MMC - Earnings call transcript Q3 2024 | Marsh & McLennan Companies, Inc.

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Operator

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

Third quarter 2024 financial results and supplemental information were issued earlier this morning. They are available on the company's website at marshmcllennan.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 our Marsh to recent McLennan on all SEC most factors, discussion of quarter our most detailed including website. Form more for this a please For the refer recent our filings, which release and available those XX-K, are

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

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

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

John Doyle

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

us me CEOs Mark and Oliver Studer of is Investor CFO; Pat new with Chief Guy South . Also Martin Nick with on this of her businesses: Dean of Officer our quarter role her Sarah the last to Closure Sarah Marsh, like Marsh. of of of is Wyman. Tomlinson We'd Carpenter; Financial McGivney, the Relations Head congratulate for On of as and morning as DeWitt. our Mercer; call

on impacted like of which and get human all and results, I storms. our first foremost, to and are United with and States. take Southeast the our are those have the the tragedy, Helen I'd into moment a comment devastated Before communities Florida thoughts Hurricane Milton, to by in These events

in well-being well as our are Our to actively we of colleagues as their has families clients primary our recovery. concern been assist and the and their working

recovery. will path significant. impact and hurricanes be put also the loss and known timing, of disparity And pressure they available of loss meaningful highlight given insured these some for ultimate for economic wide resources won't time, on loss. the enormous between close insured Both will destruction their the be storms While

U.S. of storm. to undercuts challenging a imposes and This of economy, may meaningful the resilience. According largest the protection burden more any Helene loss to some recovery insured multiple on gap economic have estimates, near-term makes

In addition, industry areas need these governments are frequency higher events, communities, We property to insurance build the businesses, development of the severity weather resilience for and and perils. rising values, greater and in help increased and protection. cat-prone driving extreme manage

storms community-based event But as Parametric these more is such to highlight, solutions opportunity there as risk and do products. through alternative preparedness mitigation,

results. Turning to our

In generated The announce thrilled our marked across quarter were XX% McLennan, X% we milestone year, we business, of to in execution third third another the revenue Marsh perform to Consulting. for underlying growth RIS solid the we reflecting the and quarter, of Insurance Services. following acquisition and continue McGriff well last quarter in

We grew operating income adjusted XX%.

XXX points, quarter in tax adjusted completed last and adjusted third Our we a the operating year, basis expanded the X% EPS quarter. excluding share benefit discrete XX%, million $XXX of or margin in grew of repurchases

to specialty capabilities McGriff segment. of middle expand culture value strengthen deep McLennan collaboration Their Marsh focus, own. and the of in growing market vast record and It to They leading talented track of insurance a I admired revenue. strong with Turning approximately U.S. billion risk long have have in is management broking mirror will and proposition industry and and and colleagues the services the agency commitment McGriff. integrity the and McGriff. our leadership, in excellent $X.X growth. provider reach a of excellence

by hand cash debt to opportunities their deliver be on McGriff them and MMA be The funded transaction $X.XX create helping to greater value will for Together, and billion will colleagues best and financing. new even clients.

be year modestly EPS, accretive X beyond. accretive expect also more in excluding close transaction by become We year-end, would in and adjusted year to amortization subject expect the regulatory meaningfully to and approval. X We to to

welcome and colleagues year for McGriff's integrating terrific the active what a record to an company have deal already business. closes. M&A excited the acquiring our to has to of over is McGriff and X,XXX added are across We track businesses, when we

We billion of are and faster-growing committed business, record on year including capital Vanguard's These deploy acquisitions business. to FBBI. capital our strategy in history, year-to-date, OCIO McGriff, $XX highlight track nearly for U.S. M&A Marsh of with to our Cardano, McLennan's the Horton segments acquisitions to largest

supportive As the the over despite continues Shifting what we of while complex delivering to be macro consistently backdrop sustained focus a in environment. term. and term for volatile growth have The said to long on before, we the near overall investing remains landscape. growth

near-term for into Central they of the the banks are recession of economies well major views have begun below a easing year. and most likelihood where coming consensus cycle of were

continue economic but rise. major declining. see and Labor health cost remains markets. across care to to elevated, of of healthy remain our risk Inflation growth continue markets in We the most

AI, their supply remains attacks, said, in across technology continuing Clients and the the the from threat Middle East. continue That on impact of frequency businesses. the assess uncertainty and with the tensions weather and and chain geopolitical extreme of implications of and cyber rising ever-persistent conflicts Ukraine to events increasing risk, advances world severity

and clients thrive. and Our help challenges solutions manage talent, expertise to accelerate opportunities

positive So for growth. we our outlook remain in

clients We a and our business. to and have the economic positioned due track well the enduring we record across value are bring resilience performing of cycles to of

second third market Index digits, Asia Pacific, single in rates in Latin and the conditions. Europe was And and was quarter Turning up mid-single in flat in Rates Global The U.K., were Market reinsurance Marsh down low X% the and Insurance flat. the quarter. America the versus digits. overall U.S. down were to insurance

second quarter. were property in rates Global down flat X% versus the

with X% quarter. up However, global casualty the casualty increased approximately in U.S. excess XX% rates

were financial X%, capacity quarter. low X%. and to professional In down Global cyber decreased adequate rise rates decreased reinsurance, demand digits. in continued single liability the while remained and compensation Workers'

know ultimate pricing. Helene While XXXX and insurance there it property an from be is to impact too Hurricanes we and early to insured Milton, the expect losses on reinsurance

for expected heavy to issuance elevated driven through casualty likely a which have Cat despite the first concerns year-end capacity bonds, is posted adequate of loss pace activity to by volume in programs And be inflation. over schedule. the record remain cost half, maturity

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

quarter third EPS our performance. tax quarter We up financial X% to ago the adjusted turn $X.XX, generated me or benefit of year discrete last year. a $X.XX let in is a which Now third from excluding XX%, of

grew revenue the and XXX On our grew revenue Guy X%. an Underlying underlying And X%,, was Overall, adjusted adjusted X% X%. and in Wyman third operating grew operating X%; basis, in margin RIS X% grew Marsh year-over-year. basis Consulting. in Mercer up X% points quarter, expanded income XX%. Carpenter Oliver

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

outlook. our to Turning

positioned We in year are another well for great XXXX.

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

outlook current macro persist. Our assumes conditions

third than our However, materially I'm strategy business. our the and environment assumptions. pleased could backdrop remains with different our performance, demonstrates uncertain Overall, momentum our execution be the of which quarter economic across continued and

our their deliver our the determination I'm value clients, and grateful to shareholders and to they focus for colleagues communities. and

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

Mark McGivney

and John, good you, Thank morning.

year. XX%, the and underlying excluding X% continued third expansion last . momentum revenue or in tax margin significant benefit in EPS adjusted a growth solid growth, large discrete with quarter Our

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

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

first growth Adjusted grew the $X.X For income operating underlying XX% months, X billion. revenue X%. to was

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

Services. Risk Looking and at Insurance

of ago a was X% quarter best continues consecutive year quarter up in or billion, $X.X growth marks from the underlying an underlying revenue growth X% Third in or stretch result X% of higher decades. basis. This the XXth X RIS, on

fiduciary the quarter, amount $XXX we decline million, looking expect ahead quarter. cuts approximately assets. and to reflecting a million recent Fiduciary fourth by this to income the drop was seasonal rate $XX In in see in

$XXX income increased million. in XX% to and our expanded operating margin RIS income XX.X%. XXX Operating to points $XXX million, Adjusted adjusted to basis operating XX% increased

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

At Marsh, of the growth in quarter year. This last quarter and $X.X top third solid on of on underlying broad-based X% quarter ago comes or billion, a X% in was was revenue the retention business and third up reflected X% year in growth. Growth the an from basis. new

the X% In growth and third the X% XX% top led last on comes strong in was growth Canada, of MMA underlying international, and for in business. underlying of U.S. year. quarter quarter, was MGA In by Vector, our and growth in

X% $X.X up Latin America revenue driven growth revenue X%. including The up and of X% up X%. X Marsh's and was was the underlying international and Global $XXX up U.S. the X% an X%. was grew international, X% Asia million billion, of Pacific up was with by Carpenter's quarter, underlying growth year, in First was was months Guy basis, EMEA on strong in Specialties. Canada or X%,

For year, million, operating growth. and underlying first up was was billion, $XXX on of of from X segment, year X% generated basis. the the $X.X Consulting operating ago or months underlying billion was million, In $X.X X%. Carpenter and quarter Guy up X% third X% income revenue revenue $XXX adjusted the Consulting income a an

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

to growth. adjusted an consecutive X% months, X% billion operating growth income and increased on X% of higher billion, Mercer's X%. first basis quarter underlying of was with This or to was up points Adjusted $X.X underlying underlying in billion XX.X%. basis. Mercer's consulting $X.X the revenue increased The revenue was our operating XX margin X $X.X quarter, XXth

in across Health growth grew saw underlying growth demand and growth grew all management. benefits X%, in and growth defined rewards investment and driven Korea remained Wealth we strategy. talent continued in by consulting at reflected regions. X%, X% strong where strong

under of XX% significantly the up third the and $XXX Our up from quarter the of quarter last rose assets to billion, management sequentially. year at third end

and driven was growth our of positive with capital net Year-over-year transaction markets, flows. Vanguard impact by the

Mercer X% in comparison XX% X a was third last the quarter on an $X.X growth. first growth at Oliver certain was quarter with of reflects of up underlying the in million, in months underlying revenue geographies. year, basis. the X% billion and revenue year $XXX Wyman's For the softness tough to This

see this trend currently quarter. We fourth the extending into

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

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

also FX quarter. fourth expect levels, at remain minimal rates we impact exchange the in current Assuming

Total noteworthy fourth as we XXXX, $XX began quarter the to restructuring million. some quarter as in program These transaction-related items million costs, were mostly of well the related in the included of $XX charges.

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

year XXXX, our other be expect credit million. we For net $XXX the will full about benefit

$XXX $XXX levels of million higher of on in reflecting excluding in to higher of approximately our amounts million, was quarter, expense rates. transaction. forecast, third XXXX, $XXX million any the the expense debt up Interest in fourth Based interest from quarter we third and related the quarter current the expect interest McGriff

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

year Our included tax foreign the release rate valuation of assets. last tax allowance a deferred on

give our we rate, items, positive tax our XX.X%. adjusted approximately do discrete negative. can items, not Excluding tax When forward or which guidance be around rate discrete effective was we project

the of on we expect Based adjusted for tax approximately an rate effective current XX.X% environment, XXXX.

a growing leadership, transaction. MMAs, presence U.S. company Turning is of similar faster mix, markets, a in performance. to record culture a to and diversified McGriff McGriff strong a track excellent our business with terrific

to consideration combination subject expect regulatory on new in debt, be billion cash we hand funded paying to $X.XX and cash of will approval. by by close a and year-end, We

we expect the part valued $XXX a approximately tax at As transaction, assume asset to million. deferred of

As maintain currently the bridge considerable we quarter of loan financing facility this purchase We've we get to balance in closing. commitments sheet opportunity. flexibility in full the fourth for and the with for plan as a secured position to the amount past, closer of to these replace us committed price noted we've type permanent

in to ratings billion that were expect affirmed X high-quality but our transaction. fund ratings, the pleased to debt our to management ratings, new on value we in next contemplated today, plan not and rating financial capital current we year. all transaction We Based outlook also deployment our raise capital recently $X.XX changes have no the with is outlook. maintaining consistent our and only we in for current expect flexibility meaningful with The agencies

cash bring us will flow line to leverage to Although with increased maintain initially, our generate growth to in levels ratings substantial expect leverage profile. as well capacity earnings increase, ratios a the debt we ratios our strong enable through back necessary as will

each share year and expect our high-quality pause we dividend includes As count a fourth share result, capital the think while to to approach intend quarter, about we as continuing management our reducing repurchases we maintain next into increasing fund our year, in well will balanced as acquisitions. that we as

our on in for next early capital obviously fourth deployment around XXXX year. earnings We outlook call our quarter guidance will have more

John in adjusted year transaction to and the more in As becoming modestly year excluding accretive noted, will X, beyond. X amortization expect we EPS, be meaningfully accretive

a of capital opportunities, our for is of into future. capital term to several the strategy, growth a delivering advantage to elements transaction management ourselves the take reflection invest to maintaining This great and reinvest growth, of flexibility sustain challenging in while to bias near

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

next scheduled is McGriff senior of expect XXXX the notes dividends, across of currently Our We capital share to first in excluding in transaction. of approximately XXXX repurchases, deploy debt the $X.X acquisitions $XXX maturity quarter mature. million with billion and

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

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

of want amortization spend EPS. to the I will to plans year, Starting impact from exclude acquisition-related we adjusted report on adjusted a next how EPS. change minute we our

item. also we exclude net We benefit It a conform report and also EPS core credit, comparability will power. the adjusted of These results adjusted other sense changes our will improve our another our margins. how earnings reporting noncash better will give operating with of the investors

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

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

John Doyle

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

Operator

Instructions] [Operator

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

Elyse Greenspan

my you My you color X taking what guess some give as on what expect say you're -- to for guys When would your beyond any first for X margin? on? less you the be that I right, question accretive And question you can that assuming year and McGriff growth to deal. intangibles us kind for want but to us are billion also, -- your is on helpful earnings the revenue what it well. guide guide, is year of $X.X are are assumptions then you the relative give for

John Doyle

for can family, Sure, together can reiterate colleagues middle regulatory their to extend Elyse, my talent have our competitive want they industry spoke group. vast the reach client a into opportunities know it's culture. you they outcomes capabilities, drive a better question. specialty excellent well. new thank market, They're they'll and for prepared -- the fragmented and strong welcome It's and and and focus working and we have a just -- create clients, approval. into I MMA, to remarks, bring for to we are with as to subject focused. the how so I excited The McGriff in obviously, really we

we're excited So all about that.

details to share MMA transactions, that excited other the when we acquire margins for don't them business the shared that matter, they're or we're disclose it. We've how about going growing, but about we're we like

return it so time. said, on year to be good earn over and more a in that, we X I and As expect after accretive will investment modestly the

conservative our about there combination So synergies, of we're we're mean. course, very in are but the can what excited and modeling,

Elyse Greenspan

market? give SPAC relative of Can for in that the that of improvement follow-up couple dynamics you us within been And there my a you're the that to IPO of and some a that's seeing growth right, in like seen X% then quarter. a again headwind was have and then business, U.S. Canada, years, this sense And on just the you any quarter?

John Doyle

terrific so all Carpenter practices, that. quarter just least, pleased and Oliver Sure. good widespread. quarter. across thought and at at a growth, Mars, It had was we underlying really about I'd in felt We and had quarter. a start, and growth Wyman. of overall, very regions growth Guy obviously was the with terrific Mercer -- all I'm I with it softer we had our

the new opportunity, could But it little and obviously, you environment, have well But Martin, in begun the some not around maybe positioned. we're seeing. and SPACs overall, pick a the U.S. up thought a was to starting is talk down M&A interest opportunities about bit and well, of come major but growth IPO's rates good world, macro economies to we're bit. and And SPACs, the and we're shifting and the I IPOs spoke in some maybe changing. marketplace I to activity, and meant that's some

Martin South

Thank John. you. Sure,

said, of top across you is with from we the in performed Elyse 'XX X%, with Construction in kind of capital growth question, and Aviation well. XQ, on growth globally, very products. a And balance XQ well, MMA see strong and in X% underlying in MMA to good pleased the but very X% of bit double-digit very as our double-click the business performed growth of and QX. benefits U.S. X% 'XX, did well and good line Vector. very international saw U.S., in We on & which growth growth markets As very and in I'll little

with continue. So expect momentum overall, and that that, pleased good to

John Doyle

course, of environment years is growth, least a off of Double-digit markets, after at in base, soft a a right, there. capital of lower couple

your you So thank questions. . for

Operator

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

Jamminder Bhullar

question on So Milton market. following on first, impact had up on a comments just your the I and its

reinsurance. on specifically just So

to loss. go how your they're Just And that down on up actually could assume given one Milton going are prices affects what high renewals? the should expectations just wondering or go

John Doyle

Yes.

to out a of point. there wide. day, of are ranges the that know quite I There's at and range at think, it's estimates the the this Jimmy, too early end obviously

And us at many lot so their learn, to there's property still just owners this a point. to are for facilities getting

economic Southeast it a to bit what And it's going recovery, and so the of I as means to overall challenging it's going a well, to and human spoke for of level those be about to the extend impact at a time. communities period

could about might I advance a the he And those Dean? Maybe bit storms? in ask comment of on impact any expecting it to thoughts have. where we're has little Dean

Dean Klisura

very and conference And our upcoming John. as of Milton, entered Thanks, the the anticipated renewal. cat property kind we fall a X of Yes. Helen clients, environment I market ahead Jimmy, at and January we think season competitive

Milton, early, cat still think X the January pricing property I we it's renewal. a think I but post at see of flattening upcoming in the market

If point about rate this property of of you some lower kind could in, remote risk-adjusted more and risk you mid-level reductions kind without programs, data layers and towers. cat see see think and layers some the all in at softening, flattish we and still

As over that said, There We're mind, still keep market. could next John be shape events additional the in wind it's the in several CAT season. early. weeks would

be it cat John all estimates. claims relying weeks estimates on data those impacts modeling And and we some just as with our right on noted, will before clients. of to sufficient partners we're our now, come loss make several And those accurate up have of to

clients. capitalized our adequate. Jimmy, well property in sum We renewal to to trade the think capacity most cat is be of increase up, will X forward January from will The demand should overall, marketplace I demand. and clients. meet be the it client for market our manageable at think But say, We would

that is our headline, the entachment think were I that the And of years high after X Hurricane by the be ago. imposed keep cat borne given major will the this points in Ian year on clients losses Jimmy, mind,

John Doyle

you Dean, follow-up? have Jimmy, do a

Jamminder Bhullar

Yes.

in is tough results of Oliver function noted well, affecting you Was were geographic that something on the seeing the mentioned. as comps weakness Just areas regions. Or you some in there that's but economy? Obviously, that else a Wyman. the

John Doyle

term. you is, we're was past, And Yes, mentioned softer year-to-date. would underlying sure. to I insights Wyman. in was at It Oliver medium and for. on we'd the the also revenue We be X%, expect maybe quarter-to-quarter the Oliver over in do market. volatility to from planned obviously, seeing going there's to . than you underlying long tough what could But some what X% comp, Wyman Nick, you're share say I a growth up higher more

Nicholas Studer

question. we've tough see that XX this no single-digit were in a for XX for than for point mid- a are But we the at say being want X. are say continuing. in When the do We're in as we're often we're likes X gains year. a we're on that and and market. that matter. business noting look it's larger macro consolidating scale those we a year just quarter They We we're at And a X/X few note, And X about Jimmy. the I XX% comp. one, to high note business to now no we at is inorganically following because talked parts cycle. as Maybe of than likes that think X the were think that level, itself, does I the more quarters low do tough a than think to Thank cycle. pandemic a whole, you, well I a you at a our fair X, we I market, Thank foot through I'd front larger there the prepandemic. where And

than in X a of larger quarters last form X% first is business the of represents the periods same And so And progress. that year.

in to has the India, Pacific very period, been strong Asia business and a seen regional and the in region, softness more our Europe. bouncing grow. Middle back growth The and East tougher continues Americas in from We've Africa

U.S., but linked corporate that economy, the I the think in for maybe just waiting some uncertainty some the Americas, buying is in given election. habits also particularly of to the

practice. been our and communications, Sector-wise, growth best our media has in technology

very Automotive being growing banking we'll to practice market, practice way well, our But pretty management and manufacturing and which asset continue relatively see large a it robust. work be tough strongly. through. to doing continuing as we our and insurance Our overall,

John Doyle

you, Thank Jim, . for questions. your

Operator

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

Charles Peters

operating flow like results. a free flow -- statement just cash was down in through cash flows, guess not there's of I the to little puts for cash And X first months, in my I'd some looking and focus takes with in on sure line bit, there. growing the the revenue. question, I I'm

Just there helpful. be some color would

John Doyle

Yes. Sure, Greg.

we've free to our share could growth, there's going to Mark, in earnings certainly But color. noted cash some As volatility the be you than flow past, growth. more maybe

Mark McGivney

We repeat flow Yes, and cash volatile just that free that, is something year-to-year. -- John. I'll is quarter-to-quarter

So best looked at over long time. stretches of

track Our as growth, before, cash been free in record we've flow has noted terrific.

you'd we're free growth that's company a digits double-digit So for that's what And flow decade expect cash plus. our a model. given high a capital for grown type its EPS double generation cash

story the in year-to-date. no There's results

free last up It quarter. So down. cash actually Dewas was is the flow XX% year. in up third

So is caused what of number just you're factors period-to-period seeing that a volatility. this year-to-date

period in variable year-over-year bit higher affect just So period, because strong and results last growth timing. quarter our of business mix And a year's of because first up the one-timers this had and just comparison. last of it's of year. we are handful Receivables that in little compensation a payouts the there's

well. strong So an continued therefore, growth cash future the our be earnings, in and growth outlook as overall, strong into we flow should for have free

John Doyle

Thanks, you Mark. have a follow-up? . Greg, do

Charles Peters

mentioned I'm wondering many comments, fiduciary if some and could guys interest your so provided guidance. in are through and about flying Mark, just Yes. think I you comments. -- you you income you income And something

and of helpful. sort next and you're or be comments it could And for revisit sort frame for quarter. it I out . us think would if -- for framing fourth you it X those we could of just year push If

Mark McGivney

sure. Yes,

this said. did I the have We what repeat lot me quarter. Let script a in

typically do activity that seasonality So the into first as fourth balances in look tend the revenue just so fall see, flag in to Carpenter, wanted we with quarter. to much of fiduciary we their we especially quarter, in given the Guy we the off half, fourth see that just

as combination So level we that seasonal a be the do to drop quarter expect have or the happened quarter. lower $XX in so saw the we the as fiduciary the they will of fourth third impact have from cuts fiduciary And that the in rate and in income balances. well million it's

next What happen out really to rate look year, depend since from balance on XXXX, to happens We the the actions it's here. this happens what of in what going year.

And but The away speculating straightforward. to past. in there, repeat of pretty just is so the things math we've stay from the going we're said to some

of So balances average $XX.X we've got billion roughly on days. these

And analysis to income. could There some that sensitivity a interplay to with some as around some offsets. would so is that fiduciary of are our next you basis be -- try There to compensation with can use what there do some interest year. would debt. short-term programs. obviously just into as in terms happens and variable we'll We less further wait we look But mean what on to cuts pay have see of

John Doyle

Greg, just I a to accustomed environment. operating add, rate in lower we're would

will from headwinds as an XXXX. not us So the headwind well. but we'll increasing adjust into likely other our plans for model And accordingly. I headwind, we out be this various scenarios, just from

But or as other rate also accordingly. of environment likely plans will lower well. impact business so And parts could a we our make

capital, of on overall, in transaction construction, We Mercer of touched of volume our increasing result a M&A course, as markets, will higher impacted IPOs, well. Wealth, be risk as cost

environment, we're those and working issues. all of So rate lower from be lots our through way outs there'll a and ins

Greg. you, Thank

Operator

of with Next Markets. question the Zaremski line comes Mike from Capital BMO

Michael Zaremski

decelerated for marketplace the -- the I impact well. is it's has year that index -- commissions so, it fees is rate on organic this index you the on pricing on growth? of Can had Marsh moved growth? territory, having and in there's update out kind to as any then thanks which organic in material know as question how But of last tease or is this element the an on and Marsh's negative of First help pricing the I impact Marsh's an index, X believe. your this

John Doyle

the the of Mike, overall, Look, bit what average, first Insurers I several are on course of over up stable. price of the have would picked last markets is a quite years. that all, say

at welcome So relief, was of after many least minus clients at a our Marsh some been for X what's pricing environment. tough

course, ultimately over reflection is cost of of risk price the Of a time.

business is our rest risk course, the Marsh I a pricing to it, prepared our as direct of line. my That at on escalate. And revenue. so in to commission. P&C fee. mentioned a cost remarks, sensitive to of of of half not through continues The it's a sensitive And is . About is

buying markets as soften habits and environment have You change the a bit changes. risk

of have the last may years. retain less than had risk You over few clients course the they

We've example, market manage the been and into change. a about marketplace. we that prior the captives faster premium continues our calls, growth get see the that business, premiums for the may captives to the growing we on If than the in competitive, that talked bit have more

but an it's it So has price. line not a from obviously, impact, straight

also would out you to and to accounts stable, helpful. Do hope index have point to mid-single that's market I that is more the skewed I follow-up? is low a you is up pricing middle What that and it's digits. large our

Michael Zaremski

distressed that's that's going Yes, But for a Hopefully, said your Health any going seems was certain E&S marketplace? people maybe it Or you even I'll could moved there's about like being other number a talk -- commentary. be pretty Maybe pricing market? in strong. maybe in that's you stick Or on? you Mercer just so that's color I to a of not plus that your clients. to the what's Is number. asked can follow-up. whether that XX, with quick U.S., big believe, dislocation some anything add about

John Doyle

I'm we're troubling seeing on Mike, insights signs Maybe call, ask to I'll on sure, in Martin real I share liability market. that some about in fact, the what marketplace. U.S. in Yes. the some last talked

Martin South

XX%. are a we're excess The index John that overall, America start Thank with to can place, composite up can North we clients I'll is our place the the book about casualty clients jobs that X.Xx limits have, comment Yes. seeing compression that there X% up XXXX. rating the programs do avoid for in since are book the that At of we insurers moment, and think in with not share up doing is we're you, just quota what capacity requesting . to smaller to limits. dislocations

significantly. we're market this in too of areas agility of movement point. for we There's players the so more market, supply don't space. Certainly, there's segment grown the and terms to And anything at rate And see that those and sinister E&S a there. big that in in has been movement clients

and well some the positioned them inflation past help that to talked that, our clients in we've about continuing we're the with social them with as deal to as well. with we're So work of

clients to to around we lots help wrap market. other that services our this navigate So . of that need

John Doyle

Mike, you, and thank Martin. . you, Thank

Operator

next of comes from UBS. Our line the with question Brian Meredith

Unknown Analyst

for one the side. First Dean on reinsurance

Do You lines. just think we'll are I'm -- X/X? to the hearing? talk reacting inflation that terms in them? lot mentioned do bit curious, a from this conditions. the are think you to are a about be you how of at reinsurers in maybe you going casualty What ample and expect little see marketplace that you we continue the tort to you you capacity tightening see can in What seeing

John Doyle

think I inflation to conference of second, we're Brian. remains overall, in Helene was it and Thanks, and a season, perspective, real a the but I'll concerned challenge hand it in Dean from the loss advance Yes. Milton. lines talk our about cost in casualty and of marketplace for clients'

could thoughts maybe casualty. share seeing . on you're Dean, what in So you reinsurance some

Dean Klisura

said, X/X in that on we we concern continue share as largely and by great at head the said, generally excess market downward think season, commissions see for John. casualty Martin X/X, continue express the we've reinsurers market to as will for current averaging all That prevail And said, quota about on ceding to discussing. XXX points. as in Thanks, market deals reinsurance Brian, the pressure think casualty to Yes. I we renewal noted basis conditions John the factors been U.S. focused, John casualty particular,

rate capacity loss deals. increases changes key across the to get a marketplace. maybe line more We the those line. adequate marketplace, and that's increase, contracts, Are is . in but XOL limits limited Thus said, getting performance most structural and will to they be going successful robust and done. And will range think they for is But getting they're the the X% their rate maybe underlying excess in do to in more underlying expect excess get John as managing deals done, are books? casualty really in the XX% the be getting deals we many deals of think Are other for our right for their but Therefore, in far, I it's across these portfolios. renewal. they're clients, the key lines the challenging of rate now that have stable the increases for formula market, in and Martin challenging, casualty

John Doyle

loss of then So and inflation, of the cost loss during clear signs by closing impact of kind the the economic courts development patterns the disrupted rebound. economy of pandemic and

we're all help around us around you navigate follow-up? it. the arms to a it. obviously our . Brian, for challenging And uncertainty do get of to best doing it's clients have our So

Unknown Analyst

know maybe just And that's we've kind to here? this John. slowing that also, that non-admitted the of the share? . Yes, on perspective Marsh to recapture anything or to mitigate continuing the in talked about And business help non-admitted maybe McGriff you have you your market. then And to think absolutely, Do flow before, potentially I does that you how react area? could can but benefit

John Doyle

But -- a the losing not result United we're share States, outsized broking markets, you're admitted given for result Generally, that. wholesale market clear, solutions we our in seen admitted we'll solution of for the capital of with if in as of seeing clients to access growth and right as we those it's E&S clients. an be what being prefer in To you have the a observed insurer. have access the comes and kind our growth that

insurers into of as including directly right? place And E&S about market today, that strategy much market we clear. we do possible. the the is our premium the directly, So E&S overwhelmingly, to So accessing be as today,

non-admitted, -- and more environment, it's that in why of to terms to dynamic react hard market they risk to solutions, flexibility use the this to risk understand future have I it but environment. certainly gives and say, growth, certainly them want growth, changing both more multichannel In nonadmitted insurers quickly admitted market more

understand continue the where use to is our efficiently as focus and brokers, client as our solutions capital continue wholesale directly we Again, possible for clients. well. so accessing and We'll they us as our to serve expertise drive So best as can that. possible I but for niche

anyway, Brian. So how see it, we that's really

Operator

Our next with from Grace . Carter Bank America. line comes of the question of

Grace Carter

amortization couple deal. might give us how McGriff. you the integration Hi, the everyone. impacts And expect might regarding of that of all much of you're cleanup should possibility a some with over Is to increase sort there like or any transaction associated thinking quarters? questions hoping next ask we the I was any below-the-line few expenses that

John Doyle

Grace, the to thanks not we're question. for do prepared that. No,

As MMA it's typical transactions. said, I

we're . with the businesses I than performance performance quite the of say, It's haven't the impressed the well, Sales or MMA. performance underlying underlying to of McGriff. margins will strong other we as similar strong So growth. disclosed is very of revenue had velocity very

Grace Carter

the kind I year, And be of I . utilizing just by XX% getting? DTA guide tax still the to the for year deal. guess assume. know impacted we're rate, bit looking on us of might the kind considering the mix the And of next could kind to of how that you geographic original about the fair the early maybe mean while be it's but is a I help you're for to at tax, on think of XX.X% line this subject time business if

John Doyle

the We'll January call. XXXX. to about in guide talk to that on going not We're

Mark, share overall? else on tax So to anything

Mark McGivney

deferred to question tax Just on assets. your the

is talked stream period deduction the we over go future about going of that So value time. affect I that out present to the tax is value and of long the a

John Doyle

next question, please? Thank Thank Grace. you, And you. .

Operator

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

Robert Cox

if the the your paying you're deployment in Appreciate that history. has all price year across MMA curious changed for thought on at brokers process relative top MMC's capital the largest avenues. I'm different XXX it's

John Doyle

about dividend to business every We and year management. in well. to as buybacks. -- capital talked investing as be our our aspire know, each Look, we've favor over the approach We you to raise

capital. responsibility, be our We have of good to obviously, stewards a

have return So -- we our last our a earn increased of capital. of have great ability confidence in the course over excess although we several in are multiples years, to cost the well of

we so should accomplish change that or deal doesn't see objectives. should a that And those

and time small material to McGriff elsewhere. the we capital a to buyer more store deploy in game various But strong tuck-in of spend planning business midsized a have marketplace. deals a kind of scenarios We like We'll lot as McGriff, reputation from very after business as not we're well but we very about talked -- forward. going flexibility make opportunity better not maintain that in we positioned the even to bigger make if lot see of just Mark a a ourselves marketplace.

you have follow-up, approach. our Do a that's Rob? So

Robert Cox

that I get to rates update get market ask was doesn't fee hoping Yes. Thanks, I but John. and like commission you years? how brokerage these there wanted stability? us of changed lot just the of anything feel And in I Yes, about on . a to have rates not, rates something a the on question airtime, hard course Is tell an in take what's operations. the the if can the recent driving over

John Doyle

the of kind accelerating I up don't a was shorter time, in loss challenging. -- actually of clients, average largely a for our start observed as we with years markets on a was with were challenging catch to certain thought period to Marsh period to what cost. several for I catch-up hard insurers say Not market, as the I retail view last right? it at that. Just

have really cyber For the in moment. and ransomware market that market retail example, at when priced settled jumped for coming is the back And risk, well. the of picked quickly underwriting up the clients quickly, favor the market quite then it not bit as but of pretty in in kind community a fact, our

constant. Marsh fairly been the with line, So part, product our at remained some I question, over another time, fairly most pretty a for your Thank has stable. Marsh Rob, From Andrew, would product for but start average of average commission that. to there's expense movement, extended rates But questions. have acquisition please? you, through line period

Operator

comes question next from the of Cowen. line Our with Kligerman Andrew TD

Andrew Kligerman

looked year underlying RIS and excellent, underlying last nothing shy decelerated businesses. know this growth the kind better to made at underlying going outstanding. year, mid-single growth to or digit but Excellent. X%, down you it. still is double-digit question is your in you guide forward, John, we which for I of across Mark, I growth And of it's

slightly even zone, gives maybe kind in of doesn't less this that of kind holds decelerate and So confidence of kind the what further? it you

John Doyle

in investing creating And market. environment, McGriff geopolitical right? always prepared mix Andrew. just has we're severity pricing on moderated, that. example have business my of and of environment time, us you, in cost help time macro clients. frequency latest example another I the things of overall. And risk, those supportive to clear. middle and events, McGriff Look, of remarks, all our growth, inorganically. remains loss be inflation, disciplined as over the opportunities We're you, been we've Andrew, focused in elevated of but capabilities, building and for mentioned have So cyber very Thank our been into -- We right? for risk this our weather, is but markets We've is deploying organically . And kind faster-growing capital the to of adding been the reshaping to

I ever would as than we growth That's also real have together better driving we're some note us working well. opportunities well. that as for

There's environment. executing us guide well in drive and So XXXX I for this feel business. in growth to around our in we're opportunities we'll like continue elevated But again, to . January. risk good real

Andrew Kligerman

could in around outpaces much . on color, faster Any provide it how corporate business. you it. that growth large MMA. John, And just you the Got touched

John Doyle

year mean several outpaced can business really a been segment different how level. consistent in It's growth, we're a it disclose in going clients time. the but at and of Marsh, way, what the for every us. scale to not for we higher. last it more but upmarket over over the that that has to marketplace growth years at of kind I every And by is excites course the bring And matter benefits about Yes. not really quarter growth it's me is

we've bring It's them and can all firms outstanding with MMA, into talent and from Marsh MMA fundamentals, So -- leadership we've And throughout terrific business. help shown, outstanding them a great I capabilities a serve brought terrific McGriff make think example. and as stronger. clients. is to better can We even business we its

excited about are we So that.

Andrew, point given thank wrap alarm call having think a Andrew, at this building. you. up we're in our questions. And So the I I appreciate that the fire we'll

you all want on call. I to for us the So thank joining

for our also our want thank to want thank I I their dedication. colleagues closing, continued their clients for In hard support. to work and

quarter. to we you again with forward and So look next thank you all, speaking

Operator

Ladies for now This and and may conclude you today's gentlemen, you program, disconnect. thank does participating.

Marsh & McLennan Companies (MMC) 17 Oct 242024 Q3 Earnings call transcript