MMC - Earnings call transcript Q2 2024 | Marsh & McLennan Companies, Inc.

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Operator

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

Second 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

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

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

John Doyle

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

me Oliver with Marsh, South Martin Mark Tomlinson of Nick is our CFO; Mercer; Guy Pat McGivney, of of CEOs and Carpenter, Wyman. call and the of On the businesses: Dean of Klisura our Studer

morning this Head us of with is Also Relations. Investor Dewitt, Sarah

their our go commitment We victims Violence the and place I Trump, discussion, like debate in civil ones. to out assassination it, hearts President, no safe, into and our U.S. comment politics We're former of to on the Donald attempted and Before results, has past that to he society. our our our thankful or is loved condemn affirm weekend. this and I'd get resolution.

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strong businesses geographies. the our underlying generated on X% of at ago. Consulting. revenue Marsh reflecting of across year execution Now in turning McLennan strong We in both delivered from and results to a adjusted We quarter year, RIS income XX% and grew top operating last growth XX% our second quarter. second the

grew EPS and expanded basis margin XXX operating XX%. adjusted points adjusted Our

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

highlight and while we investing for investments on business. capabilities, significant from trust capabilities. more an XX,XXX $XX our announced on U.K. operates acquire in Cardano, OCIO, our several in long-term than our position We're in serves high-quality Mercer and These the acquisitions the in transaction continue benefiting quarter, consistent billion make AUM. a offerings delivering the builds transactions. second important DC trading to enhances announced organic we to results and our the focus and and talent platform million also sustained our over Netherlands term. and saving long we've breadth X adds that customers approximately In leading growth near master scale on U.K. agreement build largest the made specialist in This term Cardano across with of the third employers.

Oliver in bank acquire Wyman adviser Bottrell, largest McLennan in the in United the commodity Agency quarter: Veritas X the of Solutions, one Marsh Total five agencies Fisher Brown markets. energy acquisitions affiliated completed AC Texas. agreed and and commercial States And an insurance to agencies adds Insurance benefits. our scale Perkins P&C Southeast. P&C builds FBB commercial our commercial Management business specializing Northeast, employee our the expands across in in P&C and to in the in Risk presence on

attract $X.X And public agencies very they've $XXX and make to in AmeriStar, sustained Shore, the the benefits a worth, rates of revenue of underlying acquisitions also Minnesota; to recently announced sector Jersey. Midwest. primarily million our agency high New a broker of week, we ability in company. Horton, top commercial Last with P&C insurance And the growth, agency XXX business. in revenue, our examples MMA Hudson These employee in acquisition of great based a helped announced are over along high to MMA operating best billion acquisitions a annual with net the

clients investing for continue expertise, a our thrive complex also by environment. Drawing insights, solutions to in are innovation. we help on and new We our creating data perspective,

evolve uses a Marsh example, clients. insurance for to of digital and suite for continues data to decisions strategy our insights solutions Blue[i], For generate analytics that

With analytics we with help clients quarter, our risk Blue[i] challenging to landscape navigate willing This added define amount to insights greater of risk they're and clients appetite the help a type calculations, retain. confidence. customizable

our using solution the volatility beyond cat prescriptions Guy clients Quotient, which combines our Free deep curated with and Wyman around employers in deployment lowers AI cost cyber and launched advisory proprietary protection Quotient solution implementation, specialty new knowledge. to cloud-based amongst of Health's SelectRx, employees Oliver network offers a deliver creates innovate a to Mercer that pharmacies U.S. to with and by businesses AI of specialty directing Carpenter risk the our technology a high-cost clients own the GC's in CatStop+ outcomes. platform for competition helping analytics. moves of CatStop+, real is strategic address industry Leveraging against Market deliver for the pharmacies. savings their losses. to cyber clients hypes value in launched medications. launch SelectRx meaningful expertise

clients. consistent with It to us term for enables long exceptional sustain the and growth drive performance to and shareholders. approach Our near-term innovation balancing delivers also significant over performance investment value to our

picture. macro the to Shifting

complexity to facing opportunity the help clients they're navigate see to continue We significant today.

in changes the bank and remains the key the and of supportive this the and Uncertainty environment the of assassination Beyond across escalating attempt geopolitical outlook like globe. our cyberattacks, attention economic in unsettled variables shocking the uncertainty, in of of areas growth extreme business. around with wars the remains of backdrop weather, U.S., central policy. Despite also frequency persistence the to ongoing is inflation timing the

decrease. most to continues tight. and In consensus general, economic care remain we near-term see health markets risk continues to of markets. the a of major in rise, The major in growth continued labor of for And probability our recession cost economies

economic consistent execution well and solutions clients. advice to our our for across for performed have of our cycles sustained resilience and the demand due We business,

while U.S. and increase single quarter. X% in while the rates the quarter quarter, the mid-single-digit in insurance Index decreases. flat Global market Latin versus in the Pacific The rates and Market to the first compensation low low in and saw Marsh up mid-single to Global overall the property continued to low Asia increase Turning U.K., versus U.S., in America digits, Casualty conditions. decreased with in XX% were to the in flat increased a quarter. up single low Insurance first digits. digits reinsurance was the Europe second excess workers' casualty X% Generally,

were on and while demand programs accounts decreases approximately without loss of The quota with flat for property is commissions upward limit. cyber reinsurance the billion but Casualty market with renewals XX programs property face with most reinsurance increased saw of adequate record, rates liability increases down mid-single upper slightly. professional to down Excess scrutiny, were X%, easing U.S. property and for The greater reflected Midyear losses. bonds underwriting layers Financial on The had share issued continued cat the and active pressure involving pricing in respectively. quarter with over capacity. $X digits, ceding after global rates pricing exposure completed market. bond new XXXX. with capacity significant there renewal generally adequate down cat, cat of rates were flat placements at majority X% were to in

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

financial adjusted Carpenter Guy X%, up was second XX%, X% generated basis Mercer year-over-year. Overall, Marsh from income turn points revenue grew operating year operating X%. to in expanded On $X.XX, RIS and Now grew grew our let basis, an Wyman X%. Consulting. revenue adjusted adjusted me quarter is which We quarter in saw and a up of ago. second our XX%, margin and performance. EPS underlying Underlying X% of XX% Oliver growth X% XXX the

outlook. our to Turning

We are another for well in great year XXXX. positioned

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

macro Our conditions outlook current assumes persist.

uncertainty the remains assumptions. backdrop economic could and be than meaningful our materially different However,

the on deliver across grateful initiatives Overall, clients, and they our proud demonstrates communities. our business. and our I and which and determination quarter their our value second am execution key for continued to momentum colleagues I'm focus to of shareholders performance,

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

Mark McGivney

morning. John, and you, good Thank

significant in were adjusted growth, Our strong: and expansion XX% underlying EPS. results growth second quarter solid margin

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

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

operating of points margin underlying For increased increased X XX% adjusted basis revenue the $X.X XX% XXXX, operating grew income growth $X.XX. to adjusted XXX adjusted first our to billion, EPS our our and months X%, was

and Risk at Services. Looking Insurance

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

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

renewals. growth $X.X This At an from solid for U.S. or quarter X%. in the in came of on in strong was Canada, ago up In X% basis. was quarter Growth Marsh, X%. was up quarter. second underlying new billion, growth the and year X% EMEA and XX% business underlying underlying the of reflected year. on X% revenue quarter last International growth growth was second a the strong top

up Pacific X%. was America And Asia X%. grew Latin

the was with Carpenter's months Canada For grew and or was of International on specialties. X%. XX% $XXX XX% an of top driven U.S. up revenue of underlying growth and up $X.X quarter, came geographies underlying across and Guy was X last most the X%. on was the result year, and first This year revenue by million in double-digit X% Marsh's growth terrific growth XX% billion basis.

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

was basis. was segment, on million, a $XXX and ago Consulting or $XXX quarter year million, up X% X%. Consulting income operating underlying the revenue operating up $X.X X% was billion, from income In adjusted second an

margin of adjusted second XX.X% the quarter, Our in was in increase Consulting basis XX operating an points.

basis million, Consulting X revenue points XX was underlying months of billion, of increased our operating growth margin to income first the Adjusted XXXX, $XXX XX.X%. reflecting $X.X X%. increased X% to and For

the Mercer's X% was growth underlying DB $X.X X%, up X% of and in quarter, Management XXth ago, underlying the or driven grew on continues Consultant. in compared basis. This best but of Investment years. straight a to growth both an flat and Wealth in growth revenue XX billion by year Mercer's quarter higher was run

driven of by XX% quarter X% markets sequentially the of were up growth billion management quarter, trend reflected second Career a positive of flows. transaction up under assets growth was second Vanguard, and our Our Year-over-year continuing and strong underlying net last year. X% $XXX to the the of at remained revenue at following with strong growth all end of impact X-year increased modest stretch Health regions. capital across the and in growth demand. growth X%, compared

the was underlying X revenue year, at of the For months Mercer with growth. billion X% first $X.X

in growth a year $XXX This an an Wyman's was basis. Oliver X% top the million, comes ago. of on underlying XX% revenue on quarter increase of

of The an months the first underlying increase last in was of an Oliver basis, growth the year, Wyman from of year. up revenue first on $X.X half at X X% X% billion,

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

quarter. well and a $X.XX program fourth began transaction-related we quarter of $XX related rates quarter in as exchange the mostly the were million. expense. noteworthy at of million in remain Total included the quarter be in $XX we in FX expect restructuring costs, These to current $X.XX some as Assuming fourth third the levels, the XXXX headwind to items

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

net will year, full the For other $XXX our to benefit million. expect we approximately be continue credit

million Interest expense and was current for on quarter $XXX last higher million we in in and full up of second our levels year. million quarter third of debt million, second quarter expense higher $XXX interest year, expect interest the reflecting forecast, $XXX the in from Based the rates. approximately $XXX the approximately

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

both in discrete favorable rate benefited periods tax Our items. from

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

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

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

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

on ultimate acquisitions to repurchases. The develops. how making of level XXXX will increase the year expect dividend our Last capital We our to year $X.X of confidence continue our XXth we share billion and This XX% repurchase earnings consecutive deploy approximately ago M&A of week, depend a XX% outlook. strong across increase in on and share of this dividends, in announced a dividend, top reflects comes growth. to growth quarterly our and pipeline a

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

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

margin to our our uncertainty and or in growth, the on our economy, us continue the half environment for well and another strong global expect current outlook first EPS. about great we year, outlook growth. the in today, mid-single-digit positioned supportive feel for While full the good underlying business excellent in in we there expansion growth continues better for the adjusted to leaves of XXXX. remains Overall, Based year be momentum

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

John Doyle

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

Operator

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

David Motemaden

Just of digit outlook mid-single growth had the underlying revenue greater. on a question or

revenue terms range? did the You first takes just of digit. just guys the half range in and the you to growth, single in me but why aren't increasing through of high the puts aren't underlying help guys Could increasing think X% you

John Doyle

sure. David,

Guy at quarter was first of again on Marsh another yes, Market year quarter Mercer volatile pretty pleased big had ago of growth solid top just improvements growth and So quarter. the tough XXXX. practice had in after with good by an demand I'd market I Carpenter our XX%. solid led top mean a very as region of say all, excellent a It growth. of comp. a on quarter. had in increased to a reinsurance

Career What and quarter. have growth we the has of out all growth of I was uptick of we'll is, comments, be the markets, care, than growth an growth volatility in had more from but actually like long solid, health rising quarter-to-quarter -- noted past, to It's environment Oliver a remains speaking, tough and we're growth had Wyman businesses. operating say we the Mark comp, in his in our in, growth supportive stretch best risky would Health As continue macros first pointed growth. as other the And cost -- feel but time. very very a of broadly had period positioned. rising good I strong. Wealth very good -- saw risk, the very, very in feel GDP, inflation, well we're I labor -- cost cost all a year-to-date. supportive,

compete best have the talent in. markets We that we the in

second we're the market positive so outlook a And half, again, for us. for on remains good our

about good feel we we are. so And where

David Motemaden

case? still in you . Mark, Is then, Got first the expansion expecting it. And quarter's guys call mentioned second on the half. than think that margin the greater in I you that last half are

John Doyle

to want go you Do ahead, Mark?

Mark McGivney

XXX first points facing margin statements from the several quarter and validated happy Yes. with items. expansion we made We're the about really headwinds basis

glad acceleration, and So we expansion good the for -- to track the we're we're for on solid were see year. margin

Operator

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

Jamminder Bhullar

a and So function first, your tough normal comps it's versus this comments quarters. just pipeline? a The the following of John, on maybe that Wyman. in of the quarter slowdown much up Oliver the versus last is How been just slowed business few on growth what volatility in

John Doyle

to me, about but year-to-date Yes. Nick, tough both, want it do some the here. feel very for and hand growth year-to-go -- of little the bit was But more I to right? I'll But you add a was Jimmy, comp growth, we good a it depth? -- think sure, for thanks excuse question, it Nick it's

Nicholas Studer

Yes.

first comments the a the year-to-date, that zone expect John's think territory kindly banking capabilities. industry both perspective, wide actually in a of is little are that give practice we quarter bit is our that bang same cycle. have very practices Africa right. and regionally, know, I higher fastest accelerated way through a I on average the a to of Jimmy, half This our strong growth positive communications, quarters growing against you was color also X% year. and always of To half regions India, where you is single-digit we media seeing public weak East our About X% in an in are has and on it's XX% practice. the first Mark think, XX. bit both. as a last Asia versus array Middle have somewhat continued against of his technology high I comp. from sector that growth last But But been year-to-date. little X growth and tougher our our our in noted strong And to as volatile. mid- insurance we noted And

nearer business growing research economic Our strongly.

Our services, market-leading market help our client works performance uncertain. the organizational the our people and financial transformative practice, to in really is and particularly on moment. across bit finance and risk industries team, our importantly, little which practice, pricing a But

While headcount the competitors through And some economy be John of it's sort for better, of highlighted. pricing some actions. spending, pressured some uncertainties, we see discretionary and some capacity pressure work still we're environment our to Mark -- excess through as have to due a working do seems their of as

John Doyle

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

Jamminder Bhullar

Yes.

it's fiduciary of Just sort -- income. and on maybe sequential been flattish investment a for was It Mark -- basis. on

given XQ was to in flat function a that rates grow other of and just in assume Or sequential going the are where seasonality results balances going with of it's factors? should the more growth So forward, we business? of

John Doyle

Mark?

Mark McGivney

think talked just But going the I we've in biggest as balances be driver, I think, for the to from Jimmy, is there outlook rates. is about seasonality the here in past.

the in and got of about about you've saw talked in quarter, our fiduciary sheet we've balance $XX.X balances. you billion As

And interest as do I And from modeling the going in short-term just our just just be mix forward, go banks to think business. keep rates. what mind, where you're balances reflect so central is of do revenue we our here with the going

that got So it's balances We've drive. business the nature not obviously over distribution world. all just rates U.S. our the of of because

so to outlook a looks is of said, be the picture rate really mostly like. as what yes, going I So function the

Operator

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

Elyse Greenspan

margins expense question, first you a sense My much within the how . your within can us RIS, the give helped quarter? saves of in

John Doyle

are saves, you Expense you're...

Elyse Greenspan

about... Thinking

John Doyle

Mark?

Mark McGivney

the from quantifying least, it. quarter-to-quarter. much benefit how At specifically growth away definitely We've just Yes. was we're you drop in going see that stayed But of factor. expense quarter-to-quarter, seeing definitely a is to trend even

basis Our XXX margin the savings benefit of and strong expansion. to that points growth contributed of

So but we seeing on of haven't about, the we quarter, the level seeing for we're I talked as -- we're quantified said, track each savings we that of the and amount that benefit we're it. are

John Doyle

a you Do have Elyse? follow-up,

Elyse Greenspan

second how are within in internationally, more QX about the you then guys my both some U.S. Marsh, you back what for U.S. think the could or and you in year? give seeing within And other? to outlook sense and then Yes. internationally of the the us growth, one property organic of in half And you're question, the more indexed color just the a both versus

John Doyle

And solid that, demand on quite I saw right? international you comp. color a little Martin, a indication region of to U.S. little growth mean, lead it the I seeing? bit and you by again demand. But more I Yes. tough right? But bit Guy could and practice the share just second a you're good on as pricing, I quarter maybe So Carpenter and better market of the by a markets we dynamic, versus earlier, growth in a think top good a is to was mentioned caution right? on are increase so

Martin South

Sure.

quarter, 'XX. XX X in Just is X X%. to International growth which Quite on of at of and balanced U.S. the second at and for Canada restate U.S. top the at -- quarter X

the to had Canada a very continue MMA U.S., well. In business to weaker U.S. perform quarter. Our able

'XX. little Some of on affected was International down XX in macros region, But the bit. a a across pulled there top International that X

was as our of And with we them premium the We strong was probably business in the in question. did last performance from well loss continue to Energy has Power, 'XX. Pacific and clients top of X Construction, of in and talking answer -- well, The risk its to slightly X Asia top U.S. capital U.S. more -- in top mix 'XX. new beyond future, revitalization came for stickier more build risk. and very the deeply 'XX. it's we Latin Benefits X did aspire on And in base a been second improved really the some is Canada what to weighted in and and beginning in the time growth going on the very in double-digit adviser We're well of growth we America feel as business. and Casualty which X growth International. solid, year. by internationally strong for both broad to performance markets, terms, business new see all on conventional XX to the as and your off strong and more of to business engage repeating Overall, accelerated be balanced a driven happened positioned. Property a EMEA International casualty headwind will in 'XX. to be of relationships quarter Renewal back as U.S. XX

John Doyle

Yes, of Thank Martin. liability Elyse, the and environment in U.S. for thanks, sure. you, the reflection

Operator

Our next Capital question comes from RBC the with Scott Markets. line Heleniak of

Scott Heleniak

question. a Just quick

pretty pace few year. been has for over strong M&A Given certainly and past quarters the the

tracking half? in kind rate should deceleration kind first is Just second you wondering the year? what you versus versus run that? are how in if into the thought going thinking half your for assume the buybacks And M&A of about share the Just we how of a

John Doyle

philosophy. Thanks No our the question. Yes. Sure, Scott. for to change

balanced approach capital to management. to We continue a take

not build balance let organic we buybacks, cash up billion on We deploy the favor whether either. it's to $X.X speaking, of going business, sheet course the inorganic, year. Broadly have or the we're to attractive investments but during our about over in

dividend dividend second in year. we this earlier, market. in quarter. We're raise quarter. We beginning every seen we've shares M&A $XXX back in million our our noted to the what bought with I the aspire of We increased As pleased

As quarter I here deals the the just start at it We a at after couple an said, the of first really quarter. announced was active of the second [indiscernible].

deals, the active M&A, So ultimately, we'll market. ultimate the depend continue never obviously in and we're will be business. seeing will But a to amount share know good we're be outcome those in M&A. the you in some our about of what's repurchase But excited volatile what on opportunities to invest

have Do you a follow-up?

Scott Heleniak

Yes.

Just one quick one, too.

on compared organic And strong just Just back areas, bit while. can out slower the those just Health besides growth other a just the of if strength of strong to in is there, versus Wealth, you're the kind wondering difficult there's really the seeing you if kind comps? areas what for been flesh I Health Health, those hold anything has kind generally & but a again and little Mercer, X% quite Career guess, of

John Doyle

in ask rising and comment care Yes. a Pat in pressure Thanks, But economy. big for remarks. my in mentioned It's clients to our costs second. I'll health I Scott, this a point opening

And in the and world. around major -- labor given particularly so markets most the tight economies

maybe clients quarter-to-quarter, well going some what terrific about a -- to it's is marketplace. a in Career could little really we're volatility Pat, but delivering value marketplace there. tough talk we're as to bit seeing in very So a Wealth you the our have

Patrick Tomlinson

for much question. so thanks the Thanks, Sure. and

pleased off, with X%. growth the underlying QX we're First of

business had that the XXth consecutive has X% of practices are higher and strong and tailored including growth, a was investments from to survey, times growth in was renewal segmentation some contributing inflation, Certainly, to most growth that's go client care through and As new our We new quarter hiring Health regions. Mark there tools insurer to and and revenue all really seeing. growth. needs medical It across Health, some designed impressive X% a thought contributing innovative on-demand predominantly or with leadership, right? benefited our highlighted more been with talent, you The has match quarter kind so investments new cost broad-based, digital health from solutions. certainly. highlighted, at So called a couple on with focus Quickly practices the growth. clients' we're our performance rate. what double-digit health in that highlighted, and our been of as comes

see demand of innovative advice clients. Wealth for we solutions and Career. the bring and to of to strong in and Little really digital continue value less We solutions the breadth -- growth underscoring and benefits

benefit So risk in volatile well work, let me go regulatory the benefit That we project between in balanced through Wealth, IMS? driving and had around transfers advisory increase interest of Vanguard. revenue X% right, capital in to funding to it's quickly and IMS, a work DC that them. We administration note the some from highlighted that addition with transaction inflows plans OCIO. John lift. the jurisdictions rates. important markets It's DD&A continue was from provided on solutions, also DB perspective, a in from elevated portfolio grew in It's the So business some status QX. been in predominantly an that strong revolving as some around and to net it's capital had investment certain world. includes head did we actuarial new for demand as requirements the driving some of out solutions. and are markets, We the some a

directly looked our is of lot a by OCIO times, at business AUM. only So as OCIO. And impacted it's typically

portfolio equities AUM we our Because income market have fixed as diversified half directly make is impacted So that's about exposure. by of we've we lot AUM. really, that our that a exposure, only clients where right? seen up, a only heavy of run up business have And of subset a a have

We a long the good rates think rewards of that's reduced And think saw demand is and pandemic. growth our practice important inflation bit even it equity predominantly of volatility note modest us, of last lower of then impact the growth overall has So drive slightly flat over projects. couple couple employee impact it's more fell muted of modest. Career, was down momentum the been is to reflecting clients turnover, driving while our following the growth Rewards IMS muted. sequentially But more for most growth. period was bit growth over It X%, larger more is And the our while pre-pandemic. lower was XX% I I been markets quarter. wage than some talent that and the a a the which here The for from also had of can which of some up after a at Career bit is of markets quarters, which practices, nearly size it's a on in transformation.

So so maintain about we in able a business. that those that's -- we've been predominantly strong very feel that project-based levels to

So overall, positive conditions about I us the have outlook the think very

John Doyle

Pat. you, Scott, questions. Thank your thank for you

Operator

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

Michael Zaremski

Okay. Great.

the on competitive John, environment, to you I environment. guess, said Index pricing I the believe Marsh cat property again X X. Focusing from

like the lot between there offer know And any color with different why have Marsh you of Just large kind to of on agree too, does given pricing. on we're can curious, account X you'd mid small more if tales that? I and yes, don't SMid trends like stories if feels two going there's accounts accounts. you seeing business it the a now different different

John Doyle

Martin the here volatility the I'll Thanks Mike, market has both pricing observations. question. Sure, right attached gate ask to note, some talk to then more and thoughts, larger some just maybe typically, and out that share would I'll high-level Andy for it. account Mike. I of about

have insurance weighted best been to been versus our middle I years just while historically as If settle data. case. quarter best where the to and cycles, out the on and increases. of many that's pricing more It's pointed cycle you been of markets continue Mid-market large index stable guess, or to in we collection cyber FinPro, not in It's the back after reinsurance clear, maybe volatility is consistent, has from example, more and And But remarks, to what's towards the accounts moderate. cycle. markets large. prepared be continue prices less have a I my look historical and

financing an decisions XX%, are conditions and to now, providing Casualty, showing loss be right what prices -- example, cost made clients market the signs of uncertain quite our challenging. to U.S. market some there up for Excess revisit them that they've decisions. inflation tighter market overall, But segments remains opportunity is of some make for and led risk early stress. were Some might about

market? many it's Martin, quarter as welcome color some evidenced a decisions, it a little of as we're could earlier, and growth. in Carpenter, But pricing bit more to greater in on those for share of second maybe our strong what clients you revisit the Guy seeing demand moment to our So the mentioned by I led

Martin South

Sure.

India, in contracting than except the normal. slight maybe rate claims is more pricing index in mid-market X%, saw and we result past XX the in East ourselves in Middle pretty is the we're for with world, about regions, And the mostly in just is increase reminding business, what the in quarter. this the consistent turned line rate increases in Obviously, which increases in as some segment at is seeing the the just But still seeing casualty a most business contraction umbrella book, our trends earlier business. the volatility there. XX% which said, end geographies, -- pricing. the contracting about towards in we increases, consistent much flat the John East dominated quarters, John but less our as in rate volatility noted, account is is in of X% talked up we're has FinPro the decline Property recent by now. Core of of where in geared QX. with And of quarters property, across Just with more activity and which, of The U.S. larger smaller some inflation X%, Middle cyber calls some much which flat by really as

And has of on significant as counterweight so as that. over But is been exposure those the far commission we really controlled well, concerned, that lot are our growth to is would last comment years a is our -- key course, a I which the of basis, issues now. few or as fee-based and business business

John Doyle

Dean, cover market? quickly maybe reinsurance the you could just

Dean Klisura

a reinsurance just headlines certainly market property underlying Martin that to describing. about property which market, Mike, connected of And the is that couple the is cat

our I with limit. not really, takeaway of increased In additional retrocession given coverage in They're gone volatility. But at spend John sellers, record for U.S. key this by that clients increased property headline, coverage clients our of bought plus John market. right? seeing premium say ILS cat very think more know the the We're in think reinsure an marketplace. X/X market across which have cat last I the clients. property significant and completed we're experienced cat. to limit, property year, index, by negative half the improved noted, our additional the $XX points, an it's client the the for pricing, And and the adequate the ROEs of discrete demand the significant appetite in absorb noted, as first up cat billion than is been marketplace dynamics, in bonds, truly look much the to our compared losses bond last strong for market some there's clients Taiwanese higher cat it's storms has still of noted, in we about X% earthquake, be another the that I seeing losses. seeing in why, the for cat been for could track year There's There's year-over-year. of collapse, think And first predictable smooth headline a Placements limit rates appetite XX% insured John hard quarter, in market. There's think capacity year. convective online of insured When As you if we XXXX. year bridge ILS billion in the property the and the market. with and the market, of U.S. increases last year-over-year caution plus of forced mean in for is greater reinsurer Japan, half been in a and in activity we I on $XXX vehicles attachment billion market severe the rate And in rated $XX driving property market time. issuance the you floods rate moderating market year would the XXXX quarter. in and market. both billion in XX UAE, the have cat Baltimore It Germany, is more Mike, more improved in on Hurricane $X We're also you I the

So caution in there's debt. the market around property property and

John Doyle

Thanks, Dean.

evolving So the big modest Mike, shift from favor first but of a quarter, buyers. in market more not a

clients we navigate a follow-up? world cost what's risk to you where, them continues And our to so the the Do a of help advice into factors escalate. obviously that and again, give have

Michael Zaremski

Yes. Very quick follow-up.

make chunky just in want I nothing terms net it's nitpick, there's consensus of the about that a on there at acquirer a revenue I if and off divestitures in EBITDA think is to thinking is and sure FX Just not total maybe missing, I very to and maybe little of I but M&A, impact? us looking the I bit. And think, be what, ultimately, still of was term there I'm Is that in should divestitures? anything adjusted, but growth just near guess, a terms little --

John Doyle

growth sold they basis, Mercer, capital-intensive. we we U.S., margin they're in relatively them sold the were relative And is again, in No, X X on reason no. the I at lower in admin businesses. U.K. businesses, to a low X The mean

And now, we about feel and decision. so owner have that better so we good think they a

Operator

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

Charles Peters

your comments just like back in some guess remarks. to you prepared I go to I'd made

call? wondering a You big out some data inside more business around could it called scope is of provide because data you some specific you how business, mentioned It's the the if Blue[i]. analytics it provide in was just that. I

John Doyle

part we clients advise Yes. Marsh. It's how It's of business. our not a at really

you of that brand, the suite And think analytics. and of will, so on they could types manage Blue[i] is risk. clients finance help just some range tools how for that kind share we our the use you of insight our maybe if And about Martin,

Martin South

Sure.

to So to identify that exposure they a which are of different help assess has and claims them of help could we clients We use across able as who you of cost to that. total need them this lot lines a it settled what and retain, to product at early they get to give We in economic them suite John, that risks those. pay our losses cost what the lines, across said, is transfer, and scenarios. our risk analytics tools analytics to multiple tools losses help the self-insure analyze of risk clients

that things is our it's and we of range data, real-time about lake have our business enormous to X of big and support business. we of we really, have that's one So analytics built it's a that unique moats and think the the of an

of that even tend U.S. some We insurance. by plants deploy use, we of tools They actually to call And that on in these Blue[i]. some we analytics the done biggest our generically be clients them

call So -- with in that's tool And and use. that expect it's we supply clients to the as and invest way we'll to year, to that. we continue that the added announced engaged, be we capability the in last chain so

John Doyle

It's have them help bring a the talking proprietary the we while will on we good our operates given Carpenter. of We have another way it's brand, we most approach an when upfront, market, but to the use. data scale tools understand mostly -- the time different of can the benefits and Guy to risks. you clients market under unique we risks, at to spend follow-up, be and range analytics said a set where the mitigate of reasons, it our our of we Greg? risk manage example for clients Do to same these So the really we financing and in calls about use that to part those And proposition. these strategies important market, for go it's help our those understand value of

Charles Peters

do. sure I

flow free the just could quarter year in some little it's X-month for changes working cash the like additional the flow Just on provide basis? bit. It cash to you looks flow a and cash color going for operating if on months, Wondering the the operating and X a capital. the down

John Doyle

from Yes, it's maybe quarter-to-quarter. Mark, to going volatile Greg. Sure, be you But can...

Mark McGivney

first tend flow. X we have course, to we true They of balance the when as and Greg. the because free bit but of Yes, cash you given always denominator are comes it flows months, year-to-year be look and Well a much in quarter, caution focusing seeing a that we little to issue. -- decline a not denominator bonus on volatile, always timing certainly too only small against that's cash you quarter's of you we'll payouts quarter-to-quarter, Thanks. sheet items when have a significant the -- so at of results,

then quarter X And and growth are to we payouts had the in months two be the in so are just first the the higher in cautious. first big of receivables business. But in because you capital-light comp flow you'd the in have factors of free got track well up up and growth what our record ours. growth in against has a, as expect business earnings, long that you cash stacked we've double-digit that's a But know, a like that

Operator

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

Yaron Kinar

earlier just a question an margins. on I follow-up on had

So I second expected had you half last the said you that in think the the particularly year. quarter, to margin accelerate, of

this that that's the maybe morning no response Sounded like the case. from longer

initially the if And at half guess to not? the year? part second that be I first than second you clear, expected? softening was you XXX a of to year, or your in if very you be so the guidance points -- of half to the just basis there quarter the is are of would be a better all the or half second guess change, because question, of some relative expecting expansion the bit greater it I expect this look So in margin of will the for second expansion margin the we Or in was

John Doyle

No.

half half. We the better be expect margin expansion than in to the second first

medium just the but expansion, the about long-term will our approach and too, is not share investments consecutive way It's run so continue to margins an attractive business. XXth single This and business. to just earlier, expect. to but opportunities. to of it's everybody, And continue I be we bit make manage going year color growth. maybe terrific We we margin every see we confusion and that's remind way outcome, of the the can of outcome if But right? created Sorry, business. to the and little support We're we feel of that. quarter, we growth in what costs of year every business going margin within revenue and any a a investments we happen to But

Carpenter. in got at I've of AI workflow the We're testing and scale. automation since Mercer Guy past, Marsh. As and we've mentioned efforts

So not that creation half XXXX half. again, better. value But continue first event. better second as a get technologies be But do meaningful expansion is probably to expect or we emerge, we'll to than is XXXX ourselves challenge margin to

Do have follow-up? you a

Yaron Kinar

you. So I'll back to turn it

John Doyle

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

Meyer Shields

both the Great. clients I think to Chevron of start, lines about the can and to how about advising you're guess overturning reinsurance insurance you casualty their following talk exposure to

John Doyle

the of I'm sure line between that years this a but about States. amount case couple on I particularly what we've over challenging. the overall is is the shouldn't settlements of Well, quite mega And not I last or in loss see -- -- direct the course inflation, environment. what historically talked and here just call that particular But and United would historically, of troubling you I to signs cost or is the judgments say say and large of

might talked benchmark finance make and we'll And finance in of certain cases to all balance more on own. risk that's judgments look choose capital on others clients inputs the to risk risk to what briefly and outcomes, of consider others of that as Martin limits so It's about the they suite think of type And should their of against example. about analytics clients our range we inside the ultimately sheets well. decisions -- their an help spend time, are of buying, industry more of in and some finance we lot But suite insurance and we use. those a our a ability or markets analytics, have they how or anonymously important companies as to

I hope So that's helpful?

Meyer Shields

that when we It is had you XX first is growth This of at Is what good end stacked more slowing outlook the a the in maybe or small at, compared to X you your you quarter earlier, . X in the grew let's [indiscernible] of X. the quarter? guess, the from But on X-year items is X, at plus XX say, this Career, the quarter, thought that's organic picture issue for to I had big Career look plus first very dramatically picture. issue. based

John Doyle

don't the a quarter. from change I think there's real No, first

the of And As the haven't comp we turnover dynamics view, markets outlook. less active lower changes of seen X that that in didn't Pat have mentioned months we course anything that of So of point labor business and higher a through expectations from growth during some XXXX. of -- it's

Andrew, time more. one maybe for

Operator

the from comes question line of final Cox with Goldman Rob our Sachs. And

Robert Cox

quarter, to wholesaler? premiums directly recent split that has And want was you said E&S the access versus might directly going you back How placed its that's something forward? of curious third-party Marsh solutions go percentage market between John, how I to trend today. which of most trended over through a think last years? I'm that E&S in how

John Doyle

build well. insurers of our conditions have, the business. a a of over last years. several about Yes. -- Again, quite third-party That's really to just clients. a or bring to get markets moved solutions rate, as be not course We The clear, looking speaking, and bit risk, to price terms wholesale best broadly we're want off to change I've high-risk more freedom where E&S to the to reflection to talked change change the to environment that the

of nice an proposition. as more we access -- us, not growth part outcomes what's important access we wholesale to course not they outsource premium most clients' just do sense. there's of continue it them don't couple manage and actually do and But years. that and wholesalers been -- premium, we wholesale intermediated majority so And we'll -- that want job value the today the directly makes directly to in our say last markets, for It's we experiences do today. speaking, of broadly to possible. a of where the the but E&S the But of over or directly

we access Robert? to so as to are efforts And market can. try our to a get have Do follow-up, much as you

David Motemaden

organic And gets can cap Yes. help different if bonds us placement. the sort on quarter to cap That's great versus record And you economics, traditional from think Guy question much of color. Carpenter contributed how about was reinsurance Yes. that second growth? on just

John Doyle

Yes. The economics and course, different clients. different, our can be from company insurance well. of We treaty they're with work to treaty as

As factor in growing factor to relationships about we work we what was is last was effectively The when many with commission insurance amounts a our what large particularly wholesale and the tight respects, on, price where while talked company costs. really big fee. we market a a do year,

Operator

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

John Doyle

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

Marsh & McLennan Companies (MMC) 18 Jul 242024 Q2 Earnings call transcript