportunities? on obviously year? growth earlier banking one-off turmoil back that of question My that you highlighted and is few I going we with financial half of in This or something within growth. was XXXX in I'm by that

John Q. Doyle

you maybe maybe a -- talk question. good Weston. bit could strength you about little Thanks, Nick, to-date, about you being could the but banking a mentioned And talk outlook.

Nick Studer

XX% Yes, of growth was there XX% but and growth in banking by numbers, were to our our different perhaps practice. driven takes our puts

crisis the of really separate second work the did know, the ahead It's And time. you of the beginnings need how a us. pauses to which now a quarter, our used of very is exactly see to that the very, just for different at banking lot business out we of preparing that very had system, interest we've haven't that the much hard capabilities coming response was As lead may In is decisions versus banks a may driven preeminent We in felt pipeline. that that, be they environment know There it. essentials the rate for from through had slow crisis. core some they to muscles are adding to environment. to by down uncertainty some get in very long given low-rate

on interest risk tuning that a some work the seen for network. the is management, might mention branch coming tech But there to we business deposit value so, over liability we quarters. be And yes, have that the that capabilities AI ourselves be of driver the management, rate up already and of expect to Not continue and helpful. new management,

John Q. Doyle

Thanks, Nick. -- Yes. Go ahead.

Weston Bloomer

always thumb, Have breakout XX% within real confirm that's within you've services you to of was that services. that there? I'd was financial if subsector given the driven And a XX% given that Just highlighted want to OI? you a case growth the largest or financial assume

Nick Studer

practices. of it's, also a one sectors the globally. But I areas. breakout. our it's one of consulting strongest in yes, one give largest mean, strength our It's We management don't of

Weston Bloomer

And dynamic FAC Can Got versus seeing kind buyer buying Guy growth just the more it. talk there one just about given within you or the that FAC Are there. opportunities outlook then in Carpenter. more In behaviour? placements? within changes you're of the versus treaty

John Q. Doyle

Marsh bringing been a over over me, in our very closely seen the and to excuse and quite last very, and and course the client navigate good growth the sure to together all marketplace. opportunity to Guy that clients We've fact again of to Weston. FAC, all Thanks, Carpenter couple seated what's difficult Oliver available make capital of work world capture the help Wyman driven both years, we're

in has the quite both growth well. and So, in as treaty been strong FAC

Thank you, Weston. Operator, next question please?

Operator

Thank you. And our line next Piper Paul with question the comes Newsome of Sandler. from

Paul Newsome

Good of I the Thanks me morning. didn't environment. in. squeeze think I M&A about anything heard for much

changes, updated the the of things and on how rate all versus any for thoughts waiting change of new to M&A --because interest environment we're think see I there sort but environment their you yourself?

John Q. Doyle

look Yes, not terrific remain we market of and pipeline. course, are quite a well and solid sure, We as just better course pretty and from fundamentals perspective. about we that with growth in solid will well. say us think the in active continue did deal we're team. April, We Australia better, can they them the We make were Australia. Paul. of investments for but that as We're, talent of in businesses to have make Xst a only is broad consulting big excited hopefully so I'd an RAS on both in led we and a pipeline Mercer the

means and the excited about our investments. to acquisition there what it So

deals the was obviously number market The down. of

moment, players And I buyers Some what the are out strong. strategic it at would still demand buyers, active. but primarily is financial say, quite sitting are

businesses there. higher quality are For that out

still increased And so, premium. while assets Priced obviously the cost a bit. trading of capital a are quite at has

possible buyer worked a hard and again, there. creates strong lot but the that reputation So, and a excited we're very in opportunity very as We've of for have a us. market built about what's

Do Paul? you follow-up, have a

Paul Newsome

Yes.

I talk they're made important not a follow-up, mean, size. maybe last could know or important are that or margin you quarter I small in over the they you've to As how the and about divestitures the improvements last year.

John Q. Doyle

thanks. No, Yes.

in but we we really They primarily on to Again, they've announced at in modest the being are happened in the most an size, an you relatively of admin entirely is And for the that respect. business about really are jump recently what thoughtful divestiture Sorry business. admin there. part, Mercer. or portfolio

assets core, and not solutions. operations us, intensive, that can that candidly, growth, like so of lower there owners technology than greater and are capital And bring and better scale others

but do a to it don't our better in that. stronger see expect lot do makes us invest of core, where us enables it, to we'll take opportunity and we So, steps the we and and to

Paul. Operator. Thank you,

question. Next

Operator

Thank Li with comes you. And from line next question of Jing the KBW. our

Jing Li

there. you Hi Thank questions. for taking my

a rate it for continue to business. -- Pacific on quarter? coming you Can color question see of for just I a some add expect you some Just So, on quarters? Asia this since that the do

John Q. Doyle

in our talk the but we're growth to Sure, excited Marsh, Pacific, for as it, Jing. in outlook. and leadership I'll little Maybe businesses the bit Asia as ask your across a about of possibilities. see the Martin, team, talk that lots about Martin about I you in we're very just and but mentioned quarter Australia possibility not recently we maybe could But a and

Martin South

Okay.

have be America, we'd we of growth elevated that quarter. Likewise, in It's look we to longer growth Latin With period probably in I X% expect a what of a would more the time. growth underlying over at like the periods think longer at over we important look much of as time. thing period international, slightly indicative well. time year-to-date. of X% APAC like think regard over the to when that's growth normalize to We

think just something not that I it's about. we're worried So,

We confident have in very future. a great the Pac about business Asia and feel

John Q. Doyle

Lots of of of meaningful parts world protection It's one gap. there's the a opportunities. the where

do So, have you Jing, follow-up? a

Jing Li

Yes.

quarter, this for So, guess. X% I

kind mean you So, thing. one-time like of it's guys you a mean

So, continue going to a double-digit of forward? be kind

John Q. Doyle

forward we're we well positioned growth Sure. give area, think we do Yes, we're underlying speak. an it's on revenue region that but a not guidance very strong Asia specific as going Pacific for going to growth,

in We've we're and in we're well the major terrific It's mentioned, which ways excited got As made JLT Martin us countries distribution throughout about that the market. of most region throughout stronger. positioned one quite it.

there more are So, questions? Jing. any thank Operator, you,

Operator

no at [Operator Instructions]. the showing questions I'm moment.

John Q. Doyle

Operator, we questions. can wrap more up if no there are

Operator

question, we follow-up. a have a do showing I'm

John Q. Doyle

Okay.

Operator

One moment, please.

with question Cox follow-up Sachs. Goldman comes from Our Robert

Robert Cox

less Can the you Hey, first headwind just a that a capital us on maybe if markets give and directionally M&A follow-up versus quarter in that this spec the was continued of sense quarter? one just of whether more activity. or

John Q. Doyle

growth our unpack bit, at Investments Martine a ask to I'll Maybe Martine? Mercer Sure.

Martine Ferland

been our by I rapidly OCIO impacted the absolutely. business over But many last few quarters. capital know, last the years. markets grown really you is as Yes, it's mean, over

demand the Although the market, as we've QX some due value quarter, inflows, benefit of as AUM growth seen to we the on that does accretive What still the see OCIO the small levels markets can year-over-year far year for drive that see is today. for from end rest at the well volatility capital small does for we capital but QX service, net from of a drag it from of based in it bodes

a So, diversified has for market in volatility It’s down. is about equipment this the portfolio, the good come us. business

But their client to with On it's little good lower elevated. that contributed still for It's market, have clients volatility, for been bond bit all to our and side the finding plans, us environment. pension has funding a the for of deal etcetera. regarding need of advice the on new been the the ways

John Q. Doyle

us thank on I want thank support. for our dedication. morning. to I call Thank you you, work also want XX,XXX thank Martine, and In colleagues for for thanks follow-up. continued want their the clients over and closing, their this Rob hard I for joining to our all the to

So, and we very you. speaking to next thank forward with quarter. you much Operator, thank look you all

Operator

and this Ladies today's does program. gentlemen, conclude

You may now disconnect.

Marsh & McLennan Companies (MMC) 20 Jul 232023 Q2 Earnings call transcript