MMC - Earnings call transcript Q4 2024 | Marsh & McLennan Companies, Inc.

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Operator

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

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

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

with Jay insurance as morning analyst you as the recently equity Jay Investor of from who is Many know Relations. an Gelb, this new Head McLennan his our covering Marsh time joined industry. Also us of

the clients them to left our Angeles hurting. doing and support to take people have can the McLennan in and been Los we challenging I during to discuss and our a tens thousands of moment lives our homeless and of results, I Among wildfires. have time. affected is everything to comment tragedy, Before on These human a want those area California profound represent colleagues events this company committed Marsh been lost

and natural greater means history underscore are along to The billion. development insured the need catastrophe-prone for exceed insurance to risk rising largest severity will the disasters of regard disasters, areas in impact This the wildfires to in be insured With L.A. increasing among XX the losses and with natural terms values mitigation losses. be expected resilience planning. top $XX and of frequency property industry, wildfires continued the in on

together the to individuals, devastating resilience businesses, Marsh will recovery. these industry and events to continue governments to bring build McLennan and stakeholders the catastrophic mitigate accelerate the impact to including from insurance

to results. strong McLennan. Marsh was We year $XX.X Turning risk with and in against of grew generated We growth decades generated growth underlying our X services our performance milestone strategic history. more X% billion. X% a and the revenue both objectives, Total financial continuing best XXXX stretch our results. than largest excellent consulting for delivering revenue acquisitions our executed had insurance in year to and of

XX% to Our adjusted this in on operating income grew top is of growth billion, XX% $X.X XXXX.

year adjusted consecutive EPS increased points, XX and basis Our margin of XX%. marking operating XXth reported margin adjusted grew expansion the

performance, our excellent another year In to priorities. execute key financial of on addition to continue we

We of X set And share achieving efficiency we reinvesting to We XX% our boosting completing client had billion $X.XX in we by acquisition $XXX collaboration $X.X capabilities, return record Raising restructuring successfully increasing our by of the ] ago. the capital a years acquisitions, investing our and of McGriff. delivered year significant program, M&A also repurchases. completed goals dividend including billion across our [ shareholders. Accelerating in firm. million impact, and

McLennan excited on join briefly and momentum, touch me has couldn't Marsh McGriff, XX. I Let them on Agency. great to our McGriff have of which more closed acquisition November be

plan. days, although outlook proceeding And it's Our our the integration according is fundamental same. remains to early

talent excellent transaction, record leadership, strong As I growth. a and outstanding it's when with we said, business announced a of the

largest would worth broker a the The middle States stand-alone fifth be noting that United addition extends presence the McGriff basis. growing of in also capabilities in our on It's the MMA and market.

Vanguard's as XXX top several McGriff, to as completed Cordano OCIO Mercer. business in other agencies and notable acquisitions, X addition including in In well we MMA

As you give strategy. an we year, on update start to new our to want moment I a take the

a that we positioned reinvest while and over term. sustain for our long growth in into significant also globally company strive cash a are near-term talent, particularly is investing foremost, strong of significant in market-leading well technology to outstanding performance results, First our flow capabilities. opportunities. We organic the investments businesses We consistently portion with and

tools to on clients. and them like gain Innovations of Len how the AI Investing our behalf colleagues insights and pursue clients, for needed in ambitions. Blue we us are of Eye, data SenTrisk, their our work digital other smarter are value delivering and helping perspective to examples enables

as We capital look We management. flexibility a the approach maintain efficiency capital structure. financial to manage maintain balanced we also to our of

We bias the reinvest capital to have generate acquisitions. we high-quality a into

shareholders also acquisitions recognize count. we to enough each capital of strategy. part delivers high-quality that year, we to repurchasing value our also important And time. reduce dividend is returning target and share meaningful A on growth raising over stock our focus an our However,

$XX invested boost scale. that M&A across transactions at our and approximately we've more accelerated our growth than XXX the acquisitions our returns. have These enhance attractive decade, in capabilities Over our billion extend past reach,

remain The same XXX together ever basis to than working our the the our nearly years the growth businesses. alone. X in of We've better our opportunities our intersections improved capture businesses of XXX we over constantly we're in efficiently. our decade at more points margin operate we've core time, last points the plans of past and to expanded at basis challenge operating and the strategy. by margin ourselves At by

further expenses, achieved been talent operating still improvement. This increasing Despite we while other base. to through efficiencies continuing opportunities these gains, our grow and primarily has see for

greater strategy balanced our constantly our clients of of growth, evolving underpin deliver tenets investment, value all we'll While and stakeholders. our the to are to we continue to and discipline core

insurance in insured billion, quarter. more Turning the quarter an the to the billion risk Global and X% by The elevated Market Marsh compared than landscape, reinsurance nearly of to conditions. decline global Despite remains fifth dynamic. X% market catastrophe insurance $XXX $XXX Index fourth in was third decreased losses. of market natural Insurance consecutive the year And XXXX a

our down Europe, were Asia Overall, reminder, were was large low down Latin account mid-single business. the low third approximately high down the the quarter. X% declined with U.S. to skews flat. increased Pacific catty and rates quarter. index up in X% single a property XX% rates Global Workers' compensation America excess U.K. in Global to Casualty digits up compared to single and mid-single X% was rates As digits. U.S. digits. in decreased digits.

persisted, down risk-adjusted to were X% pace reinsurance, impacted by capacity property while Global accounts and more program Professional In cat than decreased liability In retentions, cyber X%, Financial discipline increased on global underwriting at rates significant XX%. not reinsurance, a demand. X%. particularly client rates loss saw down

rates up accounts to flat While loss-impacted for were risk-adjusted XX%.

with were renewals continue capacity shares to pressure on Excess to outcomes. treaty with completed Casualty varying of commissions Quota more placements stable terms. were were flat slightly ceding while sufficient down. loss face

Turning to health trends.

global Our on a the This at surveys indicate to year would increase. in XX% least consecutive increase fifth medical a be basis costs XXXX. XX% are expected of

On X% Africa region a in in Asia. America, the North and XX% both anticipated and Pacific X% America, Middle Latin regional basis, the increase pace XX% XX% Europe in of and East in the is in

for X.X% employee the year health the of U.S., in plans after be is would cost planned consecutive growth health accounting cost average to cost per X%. benefit on measures. total reduction in third employee-sponsored around expected rise XXXX This the For

these conditions. our As dynamic market always, navigate our focus on helping clients

performance, detail. our let which Mark to me fourth in financial will quarter Now cover more turn

operating quarter with adjusted quarter remained consulting. year. pleased an in where solid Revenue basis growth growth income We X% X%, we fourth is adjusted capped are grew in of and earnings on our the had We with another from and up and X% generated which a RIS performance, strong EPS year XX% ago. X% terrific underlying $X.XX, in of

Turning XXXX. for outlook to our

including underlying anticipated along expect headwind and We with from We growth. fiduciary margin are solid growth, adjusted well another year. an revenue positioned for continued strong EPS expansion currently mid-single-digit income

conditions outlook current Our macro assumes persist.

backdrop economic the assumptions. uncertain, environment than materially different our remains However, could be and the

are our more results. In objectives performance turn that, me Mark in strong We with a results. XXXX. it our executed over and With track for of let detailed against strategic pleased our review of our summary, delivering to record continued we

Mark McGivney

good morning. John, Thank you, and

quarter Our solid strong excellent results growth with growth and continued double-digit an momentum capped underlying revenue in EPS. reflected fourth and year adjusted

fourth X% and billion, The up adjusted Operating the X%. billion was Our $X.X was quarter growth income consolidated $X.X with operating of billion income $X.X X%. increased underlying to revenue in

adjusted $X.XX and Our to discrete tax was headwind operating a from included XX% margin XX.X%. was $X.XX. benefit GAP increased EPS Adjusted foreign $X.XX favorable a and from $X.XX exchange. EPS items

acquisitions, record marking also consecutive XX.X%, year to XXth was XXXX in history. the Adjusted our reported invested year basis points of For for margin the X%. $X.X in expansion. year margin $X.XX a capital largest revenue underlying to grew adjusted grew operating was billion. EPS $X.X to XX% and income operating XX year, expanded full our XX% Adjusted deployment. growth We our billion

million raised of bought We our dividend and quarterly our $XXX stone. also XX% back

or & underlying was Looking quarter XX% XX%. adjusted at Insurance Fourth our million, increased income margin million. to in Adjusted to and X% Risk up Services. increased $XXX on billion, income RIS was operating an basis. XX% X% revenue $XXX Operating $X.X

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

result in the regions risk basis, claims a the XXth marks or ago in flood X% quarter on transaction consecutive was as of Marsh. up continued our business. X% as revenue at Marsh, in Torrent growth well our underlying billion, and underlying or This At year across from growth $X.X a activity an reflecting quarter rebound XX% higher products

XX%, X% up Canada, was Pacific underlying America up X%, for and the underlying EMEA with In international, In was up X% Latin U.S. growth Asia growth X%. and quarter.

million, quarter Marsh's X% on in and with grew by full billion, year, up basis, Canada was growth $XXX across For regions the X%. our and Guy driven the underlying international X% growth revenue X%. was Carpenter's was Global of revenue $XX.X Specialties. an U.S. and up underlying

For year underlying higher billion, Guy revenue or $X.X growth. fourth growth, Carpenter's representing X% X% underlying of the year, was consecutive

revenue GAAP million, was fourth X%. X% segment, income billion, up was Consulting the income a and operating adjusted was both million $X.X basis. quarter underlying operating $XXX $XXX up Consulting on In

was compared the impact year of seasonality margin dispositions. Our acquisitions Consulting adjusted operating reflecting in XX.X% a XX.X% to in and ago

X% or up in over the XX revenue full Mercer's in income Adjusted XX billion, $X.X and underlying and revenue was billion X% was basis. margin XX.X%. increased was best $X.X to higher billion, of growth quarter increased X% underlying X%. continues the growth adjusted This year, consecutive points basis to our growth of run on operating with For consulting Mercer's years. the XXth operating an of quarter, $X.X underlying

growth underlying quarter, Health management. was by growth was Wealth growth reflecting in X%, investment led in regions. up X% the across all

flows up assets year. last and of the transaction Our Year-over-year at quarter, sequentially net with of were our end and and fourth capital XX% was fourth of XX% growth compared the up by quarter markets. impact under the billion Vanguard, the management $XXX Cordano to positive driven

increased and driven rewards, by talent growth X%, products. surveys Career and in

For of fourth at the $XXX basis. Wyman's basis Oliver year, revenue of increase straight Mercer an million, underlying quarter higher of X% on on or $X.X year the an growth. billion, was X% increase in X% fourth the underlying an revenue underlying was an

all growth and across tough despite comparison growth This last businesses fourth of regions in X% the reflects year. and achieved to quarter was a

Wyman's was year, full income million Fiduciary X%. third quarter, Oliver million from quarter, the the For of was billion, $X.X decline interest lower in growth reflecting revenue rates. of $XXX $XX a reflecting the underlying

first approximately will of income be quarter expect XXXX, Looking the ahead fiduciary we million. $XXX to

a the headwind $X.XX a for fourth full year. was the exchange headwind $X.XX quarter in and Foreign

$X.XX FX we of will exchange of $X.XX the Assuming XXXX. be first in a quarter at remain expect headwind rates all and levels, for current

We Turning we to business, And bring and fund we're integration MMA. McGriff mid-November. McGriff to senior the well. closed the what deal excited November, transaction. notes the issued a is John as about they transaction. going $X.XX of billion mentioned, terrific In in our is to

[ perspective. first a smallest The quarter ] is from seasonally Magris revenue

QX, to for McGriff modestly expect dilutive will So we EPS. be adjusted

to want we meaningfully will to year that McGriff accretive beyond. XXXX, emphasize full to for becoming continue be adjusted expect in modestly I However, and more accretive EPS XXXX

costs these incentives million in approximately X McGriff $XXX in by the which over with We majority a with the expect associated with of million put the to was $XXX noteworthy next associated vast total of years, significant seller. portion place retention of charges

fourth adjustment. These financial from our calculations Also we for price purchase convention. exclude will costs the Total in items of statements McGriff including program the related first the XXXX. primarily were by the million, began flow underlying quarter $XXX were million year note as we but costs, growth funded seller our our to that through through the restructuring in of $XXX quarter a is noteworthy

debt XXXX. expect McGriff in quarter Interest financing well Based This as quarter the with million. interest on expense increase of levels in of quarter from current expense bridge fees our was of million, transaction. fourth reflects in higher forecast, approximately the XXXX the we first associated $XXX of up $XXX $XXX million as fourth of million the $XX

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

the our adjusted XXXX. tax in For XX% was full XXXX, effective with compared year rate XX.X%

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

Based on expect effective billion. the sheet. in capital XX% the between ended current an environment, To of rate year of debt We total and we with tax $XX.X balance adjusted management, XXXX. our XX%

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

at position of cash the was the Our fourth billion. quarter $X.X end

dividends $X.X $X.X the included ] totaled share the For $XX.X for for billion quarter billion year, billion $XXX for uses GRIF. for and billion, $X.X [ $X.X acquisitions the million in dividends, billion cash of and for Uses repurchase. of included million cash $XXX and including acquisitions, totaled

XXXX. today, how to Based level repurchase Looking on pipeline deploy of depend approximately M&A acquisitions The the to of on develops. capital $X.X dividends, repurchases. share across our share ultimate we and expect billion will outlook

we will other the last from XXXX, beginning quarter, EPS. quarter benefit the and we net adjusted discussed in credit intangible the acquisition-related first of impact As of amortization exclude

We've release and this earnings provided our recast adjusted quarters past for basis. tables EPS the fourth X in adjusted and income on operating quarter

to Turning XXXX.

growth. in our noted, for John we As remain positive outlook

growth growth, in in exchange XXXX, foreign items expect discrete interest This EPS. and margin solid and mid-single-digit declines, For tax underlying contemplates from revenue short-term adjusted outlook we expansion headwinds anticipated rate currently favorable XXXX.

We are these our also XXXX. significant in comparison have which will impact first with reflect difficult will revenue we headwinds pleased a Overall, expect more a in growth the year a versus quarter, performance ago.

XXXX. with our across I'm positioned And are that, another to momentum back John. strong have for in turn it We happy and well business year to

John Doyle

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

Operator

first of question [Operator Instructions] with our Greenspan the Fargo. Wells And Elyse line comes from

Elyse Greenspan

question first margin. My is on

earlier which So in you being But in to the overall, right, greater first than the was margin the didn't flat quarter. half fourth transpire. margin year, had pointed improvement the second guys half

what the get the just and I'm in of with to sense prior went So relative trying specifically half a fourth in also expectations on second the to margins quarter?

John Doyle

of to be consecutive expansion the Yes. different with really for reflection we've year, Elyse, of quarter-to-quarter, margin XX will talked XXth as expansion, way our from I margin our the we outcomes the our pleased business. in past, bps years was way XX and we our disciplined just year about the a approach it consecutive says it's run

disappointment. it's wasn't run the a way are was but going an to drive longer-term attractive by quarter It investments and FX. we're in business. Margins primary growth medium- acquisitions of was fourth to objective. outcome a also well. make it we going And they're to And the divestitures, company The by impacted the as impacted not to continue

good of shared to the as XXth to guided was it be And to And our opportunities margin year strong got It we've we consecutive XXXX, infrastructure for we continue to expansion. company. year expect a on focus of the expansion. across margin

have some us, operations. workflow happening Mercer important and We is course, important And lever Carpenter. got an and at for of optimization We've opportunities efforts Guy too. automation Marsh,

as there around see and learn experiment And test to as possibilities well. and we AI and we continue

the So outcome and looking have we're quite pleased forward, in follow-up? optimistic you about a we the are possibilities Do with XXXX.

Elyse Greenspan

X% question typically is the there I provided you guidance, in haven't 'XX. free growth second flow. on My know annual cash but was guys

I past look X%. the around it the at CAGR, when think years, I over right, was

digits. double So both below

but flow how So that cash was terms was should of tailwinds anything 'XX headwinds not and can growth in about by you and impacted free McGriff, just 'XX XXXX. free anything in impacted what if in provide cash in flow there sure I'm think in we

John Doyle

in cash I Mark, obviously 'XX in flow a me, consistently over Yes, track will. time, free as I earnings of X-year with you it a growth. going growth of I But there? a to in add it's don't had front not XX% CAGR believe, anything north where line, X%, do as XXXX, to have and have straight we but know

Mark McGivney

we cash is, with Yes, really pleased free flow, were X%.

up As last XX% John mentioned, we year. were

holding the a you And look we've cash over if and flow since of the years, bit kind So that bad. free last X not little is growing doubled XXXX.

So that story very for has been a good us.

-- a over Given volatile And flow the we we've we've as long in suggests, but with over guidance stretch it you time, cash over certainly be would should period-to-period an has nature expect of business, about, And have pointed our and into but our will earnings our it talked growth in out, you it guidance cash line track track future. don't as free can the growth. had flow. as earnings would double-digit growth free year-to-year, typically give growth outlook because earnings we time, for frac our and

John Doyle

Elyse. you, Thank

Operator

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

Jamminder Bhullar

First just Mark. question a for

think of I in expect mid-single XXXX. digits you organic growth mentioned you

saying I or mid- previously, better. you'd to high digits -- been or think mid-single

sure not a the slightly? adjust your into is I'm you're in seeing too that's of reading So that there comments? much if you Or your language any business change making aspect I'm

John Doyle

Jimmy, John. it's

in front Mark. Let me jump of

And want what a talk quarter, good fourth finish terrific full year, to just put underlying Carpenter. in revenue really small Marsh First really growth broad-based our X%, seasonally in excellent got was the X% is a of quarter. growth. all, the about revenue year year the the strength to as an strong well. Carpenter was finish I to at quarter

as real And we some largely in exposed Oliver The demand to. starting where, economic remains in finish, growth of we're to a the where soft the we're Wyman supportive pick finishing too, macros career most labor income, see growth as the strong over better to had you the markets a year. has growth Mercer it. economies bit been in a know, exception is markets above X% and underlying course Fiduciary last mentioned, X up. most major of But remain strong resilient growth. that of again

uncertainty tariffs course, out are lot and of big risks of around a trade there geopolitical risks And there, potential wars.

extreme confidence. talked we technology clients risks those world areas I so the them advice our can as and then As give a areas. of level other with well about, of around economies impacts that and are weather help But invest the frequency and they that around

I positioned. So we're XXXX. we're wouldn't feel much well it. growth like for We optimistic about into read

mix our admin McGriff Mercer and business, invest at in continue example and the in focus shape out of We a would our coming going good to of there. then businesses be XXXX

And so our is and well. we're team executing highly engaged,

we feel So entering good XXXX.

Jamminder Bhullar

should market on a it the part of focus a be growth that their positive XX, we fact McGriff, is assume larger platform. just just And actually they'll given your organic that for beyond and

Or maybe of should could So the in might than not they an a little bit we have do there past? impact a or your growth expect better on they as done much result?

John Doyle

McGriff. We're excited about

Mark year point beyond. from or going as accretive in modestly The a it us competitor. admired and over talked dilutive of dilutive that an slightly As be time in full of but for integration. the us a year. about to to so more the well. be it noted, earnings it's a in and seem things long far business will terms so good the to early I Culturally, XXXX view, so we've

in it scale market bringing specialty they the I we better. that a some terrific going McGriff of to quite leadership, to into middle got And few XXXX our on segment big They in market as we're wanted. talked that us be and benefits market. business doesn't bigger. the the talent We just us it make real make was about, the where extends were and capabilities, They've assets knew there and reach got focused

so about McGriff. And excited we're

Operator

next of Our line comes Barclays. question Alex the with Scott from

Unknown Analyst

U.S. I'm strong the rates if had dynamics underlying March First more from on I you helping the came retention. guessing mean, where that winning? I us if flattish. being of versus I one comments I organic with business had wonder could just book. just you most in few new understand is on just interested you're in us growth help just growth, the unpack any Maybe the was

John Doyle

really Again, we're to Martin ask Alex. really Sure, finish positioned. in strong I'll well second comment here, a

of say terms the rates, would exposed middle most we're through to I In in market. commission pricing

business our it's So subset a overall. of

a it's So course, It of impact. an well. fee-based impact, an pricing of business lot have But does does. as have we

M&A notable growth maybe going with Mark, the on we helped Mark in the that as we could the had activity commented quarter. pickup But there quarter. more that March share well. growth on color And in more bit a the at little certainly in a see environment quarter. you in the broad-based positive forward

Martin South

Of yes. course, one

X% for or growth better underlying awarded retention of and which year. a Canada Canada QX, had And throughout X% XX.X% and we the from and in growth XXth on well top fourth of year So with international looking Good as a consecutive of reacceleration signifies balance in better by U.S. X%, the growth. of quarter of 'XX. recurring growth revenue consistent as X%, year QX. globe in X%, a 'XX. is balance at improvement X%. very is a with was of had good which quarter, lost This and with in the business. great U.S. the the at the 'XX X% underlying full

some The U.S. capital see deal beginning from shoots green markets. business to also activity from

markets. year the X%. solid to signs of the full been of great We've well extremely lines to America positioned X% had with for for on APAC that. investing show the got at X% rate strong both in Latin a terrific growth growth continue pressure offset consistently -- the we see for in EMEA, to International We've and talent continues year, underlying moderation of quarter. future. However, the some financial well growth all and quarter

So that. about good very we feel

yes. So

John Doyle

you. have was finish. strong you a Alex, Thank It do follow-up? Terrific. a

Unknown Analyst

do. I Yes,

you is improve for ask have IPOs, environment I the potential question cetera, on et wanted to other the M&A, all activity. The more to

do is would kind that, through help ways As have you the you? I if on the us we impact think think there And frame of of across can us that organic that your return help different growth that benefits way you kind have activity? of businesses, any a that, can

John Doyle

going have levels separately out almost Carpenters to with different Marsh, focused report capabilities the due entirely diligence. particular, Oliver and not of industry, insurance important Wyman, at of Guy or help the we're activity, but Mercer but IPO on Yes, in we around firm course, we across M&A

suite We be of facilitate can might have need and products that buyer a when terms help transactions there some to settled between that be seller.

an it's capability we company a the an buy divesting important So moment it's obviously meaningful And side, that investment. our important set clients. a to on of business when of bring is course, selling itself or then, a and

are we where the those really and so can And ourselves moments company. important of strength our distinguish overall show

an it's So capability. important

in we noted, we a activity range saw ready out see giant XXXX. market. in an And what the see. distribute IPOs through I been XXXX of the quarter. we M&A know IPO capability. And sure investors. pickup of we'll a a We'll not have to fourth brings. declare important As it's some couple in in year But

to of spend course, We as clients, of stay well. clients' to Andrew, close our lot firms next Again, efforts a support our to and corporate question. law invest. with time

Operator

comes question Evercore David next Our of the from with Motemaden ISI. line

David Motemaden

insured primary just if impact and both the your $XX are is the an given is still you outlook obviously, wondering And any days. very what billion loss. market. had more just wildfire But and reinsurance over on property a question prospectively markets on early I I'm the guys seeing there,

John Doyle

and Maybe highlight at in about devastating in prepared ask events seeing it's in California. I Southern just point. Thanks, I'll to the and of make my terms lot remarks, a couple they're what a Dean then talk David. market But think as Martin I'll not market, in Yes. noted this I absolutely is impact of comments, which

net colleagues helping adviser them clients and homeowners relocation beginning would rebuilding long our and so as a about Marsh say insurers a McLennan of families back a And I high claims that It's to way. helping limited a perspective road claims going and primarily impactful going recovery. to prep exposure in and business with overall worth an the financial not our on filing be to it's then with is that focus view along is the to We're think effort. that as our perspective. from our we're and support to

plan fare But comments certainly to the build to the having as is efforts to risk about I say would future ways about subsidies say something to create the communities we greater to And conversation have about conversation. insurance. with how trying major into wrong should a The and how to back rather of greater insurance. really we reading for find adviser, it's Candidly, resilience. building than or lots support resilience subsidize be these

happier to California. That of that cap homeowners course, will residents over of lead and to and California And Southern conversation time. limited ] other areas [ prone isn't Southern

that the need we're So important in same steps taken so devastating the be not to soon. place, sad and place sometime again

the insurance have market. in maybe on and what seeing far we'll Martin reinsurance the market, you're about you then so Dean, could with that, talk But comment

Unknown Executive

David, committed formed Guy navigate as clients colleagues, meteorologists, dedicated a comprised of the Thanks, perspective, complexity of as John. John first has loss. magnitude reinsurance analytics, and a from give they to supporting foremost, And to with our this modelers, engaging so we're, noted, task of assess brokers. insights claims, clients them We're our cat loss. they best wildfire better fully the Carpenter force the our can

programs. It's have losses of many the resulting reinsurance in claims our reinsurance clients clear to that will

on we've will noted, this ultimate is impact reinsurance we time yesterday the saw that estimates and being loss in bigger at magnitude reinsurance the reported. loss. uncertain industry exceed As depend The market John market the billion, $XX on expect the certainly although seen numbers the than to of

we tempered risk-adjusted reductions renewal at be stage, January April X David, this we would moving X, could the certainly witnessed rate that into I But go say, the forward season. in as

John Doyle

Sean. Martin, Thanks, thoughts? any

Martin South

the overall rates X% came quarter. The down Yes. fourth in

It's and put property is world. gone to segment, in and You We did this focused early event slow commercial not too It's decreases it's up to It's really going say XXXX. see that account the across a some in rate large what a big quarter our have. the to X.Xx since have impact down context. for clients. in on book last

I really high our and wait right and think on forward. advice worth to building going focus our net clients think to providing is And the are clients for resilience we're that and making see. we're there sure our have as they about colleagues,

market for So hysteria. That's not sure.

John Doyle

know, market homeowners real you market under California as stress was David, -- before was events. on these the

underscores build it And the just into again, to so resilience communities. the need just these critical better

So you follow-up? a do have

David Motemaden

yes. do, I

help a switching growth just consulting was difficult, you business bit think health to the more surprised but So little deceleration? -- underlying me the X% to gears, through the Mercer see I comp within growth. got the and could I know

I the been since it's XXXX. think lowest it's

And costs know, increasing, the John, still in it mentioned health was 'XX. expectation XX%, think was I I you

So are me And guys about there? think help you could you growth into 'XX. as the thinking we deceleration go how through

John Doyle

ask markets mostly United issues David. of directly spoke I increases second. to I'll about world supplemental care outside we the other care States. have around where just the maybe employer-sponsored say would my I those the in to critical of around you nature advice the employers provide I exposed those -- that raising or necessarily comment in in we're not a Sure, Pat was to prepared remarks, cost that

well. world are as increases source around employers So and obviously, real broader economies cost the of and for stress inflation for

And underscores nature of the provide. advice we again, it so just the critical

could talk health. you in little maybe Pat, and of So bit results 'XX a outlook the our about and

Patrick Tomlinson

to of the X%. quarter I growth for more growth. just underlying thanks pleased or that we're Listen, start QX with growth that also our pleased want with our question. It's practices And consecutive X% and to XXth really are contributing overall, for Sure. of that the all Mercer,

relevance the of our the times Full really have and that in our business resilience results continued we helping I consistency and underscores in solutions and of year highlights our clients. X%, think, uncertain during the volatile

the on from quarter X% as in X% highlight, fourth the full specifically for Now year. the health you

I would was across say it from few things. broad-based a the different performance and comes regions

hiring talent. Continued in new

on John national the of health thought a his leadership. opening plans. employer-sponsored during focus survey of few Our our around highlighted pieces

risk digital our Health survey. people also Trends the XXXX Our expanding tools. We've report, been

needs regulatory from have XXX we -- market, can client and now on to focus large health solutions we've tailored see tailwinds client multinationals. to tools, continued got we Do sure countries some that we ahead global real and on We're in and employment innovative continue you care digital match based segmentation those think a see make mid-market, go the changes. with with rates,

And for access quality I as momentum. obviously, and firm cost payers. focus collaboration, health growth talked we've which about the client on affordability drives care the And all support to our medical inflation, think to continues across then of before,

the was would our more percent is from but quarter, of including say given have full timing, I our I about. reflective growth any believe in quarter, one-offs and right, the much which some variability that talked we can performance, year we Now

like we health obstacles different its growth labor like definitely with inflation the benefits Employers right? mentioned just continued I now. due maintain tee-up prices and various the John expertise. that the momentum consolidation positive absolutely. a higher health think leadership, the employers, demand. industry have business continue our outlook demand will combined our pieces clients. proposition medical for and value we up we cost of anticipate shortages, facing to see thought strong offer system structural strong Absolutely for we to drives -- So the and and how are ongoing elevated

have our fee work. fixed globally, does commission and But revenue health balance a of

the our don't that been say, right? impact directly inflation that medical it's or periods John see would low. speaking, couple when years in was generally in it's and I like talking about of last the periods of of high, we So of in revenue, inflation full on Either

to costs escalation cost while to we impact But work clients their that directly higher design and their about and on necessarily as and medical same the medical help clients try and on absolutely through the higher drives we and at point, demand inflation think colleagues. have do plan projects mitigate not how fee-based commissions, higher client

John Doyle

note Thanks, lot Pat. the that Wyman And in Oliver of would I industry well. as does a work important

the thank So David, Andrew? questions. you, for

Operator

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

Unknown Analyst

somehow to the I I'm Can into flowing reason retention on I see comments as to at by income adjustments. the be recaptured. guess statement, or think mentioned million this, this of your you acquisition go costs million million why McGriff, that I the I related that I incentives $XX -- the is triggered total look back go retention through are to $XXX $XXX going in

in of out I think trying about what just as should 'XX. to terms I adjustments think So about the map

John Doyle

is had Mark acquisitions jump to talk funded seller of put a ask I'll critical could place you Greg. work here. the do. that second, Sure, And tension retention part in Yes. for any was [indiscernible] to we we in a a course, for but transaction on of meaningful our Mark, plan help But maybe

Mark McGivney

$XX next $XXX the though biggest bridge And X through you the is mentioned quarter solely So What financing total retention, over of heard that fourth million costs. have be I in retention of noteworthy that isn't we that in might million will me seeing actually not it's you're of said, chunk it. as come million just years. even the to charges $XXX expect

the in beginnings noteworthy. purchase seller of through recognize it was starting amortized to But place and it adjustment. amortize And a consider then by retentions. to funded that our we'll the that was is and statements financial healthy those put be important of to price amount a it And has through why retention flow

John Doyle

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

Unknown Analyst

I do.

Just keeping category. adjustment on the

full of [indiscernible] are be you in restructuring the that McGriff of $XXX I for restructuring in what is kind going recorded what that Is totaled the on or -- terms we and I in going year, and it about charges charges million think 'XX? 'XX? $XXX of to insurance independent charges. expecting For restructuring of million. exclusive How what's risk you think

John Doyle

noted, program. in could as up it Mark bit you we But about was, Mark, restructuring as wrapped XX Yes. outlook well. maybe I Sure. talked a our 'XX.

Mark McGivney

the point. our in program But we driver to as this the that and of program we XXXX. said, at definitely started back closed growth. -- expansion seen with is a And it it's earnings that contributed we've of execution So is big we're happy sectionally margin the restructuring really

remaining the fourth So charges were in the quarter.

So forward, is noteworthy piece to as through related the the items expectation be largest this at largest we coming point look McGriff. of will our --

true-ups But go there. will other this to through some things stuff that time McGriff point. from really programs, like earnouts it's have and to mean time, I we'll in terms major of

John Doyle

questions. Thanks, the Appreciate Greg. Andrew.

Operator

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

Michael Zaremski

Going read into analysts, remarks. I But to The least, the last I we're growth -- it. Jim, just years, or of your still. mid-single-digit prepared guess made try commentary you heard it to or we're you back read at don't said into going I in to the to know organic few on greater. answer that mid-single digit

there it told down in also process we've maybe us is Or for like is proxy? did index, index a I pricing the seen planning you Marsh just -- the is something -- X%. XX So guess that change

so it And sensitivity of there's to from kind in a while some assuming for I'm right marketplace. the a revenues your being account market soft-ish large

into your kind playing remarks. So of prepared maybe that's

John Doyle

and Mike. the Thanks, appreciate P&C market I to I where Look, No. question. most we're in stable. be market more pricing to tends pricing think Yes. middle exposed is the middle

on central here than So into it's -- quarter I major issue I I what would certainly Mark here, see banks thought think stickier obviously, that's is from headwinds primary so remained And factor. certainly don't that. right? States. We'll like. fit, most outlook. -- uncertain an your some we would insights in United attempt a like, has read the be the would to The first shared inflation

of there's administration the And -- And we'll with the tariffs. potential think see is what but that steps around from right? some I volatility driver. some the volatility is taking really so primary bid new and that trade means, But

Michael Zaremski

also Okay. Mark for Got probably on it. capital. And then a quick on -- follow-up

I'm are integrate for we billion that thinking 'XX and $X.X should charges assuming be other no McGriff? most guide Or pieces is just material the moving about? there due So of change of deploy year-over-year. to

Mark McGivney

outlook We're think with is what outlook. the capital about, asking that So for deployment, you're happy billion. really at $X.X I

up flexibility, than think $XX coming into lot was a built certainly that last we you the have more we year, year. to and of planned spent a and If back had to we close billion significant amount

looking be buy looking all year in. is have a to and be deployment stock But that's of a lot to year pay a in flexibility dividends great M&A, still a having XXXX, at be and position do a done normal to of year, just at capital that of back

we really feel good where are. So about we

John Doyle

history X OCIO XXX McGriff Vanguard's deploy. to we've our business agencies, top and The largest deal in in got $X.X billion Cordano,

of and to the speaks our we're I reputation and would that and mean, it franchise. have market, cash a I flow the are generation strength the too, M&A add great the in So the that brand we active in I market, yes, company mean, we quite of market.

people in businesses. important that's And

right do have ability deals we if Of itself. the do to course, bigger the deal presents

talked of serve flexibility string likely the so that's leverage bring to our it back we continue our strike want strategy I to Mark about, when and to to likely as But retain sense. pearls more we're well, will this we're down. and think I makes

Joshua Shanker

Andrew? Mike. you, Thank

Operator

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

Meyer Shields

impede United or the that want ability to big the follow I do integrate within? just effort Does John, made. up required the to on point overall you deals McGriff to States, either the in

John Doyle

sure reason not for I'm you mean? -- I understand what what the impede do

Meyer Shields

the... in Just management effort

John Doyle

going we no about talking together and issues say when It's businesses, of the as social getting come highlighted to doing I businesses an what So Again, why these people what organization. possibilities we important. are are our new we're question are there's really right? do reputation when we're

be going there's capacity. a to always So

capacity mistakes And course, very big successful constraint around very, attention. we to for either. don't history. make want XXX-year-plus management We've Some of of been have level much consolidator a any our been of and and time

his the of to the them target first time obviously lot likely And continue so pearls have -- meeting There's string doing family. but a the Meyer, strategy, MMA note, to no team not at Dave ability our but something again, for we we're And when welcoming of do question these in I more experience this. we're again, also have and would bigger. to we're firms do

deals for So we Meyer? have many years. many these a work follow-up, Do many, you on of

Meyer Shields

know dig talked Just to typical last quarter just that mentioned are that Mark organic recurring have a comp than brokers first Was one. revenues less I little coming other in there in something year's up. there wanted well. And the was quick I a book? bit. difficult about growth that a as

John Doyle

being that first the McGriff's around do not the revenue have no, have quarter, planning some mentioned No, bit -- in but FX, first as that We all. quarter we've to full some headwinds at we're bid we the in a unusual some got We seasonally year. of on just throughout headwinds late. well, seasonality Mark persist the tax,

bit a comp So first question, quarter. of All quarter. anyway, first in another tougher about things a in prior no, nothing year's unusual the those Andrew, please?

Operator

Certainly.

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

Robert Cox

I'm if analytics middle flowing was question on talk picture opportunities. you insurer for market John. means small based market, if curious in to about data a large bigger a of advantages. recently of secular and premiums their a and bit growth what My could and first scale middle that of a insurers are with kind the trend shift Marsh that smaller And you, number agree trend? question more for a highlighted you

John Doyle

sure familiar I'm not with I'm those comments.

be commenting think So about I about middle I want do to market. what somebody the matters, scale careful on might else say Yes.

scale think matters business. in I our

to I intermediaries. it it underwriters. And matters think to I matters think

balance the the There's those the and no to of matters, asset data of question risk diversification course, things broader matter. having and ability all liability then, both of develop side on insights of sheet,

out risk United Certainly, So a anybody. we broker and in basis, on the just maybe as we the about if we -- about market, originate about in your and basis, than largest the do talked there. middle Marsh will MMA global are the market, question on was we be more States, middle I fifth through guess stand-alone

really bring have ability the the solutions so we of yes. larger the ability that market. middle of to I benefits segment that some the in terrific things the they market. Our with the of middle of market to McGriff, about to relationships find commented And bring I mean our to there, insurers trade is context innovative one scale attractive we and

that matters to customer that And base.

insurer benefits, yes, in matters. scale it can bring the so an And to similar extent

Robert Cox

that to benefit as relationships larger mean, you a I Yes. imply clarification, that larger share And might meant insurers. think would be think have going for to Marsh I with for were market comments more I And insurers? is just the those that,

John Doyle

follow-up it. a Got it. you Got Do have Rob?

Robert Cox

I time? some to XXXX. an rough the was the margins to margins directionally or in could whether but you McGriff if give those us be follow-up, hoping into acquisition to And guidance on Yes, opportunity there's above-average expand you additive margins, appreciate no insight specific expect over I McGriff think dilutive you

John Doyle

Yes.

mentioned to last But was quarter, the I a this a clear. mentioned of not meaningful be are I carve-out, possibilities really McGriff built just synergies, as we around around just the and we so think carve-out not that McGriff matters expense our them give others matters because can't it technology for colleagues it scale shareholders can data to our clients, earlier, matters tools well. to and and our insights and as in

excited we're scale and 'XX to bring expect all 'XX what And 'XX. EPS later about benefits we into and So adjusted X. McGriff mean to in will to

Rob. on hour. the With past you, for everyone that, we've you. the of thank call Thank thank So the to Andrew, got want wrap bottom I up. to this joining us We're morning.

thank And want I thanks in next their continued confidence also I for want you again of and speaking Andrew. to to and Marsh McLennan, for clients again dedication. forward support their work all quarter. colleagues you, our with our all to hard also Thank we look everyone, to their and thank

Marsh & McLennan Companies (MMC) 30 Jan 252024 Q4 Earnings call transcript