MMC - Earnings call transcript Q1 2024 | Marsh & McLennan Companies, Inc.

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Operator

Welcome to Marsh & McLennan's earnings conference call. Today's call is being recorded.

First quarter 2024 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 risks and and variety those Forward-looking to differ

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

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

to Instructions] I the CEO refer to measures closely turn a comparable in please these For President of reconciliation over measures, most to today's GAAP of and this McLennan. Doyle, John earnings will schedule Marsh the release. [Operator now

John Doyle

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

me of who with with Marsh; South Martin Mark the Studer of us and is our Investor call Pat. this CFO; Sarah Head Relations. Oliver Guy Nick today first McGivney, of us of of CEOs for time. and Dewitt, Also Carpenter; Mercer, call Welcome, Wyman; the is Tomlinson On joining the -- businesses: joining Dean is of Klisura our Pat

Marsh start strong had XXXX. to McLennan a

results another which continued were year. we Our first first of of the Top quarter on positioned with for last X% and quarter top well good X% are was underlying excellent, growth line year. revenue growth in

Wyman accelerating year by the our strong income ago. Marsh, from All and revenue growth had businesses Oliver quarter. with of a adjusted We growth fourth from XX% operating grew Mercer

share in of $XXX We margin of compared the had EPS Our quarter. XX%. to growth repurchases expanded of adjusted the XXXX. points completed basis we million And quarter operating adjusted XX first

top capabilities through add growth. will we line to These sustain our strategic our In investments to position continue and and scale talent, help strengthen acquisitions. addition,

acquisition closed completed Louisiana. the Vanguard's X Oliver the and transportation in industries. Wyman agencies expands example, our extends into in leading For SeaTec the And reach which MMA of endowments OCIO capabilities segment. purchase the of aviation, which our defense business foundations acquired and Mercer

we strategy decisions capabilities McLennan, confidence. to together risk, Marsh specialized critical make help perspectives and across with bring people At and clients

and in perspective draws chain of Oliver key area capabilities [ developed is client's we Marsh we which for the the which a multiple a in framework, create help Wyman, digital clients' on vulnerability SENTRISK clients including aviation across to of supply assessment product this called of risks the industries. a provides model For already ], twin sectors, and to supply scenario-based defense example, manage and risk. lines, risk, our helping a manufacturing, in chains. Using supply identify banking, solution This

with Carpenter economic war. DZ As worked facility This Marsh, to Oliver all the Ukrainian cargo. last we Guy and In insurance Ukraine's of help a quarter, enables support the others that carrying expand ports. Bank, first we ships time will public developed quarter, grain Lloyd's and shipments facility, Wyman private in Ukrainian from nonmilitary noted Unity government, resilience to solution the the

retention, challenges our These are care data patient assessment In combined clients. a Marsh's in are unique and cost health Mercer's and connections expertise, to creating applying value help insurance. deliver how talent highly extensive human are valued safety and to of the evaluate new, we're to and Mercer health together the sets examples risk clients Marsh expertise with between the and rich perspectives sector. few pressing sector, significant health malpractice of capital our working care capabilities just address

impact of communities and have report disclosure live ESG report. annual on we're work. a our also and where our efforts the taking on our actions The released positive we includes underscores how Recently, behalf and ESG enhanced the on clients we

some examples. share me Let

to program of In personal goods. catastrophe. helps we households within grants solution community-based a viruses, the an Neighborhoods micro parametric to insurance insurance threats a global members deliver NYC event, failure with for cyber, like community catastrophe developed reaching against program. We finance cyberbullying funds Center online protect launch emergency purchased and to a collaborated to This with days following identity insurance theft,

to sustainability, energy Authority's With clean we supporting the XXXX. regard by & sources are XXX% provide Energy of Dubai to commitment its Water from

proposed As ability resilience solar to largest the adaptation part one to extreme risks. a mitigate conditions, a of climate modeled withstand client the of this future work, -- site's We world's we conducted parks. assessment climate of and measures

continue own to well. our improve operations as We sustainability in

our exceptional generating shareholders, a outcomes lasting performance positive and clients to effect recognize successful that we enable submitted U.S. for example, have for part For U.K. to our returns expanded climate we our own globally we and also committed remain of locations. for our renewable communities in largest our across X We XXXX. financial help electricity as goal we targets achieve offices our in XXXX, by And and of actions and net world. around the the use the validation can on

Shifting interest outlook opportunity outcomes More to the that rising of risk of our unsettled see supportive complex The tensions the go rise. half Inflation well. Despite than our of backdrop clients world's by more and navigate in geopolitical remains continued most and range elections we the with XXXX, macro care is this cost significant helps markets. environment. remain uncertainty, costs tight, labor economic uncertain remains major is multiple as globally. to growth picture, In in up in continue of population growth a business. markets health and see the the will rates are to and economic driven major elevated, wars we the general, environment

our across have and resilience record the and solutions. due to cycles business demand for performance strong of of advice our economic We a

digits, and decreased rates mid-single with while decreased rates rates line X%. in overall insurance liability up reinsurance pricing market versus and fourth increased Marsh Market Global Property Index conditions. X% quarter. insurance was financial with X% Primary Workers' Insurance the increased, to X% in cyber Turning the X%, X% quarter. Casualty the professional and down quarter. up last were compensation in

remain rates some with market with averaged client market XX% casualty conditions decreases renewal property in without in capacity. reinsurance renewals. line rates The but for adequate January was challenging, with XX% increased accounts In accounts flat demand April and the U.S. were increases stable cat losses. were the to Loss-impacted period, U.S. Reinsurance range. reinsurance

January, growth cat April to cedents. market In appetite overall for June to Early X meet property improved Florida risk-adjusted renewals a rates higher be basis. down signs X demand. point reinsurance conditions adequate slightly Increased for should on cat were for risk

our As always, helping clients navigate we dynamic are market conditions. these

X%; of generated to underlying ago. performance, versus Now both income financial grew which XX% first X% operating X%; let our up our up in Wyman adjusted will and up adjusted Mark growth year XX% $X.XX, grew XX Guy is XX%. RIS basis with and X% and consulting. in quarter EPS which had was on Mercer, Overall, turn Revenue adjusted cover a briefly in in detail. margin the of Oliver me year-over-year. We we growth Marsh operating Carpenter X%; points basis first was expanded an quarter,

outlook. Turning our to

We are XXXX. for in very well positioned another year good

We expansion adjusted strong underlying continue and or growth, margin year another of revenue to EPS. growth in better expect mid-single-digit

different macro current than the and however, outlook Our materially backdrop conditions remains, be could economic assumes meaningful our uncertainty assumptions. persist,

Marsh the great year In to summary, for the quarter first start McLennan. was a

our strong shareholders. the the our focus value to and to colleagues delivered our and we of and business and performance, proud continue on determination deliver they clients strategic execute I'm of well Our initiatives.

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

Mark McGivney

Thank John, you, good morning. and

and were expansion in results to growth double-digit quarter underlying margin EPS. excellent the first adjusted an saw continued Our represent growth, outstanding strong momentum and start year. We in

growth underlying adjusted Our billion. $X.X consolidated X%. was operating X% income billion, in XX% revenue the increased billion, $X.X quarter increased to of $X first Operating income to and

to we in compared higher for Our the was the up rest expansion the adjusted year. year, EPS EPS $X.XX margin operating second and XX%, margin of basis $X.XX, increased XX XX% particularly GAAP to half. last adjusted expect was and points

Services. Insurance & Risk at Looking

First billion, the in a both and income adjusted X% basis higher to in stretch margin of $X.X up or was RIS the was marks last billion, This XXth billion up consecutive continues first XX.X%. and underlying our $X.X expanded a of quarter. year XX decades. reported operating also growth points XX% quarter quarter over and operating revenue Adjusted the X% year, best growth basis. X income operating RIS $X.X ago result on compared in underlying was with

X%. strong growth. first America X%; international, In Pacific EMEA was business was At comes top grew growth on on X% last underlying in and increased This underlying in X% In of quarter top U.S. the growth the on X% Marsh, to growth the basis. quarter, revenue an the of $X and Latin first underlying and solid Asia in up was up was billion XX% last year. X% comes or year. X% for at Canada, reflecting of and quarter quarter X%; renewal new

by Carpenter. adjusted X% X%. and global was on Guy straight driven Carpenter's higher X% Guy was operating underlying Consulting million, regions across segment, income Consulting $XXX growth quarter underlying X% up fifth or specialties. and the most $X.X million, on underlying first an the at X% was growth $X.X revenue or This an revenue of up billion, income quarter billion, operating In was was $XXX up basis. basis,

and in This an billion straight $X.X in reflected management XX up of run XX.X% years. X% X% growth the first momentum across was growth strong underlying the XX Wealth in an XXth underlying investment increase best X%, all in basis higher XX% margin Mercer's and consulting. Health underlying grew or quarter, Consulting was basis. and was Our points. Mercer's DB on adjusted driven revenue continues operating quarter, quarter was both in growth regions. by growth the of of

were last up sequentially the of under XX% end $XXX of and year. billion up first at the quarter, compared the assets management Our to first XX% quarter

we XX% markets in Oliver driven quarter reflecting was the and with U.S. as million, start had rebound well growth on from of growth and period tough increased last X%, by comparison underlying the and regions. a strength last Vanguard, to of in an quarter softness basis transactions flows. year Westpac as $XXX the across slow net Wyman's year Year-over-year all up a the first revenue reflected in our in was positive of first Career revenue strong capital

very earnings in exchange impact quarter. had the on first Foreign little

Assuming $XX XXXX. items majority levels, in began we half. $X.XX FX be in related a Total we a noteworthy fourth second were were headwind to the items rates of these in quarter mostly exchange costs, and of the at in program to further the quarter remain expect current The million. quarter restructuring the headwind the second $X.XX

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

full we and interest of quarter quarter will $XXX $XXX the year. expect year, $XXX the we in $XXX in benefit was of For full first forecast, the our expense debt the XXXX, our first of and quarter credit interest million, million. reflecting the higher other second million million Interest higher expect net be approximately from up million $XXX current in Based on levels for rates. expense approximately

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

rate benefited the ago. favorable was Our largest for of which year share-based discrete to items, the a from compensation tax similar accounting

discrete items, Excluding adjusted approximately XX.X%. our was tax rate effective

not forward do between adjusted XX.X% be on an which effective environment, or When tax we our around XX.X% and to current continue project rate, guidance for discrete the we XXXX. of expect items, Based give tax negative. can we positive rate

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

Our million of quarter the $XXX mature. in next is notes scheduled debt when maturity second senior

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

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

in current uncertainty outlook the we economy, global the and the be environment in to remains of continues there growth. about momentum the feel supportive for business, good While our

XXXX. outlook it Overall, us we expect to underlying our margin to back well for for year, full John. adjusted today, happy mid-single-digit EPS. With in expansion positioned that, good our turn the strong year I'm growth, in better or start continue and another strong to leaves on Based growth

John Doyle

Mark. Andrew, begin to you, are Thank Q&A. ready we

Operator

from comes with the Instructions] of Evercore David And Motemaden [Operator line question first our ISI.

David Motemaden

this bit Marsh question from just global accelerated from growth. first to Marsh But I John, -- growth X% X% index, organic pricing on quarter. what My moved the said the to little quarter. on down last which call you a X% last X% or is the quarter I decelerated

can help between accelerating the gap you bridge hoping pricing. I'm the and So growth decelerating me

John Doyle

hard obviously is not Marsh's It's index Thanks, David, for pricing. half revenue P&C the an right? very question. work it's of an We on pricing, exposed to impact, be does macro some but element, a factor to have than less P&C that

we're where that market. is you to in the exposed say most also to would I What is middle commission

a market skews what the index account account more market. Pricing it large large Our data. and the less segment in up is account in the you in cyclical to is typically than than middle bit see is larger

about and fourth accelerated But year, quarter I I start pleased X% want to top of growth with was on last just year talk the to very growth X%. overall. of X% from the the

Marsh, accelerated supportive, fourth I Oliver The As mentioned, David. be Wyman quarter. and had Mercer to growth continue the from all macros

health most demand a bit although increase growth and remains GDP I remain pressure. under cost Solid The costs. continues in major very elevated. markets, markets, overall risk care said There's rates it's Inflation labor interest and before, rising tight of of as to strong.

course. couple We've We're got global a happening, stress. supply wars not the long pandemic, chain of out of of

them about and better to And about I of continue we as talking We We're mix a help at Mercer awareness. really cycle, between sold efficiency. balance risk acquisitions through and we the right? did. resilience broader the this talked to showing are in some businesses to We're find couple business of our admin clients them improving quarter. trying Our that invest well.

on how with talent pleased last course operations. than been with colleagues talked about executing, We've have. we're that, improving continue engagement the working we model I'm the to invest the and over are client our sales I've more year, starts our that very, And in very as collaborating ever. It of And too.

but have not we're We're, the including business, We immune we about and you have Do level, on excited follow-up? in XXXX. of that resilient pricing the some a talent quite operate best a macros, to markets course, we're in.

David Motemaden

of acceleration That's business? middle within capital zeroing it back talk coming on Was Could the driver there? that the just specifically guess it nice for in and the and and specifically the growth you do. Was Marsh, I U.S. quarter. I outlook activity about helpful. your in sort for on markets had the Canada sustainability recovery that market? a

John Doyle

the in give Martin, Sure, David could to And I sure. little U.S. Yes. more start, a Canada, and Marsh, color. U.S. you out. off terrific would point a got maybe bit

Martin South

It to Yes. get a on a great in product the lot dig business. are. I'll color and it's last just was of It of balance you across drivers bit U.S. few the and of into some growth the little But wasn't U.S. work of we the growth really give there, Canada. and the a some been years where

business, business. So growth both of MMA that our X%, fantastic by start renewal to overall year. growth the a had mid-market the the businesses, terrific new in The driven business is and

great in very Victor, last our a had tough year nicely. rebounded, a back, it Canada. MGA U.S. and business core has the bounced strong in grew ] They the business year, performance performance, [

strong drivers really, first The strong. areas, good. very in MMP business the quarter. was particularly the very in was So specialty construction

the makes much very stickier. adviser Our spear of relationship tip of strong advisory risk to the business in and was the the of U.S. as our the future part

our and good, business was growth loss down. renewal our So rate was

on, these feel client industry-focused all that drivers advisory, the the things specialization, very about focusing relationship we we've been for areas all that growth. good are So

very good feel we about So things.

John Doyle

quarter, some the M&A I terms quarter David, was smaller pick Martin. our bang-out part impact of encouraging. smaller business it's there. little volume which, now risk during a less. wasn't But part, after in add, Thanks, we up see in activity is would part smaller It's of business, it feedback of a slowdown, activity M&A a -- did so but the business our our course, in transaction a of the

Andrew, questions. thank you So your question, next please. for

Operator

with comes question Bhullar line JPMorgan. of next from the Our Jimmy

Jamminder Bhullar

what that behavior? the things coverage seems consistent trying than terms on tight could of in reinsurance market. year? in had they've in with save given seeing Are wondering the just I trying Or cedents was past buyer sort a levels was has the So are the like market and the more they of you comments are had less little to John it buy bit? over But is pricing elaborate money -- to year. And it come on if what past you keep

John Doyle

little Maybe I I'll about in both average of markets reinsurance Thanks and a remind again, is a a single Sure, better stabilization in the on And That increased I market. led of think elaborate continue to stabilize talk both quarter. on collection good question. bit markets, Dean the remarks would the bit then my reinsurance. But some prepared Jimmy. our to ask it's and for a a clients. in And everyone, cases, not for has insurance market demand some to market.

we've the in that bit the clients I skews Marsh growth to looks into what manage the see as premium at in would premium that captives to market. a can We'll our higher accounts. out also compared the years, That recent we earlier, major point index going had market adjust like traditional forward. our change now. mentioned and markets may stabilize I to flow

a the in move market pricing I So to middle bit continues than points earlier. the mentioned data more up

say that mentioned reinsurers would of about rising I also well. I cautious that environment and cost insurers that are But risk as

And stabilizing don't of community rising the clients is our issues anytime for so overall, of a that again, expect I market given risk relative the stability soon confronting. that insurance to cost some better is while, change

bit happening what's maybe in Dean, talk can about a more reinsurance. So you little

Dean Klisura

the April And Jimmy, a Thanks, X That little would bit helpful. color I'll John. Yes. you reinsurance give more on be renewal.

saw As X. we continuation John a January of that market noted, experienced in conditions we

cat That first top As pronounced demand through X/X particularly seeing increased John the the we're programs. are very the end property by quarter. throughout client market additional at limits, definitely was quarter conditions noted, at stable, but of

inflow of good returns driven end quarter of market on certainly, top about by and on XXXX. capacity, There's trend continued capital call. is competition into reinsurer that It's in and the reinsurance the strong inflows strong sellers increased talked at appetite last programs. buyers marketplace. an for double-digit capital returns, for We both Reinsurer the And in X, property cat. been that April the

to said, cat the property capacity in Specifically April as I U.S. X, strong. was at

I As without lot But saw you increasing in the growth, a on XX% But value growth, said, John was a to cat Accounts cat be still programs incrementally there's noted, business. tailwind Carpenter to premiums And give factor a when kind losses are down you clients inflation, in Guy in to adjusted flat figures. rate we for cat for of the losses. for with these cat year-over-year. mind, as It keep generally increases. XX% continues exposure market of competition marketplace. rate

John was U.S. Casualty, noted, as challenging.

board, Just as was past. challenging and the renewal. rate share contracts contracts, in lines, commissions about certain X from has Reinsurers Martin terms are pressure the seeing on on cases, on April financial double-digit. at it Ceding across as and X pricing of the conditions. pressure are particularly in facing downward talked January some Excess which increases quota are reinsurers exerting loss

However, April increasing we by against concern there social was I marketplace in would balance loss inflation driven continued all full. cost X. adverse completed the and adequate with that of casualty placed But the And reinsurer capacity development, in that got programs in trends.

I U.S. we that's think where the in good market. summary of a were

many changes, note We date big attachment Japan. January where stayed rating Japan, earthquake were in oversubscribed. very year from in down, in was Japan. were ago. impact really perspective. orderly a very they structural market didn't market, sufficient from capacity, average, any observe Overall, Japan, a April a cat the that a X% we market a CAT on was it Just orderly again, any a And at And from on observe didn't X rate points X programs April

John Doyle

have Jimmy, Dean. do a you. Thank follow-up? Terrific, you

Jamminder Bhullar

But where and expectation than your that's it assuming just income, you talk rates on more for Perhaps lower seasonality. XQ. could given if short-term currently. I'm that flat are about sequentially was

John Doyle

to you do on Mark, that jump one? want

Mark McGivney

in is seasonal is to QX There Yes, balances. lows as a Jimmy, little you seasonality there tend -- and a to be seas, modestly. little tends pointed QX a fiduciary out. little be our

that. explain that So would

we've fiduciary what about got interest balances outlook, rates. see -- $XX.X In of function is And to income terms interest we'll be and a of to environment. the billion rate balances. happens going The of

you to what want the trajectory of rates, math the pretty for So straightforward. assume depending on is

John Doyle

and Mark, thank please. Andrew, you, Jimmy. Thank next you, question,

Operator

next our with Greenspan of And Fargo. question from comes Wells Elyse the line

Elyse Greenspan

guidance. was question margin on My the first

there expansion expansion the first half, that's You margin within seasonality guys driving investment said or of half this driving second just more What's year. the the more back that? Is margin the the else in in more something year? in savings the half falling

John Doyle

Elyse, we expect, good margin in XXXX. expansion again,

half out, As you half. than Mark better pointed second the noted, to the we expect first be

headwinds, from expected really seasonality, merit year some a driven pool really ago. have a We not but higher

expenses. acquisition-related some reimbursable and costs Some higher

primary to everybody not But outcome margin to opportunity of business, remind going improvement. the to having Again, see not long-term improvement, one margin the to any ours. I run how of focus quarter, want it's the a and investments we're we But attractive really particular to said on of of we again, that, medium- business. margin for to support make continued growth continue objective

for We underway, automation number press efficiency opportunities continue workflow ongoing at well. at And efforts improve and efforts of of Guy businesses intersections to Carpenter. have to Marsh, and our as the a Mercer we different

So you expect Elyse? pointed than as out, second the first. have we follow-up, we opportunity. be to see a And half Do better the we

Elyse Greenspan

early time? for question, internalized with the Victor there days, through but wholesale of Marsh its the impetus And my placed reason wholesalers Victor launched third-party by be couldn't risk what it's over second Access. the any then I this know wholesale currently Yes. And majority venture, is was recently potentially Marsh why strategy?

John Doyle

our Elyse, Not several there for happened of the be third-party been the to Generally, years. course to preferring the that looking admitted in the me the clear, clients. that solutions the E&S good the market. wholesale things clients. We let aren't So not to want considerable bring or best in we're marketplace last our There's solutions in market build E&S a business. we're obviously wholesale growth over

the innovation Of E&S course, areas of the is And where are. one is market there important.

that but directly that that E&S continue press make we to E&S access as But access we and market of directly. we solutions as much our to sure can today, want actually want of market most access market of much directly. to We

outcomes, really as So as it's driven client managing experiences client directly us it's the and about client possible.

niche we'll use program strong Having expertise. as said serve businesses cases. very well clients They in for our have They continue well wholesalers well. very us those that, also and to

that's It's as capital anyway, it's much as possible directly our directly So what again, for clients. can access just, about. we sure making

Thank you for that. next Andrew, question.

Operator

Our comes the line next with James. question Raymond from Peters Greg of

Charles Peters

preannounced pivot I'd to for first the pieces pivot this cutting this Not box. forecasting that of color the to consulting like could the you be which provide little management us be but question, color pipeline, weakness seeing you really nice in they're consultants I black had to quarter. can going if staff to some -- because of out some give additional to year. of Wondering bit different any a signs are some a a seems business, have moving. maybe around your know how the

John Doyle

Greg. pleased to the Thanks, year. Yes, Okay. we start the to are very

There's in to start medium Oliver had year; XXXX, year average over color nice had first Oliver growth Wyman, to can expect a longer course, Wyman of in going better Greg you at term. the to recall, slow on a the of some on Wyman share you we growth revenue maybe but from the quarter. with volatility a also Nick, to be growth. demand Oliver overall As more bit

Nicholas Studer

profession. a start in good about you was XX% is Yes, many what, Greg. you, very, as makes on tough marvelous proud Thank John. of our environment for to view. you, John's we're already pleasing the start very a headline. a the It taking X-year year. very a caution the given noted, And Thank

probably very might be also up of guidance in the might This from mid- single-digit little a shown things that timing benefits we through should have much business. shown QX. few We cycle. in And benefit have QX, high still a up to give

that that That backlog. they such noted a nature the short relatively out it you our true because it have And tricky is when clients we sort of need assistance, is work The challenge. quickly. need forecasting of a as

are to very, And ready very so we move nimbly. always

NERA, more double in very across in East, regions management to Middle close the pretty digits business. other research little the strongly fastest digits double you very our in our color, strongly, consulting a we of all grew bit grew major X we but regions the business, give And the have. To economic X all or of also

also was fairly it spread. sectorally, And broadly

technology obviously, been portfolio face much which banking. previous a pretty company the communications, team capabilities work Seeing insurance grew health But robust lower even of, broadly we grew there. I've market. across to very has has also and and helped on well, rebound the private work, quite on as our us a in Our media deal performance bring growing in care noted calls, well, well. bear And that capital

we're So the environment. tough the we think this that we that, position. years, about mid- gained is cycle. few a business but high share over through indicates how growth We've pipeline in And last a forecast good We're confident. very to it's our think consulting single-digit environment, growth

John Doyle

time, as That's maybe Mercer have priorities call Tomlinson first also share Pat, your you about the this maybe talk thoughts ask could at helpful. a And you're you I Greg, some I'll on the first while our bit just to And joining given consulting for operations at Nick. very obviously, there. you, mentioned, floor, Thank Pat quarter the Mercer.

Patrick Tomlinson

with QX XXXX Yes, are our Sure. Thanks, underlying John. we growth. pleased

was with and digital mentioned segment it double-digit adaptive focusing XXth focus segmentation, on size, comes the and health growth QX. it As in practices. solutions was quarter our another That on leadership, client match talent, across more investments of with -- innovative nearly impressive the earlier, hiring it growth on all new that to tools X% trying upon the creating back X%, have. thought And it growth, in regions. care XX% really especially was growth with industry client we quarter the consecutive needs across with based really Health, breadth or

clients they So to where really trying are. meet

and cost solutions value benefited clients. We there. are revenue strong had certainly to that providing kind for digital medical inflation from we're We insurer renewal We innovative underscoring has significant demand impact that the an see growth, of retention. the good and benefits

equally-strong balanced, benefit QX. performance see grew in funding over pivot driving If in plans, from creating DBA have to elevated of continue X% as to I that well in risk are IMS. couple demands we statuses and There rates the that's good, interest a we project transfer DB We Wealth, and last as regulatory requirements increase some over some an was years work.

in -- investment markets, demand add our it's solutions strong capital you for driving If and business. capital both some actuarial volatile our some

we some capital and OCIO net Speaking some also us inflows, Mark mentioned of markets revenue investment solutions, earlier, in but and Westpac from lift provided good transactions in Vanguard. that QX. benefited in new

to growth last a growth for was including a quarter, years, strong mentioned, period and see, transformation some We the strong year. international, space. did a XX% growth we're all but challenging very rewards in broad of U.S. The muted the specifically in over the several was softness X% in regions. comparable Career, perspective, From was career across was past practices following in as

As some I navigate coming I to long X by macro right? off So let employee practices double past say, large conditions, as starting career digits of I me driven of the in mentioned, attrition. for would would say, quarters, growth, and clients -- the very the highlight in are part, that period inflation

of the over there they to have didn't they resources. all technology, the were rewards shortages as out they clients created lot and innovation resources they less all those. they pandemic, people a great work that also labor pay the about the was to retained, to think and had right back about through which think talked lot clients starting of pivot transformation them the might to a -- demand helping projects were having need remember coming as And past as in to and because with skills for keep we drove we've If to and of the how really about trying AI and resignation if with

perspective, I good So we certainly, think there's market our demand from of that in good and that fill feel breadth and we go the needs. ahead as those solutions

I asked a the priorities, bit quickly John talk me too. business about little the and think how about to

the futures our for our am are humbled to first and April a my and So on of and colleagues opportunity to step as world brighter call fantastic begin I people. creating in the obviously, on this leading lifetime be honored clients firm. their of this I we extremely for focused Mercer CEO and XX,XXX from around got X,

we and to leverage And new collaboration can growth momentum. perform I impact on want here, the a very personally, the and purpose-driven built culture smooth here. fantastic accelerate helped we're our work to and transition impact that From a for really Martine to clients careers for as positive that our the to can technologies, have really the create thank and communities Marsh well. want having colleagues we for we that momentum across I Priority-wise, Ferland colleagues McLennan, she amongst

practices. been ourselves scale. been in I reshaping very we've We've OCIO. benefits admin and over clients positioned well think capabilities portfolio. global We've creating we're on. last and as been the repositioning accelerating just And what been more the that's focused divesting at mentioned we're acquisitions, been our building Mark we've reach divestitures, several in years, really value and we've for

our future. about So I'm very optimistic

John Doyle

this follow-up? at you excited We're Greg, table. to have do a you Pat. have you, Thank

Charles Peters

we I to and outlook being being that do. interest higher that's Mark, want And expense the cost which debt issued M&A off. interest I pivot is you think note I paid specifically, versus the rate company. for of the the mentioned to

there's M&A if looking that And So those smaller I'm of at between in there's of on any also if that market. in terms costs larger curious valuation looking difference curious the been any properties valuation higher follow-through at. you're properties versus you're transactions I'm the

John Doyle

market. we good in I strong is Thanks, pipeline. say have remain good, active a There's the -- Greg. we Yes. What would quite a

excellent we as about good well. As talked in reputation past, I've being as a an have that owner marketplace in the

we're active the we're remain again, we And in quarter. market. in excited did to about going to the So continue first the deals

valuations other have high, out very, have would the say, stubbornly of of I remained that that quality top at some also for And I lesser point while I quality traded might would think high side some on assets, things. expect very multiples late. assets we

strong capital very forward. real that And again, Mark good we growth We're and going better We've to And make successful us for businesses fundamentals picky. cultural to be so it. we're to in for continue deploy market going looking expect our the at organization. fit a been are pointed with as out, well-led

Operator

Capital the of from with line BMO comes Zaremski question Michael next Our Markets.

Michael Zaremski

given And think changing relationship improvement a the general should year about there, there, margin the margins comp rather bit the little the the and plus, come on other on I'm from if a over correct. -- flipped last go-forward and basis? how this Mark, for the or just bucket where looks ben. much anything in margin quarter, management expense than buckets. is programs the the expense look and If Probably like I from so terms coming It we improvements of it more

John Doyle

do Mark, Mike. you Thanks, to? want

Mark McGivney

and think talked it's several over We've it investments last talent. think the of the you're great heavy a made organically the continually in we've positioning strategy that I the future. ourselves we've for about in years, company. reflects we've And the invested said making, I point

I things gains we've costs, functional thoughtful across some operating done Really, we're firm, think job we T&E. made other being really we've our so in terrific them. harvested the of And all a the of how leveraging about pandemic, expenses, the

over lot So really expansion client investing of as far the last on being years the a has you heavily our things margin from talent. X point from in come client-facing disciplined away and out,

we're so to leverage forward. factor forward, think in also there's going a I is our be which I those is we look think about And investments, going that in why optimistic as margins And growth.

John Doyle

Thank a you. do Mike, have follow-up? you

Michael Zaremski

you commercial us follow-up. quick power, commentary a Yes, a lot gave insurance on bit. a Marsh pricing And told of declined know you of Index primary I the kind

feels can like of you offer context, if soft curious more a market any number. Just kind X%

seems causing kind trends? of your more still gave kind what's What is the it power of kind of carrier downwards of driving on that's kind the being partners seeing returns commentary. of -- behalf pricing color I inflationary in any just you like there Or you what light on excellent by-line just know of us are decel.

know... So don't I

John Doyle

Yes. to skews a price accounts more X And and larger than be index our cycle. typically after right? noted, that, and been cycles the mean, our to increases. it expect past, feel I bit clients, doesn't Mike, shorter throughout I narrower the I soft in years as what of like would say volatility they've to I market a where there's

in underwriting over more That's There's technology better that part quickly Capital dynamic the course the all and last observed on the market out. several front. of the much better so moves have years. of E&S data, you

So way, outside will I a And time kind meaningful risk, from of particular stability. that normal expect cycle. relative to areas more and in product time, will a change maybe of of things certain bounce course, of some

course We fourth improved underwriting one couple years. of on last over portfolios result, emerging their quarter reinsure for aggregate in their loss reserve first are the And some have our not results course. mentioned troubling additions is that of our saw the And how I think data the book risk in the cost the in to entire I great costs, mentioned casualty how and rising results call contributes earlier. ecosystem, positioned. overall. good lots right? client. our And of unknown the feel Insure that's as that most of for quarter, There's it of I about -- all It's

see and our of touched in includes factors. that And for on point, for bit new business, this don't indices other all should are out, exposure, limit, that necessarily right? it maybe, I market and adjusts the out You also those that index little some point Dean a attachment adjust

I And right? might -- premium the in end have directly growth market, is what that, Mike, it increase. would maybe the of last of point, Because is an a the day, that less number make with the correlate might that you at doesn't necessarily be the

have buying more. You clients might certain

I new to market clients, for new at reinsurance most and equilibrium, from level that pricing demand again, higher moment. having as seeing to think adjusted prevalent coverage we're in that's clients. market a well, But the in cases, led our of Marsh where some the at market the has

hope that's helpful. I anyway, So

next please. Andrew, question,

Operator

question the Our with of Kinar Yaron from Jefferies. comes next line

Yaron Kinar

Two ties questions the there. to I market rates maybe the up just views, but see loss John. one hear on surprised guess last to seeing environment And former And the CEO underwriter. you're comments, both I also your the Are love Marsh your trends? as a as to of maybe X%, I'd first only casualty think and given well you Marsh,

John Doyle

very very, actually I it's -- -- a hard right now. It's

as the of there's earlier, some But of community thrown Bridge course, frequency mentioned And market, technology. a is of nuclear just loss events. where frequency, not been. They larger big the ever casualty last better points, not there, verdicts, better the big just to said, with underwriting a kind clients market. Key frequency, kind or I See the even of larger accident in just It's of a much loss, troubling settlements on data increased right? some will level the And As risk it's very, an several the of that as I be better Francis around a years, but signs. data, are years of term a we big example, help of it's of some the that where have clients impact it's than in troubling very gets again, management bigger Scott in as them, so loss maybe couple not have pandemic, the are. But difficult programs costs of is the the right? thrown that a mix project loss

in kind frequency just that out market, in lines certainly the more even more just resolved. auto, events to But you've type seen commercial auto costing get play and personal of

overall. well you claims of signals have out all to about again, clients capabilities so as we're bit into through putting runoff even think follow-up? And try pointing rising to that costs yellow there they transfer we're liabilities think insurers investing ahead how efforts this. Do And a their assume our better to market. our flashing to, in the to the a helping and the quite I get But some are

Yaron Kinar

Yes, I color there. do. thanks the And for

had the helpful. be there a a would is to down. Asia timing a results some point Is obviously I XQ bit there we in Pacific in little saw place I organic that know we only where the very one-offs? there. with I then anything 'XX certainly step guess issue were -- you But and organic if Canada. and result a So I Pacific, Asia to very, saw U.S. a be try poke maybe Marsh, you in could was strong, terms strong nice could would of very

John Doyle

don't I no -- Yes, major issues or one-offs there.

good and we're how top in of gaps years Big very of positioned strong comps throughout growth, of love we a on Just couple protection Asia. Asia. very,

throughout region. all strong the We in-country have really operations

just a in-country and regional working we're clients So center. very there. We're with closely not our very,

look in of I to over what's in couple As at it's one growth any wouldn't quarter. you the the last on top we've of some Asia outstanding again, particular years. And past, said been

we're about headed where in good Asia we So overall. feel

Andrew, please. question, next

Operator

Our next with line KBW. of Shields Meyer the question comes from

Meyer Shields

competitive environment discuss to hoping in I RIS, perspectives. was X the maybe from

rate First, insurance don't help the I'm enormously-fragmented includes share resources. world you're brokerage the the with just in to that company Marsh's potential rising successfully a manage a is market wondering when clients of How costs have lot difference that make? a companies gain And difference a resources in much environment. whether does there higher as as

John Doyle

our when colleagues, Meyer. question, you right? they choose of learning It's access benefits in them somewhere a to might our feel trying have stakeholders, to on -- not you we very, market else -- want here, scale industry. We're XX,XXX and work We that to all them bring focused and analytics, support right, including our to good to well, very work our key have they helping nearly like them with data development, folks should want

client of view So it about we perspective, perspective, certainly an think colleague investor it the from about point we we from as it well. from the think about and think

more a I speaking, that the fragmented than say, you again, bit maybe upmarket talked is a would this perspective, before. of client broadly What from about some segments

Our clients the are they've in aware than risk past. more been

But make events upon recent us them again, some have to incumbent that, in helped role benefits those And think that. certainly scale to a aware to it's I bring market. to the of play heighten meta-risks. risk trying had we more have in

captive the to world. of largest And the terms in course rising of over that's benefits the business. different of types in scale just clients not our earlier several our years. meaningful but data mentioned risk rate market We're analytics a I the manager or access, environment manage for And the been outlet last solutions. in captive

the for market scale yes, well. it a that sellers in some So role would tell as the I plays you also matters. of

that scale -- we them As type may at they sell times, to talk replicate. are moment, the to look why through it's with regarding we for targets, have scaled-up type M&A difficult potential capabilities that at

I know as for them fundamentals, better, looking well-led we too. can we us. we're earlier, so for make really said And part the solid but growth that's And with exciting businesses

a follow-up? have you Do

Meyer Shields

competitors brokerage I accounts. I do, market XXX-type but are at the In norms? competition longer-term fighting the as Fortune of is thorough. Or more was Are it normally parts as thinking intensive is? competitive -- there When are the very all full now that your strength? concentrated the here, at view, they any are that or we is I'm right look -- reinsurance differences guess, from

John Doyle

of same in I and me passionate we mean, of clients out of No, than about winning clients. that up competition. try we way. the We're team to There's front our course, is fired to value you highly the it's And -- getting And in both segments that nothing ultimately. gets love competitive the it our mentioned, deliver more market. is a

And I so mentioned than as more collaborating ever. earlier, we're

efforts so, think our capabilities that and to and client a you the course over segments particular it. It set we those mentioned, very, But been welcome a makes the broader or in And meaningful I bring to better. set. very of it's market, particularly competitive last year it's no, of us

maybe question, next one. the Andrew, Meyer. Thanks, and last

Operator

Cox the with from comes Goldman line Sachs. question Our next Robert of

Robert Cox

In could between continuing hoping that guys Health. strongest organic that comments brokerage I about care you're the was you and and XX% there organic in there talk business parts what in generating to are prepared of consulting costs were growth maybe the maybe rise. the seeing on health remarks, some

John Doyle

in pressure in in cost and Marsh Sure. and of to Robert. markets and to business some cost an remarks, in a it's is try to collaboration really and continue of industry Thank secret It's big between around a -- part invest and our don't I care of think Mercer driver inflation relief about big our you, my prepared that growth the angle talked health for marketplace. clients some of been the pressure major us, I bring a it. Health we world. that inflation care-related to And any the medical for overall. point many care is health

talk But as Pat, seeing maybe could about inflation we're the of you and some well? cost

Patrick Tomlinson

Sure.

health way. In based larger more of market then world area perspective markets. world, from the where business based inflation lot be our bit And the that predominantly we're in. the the brokerage more inside based the some that the impacts would are we're of that of Mercer a So areas of way it's in care the certain It's markets, more and little upon varies to large fee-based. predominantly U.S. like that we a a mature,

we're But the health costs care let significant me fee, a drives increased where even fixed be inflation clear, to clients. spots

demand creates for create a of So project it does us, work lot -- for a lot it work. of

will we don't cost health redesign is for based inflation linear other that through necessarily is don't Because cost care of had. flowing a -- right? activity flowing that they've of of P&L, plan we're sure not control activity not they there through themselves out driven perspective, that health not upon out help areas see that's care make that that really always that It's in So one that, directly full care to inflation client we're their type way. And projects commission from costs the a the even the brokerage, inflation. there's doing P&L., larger to once health the because it's a if it's -- client where they

inflation So does Occasionally, of that those design in higher mitigate project commission-based doing it with have we're in mitigate P&L. through still the rates is to brokerage. But we're on costs. higher helps impact client and flows us. times, a Part that's rates, plan the that trying lot Even where really the brokerage, those to to work. where create the activity straight spot try it and going it's client increased a of many is

John Doyle

point appreciate. benefit where, market, So Robert? market of again, have a a set labor again, and that scale rising example is to another bring and you costs in clients a the our we tight health follow-up, Do and a pressure broader can capabilities

Robert Cox

question. last just Maybe helpful. very Yes,

if year, them was Wealth business. but achieved pension that Wealth? occur of the of business investment growing was your X% stronger as well in similar to quarter in I probably both than me wrong, On I'm Did the growth think correct first were kind Or segment, here? the the that organic last

John Doyle

growth good benefits. solid Yes, management we across had and defined investment

mentioned, the period OCIO good of than elevated Pat in seen couple our but of expected and has course As business. we a inside of growth this growth the business DB years, more our broader last our of consulting our bit of rates business investment over interest capabilities and set

So that. we about good felt

Thank you, Robert. Andrew?

Operator

the call any turn and Marsh President closing to back McLennan to like now would for remarks. I of you. CEO John Thank Doyle, over

John Doyle

quarter. you All Thank I again us and Thank Andrew, dedication. I call clients want all colleagues with next for morning. much, In for hard forward the right. for our their to and speaking to thank their joining everyone I want very want thank and thank on work this continued also you, look to our you to I closing, support.

Operator

This you for concludes participating, today's disconnect. you conference. Thank and now may

Marsh & McLennan Companies (MMC) 18 Apr 242024 Q1 Earnings call transcript