NYSE:MMC Marsh & McLennan Companies Q4 2023 Earnings Report $219.37 +0.41 (+0.19%) Closing price 04/25/2025 03:59 PM EasternExtended Trading$219.14 -0.23 (-0.10%) As of 04/25/2025 06:50 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Marsh & McLennan Companies EPS ResultsActual EPS$1.68Consensus EPS $1.63Beat/MissBeat by +$0.05One Year Ago EPS$1.47Marsh & McLennan Companies Revenue ResultsActual Revenue$5.55 billionExpected Revenue$5.54 billionBeat/MissBeat by +$12.39 millionYoY Revenue Growth+10.60%Marsh & McLennan Companies Announcement DetailsQuarterQ4 2023Date1/25/2024TimeBefore Market OpensConference Call DateThursday, January 25, 2024Conference Call Time8:30AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Marsh & McLennan Companies Q4 2023 Earnings Call TranscriptProvided by QuartrJanuary 25, 2024 ShareLink copied to clipboard.There are 13 speakers on the call. Operator00:00:00Welcome to Marsh McLennan's Earnings Conference Call. Today's call is being recorded. 4th Quarter 2023 Financial Results and Supplemental Information were issued earlier this morning. They are available on the company's website atmarshmclennan.com. Please note that remarks made today may include forward looking statements. Operator00:00:22Forward looking statements are subject to risks and uncertainties, and a variety of factors may cause actual results to differ materially from those contemplated by such statements. For a more detailed discussion of those factors, please refer to our earnings release for this quarter into our most recent SEC filings, including our most recent Form 10 ks, Speaker 100:00:43all of which are available on Operator00:00:44the Marsh McLennan website. During the call today, we may also discuss certain non GAAP financial measures. For a reconciliation of these measures To the most closely comparable GAAP measures, please refer to the schedule in today's earnings release. I'll now turn this over to John Doyle, President and CEO of Marsh McLennan. Speaker 200:01:29Good morning, and thank you for joining us to discuss our 4th quarter results reported earlier today. I'm John Doyle, President and CEO of Marsh McLennan. Joining me on the call today is Mark McGivney, our CFO and the CEOs of our businesses, Martin South of Marsh Dean Klasseur of Guy Carpenter Martin Forlan of Mercer and Nick Studer of Oliver Wyman. Also with us this morning is Sarah DeWitt, Head of Investor Relations. 2023 was an outstanding year for Marsh McLennan. Speaker 200:02:01Total revenue grew 10% to $22,700,000,000 We generated 9% underlying revenue growth, continuing our best period of growth in more than 2 decades with each of our businesses delivering strong results. Adjusted operating income grew 17% to $5,600,000,000 This is on top of 11% growth in 2022. Our adjusted operating margin increased 130 basis points, marking the 16th consecutive year we've reported margin expansion. And adjusted EPS grew 17%. We invested $1,600,000,000 in acquisitions that added to our talent, capabilities and scale. Speaker 200:02:45This was our largest year for acquisitions in nearly 2 decades aside from 2019 when we acquired JLT. Our acquisition of Graham expanded MMA's Mid Atlantic presence, Honan strengthened our Australian middle market business And our transaction with Westpac created one of Australia's most competitive super funds. At the same time, we continue to optimize our portfolio with the sale of 2 administration businesses at Mercer, which closed on January 1, 2024. And we delivered significant capital return to shareholders, raising our dividend by 20% and completing $1,150,000,000 of share repurchases. I'm proud of what our team achieved in 2023. Speaker 200:03:32Our colleagues executed on key initiatives and generated value for clients and shareholders. Our performance reflects execution of a well defined strategy, which includes building a culture that attracts and retains top talent, strengthening our capabilities through organic and inorganic investment, positioning ourselves in segments and geographies with attractive growth and margin profiles leveraging data, insights and innovation to support clients in managing uncertainty and finding new opportunities and delivering the power of Marsh McLennan's perspective to help clients thrive. I just returned from the World Economic Forum where geopolitical, economic, climate, technology and social risks were all very much top of mind for business and government leaders. Marsh McLennan is uniquely positioned to help clients manage the broad range of outcomes they're confronting from these issues. The launch of the Unity facility with Ukraine in November is a great example. Speaker 200:04:39Marsh, Oliver Wyman and Guy Carpenter came together to create an innovative insurance solution through a public private partnership. Uniti is now providing access to affordable war risk insurance for grain shipments in the Black Sea. The Ukrainian government's ambition is for the facility to enable nearly 1,000 shipments annually, helping to support their economy and global food security. Launching this facility was a proud moment for us And I can't think of a better example of our purpose, our capabilities and our impact in action. In so many ways, Marsh McLennan is well positioned to address today's challenges and we are only just beginning to harness our combined capabilities, which are a distinct advantage. Speaker 200:05:28We are inspired by the possibilities and consider it a privilege to do this important work. Our business strategy is complemented by a balanced approach to expense and capital management. We focus on generating consistent strong earnings growth and have a discipline of growing revenue faster than expenses. Our approach to capital allocation delivers results today while investing to sustain growth in the future. And we are implementing new ways to operate, reduce complexity and organize for impact. Speaker 200:06:03The strong value propositions of our individual businesses, the upside from bringing our collective strength to clients and our restructuring actions position us well for 2024. Looking to the year ahead, we continue to see a complex macro environment. Major economies continue to face the risk of recession, but moderating inflation and the possibility of easing interest rates make a soft landing more likely. The geopolitical situation remains unsettled with multiple wars, escalating conflict throughout the Middle East and rising tension in the South China Sea. Despite these challenges, we continue to believe there are factors that are supportive of growth in our business. Speaker 200:06:48Nominal GDP expectations for 2024 remain healthy for our major markets. While inflation has moderated, it is still elevated and tight labor markets and supply chain challenges persist. Continued low unemployment and sustained payroll growth support demand in health and benefits and exposure unit growth in workers' compensation. The cost of risk continues to increase as insurers account for rising frequency and severity of catastrophe losses, the risks of social inflation and higher reinsurance costs. Healthcare costs, driven in part by the rising cost of prescription drugs, accelerated in 2023 and are expected to remain elevated. Speaker 200:07:34And while short term interest rates could ease, they remain at the highest level since the financial crisis. As we've stated before, we have a track record of resilience and performance across economic cycles. Now let me turn to insurance and reinsurance market conditions. Primary insurance rates increased for the 25th consecutive quarter with the Marsh Global Insurance Market Index up 2% overall compared to a 3% increase in the 3rd quarter. Property rates increased 6% versus 7% in the 3rd quarter and casualty pricing continued to be up low single digits. Speaker 200:08:15Workers' compensation decreased slightly, while financial and professional liability rates were down mid single digits. Cyber pricing decreased modestly after several years of increases. In Reinsurance, The January 1 renewals reflected a market with more balanced trading conditions than a year ago. As we expected, underwriting discipline continued, but the market was more responsive to client objectives. Capacity was generally adequate and we saw increased demand from clients. Speaker 200:08:48In Global Property Cat Reinsurance, accounts without losses saw rates up modestly, while loss impacted accounts increased between 10% 30%. Casualty programs faced more scrutiny this year with pressure on pro rata seating commissions and excess of loss pricing. However, casualty capacity was adequate. As always, we are helping our clients navigate these dynamic market conditions. Now let me briefly turn to our Q4 financial performance, which Mark will cover in detail. Speaker 200:09:23We generated adjusted EPS of 1.68 dollars which is up 14% versus a year ago. Revenue grew 7% on an underlying basis with 8% growth in RIS and 7% in consulting. Overall, in the 4th quarter, we had adjusted operating income growth of 16% And our adjusted operating margin expanded 130 basis points year over year. In summary, 2023 was another outstanding year for Marsh McLennan. All of our businesses delivered, generating excellent revenue and earnings growth. Speaker 200:10:00We executed on our strategic initiatives, invested in high quality acquisitions, made the largest dividend increase in 25 years and made meaningful share repurchases. Looking forward, we are well positioned for 20 mid single digit or better underlying revenue growth, margin expansion and strong adjusted EPS growth. Our outlook assumes current macro conditions persist. However, meaningful uncertainty remains, and the economic backdrop could be materially different than our assumptions. With that, let me turn it over to Mark for a more detailed review of our results. Speaker 100:10:40Thank you, John, and good morning. Our strong 4th quarter results capped an excellent year. Our consolidated revenue increased 11% in the 4th quarter to 5,600,000,000 underlying growth of 7%. Operating income was $1,100,000,000 and adjusted operating income was $1,200,000,000 16% from a year ago. Our adjusted operating margin increased 130 basis points to 23.3%. Speaker 100:11:09GAAP EPS was $1.52 adjusted EPS was $1.68 up 14%. Our full year 2023 results were outstanding. Operating income for the year was $5,300,000,000 and adjusted operating income was $5,600,000,000 an increase of 17% over 2022. Adjusted EPS grew 17% $7.99 and our adjusted operating margin expanded 130 basis points marking our 16th consecutive year of reported margin expansion. 2023 was also a strong year for capital management. Speaker 100:11:50We deployed $4,000,000,000 of capital, enhanced our short term liquidity, raised our quarterly dividend 20% and saw Moody's upgrade our senior unsecured debt rating to A3. Looking at Risk and Insurance Services, 4th quarter revenue increased 11% to $3,300,000,000 or 8% on an underlying basis. This result marks the 11th consecutive quarter of 8% or higher underlying growth in RIS and continues the best stretch of growth in 2 decades. RIS operating income was $753,000,000 in the 4th quarter. Adjusted operating income increased 15% to $791,000,000 and our adjusted margin expanded 140 basis points to 27%. Speaker 100:12:40For the full year, revenue in RIS was $14,100,000,000 representing an increase of 11% an underlying basis. Adjusted operating income grew 17% for the year and our adjusted operating margin in RIS increased 150 basis points to 31.3%. At Marsh, revenue in the quarter increased 7% to $2,900,000,000 or 6% on an underlying basis. For the full year, Revenue at Marsh was $11,400,000,000 reflecting underlying growth of 8%. In U. Speaker 100:13:16S. And Canada, underlying growth was 5 for the quarter reflecting solid renewal and new business growth despite continued headwinds in financial and professional lines. We also saw a headwind of nearly a point from lower flood claims in our MGA business. For the full year, underlying growth in U. S. Speaker 100:13:34And Canada was strong at 7%. In international, underlying growth was 7% quarter with Latin America up 11%, Asia Pacific up 10% and EMEA up 5%. For the full year, underlying growth in international was excellent at 9%. Guy Carpenter's revenue was $252,000,000 up 9% on an underlying basis driven by growth across Global Specialties in most regions. For the year, Guy Carpenter generated $2,300,000,000 of revenue and 10% underlying growth, our strongest year since 2003. Speaker 100:14:18In the Consulting segment, 4th quarter revenue was $2,300,000,000 up 10% from a year ago or 7% on an underlying basis. Consulting operating income was 443,000,000 And adjusted operating income was $480,000,000 up 18%. Our adjusted operating margin 130 basis points in the quarter to 21.3%. For the Full year consulting revenue was $8,700,000,000 an increase of 7% on an underlying basis. Adjusted operating income for the year increased 13 percent to $1,700,000,000 and our adjusted operating margin increased 70 basis points to 20.4%. Speaker 100:15:05Mercer's revenue was $1,400,000,000 in the quarter reflecting underlying growth of 5%. This was Mercer's 11th straight quarter of 5% or higher underlying growth and continues the best run of growth in 15 years. Health grew 9% in the 4th quarter reflecting strength in employer and government segments and momentum across all regions. Wealth was up 4% driven by growth in investment management and DB administration. Our assets under management were $420,000,000,000 at the end of the 4th quarter, up 11% sequentially and up 22% compared to the Q4 of last year. Speaker 100:15:49Year over year growth was driven by our transaction with Westpac, a rebound in capital markets and positive net flows. Career revenue increased 1% reflecting tough comparables following a period of strong growth in the reward space. For the year, revenue at Mercer was 5.6 $1,000,000,000 an increase of 7% on an underlying basis, the best results since 2,008. Oliver Wyman's revenue in the 4th quarter was $856,000,000 an increase of 9% on an underlying basis, like to see strength in Europe and the Middle East. For the full year, Oliver Wyman's revenue was $3,100,000,000 reflecting underlying growth of 8%. Speaker 100:16:38Adjusted corporate expense was $78,000,000 in the quarter. Foreign exchange had very little impact on earnings in the 4th quarter and was a $0.07 headwind for the full year. Assuming exchange rates remain at current levels, we expect FX will have a negligible impact on the Q1 full year of 2024. Total noteworthy items in the quarter were 90,000,000 The majority of which related to our restructuring actions partly offset by a $58,000,000 gain related to a legal settlement. We reported $131,000,000 of total restructuring costs, approximately $113,000,000 of which relates to the program we launched in the Q4 of 2022. Speaker 100:17:27These charges largely reflect costs related to severance, lease exits and streamlining our technology environment. We expect total charges under this program of approximately $475,000,000 and expect total savings of roughly $400,000,000 of which approximately $230,000,000 was realized in 2023. We expect to realize the bulk of the remaining savings in 2024. To date, we've incurred approximately $440,000,000 of charges under this program. Our other net benefit credit was $59,000,000 in the quarter and $239,000,000 for the full year. Speaker 100:18:10For 2024, we currently expect our other net benefit credit will be up slightly. Cash contributions to our global defined benefit plans were $111,000,000 in 2023. We expect a similar amount in 2024. Investment income was a loss of $1,000,000 in the 4th quarter on both a GAAP and adjusted basis and we aren't currently projecting any investment income in the Q1 of 2024. Interest expense in the Q4 was $151,000,000 up from $127,000,000 in the Q4 of 2022, reflecting higher levels of debt and higher interest rates. Speaker 100:18:53Based on our current forecast, we expect interest expense for the Full year 2024 was approximately $625,000,000 with $159,000,000 in the first quarter. Our adjusted effective tax rate in the 4th quarter was 25.5%. This compares with 22.9% in the Q4 last year, which benefited from favorable discrete items. For the full year 2023, our adjusted effective tax rate was 24% compared with 23.5% in 2022. Both periods benefited from favorable discrete items. Speaker 100:19:34When we give forward guidance around our tax rate, do not project discrete items which can be positive or negative. Based on the current environment, we expect an adjusted effective tax rate of between 25.5 $26,500,000 for 2024. Turning to capital management and our balance sheet. We ended the year with total debt of $13,500,000,000 Our next scheduled debt maturities are in the Q1 of Recall that last September, we issued $1,600,000,000 of new debt to fund these maturities. Our cash position at the end of the 4th quarter was $3,400,000,000 Uses of cash in the quarter totaled $1,100,000,000 included $354,000,000 for dividends, dollars 486,000,000 for acquisitions and $250,000,000 for share repurchases. Speaker 100:20:34For the year, uses of cash totaled $4,000,000,000 and included $1,300,000,000 for dividends, dollars 1,600,000,000 for acquisitions $1,150,000,000 for share repurchases. I want to take a minute to reiterate our approach to capital management. We've consistently followed a balanced capital management strategy that helps us deliver solid performance in the near term while investing for sustained growth over the long term. We prioritize investment in our business both through organic investments and acquisitions. We favor attractive acquisitions over share repurchases and believe they are the better value creator for shareholders and the company over the long term. Speaker 100:21:20However, we also recognize that returning capital to shareholders generates meaningful returns for investors over time And each year, we target raising our dividend and reducing our share count. Looking ahead to 2024, based on our outlook Today, we expect to deploy approximately $4,500,000,000 of capital across dividends, acquisitions and share repurchases. The ultimate level of share repurchase will depend on how the M and A pipeline develops. As John noted, there is significant uncertainty in the outlook for the global economy. However, we feel good about our momentum and position. Speaker 100:21:58And despite the uncertainty, there are factors that remain supportive of growth. For 2024, we currently expect mid single digit or better underlying revenue growth, margin expansion and strong growth in adjusted EPS. With that, I'm happy to turn it back to John. Speaker 200:22:15Thank you, Mark. Andrew, we're ready to begin Q and A. Operator00:22:20Thank you. We will now begin the question and answer session. And in the interest of addressing questions from as many participants as possible, And our first question comes from the line of Elyse Greenspan with Wells Fargo. Speaker 300:23:07Hi, thanks. Good morning. My first question, earlier this week, We had another insurance broker who's updating their reported EPS metric to back out intangibles. So That does leave you guys as the only broker peer, right, that doesn't back out intangibles out of your adjusted EPS figure. If you guys could give in consideration to moving towards what's become industry common practice? Speaker 200:23:37Morning, Elyse. Mark, maybe you could comment on that? Speaker 100:23:39Elyse, we don't have any current plans to change our reporting. We do provide amortization and other information that allows you to stack us up against other companies, but we don't plan to change how we report at this point. Speaker 300:23:57Okay. Thanks. And then my second question, I was hoping to get more color on both the U. S. And Canada and EMEA, which did see growth slow in the quarter. Speaker 300:24:09I know Mark alluded to one point headwind from lower flood business within the U. S. And Canada. I wasn't sure if there was anything else to point out in the quarter And also hoping to get similar color on anything one off within organic growth within EMEA as well. Speaker 200:24:26Sure, sure, Elyse. And I'll make a couple of comments and then ask Martin to jump in. First of all, Marsh had an excellent year of growth at 8% underlying revenue growth for the year, a strong finish to the year. We saw Q4 of 2022 have slightly lower underlying growth as well, but we feel like we're very well positioned. Mark made a few comments about the growth in the quarter, but Mark maybe you could add a little bit more color. Speaker 400:24:50Yes. Thank you, John. As you said, we had a very good year with 7% growth This year and last for the quarter 5% growth was also the same as the prior year. M and A had an outstanding performance driven really by great retention new business, our M and A pipeline is robust. The U. Speaker 400:25:09S. Business continued to perform well. There are some headwinds in the market activity and pressure on financial lines, but our advisory business grew. It was partially offset by Canada, which is impacted more by a macro headwinds. And of course, we met the lower flood claims in the MGA business. Speaker 400:25:28So in EMEA, we had an excellent year in EMEA, 9% growth. Q4 was 5% growth. The European business within EMEA is the smallest quarter by some margin. And so it's susceptible to some slowdown in some of the projects. We had a very strong year, strong quarter in the Middle East, steady results in the UK. Speaker 400:25:52And so that was really it. Nothing Remarkable strong momentum we'd expect to be very confident going into next year. Speaker 200:26:01Thanks, Martin. So Elyse, FinPro pricing, as Mark mentioned, flood claims and the continued slow M and A environment, all factored in the U. S. But again, we feel like we're very well positioned and demand is quite strong for us in 2024. Operator, next question. Operator00:26:21Thank you. And our next question comes from the line of Jimmy Bhullar with JPMorgan. Speaker 500:26:28Hey, good morning. So first, just a question on the reinsurance brokerage business. Obviously, prices this year haven't gone up like they did last year. But what have you seen in terms of terms and conditions and buying behavior? Because last we saw the primaries retain a lot of risk and attachment points went up. Speaker 500:26:51Have those come back down or are like sort of terms and structures of programs similar to how they were last year? Speaker 200:26:58Yes. Thanks for the question, Jimmy. Guy Carpenter just had an excellent year helping clients navigate what was very, very choppy market in 2023. We certainly began 2024 with a more orderly But growth was outstanding and I feel terrific about how we're positioned to help clients going forward. But Dean, maybe you could share a little bit more insight on the market on 11. Speaker 600:27:21Thanks, John. And Kimi, let me give you a little bit more color on the oneone renewal and reinsurance. As John stated, we saw a balanced reinsurance market At the January 1 renewal, overall capacity was adequate for the completion of most programs across products and classes of business. Capacity did increase given rebounding capital in the marketplace and improved reinsurer returns in 2023. We estimate that dedicated reinsurance capital increased double digit for the oneone renewal. Speaker 600:27:57Turning to property cat, which I think you're mainly referring to, as John noted, it was more consistent trading rhythm than last year, capacity overall was adequate to cover most non frequency exposed layers. But as John noted, reinsurers held firm on terms and conditions. Attachment points did not come down. So reinsurers held on what they achieved in 2023 continuing to expose our clients balance sheets to attritional volatility moving forward. So that certainly didn't change. Speaker 600:28:34But overall, I Speaker 200:28:35thought it Speaker 600:28:35was a positive renewal. Clients bought more capacity At the top of cat programs, you saw some of those reported in the marketplace. So clients were able to get more capacity than last year, Achieve their objectives as John noted. John talked about risk adjusted rate increases for clients with non loss impacted portfolios. They saw a range of flat to high single digit kind of rate increases, but clients with cat losses We're in the 10% to 30% rate increase range, right? Speaker 600:29:12So I think that was pretty robust in both kind of the U. S. And European markets. Maybe a minute on casualty as well. In prior calls, we talked a lot about casualty and increased scrutiny of casualty portfolios heading into the oneone renewal. Speaker 600:29:31Reinsurers have been expressing concerns about adverse loss development now for several quarters in real and social inflation. However, I would say that at oneone that pricing movement was more constrained, slightly more muted than we anticipated kind of earlier in the Q4. That said, as John mentioned, there was downward pressure on ceding commissions for quota share contracts and excess of loss contracts saw double digit rate increases moving forward. But in the casualty renewal, I would say overall capacity was adequate. Speaker 200:30:08Thanks, Dean. Jimmy, I would add just in both the insurance and reinsurance market, the pace of loss cost inflation in casualty is the great unknown at the moment. We all know it's increasing. We all see mounting evidence of it, but that's the challenge for all of us in the market to sort through at the moment. Speaker 400:30:28Do you have a Speaker 200:30:28follow-up to me? Speaker 500:30:29Yes. Just on fiduciary investment income, so it had been increasing at a pretty sharp rate and declined modestly sequentially. Is that a function of just what's happened with interest rates or something to do with fiduciary balances or seasonality or something else? Speaker 200:30:45Sure. Mark, you want to? Speaker 100:30:47Yes, Jimmy, it is seasonality. Our balances tend to have a pattern of seasonality. Results in Q4 and Q1 tend to be seasonal lows for average balances, so it's purely a function of that. Speaker 200:31:04Thanks, Jimmy. Operator, next question please. Operator00:31:07And our next question comes from the line of Michael Zaremski with BMO Capital Markets. Speaker 700:31:14Hey, good morning. Back to the organic growth commentary, especially on the brokerage side, Loud and clear on kind of some of the pluses and minuses. I didn't hear anything about any influence from maybe a diminishing a tailwind from some of the excess hires you've made in past years. Is that a dynamic we should be thinking about as we I think about 2024 and 2025? Speaker 200:31:42Yes. Thanks, Mike. No, I don't think so. We continue to invest both organically and inorganically, Maybe not at the pace of a few years ago, but that's an important metric for us that we track around how we're driving production capacity in all of our businesses. So as I mentioned in my prepared remarks, we think the macro environment continues to be supportive of growth in our business. Speaker 200:32:09Nominal GDP will drive some growth. Inflation, while easing, is still elevated. Tight labor markets, We're just talking about the cost of risk in casualty as well. And as a result of that, we think pricing in the market will maintain will remain relatively stable as it's been really throughout most of 2023. We're quite optimistic about 2024. Speaker 200:32:34Our outlook is positive. I would also say a couple of other things. We're a better business entering 2024. We've been working hard at that. Our mix continues to improve. Speaker 200:32:46I talked about that a little bit about some of the divestiture activity, but also the inorganic investment we made. I mean, we'll continue to invest organically in the business as well and demand remains strong. So we're excited about 2024. Speaker 700:33:03Understood. And my follow-up is switching gears a little bit to Mercer. In your prepared remarks, I think you made, John, some comments about medical or health inflation. Some of the data points We've seen our medical costs for employers should might accelerate in 2024. Should that have a tailwind or any influence on the health segment specifically? Speaker 700:33:26Thanks. Speaker 200:33:28Sure, sure. Health was a terrific story for us in 2023 and Helping employers navigate what's a very, very complex and increasing cost environment will be very much on the top of our agenda in 2024 as well. Maybe Martijn, I'll ask you to comment a little bit about how we finished the year and what your outlook is around health for 2024? Speaker 800:33:52Yes. Thanks, John, and thanks, Mike, for the question. We're very pleased with the results in Health and We have had a quarter of 9% a year of 10% in overall sales and it comes from all regions. And it comes from many places. Of course, full employment does drive good results there, more people to cover in our employers benefit programs. Speaker 800:34:19But we also have invested in innovative and adaptive solutions. And medical consultation is there and what it drives for us is a lot of consulting around, trying to help clients and their employees could focus by better design, better fit for purpose programs. So we'll see there's not a huge of our business that is actually directly linked to inflation. We have a lot of fee based revenue in the business. So usually whether there's a lot of inflation or inflation abased a little bit is not a big factor in the overall results. Speaker 800:35:00I think it's more around Access to healthcare, innovative form of healthcare like digital health, mental health, good for clients and their employees that's mostly driving Speaker 400:35:14our business results. Speaker 200:35:16Thanks, Martin. Andrew, next question please. Operator00:35:20Certainly. Our next question comes from the line of David Motamedian with Evercore ISI. Speaker 900:35:28Hi, thanks. Good morning. I had a question just on Oliver Wyman and I know a few quarters ago we spoke about the pipeline that had slowed a little bit, but growth has remained pretty resilient there. I'm wondering if you could just talk about some of the drivers there within Oliver Wyman for organic. And we've seen a few more, a little bit more activity on the life insurance transaction side, just M and A activity. Speaker 900:35:57Is that something that's been an outsized driver to results? Speaker 200:36:02Yes. Thanks, David. Oliver Wyman had a terrific year. And as we all recall, we had a flat start to 2023. So demand continued to pick up and sales continued to pick up throughout the course of the year and we had a real strong finish. Speaker 200:36:16But Nick, maybe you could share a bit more color on what drove the growth and your outlook a bit. Speaker 1000:36:22Thank you, David, for the question. Yes, 12 months ago, we were coming off pretty strong year, but we knew the Q1 was going to be tough. And looking back on the year, it was indeed a pretty Tough marketplace for many of our competitors and for the industry, and we're very proud of clawing back from that slow start So a strong year. It was pretty wide based growth. As Mark mentioned in his Prepared remarks. Speaker 1000:36:49Our Middle East business grew very strongly, but excellent growth in Europe. We had strong growth in Our economic research capabilities as well as in digital, in finance and risk, some of our Other capabilities grew our people and organizational performance capability. And I've mentioned a few times that we've been building a restructuring practice. It's still not a big restructuring cycle, but that practice continues to grow very strongly. And across the industry is again broad based growth in the public sector, which is a strong practice for us, particularly in the Middle East. Speaker 1000:37:27Good growth in banking. You mentioned life insurance and consolidation. You have a strong insurance practice. We've seen a lot more activity in post merger integration and M and A across all sectors. And then our transportation and services and our communications, media And technology practices also grew strongly. Speaker 1000:37:48And I think it's off the base of just Good hiring, good organic growth and also some good inorganic growth. We've made a number of acquisitions over the last few years. We announced one which we hope to complete in the next couple of months. And both Great partner level hires and M and A are helping fuel that growth as well. And so the business is now 50% bigger than it was 3 years ago. Speaker 1000:38:16That scale, that breadth allows us to play in more places, allows us to help our clients with that big transformative moments. Speaker 200:38:25Thank you, Nick. And David, I would add Oliver Wyman is just one of the ways in which we can show up in a very, very different way in front of clients and prospects. And so We have a unique collection of capabilities certainly with them in the family. Do you have a follow-up, David? Speaker 900:38:40I do, yes. Thanks for that. Just a bigger picture question. I just sort of look over the last decade or the decade pre pandemic, Marsh as an enterprise has grown organically in the 3% to 5% range and we've obviously been well above that over the last 3 years including 9% here in 2023. Yes, there have been a number of tailwinds, but you guys have also been investing in the business. Speaker 900:39:12So I'm wondering if you think we can sustainably grow above that 3% to 5% organic growth we saw in the decade pre pandemic as we think about the next several years? Speaker 200:39:25Yes. Thanks, David. Yes, as I said just a couple of minutes ago, I think we're a better business entering 2024 than we were in 2023. I thought we're an outstanding business leading into 2023, but we've been working hard at being a better growth business for many years now. Part of that's reshaping the mix of business. Speaker 200:39:44As we've talked about investing organically and inorganically, We've spent a lot of time refining our client engagement models and investing in sales operations and technology to support sales. So I and of course, in 2019, we made the biggest acquisition in our history with JLT. So we were building up these capabilities going into 2020 when, of course, the pandemic hit. So I knew we were ready to run coming out of the pandemic. The macro environment, of course, has been supportive since the pandemic. Speaker 200:40:21And as I mentioned earlier, We expect the macros to continue to be supportive in 2024. So we think we're well positioned. As I mentioned earlier, we expect mid single digit revenue growth or better. So we're excited and quite optimistic heading into the year. Operator, next question please. Operator00:40:43Our next question comes from the line of Robert Cox with Goldman Sachs. Speaker 1100:40:48Hey, thanks for taking my question. So just curious if you could give us some more color on any changes in the middle market operating environment in particular and anything you guys are thinking about in terms of competitive dynamics as some large peers enter the space in a bigger way? Speaker 200:41:13I think you could ask Aon about NFP. I'm happy to talk about our middle market offering. I believe we have the best in class middle market U. S. Platform in MMA. Speaker 200:41:26It has been 12 years that we've been building our business here in the United States, and we've been building it out methodically and very, very proud of it. We love competition. And so I'll take our team in the market, but we're excited about our prospects at MMA. And candidly, I think we're just getting started. And when we began this effort 12 years ago, there were 30,000 independent agents in the United States. Speaker 200:41:55And today there are 30,000 independent agents in the United States. So there's much more in front of us. Do you have a follow-up? Speaker 1100:42:04Yes. So, just for a follow-up, maybe going back to the health space. I think you guys have discussed how you're largely compensated on a fee per employee basis. And employment growth is much lower than the 9 percent organic you achieved in the quarter. So I was just wondering if you could help me understand, is this more consulting new business out there? Speaker 1100:42:28Are you raising fees? And maybe is brokerage growing at a similar pace to the headline 9% organic? Speaker 200:42:37Yes, it's I think all of the above, but good sales and a value proposition to clients and prospects that they appreciate very much. Martijn, do you have anything to add to that? Speaker 800:42:49Well, first, a correction. The large part of our business is actually consulting fees. It's not fees per member as you mentioned, Robert. So just to be clear about that. There's a small portion of the business in the U. Speaker 800:43:02S. That is fee per participant, but that's the business that we divested. It's more in the NIM business. This is how those businesses are usually paid out. So the bulk of our business, some of it is based on the commission, but as I said, clients are really trying to control costs. Speaker 800:43:19So there's not a direct link to inflation in premium there because they would change the attachment point as my colleagues in reinsurance like to talk about. They would vary the benefit programs, etcetera. And there's a large part that is project based. And to your point, our growth has been In part, full employment because there's much more work to be done to cover the employee population. But there's also a lot of change, high cost of prescription drugs, for example, Accessibility through different means technology coming into space to help out people choose the right providers, the right programs And we're there with them helping them design those programs, communicate them to employees, measure them in terms of efficiency, but also cost, etcetera. Speaker 800:44:17So that's what's been and the health space everywhere is also seeing lots of change, lots of pressure on cost. So I don't see us being Not busy anytime soon. Nothing finds through that. Speaker 200:44:32Thank you, Martin. Thank you, Robert. Andrew, next question please. Operator00:44:37Our next question comes from the line of Meyer Shields with KBW. Speaker 500:44:43Great. Thank you. Two quick questions. First, can you give us a sense of the seasonality of the Reinsurance acquisition that contributed so much to this quarter's Speaker 100:44:58Mark, maybe you can Meyer, what you're seeing, I think you're referring to the underlying growth schedule and What looks like a large acquisition in Guy Carpenter is actually that column is acquisitions, dispositions and other adjustments. And we had in my prepared remarks, I mentioned a legal settlement that we had a noteworthy item in the quarter. So that's what's running through that schedule. It wasn't Not M and A, for Nite Corp. Speaker 500:45:25Okay. Do you Speaker 200:45:25have a follow-up? Speaker 500:45:27Yes, a quick one. When you've got the flood premiums with revenues in last year's, I guess, U. S. And Canada operations with restricted insurance, that had any impact on last year's margins or the year over year progress? Speaker 200:45:43Well, we don't report margins by business, but you saw a good margin expansion during the course of the year. And again, our outlook for 2024s 1st 17th year in a row to expand margins yet again. But so it wasn't material. We managed through it. There are parts of our business that are lumpy, right? Speaker 200:46:04And that's why we caution everybody not to get too worked up about growth rates in a particular quarter. And The flood claim activity was largely related to hurricane Ian related work that we did at that time last year. Thank you, Meyer. Andrew, next question please. Operator00:46:26And our next question comes from the line of Brian Meredith with UBS. Speaker 1200:46:32Hey, thanks, John. Just quickly and kind of following on Rob's question a little bit. If we look at the middle market space, there are some kind of larger competitors of yours that are going through some transitions, be it being acquired, maybe being acquired, not sure all sorts of stuff. Is that creating maybe another opportunity here for you to kind of ramp up talent acquisition? You've obviously really successful a couple of years ago doing that. Speaker 1200:46:58Is that opportunity out there you think again? Speaker 200:47:01Yes. Look, Brian, what I would say, 1st and foremost about talent acquisition is that we are very, very focused. I mentioned this in my prepared remarks about building a culture that attracts and retains the best in our work. The way we frame it, we talk about being at your best at Marsh McLennan, right? How can we for those that want to commit their career to risk strategy and people related work, how is it that being at Marsh McLennan, you can be your best and We frame those programs around learning and development, mobility, various aspects of wellness, and you get to do really purposeful work here. Speaker 200:47:40I mentioned the Ukraine work As an example earlier, you get to work with exceptional talent, and it's a collaborative environment and a learning environment. And so feel like we have the best talent in our business. I feel like our brand as an employer in the market is very, very It doesn't mean everybody wants to work here. Of course, we're a big company. And as we all know, there's lots of things that come with working at a bigger company. Speaker 200:48:04But I like how we're positioned. So M and A, yes. Does it create opportunities for talent acquisition? Much like we saw a bit of talent breakage when we acquired JLT, folks sign up for working at a certain place and when you have that kind of change, It's an opportunity possibly for folks to think through what they want to do going forward. I like how we're positioned in that respect. Speaker 200:48:33And then back to your other kind of yes, there are a number of bigger businesses in our particularly in the risk space that are likely to change hands over time. Speaker 400:48:47Great. Speaker 1200:48:48Thanks. And then I guess my next question, Could you talk a little bit about kind of the M and A environment, particularly in the risk business, multiples being paid, what the pipeline kind of looks like there, more competitive, less competitive? Speaker 200:49:02Yes. Thanks, Brian. We remain very active in the market. As I said earlier, last year was our biggest year of acquisitions other than 2019 when we did JLT over a long period of time. We're very selective. Speaker 200:49:17We're looking for high performing businesses, well led businesses in attractive markets. As I mentioned, we want Growth businesses with the ability to grow earnings as well. The 3 bigger deals that I highlighted In my prepared remarks, we're very excited about Honan in Australia. It gives us really an anchor platform deeper into the middle market in what's a very important and attractive market for us. Graham here in the United States, another step forward for us at MMA and then BT Westpac in Australia strengthening our wealth business. Speaker 200:49:52So we have a couple of deals that we announced in the later part of last year, Vanguard's CIO operation, a career business, those will close sometime over the next few months. So we're going to continue to be active. Much like I was talking about our brand as an employer, our brand as a buyer is also quite strong, right? We do what we say we're going to do. And then on valuations, for really attractive assets, their multiples remain high. Speaker 200:50:23And so anyway, but we'll continue to deploy capital that way. And as Mark mentioned, we'd rather deploy capital on attractive inorganic and organic investment for that matter over share buybacks. But in the course of the year, you never know how things will run, But the pipeline is quite strong at the moment. Thank you, Brian. Andrew, next question. Operator00:50:48Our next question comes from the line of Andrew Kligerman with TD Cowen. Speaker 700:50:53Hey, good morning. John, you talked about the great unknown in terms of loss cost inflation, social inflation. On the flip side, we've seen a few carriers report and their results have been exceptional. So I understand that you're kind of projecting out some good pricing, but at what point Does that give and take ratio change and we kind of see some softer pricing and how would that affect Marsh? Speaker 200:51:32So, look, we as I've said a couple of times on this call, we've been working very hard at becoming a better growth business. We're not an index on P and C pricing. Of course, we're exposed to it. And just to be clear, I wasn't trying to project higher casualty prices over time. Our job is to get the most efficient risk financing as we can for our clients. Speaker 200:51:58But what I can tell you is it is quite clear, that there's stress emerging in casualty. There's no question about it. There are some casualty cats that are out there, that are concerning to underwriters and buyers. And we're just seeing greater frequency of mega settlements and for that matter, even judgments on individual cases. Core inflation, of course, is something that's always a factor in the market. Speaker 200:52:24And you see that you've seen some of that manifest itself in shorter tail lines from carriers. But we're all quite concerned inside of our risk business about where casualty loss costs are headed. Speaker 700:52:39Thanks for that one. And then my second question is just the stellar growth underlying growth in Asia Pacific at 10%, LATAM at 11% in risk and insurance services. Question is, what particularly you're seeing in those markets that is driving some of that excellent growth and then underlying that, What is Marsh doing differently from the competitors? Speaker 200:53:08Yes. I mean, we're very proud of our businesses in both of those regions. They've been growth leaders for us Over the last several years, I would point out it's one of the things that JLT brought to us in 2019. We expanded our footprint and brought along much greater distribution in both Latin America and Asia. But Martin, maybe you could talk a little bit more about both of those regions. Speaker 400:53:37Yes. As you say, I mean, we're the clear market leader By some margin in Asia Pac, there are several factors we have literally market leadership in every single major geography there. We're able to bring all of our best capabilities from around the world to there. We have great teams, Very specialized, a very strong employee benefits business. We have scale. Speaker 400:54:03We're able to attract and retain talent in a way. There's just there's real momentum there. And the same can be said in Latin America, slightly different economic dynamics, obviously, with Latin America, Big protection gap, a lot of opportunities, market leadership in the areas there and still quite an unconsolidated marketplace. So we like the fact that we built our businesses organically, So we like the fact that we built our businesses organically, so the cultures are strong. There's not much on the M and A pipeline in those markets That we like, we're confident that we can build our businesses organically. Speaker 400:54:41And the differentiation of having global service and our global capabilities really is really well sorted out to buy our clients. Speaker 200:54:50Thanks Andrew and Martin for that. We continue to be to be excited about how we're positioned in those markets. Andrew, next question please. Operator00:55:00Our next question comes from the line of Bob Wang with Morgan Stanley. Speaker 100:55:05Hi. I only have one major question. So this is regarding MMA. So just curious, how much did MMA contribute to the overall revenue for 2023? And as we move into 2024, How should we think about the trajectory for MMA? Speaker 100:55:22Is it like should we continue to expect it to further outgrow the broader business as a whole? Or how should we think about just the competitive dynamic overall as well? Speaker 200:55:32So we obviously don't separately report MMA's results, but it's an important part of our business in the United States and it continues to perform exceptionally well. We couldn't be more pleased as I mentioned earlier, and as I also said, I think we're just getting started, right? And what I would also say is that the broader Marsh has learned a great deal from MMA about what it takes to win in the middle market and Martin and the team apply those lessons as we expand in the middle market all over the world and where possible even deploy inorganic investment like we did in the case of Honan in Australia. But our business at MMA also benefits from being part of Marsh. They're excellent at really mining Marsh for content and capability that can enable them to show up with scale in local markets in a way that really distinguishes themselves from others. Speaker 200:56:32So as I mentioned earlier, we've been methodically building out MMA over the course of the last 12 years, piece by piece and A plus asset by A plus asset. And so we couldn't be more excited and we think there's a long road ahead of us. Do you have a follow-up, Bob? No, I think I'm good. Thank you. Speaker 200:56:53Okay. Thank you. Andrew, next question please. Operator00:57:01Our next question comes from the line of Michael Ward with Citi. Speaker 500:57:06Thanks guys. Good morning. Just on the capital deployment target, I think it was up over 10%. And I was just wondering if that's a function of the cost savings program rolling off or anything else? Speaker 200:57:23No, but Mark, maybe you could just talk generally about our approach. Speaker 100:57:27We had a as you saw a strong year of free cash flow generation. We have Significant financial flexibility, our balance sheet is strong and so it's just really a reflection of our the growth in our outlook for capital cash generation. Speaker 500:57:44Okay. And then any kind of update on the progress with synergizing the various business sales efforts together? Speaker 200:57:55Yes. Thanks, Mike, for that question. One of the things that I think makes us a better business is we're working better together than we ever have, right? And we I've shared with you where we are on the expense side of things, but we're showing up together in front of clients and prospects. As I mentioned earlier, strength of our individual business propositions will continue to drive the growth of our business overall, But more and more, we can show up in a very, very unique way. Speaker 200:58:25And so we made good progress during 2023. We've certainly learned a great deal. We've done some testing and we'll continue to refine that. But we have a number of global growth opportunities where we're showing up in front of clients and together. And what we really did was create a framework for our folks in the field. Speaker 200:58:43As you'll recall, we appointed Marsh McLennan leaders in each of the regions. And so a big part of their Day is making sure that we're bringing our collective capabilities to market at a local level where it makes sense. So we continue to be excited about what that will mean to future growth. Operator00:59:00Thank you. I would now like to turn the call back over to John Doyle, President and CEO of Marsh McLennan for any closing remarks. Speaker 200:59:09Thanks, Andrew, and I want to thank you all for joining us on the call this morning. In closing, I want to thank our colleagues for their hard work and dedication. I also want to thank our clients for their continued support. Thank you all very much and we look forward to speaking with you again next quarter.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallMarsh & McLennan Companies Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(10-K) Marsh & McLennan Companies Earnings HeadlinesMarsh & McLennan Companies, Inc. (NYSE:MMC) Receives $241.93 Average Target Price from AnalystsApril 26 at 3:43 AM | americanbankingnews.comXChange TEC.INC (NASDAQ:XHG) versus Marsh & McLennan Companies (NYSE:MMC) Head-To-Head ComparisonApril 24 at 2:23 AM | americanbankingnews.comHere’s How to Claim Your Stake in Elon’s Private Company, xAIElon Musk has done it again. He’s developed a powerful new AI model that’s already turning heads — and turning the industry upside down. Some say it could threaten Google’s search engine dominance. Others believe it could mark the beginning of the end for ChatGPT.April 26, 2025 | Brownstone Research (Ad)Marsh & McLennan Companies (NYSE:MMC) Price Target Cut to $215.00 by Analysts at Keefe, Bruyette & WoodsApril 22, 2025 | americanbankingnews.comMarsh & McLennan Companies Inc (MMC) Q4 2024 Earnings Call Highlights: Strong Revenue ...April 21, 2025 | gurufocus.comBalanced Outlook on Marsh & McLennan: Hold Rating Amid Growth and Cost ChallengesApril 20, 2025 | tipranks.comSee More Marsh & McLennan Companies Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Marsh & McLennan Companies? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Marsh & McLennan Companies and other key companies, straight to your email. Email Address About Marsh & McLennan CompaniesMarsh & McLennan Cos., Inc. is a professional services firm, which engages in offering clients advice and solutions in risk, strategy, and people. It operates through the Risk and Insurance Services, and Consulting segments. The Risk and Insurance Services segment is involved in risk management activities, as well as insurance and reinsurance broking and services. The Consulting segment offers health, wealth, and career solutions and products, and specialized management, strategic, economic, and brand consulting services. The company was founded by Henry W. Marsh and Donald R. 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There are 13 speakers on the call. Operator00:00:00Welcome to Marsh McLennan's Earnings Conference Call. Today's call is being recorded. 4th Quarter 2023 Financial Results and Supplemental Information were issued earlier this morning. They are available on the company's website atmarshmclennan.com. Please note that remarks made today may include forward looking statements. Operator00:00:22Forward looking statements are subject to risks and uncertainties, and a variety of factors may cause actual results to differ materially from those contemplated by such statements. For a more detailed discussion of those factors, please refer to our earnings release for this quarter into our most recent SEC filings, including our most recent Form 10 ks, Speaker 100:00:43all of which are available on Operator00:00:44the Marsh McLennan website. During the call today, we may also discuss certain non GAAP financial measures. For a reconciliation of these measures To the most closely comparable GAAP measures, please refer to the schedule in today's earnings release. I'll now turn this over to John Doyle, President and CEO of Marsh McLennan. Speaker 200:01:29Good morning, and thank you for joining us to discuss our 4th quarter results reported earlier today. I'm John Doyle, President and CEO of Marsh McLennan. Joining me on the call today is Mark McGivney, our CFO and the CEOs of our businesses, Martin South of Marsh Dean Klasseur of Guy Carpenter Martin Forlan of Mercer and Nick Studer of Oliver Wyman. Also with us this morning is Sarah DeWitt, Head of Investor Relations. 2023 was an outstanding year for Marsh McLennan. Speaker 200:02:01Total revenue grew 10% to $22,700,000,000 We generated 9% underlying revenue growth, continuing our best period of growth in more than 2 decades with each of our businesses delivering strong results. Adjusted operating income grew 17% to $5,600,000,000 This is on top of 11% growth in 2022. Our adjusted operating margin increased 130 basis points, marking the 16th consecutive year we've reported margin expansion. And adjusted EPS grew 17%. We invested $1,600,000,000 in acquisitions that added to our talent, capabilities and scale. Speaker 200:02:45This was our largest year for acquisitions in nearly 2 decades aside from 2019 when we acquired JLT. Our acquisition of Graham expanded MMA's Mid Atlantic presence, Honan strengthened our Australian middle market business And our transaction with Westpac created one of Australia's most competitive super funds. At the same time, we continue to optimize our portfolio with the sale of 2 administration businesses at Mercer, which closed on January 1, 2024. And we delivered significant capital return to shareholders, raising our dividend by 20% and completing $1,150,000,000 of share repurchases. I'm proud of what our team achieved in 2023. Speaker 200:03:32Our colleagues executed on key initiatives and generated value for clients and shareholders. Our performance reflects execution of a well defined strategy, which includes building a culture that attracts and retains top talent, strengthening our capabilities through organic and inorganic investment, positioning ourselves in segments and geographies with attractive growth and margin profiles leveraging data, insights and innovation to support clients in managing uncertainty and finding new opportunities and delivering the power of Marsh McLennan's perspective to help clients thrive. I just returned from the World Economic Forum where geopolitical, economic, climate, technology and social risks were all very much top of mind for business and government leaders. Marsh McLennan is uniquely positioned to help clients manage the broad range of outcomes they're confronting from these issues. The launch of the Unity facility with Ukraine in November is a great example. Speaker 200:04:39Marsh, Oliver Wyman and Guy Carpenter came together to create an innovative insurance solution through a public private partnership. Uniti is now providing access to affordable war risk insurance for grain shipments in the Black Sea. The Ukrainian government's ambition is for the facility to enable nearly 1,000 shipments annually, helping to support their economy and global food security. Launching this facility was a proud moment for us And I can't think of a better example of our purpose, our capabilities and our impact in action. In so many ways, Marsh McLennan is well positioned to address today's challenges and we are only just beginning to harness our combined capabilities, which are a distinct advantage. Speaker 200:05:28We are inspired by the possibilities and consider it a privilege to do this important work. Our business strategy is complemented by a balanced approach to expense and capital management. We focus on generating consistent strong earnings growth and have a discipline of growing revenue faster than expenses. Our approach to capital allocation delivers results today while investing to sustain growth in the future. And we are implementing new ways to operate, reduce complexity and organize for impact. Speaker 200:06:03The strong value propositions of our individual businesses, the upside from bringing our collective strength to clients and our restructuring actions position us well for 2024. Looking to the year ahead, we continue to see a complex macro environment. Major economies continue to face the risk of recession, but moderating inflation and the possibility of easing interest rates make a soft landing more likely. The geopolitical situation remains unsettled with multiple wars, escalating conflict throughout the Middle East and rising tension in the South China Sea. Despite these challenges, we continue to believe there are factors that are supportive of growth in our business. Speaker 200:06:48Nominal GDP expectations for 2024 remain healthy for our major markets. While inflation has moderated, it is still elevated and tight labor markets and supply chain challenges persist. Continued low unemployment and sustained payroll growth support demand in health and benefits and exposure unit growth in workers' compensation. The cost of risk continues to increase as insurers account for rising frequency and severity of catastrophe losses, the risks of social inflation and higher reinsurance costs. Healthcare costs, driven in part by the rising cost of prescription drugs, accelerated in 2023 and are expected to remain elevated. Speaker 200:07:34And while short term interest rates could ease, they remain at the highest level since the financial crisis. As we've stated before, we have a track record of resilience and performance across economic cycles. Now let me turn to insurance and reinsurance market conditions. Primary insurance rates increased for the 25th consecutive quarter with the Marsh Global Insurance Market Index up 2% overall compared to a 3% increase in the 3rd quarter. Property rates increased 6% versus 7% in the 3rd quarter and casualty pricing continued to be up low single digits. Speaker 200:08:15Workers' compensation decreased slightly, while financial and professional liability rates were down mid single digits. Cyber pricing decreased modestly after several years of increases. In Reinsurance, The January 1 renewals reflected a market with more balanced trading conditions than a year ago. As we expected, underwriting discipline continued, but the market was more responsive to client objectives. Capacity was generally adequate and we saw increased demand from clients. Speaker 200:08:48In Global Property Cat Reinsurance, accounts without losses saw rates up modestly, while loss impacted accounts increased between 10% 30%. Casualty programs faced more scrutiny this year with pressure on pro rata seating commissions and excess of loss pricing. However, casualty capacity was adequate. As always, we are helping our clients navigate these dynamic market conditions. Now let me briefly turn to our Q4 financial performance, which Mark will cover in detail. Speaker 200:09:23We generated adjusted EPS of 1.68 dollars which is up 14% versus a year ago. Revenue grew 7% on an underlying basis with 8% growth in RIS and 7% in consulting. Overall, in the 4th quarter, we had adjusted operating income growth of 16% And our adjusted operating margin expanded 130 basis points year over year. In summary, 2023 was another outstanding year for Marsh McLennan. All of our businesses delivered, generating excellent revenue and earnings growth. Speaker 200:10:00We executed on our strategic initiatives, invested in high quality acquisitions, made the largest dividend increase in 25 years and made meaningful share repurchases. Looking forward, we are well positioned for 20 mid single digit or better underlying revenue growth, margin expansion and strong adjusted EPS growth. Our outlook assumes current macro conditions persist. However, meaningful uncertainty remains, and the economic backdrop could be materially different than our assumptions. With that, let me turn it over to Mark for a more detailed review of our results. Speaker 100:10:40Thank you, John, and good morning. Our strong 4th quarter results capped an excellent year. Our consolidated revenue increased 11% in the 4th quarter to 5,600,000,000 underlying growth of 7%. Operating income was $1,100,000,000 and adjusted operating income was $1,200,000,000 16% from a year ago. Our adjusted operating margin increased 130 basis points to 23.3%. Speaker 100:11:09GAAP EPS was $1.52 adjusted EPS was $1.68 up 14%. Our full year 2023 results were outstanding. Operating income for the year was $5,300,000,000 and adjusted operating income was $5,600,000,000 an increase of 17% over 2022. Adjusted EPS grew 17% $7.99 and our adjusted operating margin expanded 130 basis points marking our 16th consecutive year of reported margin expansion. 2023 was also a strong year for capital management. Speaker 100:11:50We deployed $4,000,000,000 of capital, enhanced our short term liquidity, raised our quarterly dividend 20% and saw Moody's upgrade our senior unsecured debt rating to A3. Looking at Risk and Insurance Services, 4th quarter revenue increased 11% to $3,300,000,000 or 8% on an underlying basis. This result marks the 11th consecutive quarter of 8% or higher underlying growth in RIS and continues the best stretch of growth in 2 decades. RIS operating income was $753,000,000 in the 4th quarter. Adjusted operating income increased 15% to $791,000,000 and our adjusted margin expanded 140 basis points to 27%. Speaker 100:12:40For the full year, revenue in RIS was $14,100,000,000 representing an increase of 11% an underlying basis. Adjusted operating income grew 17% for the year and our adjusted operating margin in RIS increased 150 basis points to 31.3%. At Marsh, revenue in the quarter increased 7% to $2,900,000,000 or 6% on an underlying basis. For the full year, Revenue at Marsh was $11,400,000,000 reflecting underlying growth of 8%. In U. Speaker 100:13:16S. And Canada, underlying growth was 5 for the quarter reflecting solid renewal and new business growth despite continued headwinds in financial and professional lines. We also saw a headwind of nearly a point from lower flood claims in our MGA business. For the full year, underlying growth in U. S. Speaker 100:13:34And Canada was strong at 7%. In international, underlying growth was 7% quarter with Latin America up 11%, Asia Pacific up 10% and EMEA up 5%. For the full year, underlying growth in international was excellent at 9%. Guy Carpenter's revenue was $252,000,000 up 9% on an underlying basis driven by growth across Global Specialties in most regions. For the year, Guy Carpenter generated $2,300,000,000 of revenue and 10% underlying growth, our strongest year since 2003. Speaker 100:14:18In the Consulting segment, 4th quarter revenue was $2,300,000,000 up 10% from a year ago or 7% on an underlying basis. Consulting operating income was 443,000,000 And adjusted operating income was $480,000,000 up 18%. Our adjusted operating margin 130 basis points in the quarter to 21.3%. For the Full year consulting revenue was $8,700,000,000 an increase of 7% on an underlying basis. Adjusted operating income for the year increased 13 percent to $1,700,000,000 and our adjusted operating margin increased 70 basis points to 20.4%. Speaker 100:15:05Mercer's revenue was $1,400,000,000 in the quarter reflecting underlying growth of 5%. This was Mercer's 11th straight quarter of 5% or higher underlying growth and continues the best run of growth in 15 years. Health grew 9% in the 4th quarter reflecting strength in employer and government segments and momentum across all regions. Wealth was up 4% driven by growth in investment management and DB administration. Our assets under management were $420,000,000,000 at the end of the 4th quarter, up 11% sequentially and up 22% compared to the Q4 of last year. Speaker 100:15:49Year over year growth was driven by our transaction with Westpac, a rebound in capital markets and positive net flows. Career revenue increased 1% reflecting tough comparables following a period of strong growth in the reward space. For the year, revenue at Mercer was 5.6 $1,000,000,000 an increase of 7% on an underlying basis, the best results since 2,008. Oliver Wyman's revenue in the 4th quarter was $856,000,000 an increase of 9% on an underlying basis, like to see strength in Europe and the Middle East. For the full year, Oliver Wyman's revenue was $3,100,000,000 reflecting underlying growth of 8%. Speaker 100:16:38Adjusted corporate expense was $78,000,000 in the quarter. Foreign exchange had very little impact on earnings in the 4th quarter and was a $0.07 headwind for the full year. Assuming exchange rates remain at current levels, we expect FX will have a negligible impact on the Q1 full year of 2024. Total noteworthy items in the quarter were 90,000,000 The majority of which related to our restructuring actions partly offset by a $58,000,000 gain related to a legal settlement. We reported $131,000,000 of total restructuring costs, approximately $113,000,000 of which relates to the program we launched in the Q4 of 2022. Speaker 100:17:27These charges largely reflect costs related to severance, lease exits and streamlining our technology environment. We expect total charges under this program of approximately $475,000,000 and expect total savings of roughly $400,000,000 of which approximately $230,000,000 was realized in 2023. We expect to realize the bulk of the remaining savings in 2024. To date, we've incurred approximately $440,000,000 of charges under this program. Our other net benefit credit was $59,000,000 in the quarter and $239,000,000 for the full year. Speaker 100:18:10For 2024, we currently expect our other net benefit credit will be up slightly. Cash contributions to our global defined benefit plans were $111,000,000 in 2023. We expect a similar amount in 2024. Investment income was a loss of $1,000,000 in the 4th quarter on both a GAAP and adjusted basis and we aren't currently projecting any investment income in the Q1 of 2024. Interest expense in the Q4 was $151,000,000 up from $127,000,000 in the Q4 of 2022, reflecting higher levels of debt and higher interest rates. Speaker 100:18:53Based on our current forecast, we expect interest expense for the Full year 2024 was approximately $625,000,000 with $159,000,000 in the first quarter. Our adjusted effective tax rate in the 4th quarter was 25.5%. This compares with 22.9% in the Q4 last year, which benefited from favorable discrete items. For the full year 2023, our adjusted effective tax rate was 24% compared with 23.5% in 2022. Both periods benefited from favorable discrete items. Speaker 100:19:34When we give forward guidance around our tax rate, do not project discrete items which can be positive or negative. Based on the current environment, we expect an adjusted effective tax rate of between 25.5 $26,500,000 for 2024. Turning to capital management and our balance sheet. We ended the year with total debt of $13,500,000,000 Our next scheduled debt maturities are in the Q1 of Recall that last September, we issued $1,600,000,000 of new debt to fund these maturities. Our cash position at the end of the 4th quarter was $3,400,000,000 Uses of cash in the quarter totaled $1,100,000,000 included $354,000,000 for dividends, dollars 486,000,000 for acquisitions and $250,000,000 for share repurchases. Speaker 100:20:34For the year, uses of cash totaled $4,000,000,000 and included $1,300,000,000 for dividends, dollars 1,600,000,000 for acquisitions $1,150,000,000 for share repurchases. I want to take a minute to reiterate our approach to capital management. We've consistently followed a balanced capital management strategy that helps us deliver solid performance in the near term while investing for sustained growth over the long term. We prioritize investment in our business both through organic investments and acquisitions. We favor attractive acquisitions over share repurchases and believe they are the better value creator for shareholders and the company over the long term. Speaker 100:21:20However, we also recognize that returning capital to shareholders generates meaningful returns for investors over time And each year, we target raising our dividend and reducing our share count. Looking ahead to 2024, based on our outlook Today, we expect to deploy approximately $4,500,000,000 of capital across dividends, acquisitions and share repurchases. The ultimate level of share repurchase will depend on how the M and A pipeline develops. As John noted, there is significant uncertainty in the outlook for the global economy. However, we feel good about our momentum and position. Speaker 100:21:58And despite the uncertainty, there are factors that remain supportive of growth. For 2024, we currently expect mid single digit or better underlying revenue growth, margin expansion and strong growth in adjusted EPS. With that, I'm happy to turn it back to John. Speaker 200:22:15Thank you, Mark. Andrew, we're ready to begin Q and A. Operator00:22:20Thank you. We will now begin the question and answer session. And in the interest of addressing questions from as many participants as possible, And our first question comes from the line of Elyse Greenspan with Wells Fargo. Speaker 300:23:07Hi, thanks. Good morning. My first question, earlier this week, We had another insurance broker who's updating their reported EPS metric to back out intangibles. So That does leave you guys as the only broker peer, right, that doesn't back out intangibles out of your adjusted EPS figure. If you guys could give in consideration to moving towards what's become industry common practice? Speaker 200:23:37Morning, Elyse. Mark, maybe you could comment on that? Speaker 100:23:39Elyse, we don't have any current plans to change our reporting. We do provide amortization and other information that allows you to stack us up against other companies, but we don't plan to change how we report at this point. Speaker 300:23:57Okay. Thanks. And then my second question, I was hoping to get more color on both the U. S. And Canada and EMEA, which did see growth slow in the quarter. Speaker 300:24:09I know Mark alluded to one point headwind from lower flood business within the U. S. And Canada. I wasn't sure if there was anything else to point out in the quarter And also hoping to get similar color on anything one off within organic growth within EMEA as well. Speaker 200:24:26Sure, sure, Elyse. And I'll make a couple of comments and then ask Martin to jump in. First of all, Marsh had an excellent year of growth at 8% underlying revenue growth for the year, a strong finish to the year. We saw Q4 of 2022 have slightly lower underlying growth as well, but we feel like we're very well positioned. Mark made a few comments about the growth in the quarter, but Mark maybe you could add a little bit more color. Speaker 400:24:50Yes. Thank you, John. As you said, we had a very good year with 7% growth This year and last for the quarter 5% growth was also the same as the prior year. M and A had an outstanding performance driven really by great retention new business, our M and A pipeline is robust. The U. Speaker 400:25:09S. Business continued to perform well. There are some headwinds in the market activity and pressure on financial lines, but our advisory business grew. It was partially offset by Canada, which is impacted more by a macro headwinds. And of course, we met the lower flood claims in the MGA business. Speaker 400:25:28So in EMEA, we had an excellent year in EMEA, 9% growth. Q4 was 5% growth. The European business within EMEA is the smallest quarter by some margin. And so it's susceptible to some slowdown in some of the projects. We had a very strong year, strong quarter in the Middle East, steady results in the UK. Speaker 400:25:52And so that was really it. Nothing Remarkable strong momentum we'd expect to be very confident going into next year. Speaker 200:26:01Thanks, Martin. So Elyse, FinPro pricing, as Mark mentioned, flood claims and the continued slow M and A environment, all factored in the U. S. But again, we feel like we're very well positioned and demand is quite strong for us in 2024. Operator, next question. Operator00:26:21Thank you. And our next question comes from the line of Jimmy Bhullar with JPMorgan. Speaker 500:26:28Hey, good morning. So first, just a question on the reinsurance brokerage business. Obviously, prices this year haven't gone up like they did last year. But what have you seen in terms of terms and conditions and buying behavior? Because last we saw the primaries retain a lot of risk and attachment points went up. Speaker 500:26:51Have those come back down or are like sort of terms and structures of programs similar to how they were last year? Speaker 200:26:58Yes. Thanks for the question, Jimmy. Guy Carpenter just had an excellent year helping clients navigate what was very, very choppy market in 2023. We certainly began 2024 with a more orderly But growth was outstanding and I feel terrific about how we're positioned to help clients going forward. But Dean, maybe you could share a little bit more insight on the market on 11. Speaker 600:27:21Thanks, John. And Kimi, let me give you a little bit more color on the oneone renewal and reinsurance. As John stated, we saw a balanced reinsurance market At the January 1 renewal, overall capacity was adequate for the completion of most programs across products and classes of business. Capacity did increase given rebounding capital in the marketplace and improved reinsurer returns in 2023. We estimate that dedicated reinsurance capital increased double digit for the oneone renewal. Speaker 600:27:57Turning to property cat, which I think you're mainly referring to, as John noted, it was more consistent trading rhythm than last year, capacity overall was adequate to cover most non frequency exposed layers. But as John noted, reinsurers held firm on terms and conditions. Attachment points did not come down. So reinsurers held on what they achieved in 2023 continuing to expose our clients balance sheets to attritional volatility moving forward. So that certainly didn't change. Speaker 600:28:34But overall, I Speaker 200:28:35thought it Speaker 600:28:35was a positive renewal. Clients bought more capacity At the top of cat programs, you saw some of those reported in the marketplace. So clients were able to get more capacity than last year, Achieve their objectives as John noted. John talked about risk adjusted rate increases for clients with non loss impacted portfolios. They saw a range of flat to high single digit kind of rate increases, but clients with cat losses We're in the 10% to 30% rate increase range, right? Speaker 600:29:12So I think that was pretty robust in both kind of the U. S. And European markets. Maybe a minute on casualty as well. In prior calls, we talked a lot about casualty and increased scrutiny of casualty portfolios heading into the oneone renewal. Speaker 600:29:31Reinsurers have been expressing concerns about adverse loss development now for several quarters in real and social inflation. However, I would say that at oneone that pricing movement was more constrained, slightly more muted than we anticipated kind of earlier in the Q4. That said, as John mentioned, there was downward pressure on ceding commissions for quota share contracts and excess of loss contracts saw double digit rate increases moving forward. But in the casualty renewal, I would say overall capacity was adequate. Speaker 200:30:08Thanks, Dean. Jimmy, I would add just in both the insurance and reinsurance market, the pace of loss cost inflation in casualty is the great unknown at the moment. We all know it's increasing. We all see mounting evidence of it, but that's the challenge for all of us in the market to sort through at the moment. Speaker 400:30:28Do you have a Speaker 200:30:28follow-up to me? Speaker 500:30:29Yes. Just on fiduciary investment income, so it had been increasing at a pretty sharp rate and declined modestly sequentially. Is that a function of just what's happened with interest rates or something to do with fiduciary balances or seasonality or something else? Speaker 200:30:45Sure. Mark, you want to? Speaker 100:30:47Yes, Jimmy, it is seasonality. Our balances tend to have a pattern of seasonality. Results in Q4 and Q1 tend to be seasonal lows for average balances, so it's purely a function of that. Speaker 200:31:04Thanks, Jimmy. Operator, next question please. Operator00:31:07And our next question comes from the line of Michael Zaremski with BMO Capital Markets. Speaker 700:31:14Hey, good morning. Back to the organic growth commentary, especially on the brokerage side, Loud and clear on kind of some of the pluses and minuses. I didn't hear anything about any influence from maybe a diminishing a tailwind from some of the excess hires you've made in past years. Is that a dynamic we should be thinking about as we I think about 2024 and 2025? Speaker 200:31:42Yes. Thanks, Mike. No, I don't think so. We continue to invest both organically and inorganically, Maybe not at the pace of a few years ago, but that's an important metric for us that we track around how we're driving production capacity in all of our businesses. So as I mentioned in my prepared remarks, we think the macro environment continues to be supportive of growth in our business. Speaker 200:32:09Nominal GDP will drive some growth. Inflation, while easing, is still elevated. Tight labor markets, We're just talking about the cost of risk in casualty as well. And as a result of that, we think pricing in the market will maintain will remain relatively stable as it's been really throughout most of 2023. We're quite optimistic about 2024. Speaker 200:32:34Our outlook is positive. I would also say a couple of other things. We're a better business entering 2024. We've been working hard at that. Our mix continues to improve. Speaker 200:32:46I talked about that a little bit about some of the divestiture activity, but also the inorganic investment we made. I mean, we'll continue to invest organically in the business as well and demand remains strong. So we're excited about 2024. Speaker 700:33:03Understood. And my follow-up is switching gears a little bit to Mercer. In your prepared remarks, I think you made, John, some comments about medical or health inflation. Some of the data points We've seen our medical costs for employers should might accelerate in 2024. Should that have a tailwind or any influence on the health segment specifically? Speaker 700:33:26Thanks. Speaker 200:33:28Sure, sure. Health was a terrific story for us in 2023 and Helping employers navigate what's a very, very complex and increasing cost environment will be very much on the top of our agenda in 2024 as well. Maybe Martijn, I'll ask you to comment a little bit about how we finished the year and what your outlook is around health for 2024? Speaker 800:33:52Yes. Thanks, John, and thanks, Mike, for the question. We're very pleased with the results in Health and We have had a quarter of 9% a year of 10% in overall sales and it comes from all regions. And it comes from many places. Of course, full employment does drive good results there, more people to cover in our employers benefit programs. Speaker 800:34:19But we also have invested in innovative and adaptive solutions. And medical consultation is there and what it drives for us is a lot of consulting around, trying to help clients and their employees could focus by better design, better fit for purpose programs. So we'll see there's not a huge of our business that is actually directly linked to inflation. We have a lot of fee based revenue in the business. So usually whether there's a lot of inflation or inflation abased a little bit is not a big factor in the overall results. Speaker 800:35:00I think it's more around Access to healthcare, innovative form of healthcare like digital health, mental health, good for clients and their employees that's mostly driving Speaker 400:35:14our business results. Speaker 200:35:16Thanks, Martin. Andrew, next question please. Operator00:35:20Certainly. Our next question comes from the line of David Motamedian with Evercore ISI. Speaker 900:35:28Hi, thanks. Good morning. I had a question just on Oliver Wyman and I know a few quarters ago we spoke about the pipeline that had slowed a little bit, but growth has remained pretty resilient there. I'm wondering if you could just talk about some of the drivers there within Oliver Wyman for organic. And we've seen a few more, a little bit more activity on the life insurance transaction side, just M and A activity. Speaker 900:35:57Is that something that's been an outsized driver to results? Speaker 200:36:02Yes. Thanks, David. Oliver Wyman had a terrific year. And as we all recall, we had a flat start to 2023. So demand continued to pick up and sales continued to pick up throughout the course of the year and we had a real strong finish. Speaker 200:36:16But Nick, maybe you could share a bit more color on what drove the growth and your outlook a bit. Speaker 1000:36:22Thank you, David, for the question. Yes, 12 months ago, we were coming off pretty strong year, but we knew the Q1 was going to be tough. And looking back on the year, it was indeed a pretty Tough marketplace for many of our competitors and for the industry, and we're very proud of clawing back from that slow start So a strong year. It was pretty wide based growth. As Mark mentioned in his Prepared remarks. Speaker 1000:36:49Our Middle East business grew very strongly, but excellent growth in Europe. We had strong growth in Our economic research capabilities as well as in digital, in finance and risk, some of our Other capabilities grew our people and organizational performance capability. And I've mentioned a few times that we've been building a restructuring practice. It's still not a big restructuring cycle, but that practice continues to grow very strongly. And across the industry is again broad based growth in the public sector, which is a strong practice for us, particularly in the Middle East. Speaker 1000:37:27Good growth in banking. You mentioned life insurance and consolidation. You have a strong insurance practice. We've seen a lot more activity in post merger integration and M and A across all sectors. And then our transportation and services and our communications, media And technology practices also grew strongly. Speaker 1000:37:48And I think it's off the base of just Good hiring, good organic growth and also some good inorganic growth. We've made a number of acquisitions over the last few years. We announced one which we hope to complete in the next couple of months. And both Great partner level hires and M and A are helping fuel that growth as well. And so the business is now 50% bigger than it was 3 years ago. Speaker 1000:38:16That scale, that breadth allows us to play in more places, allows us to help our clients with that big transformative moments. Speaker 200:38:25Thank you, Nick. And David, I would add Oliver Wyman is just one of the ways in which we can show up in a very, very different way in front of clients and prospects. And so We have a unique collection of capabilities certainly with them in the family. Do you have a follow-up, David? Speaker 900:38:40I do, yes. Thanks for that. Just a bigger picture question. I just sort of look over the last decade or the decade pre pandemic, Marsh as an enterprise has grown organically in the 3% to 5% range and we've obviously been well above that over the last 3 years including 9% here in 2023. Yes, there have been a number of tailwinds, but you guys have also been investing in the business. Speaker 900:39:12So I'm wondering if you think we can sustainably grow above that 3% to 5% organic growth we saw in the decade pre pandemic as we think about the next several years? Speaker 200:39:25Yes. Thanks, David. Yes, as I said just a couple of minutes ago, I think we're a better business entering 2024 than we were in 2023. I thought we're an outstanding business leading into 2023, but we've been working hard at being a better growth business for many years now. Part of that's reshaping the mix of business. Speaker 200:39:44As we've talked about investing organically and inorganically, We've spent a lot of time refining our client engagement models and investing in sales operations and technology to support sales. So I and of course, in 2019, we made the biggest acquisition in our history with JLT. So we were building up these capabilities going into 2020 when, of course, the pandemic hit. So I knew we were ready to run coming out of the pandemic. The macro environment, of course, has been supportive since the pandemic. Speaker 200:40:21And as I mentioned earlier, We expect the macros to continue to be supportive in 2024. So we think we're well positioned. As I mentioned earlier, we expect mid single digit revenue growth or better. So we're excited and quite optimistic heading into the year. Operator, next question please. Operator00:40:43Our next question comes from the line of Robert Cox with Goldman Sachs. Speaker 1100:40:48Hey, thanks for taking my question. So just curious if you could give us some more color on any changes in the middle market operating environment in particular and anything you guys are thinking about in terms of competitive dynamics as some large peers enter the space in a bigger way? Speaker 200:41:13I think you could ask Aon about NFP. I'm happy to talk about our middle market offering. I believe we have the best in class middle market U. S. Platform in MMA. Speaker 200:41:26It has been 12 years that we've been building our business here in the United States, and we've been building it out methodically and very, very proud of it. We love competition. And so I'll take our team in the market, but we're excited about our prospects at MMA. And candidly, I think we're just getting started. And when we began this effort 12 years ago, there were 30,000 independent agents in the United States. Speaker 200:41:55And today there are 30,000 independent agents in the United States. So there's much more in front of us. Do you have a follow-up? Speaker 1100:42:04Yes. So, just for a follow-up, maybe going back to the health space. I think you guys have discussed how you're largely compensated on a fee per employee basis. And employment growth is much lower than the 9 percent organic you achieved in the quarter. So I was just wondering if you could help me understand, is this more consulting new business out there? Speaker 1100:42:28Are you raising fees? And maybe is brokerage growing at a similar pace to the headline 9% organic? Speaker 200:42:37Yes, it's I think all of the above, but good sales and a value proposition to clients and prospects that they appreciate very much. Martijn, do you have anything to add to that? Speaker 800:42:49Well, first, a correction. The large part of our business is actually consulting fees. It's not fees per member as you mentioned, Robert. So just to be clear about that. There's a small portion of the business in the U. Speaker 800:43:02S. That is fee per participant, but that's the business that we divested. It's more in the NIM business. This is how those businesses are usually paid out. So the bulk of our business, some of it is based on the commission, but as I said, clients are really trying to control costs. Speaker 800:43:19So there's not a direct link to inflation in premium there because they would change the attachment point as my colleagues in reinsurance like to talk about. They would vary the benefit programs, etcetera. And there's a large part that is project based. And to your point, our growth has been In part, full employment because there's much more work to be done to cover the employee population. But there's also a lot of change, high cost of prescription drugs, for example, Accessibility through different means technology coming into space to help out people choose the right providers, the right programs And we're there with them helping them design those programs, communicate them to employees, measure them in terms of efficiency, but also cost, etcetera. Speaker 800:44:17So that's what's been and the health space everywhere is also seeing lots of change, lots of pressure on cost. So I don't see us being Not busy anytime soon. Nothing finds through that. Speaker 200:44:32Thank you, Martin. Thank you, Robert. Andrew, next question please. Operator00:44:37Our next question comes from the line of Meyer Shields with KBW. Speaker 500:44:43Great. Thank you. Two quick questions. First, can you give us a sense of the seasonality of the Reinsurance acquisition that contributed so much to this quarter's Speaker 100:44:58Mark, maybe you can Meyer, what you're seeing, I think you're referring to the underlying growth schedule and What looks like a large acquisition in Guy Carpenter is actually that column is acquisitions, dispositions and other adjustments. And we had in my prepared remarks, I mentioned a legal settlement that we had a noteworthy item in the quarter. So that's what's running through that schedule. It wasn't Not M and A, for Nite Corp. Speaker 500:45:25Okay. Do you Speaker 200:45:25have a follow-up? Speaker 500:45:27Yes, a quick one. When you've got the flood premiums with revenues in last year's, I guess, U. S. And Canada operations with restricted insurance, that had any impact on last year's margins or the year over year progress? Speaker 200:45:43Well, we don't report margins by business, but you saw a good margin expansion during the course of the year. And again, our outlook for 2024s 1st 17th year in a row to expand margins yet again. But so it wasn't material. We managed through it. There are parts of our business that are lumpy, right? Speaker 200:46:04And that's why we caution everybody not to get too worked up about growth rates in a particular quarter. And The flood claim activity was largely related to hurricane Ian related work that we did at that time last year. Thank you, Meyer. Andrew, next question please. Operator00:46:26And our next question comes from the line of Brian Meredith with UBS. Speaker 1200:46:32Hey, thanks, John. Just quickly and kind of following on Rob's question a little bit. If we look at the middle market space, there are some kind of larger competitors of yours that are going through some transitions, be it being acquired, maybe being acquired, not sure all sorts of stuff. Is that creating maybe another opportunity here for you to kind of ramp up talent acquisition? You've obviously really successful a couple of years ago doing that. Speaker 1200:46:58Is that opportunity out there you think again? Speaker 200:47:01Yes. Look, Brian, what I would say, 1st and foremost about talent acquisition is that we are very, very focused. I mentioned this in my prepared remarks about building a culture that attracts and retains the best in our work. The way we frame it, we talk about being at your best at Marsh McLennan, right? How can we for those that want to commit their career to risk strategy and people related work, how is it that being at Marsh McLennan, you can be your best and We frame those programs around learning and development, mobility, various aspects of wellness, and you get to do really purposeful work here. Speaker 200:47:40I mentioned the Ukraine work As an example earlier, you get to work with exceptional talent, and it's a collaborative environment and a learning environment. And so feel like we have the best talent in our business. I feel like our brand as an employer in the market is very, very It doesn't mean everybody wants to work here. Of course, we're a big company. And as we all know, there's lots of things that come with working at a bigger company. Speaker 200:48:04But I like how we're positioned. So M and A, yes. Does it create opportunities for talent acquisition? Much like we saw a bit of talent breakage when we acquired JLT, folks sign up for working at a certain place and when you have that kind of change, It's an opportunity possibly for folks to think through what they want to do going forward. I like how we're positioned in that respect. Speaker 200:48:33And then back to your other kind of yes, there are a number of bigger businesses in our particularly in the risk space that are likely to change hands over time. Speaker 400:48:47Great. Speaker 1200:48:48Thanks. And then I guess my next question, Could you talk a little bit about kind of the M and A environment, particularly in the risk business, multiples being paid, what the pipeline kind of looks like there, more competitive, less competitive? Speaker 200:49:02Yes. Thanks, Brian. We remain very active in the market. As I said earlier, last year was our biggest year of acquisitions other than 2019 when we did JLT over a long period of time. We're very selective. Speaker 200:49:17We're looking for high performing businesses, well led businesses in attractive markets. As I mentioned, we want Growth businesses with the ability to grow earnings as well. The 3 bigger deals that I highlighted In my prepared remarks, we're very excited about Honan in Australia. It gives us really an anchor platform deeper into the middle market in what's a very important and attractive market for us. Graham here in the United States, another step forward for us at MMA and then BT Westpac in Australia strengthening our wealth business. Speaker 200:49:52So we have a couple of deals that we announced in the later part of last year, Vanguard's CIO operation, a career business, those will close sometime over the next few months. So we're going to continue to be active. Much like I was talking about our brand as an employer, our brand as a buyer is also quite strong, right? We do what we say we're going to do. And then on valuations, for really attractive assets, their multiples remain high. Speaker 200:50:23And so anyway, but we'll continue to deploy capital that way. And as Mark mentioned, we'd rather deploy capital on attractive inorganic and organic investment for that matter over share buybacks. But in the course of the year, you never know how things will run, But the pipeline is quite strong at the moment. Thank you, Brian. Andrew, next question. Operator00:50:48Our next question comes from the line of Andrew Kligerman with TD Cowen. Speaker 700:50:53Hey, good morning. John, you talked about the great unknown in terms of loss cost inflation, social inflation. On the flip side, we've seen a few carriers report and their results have been exceptional. So I understand that you're kind of projecting out some good pricing, but at what point Does that give and take ratio change and we kind of see some softer pricing and how would that affect Marsh? Speaker 200:51:32So, look, we as I've said a couple of times on this call, we've been working very hard at becoming a better growth business. We're not an index on P and C pricing. Of course, we're exposed to it. And just to be clear, I wasn't trying to project higher casualty prices over time. Our job is to get the most efficient risk financing as we can for our clients. Speaker 200:51:58But what I can tell you is it is quite clear, that there's stress emerging in casualty. There's no question about it. There are some casualty cats that are out there, that are concerning to underwriters and buyers. And we're just seeing greater frequency of mega settlements and for that matter, even judgments on individual cases. Core inflation, of course, is something that's always a factor in the market. Speaker 200:52:24And you see that you've seen some of that manifest itself in shorter tail lines from carriers. But we're all quite concerned inside of our risk business about where casualty loss costs are headed. Speaker 700:52:39Thanks for that one. And then my second question is just the stellar growth underlying growth in Asia Pacific at 10%, LATAM at 11% in risk and insurance services. Question is, what particularly you're seeing in those markets that is driving some of that excellent growth and then underlying that, What is Marsh doing differently from the competitors? Speaker 200:53:08Yes. I mean, we're very proud of our businesses in both of those regions. They've been growth leaders for us Over the last several years, I would point out it's one of the things that JLT brought to us in 2019. We expanded our footprint and brought along much greater distribution in both Latin America and Asia. But Martin, maybe you could talk a little bit more about both of those regions. Speaker 400:53:37Yes. As you say, I mean, we're the clear market leader By some margin in Asia Pac, there are several factors we have literally market leadership in every single major geography there. We're able to bring all of our best capabilities from around the world to there. We have great teams, Very specialized, a very strong employee benefits business. We have scale. Speaker 400:54:03We're able to attract and retain talent in a way. There's just there's real momentum there. And the same can be said in Latin America, slightly different economic dynamics, obviously, with Latin America, Big protection gap, a lot of opportunities, market leadership in the areas there and still quite an unconsolidated marketplace. So we like the fact that we built our businesses organically, So we like the fact that we built our businesses organically, so the cultures are strong. There's not much on the M and A pipeline in those markets That we like, we're confident that we can build our businesses organically. Speaker 400:54:41And the differentiation of having global service and our global capabilities really is really well sorted out to buy our clients. Speaker 200:54:50Thanks Andrew and Martin for that. We continue to be to be excited about how we're positioned in those markets. Andrew, next question please. Operator00:55:00Our next question comes from the line of Bob Wang with Morgan Stanley. Speaker 100:55:05Hi. I only have one major question. So this is regarding MMA. So just curious, how much did MMA contribute to the overall revenue for 2023? And as we move into 2024, How should we think about the trajectory for MMA? Speaker 100:55:22Is it like should we continue to expect it to further outgrow the broader business as a whole? Or how should we think about just the competitive dynamic overall as well? Speaker 200:55:32So we obviously don't separately report MMA's results, but it's an important part of our business in the United States and it continues to perform exceptionally well. We couldn't be more pleased as I mentioned earlier, and as I also said, I think we're just getting started, right? And what I would also say is that the broader Marsh has learned a great deal from MMA about what it takes to win in the middle market and Martin and the team apply those lessons as we expand in the middle market all over the world and where possible even deploy inorganic investment like we did in the case of Honan in Australia. But our business at MMA also benefits from being part of Marsh. They're excellent at really mining Marsh for content and capability that can enable them to show up with scale in local markets in a way that really distinguishes themselves from others. Speaker 200:56:32So as I mentioned earlier, we've been methodically building out MMA over the course of the last 12 years, piece by piece and A plus asset by A plus asset. And so we couldn't be more excited and we think there's a long road ahead of us. Do you have a follow-up, Bob? No, I think I'm good. Thank you. Speaker 200:56:53Okay. Thank you. Andrew, next question please. Operator00:57:01Our next question comes from the line of Michael Ward with Citi. Speaker 500:57:06Thanks guys. Good morning. Just on the capital deployment target, I think it was up over 10%. And I was just wondering if that's a function of the cost savings program rolling off or anything else? Speaker 200:57:23No, but Mark, maybe you could just talk generally about our approach. Speaker 100:57:27We had a as you saw a strong year of free cash flow generation. We have Significant financial flexibility, our balance sheet is strong and so it's just really a reflection of our the growth in our outlook for capital cash generation. Speaker 500:57:44Okay. And then any kind of update on the progress with synergizing the various business sales efforts together? Speaker 200:57:55Yes. Thanks, Mike, for that question. One of the things that I think makes us a better business is we're working better together than we ever have, right? And we I've shared with you where we are on the expense side of things, but we're showing up together in front of clients and prospects. As I mentioned earlier, strength of our individual business propositions will continue to drive the growth of our business overall, But more and more, we can show up in a very, very unique way. Speaker 200:58:25And so we made good progress during 2023. We've certainly learned a great deal. We've done some testing and we'll continue to refine that. But we have a number of global growth opportunities where we're showing up in front of clients and together. And what we really did was create a framework for our folks in the field. Speaker 200:58:43As you'll recall, we appointed Marsh McLennan leaders in each of the regions. And so a big part of their Day is making sure that we're bringing our collective capabilities to market at a local level where it makes sense. So we continue to be excited about what that will mean to future growth. Operator00:59:00Thank you. I would now like to turn the call back over to John Doyle, President and CEO of Marsh McLennan for any closing remarks. Speaker 200:59:09Thanks, Andrew, and I want to thank you all for joining us on the call this morning. In closing, I want to thank our colleagues for their hard work and dedication. I also want to thank our clients for their continued support. Thank you all very much and we look forward to speaking with you again next quarter.Read morePowered by