John Doyle
President and Chief Executive Officer at Marsh & McLennan Companies
Good morning. Thank you for joining us to discuss our first quarter results reported earlier today. I'm John Doyle, president and CEO of Marsh McLennan. On the call with me is Mark McGivney, our CFO; and the CEOs of our businesses. Martin South of Marsh; Dean Klisura of Guy Carpenter; Nick Studer of Oliver Wyman; and Pat Tomlinson of Mercer, who is joining us -- joining this call for the first time. Welcome, Pat. Also with us today is Sarah DeWitt, head of investor relations.
Marsh McLennan had a strong start to 2024. Our first quarter results were excellent and we are well-positioned for another good year. Top line continued with 9% underlying revenue growth, which was on top of 9% growth in the first quarter of last year, all of our businesses had strong revenue growth with Marsh, Mercer, and Oliver Wyman accelerating growth from the fourth quarter. We grew adjusted operating income by 11% from a year ago. Our adjusted operating margin expanded 80 basis points compared to the first quarter of 2023. We had adjusted EPS growth of 14% and we completed $300 million of share repurchases in the quarter.
In addition, we continued to add to our talent, capabilities, and scale through acquisitions. These investments will help strengthen our strategic position and sustain topline growth. For example, Mercer completed the purchase of Vanguard's OCIO business which expands our reach into the endowments and foundation segment. MMA acquired two leading agencies in Louisiana and Oliver Wyman enclosed the acquisition of SeaTec, which extends our capabilities in the aviation, transportation, and defense industries. At Marsh McLennan, we bring together specialized capabilities and perspectives across risk, strategy, and people to help clients make critical decisions with confidence.
For example, in the area of supply chain risk, we developed a solution called [Indecipherable], which draws on the perspective and capabilities of Marsh and Oliver Wyman to identify key risks in our client supply chains. Using this framework, we create a digital twin model of a client supply lines which provides for a scenario-based vulnerability assessment to help manage risk. This product is already helping clients across multiple sectors, including in the banking, manufacturing, aviation, and defense industries.
As we noted last quarter, Marsh, Oliver Wyman, and Guy Carpenter developed a unity facility, a public private insurance solution that enables grain shipments from Ukrainian ports. In the first quarter we worked with the Ukrainian government, DZ Bank, Lloyds and others to expand the facility to all ships carrying nonmilitary Cargo. This will help support Ukraine's economic resilience in time of war. In the healthcare sector Marsh and Mercer are working together to help clients evaluate connections between talent retention, patient safety, and the cost of malpractice insurance. Marsh's risk assessment capabilities and Mercer's extensive health and human capital expertise, combined with our rich data sets, are creating new, highly valued perspectives in the healthcare sector.
These are just a few examples of how we're applying our unique expertise to address pressing challenges and deliver significant value to clients. Recently, we released our annual ESG report. The report includes enhanced disclosure on our ESG efforts and underscores how the actions we're taking and on behalf of our clients also have a positive impact on the communities where we live and work. Let me share some examples. We collaborated with the center for NYC Neighborhoods to launch a community-based catastrophe insurance program. This parametric insurance program helps finance emergency grants to community members following an event, with funds reaching households within days of a catastrophe.
In cyber, we developed a global personal micro insurance solution to protect against threats like online identity theft, viruses, cyberbullying, and failure to deliver purchase goods. With regard to sustainability, we are supporting the Dubai energy and water authorities commitment to provide 100% of its energy from clean sources by 2050. As part of this work, we conducted a climate resilience assessment of one of the world's largest solar parks. We modeled the site's ability to withstand future climate conditions and proposed adaptation measures to mitigate extreme risks. We continue to improve sustainability in our own operations as well.
For example. In 2023, we expanded the use of renewable electricity across our US offices and in our largest UK locations and we submitted our climate targets for validation as part of our goal to achieve net zero globally by 2050. We remain committed to generating exceptional financial performance and returns for shareholders and we also recognize that the successful outcomes we help enable for our clients and our own actions can have a lasting, positive effect on communities around the world. Shifting to the macro picture, we see significant opportunity that helps clients navigate the range of outcomes driven by a more complex environment.
The geopolitical backdrop remains unsettled. With multiple major wars and rising tensions globally. More than half the world's population will go to elections in 2024 and the economic outlook remains uncertain as well. Despite this uncertainty, the environment is supportive of growth in our business. In general, we see continued economic growth in most of our major markets. Inflation and interest rates remain elevated. Labor markets are tight. The cost of risk is up and healthcare costs continue to rise. We have a strong record of performance across economic cycles due to the resilience of our business and demand for our advice and solutions.
Turning to insurance and reinsurance market conditions. Primary insurance rates increased with the Marsh global insurance market index up 1% overall in the quarter. Property rates increased 3% versus 6% in the fourth quarter. Casualty was up 3%, in line with last quarter. Workers' compensation decreased mid-single digits while financial and professional liability rates were down 7% and cyber pricing decreased 6%. Reinsurance market conditions remained stable. With increased client demand and adequate capacity. In the April renewal period, US property cat reinsurance rates were flat, with some decreases for accounts without losses.
Loss impacted accounts averaged increases in the 10% to 20% range. The US casualty reinsurance market was challenging, but rates were in line with January renewals. In January, April 1 property cat rates overall were down slightly on a risk-adjusted basis. Early signs for June 1 Florida cat risk renewals point to improved market conditions for seasons. Increased reinsurance appetite for growth should be adequate to meet higher demand. As always, we are helping our clients navigate these dynamic market conditions.
Now let me turn briefly to our first quarter financial performance, which Mark will cover in detail. We generated adjusted EPS of $2.89, which is up 14% versus a year ago. Revenue grew 9% on an underlying basis, with 9% growth in both RIS and in consulting. Marsh was up 8%. Guy Carpenter grew 8%, Mercer 6%, and Oliver Wyman was up 13%. Overall in the first quarter, we had adjusted operating income growth of 11%, and our adjusted operating margin expanded 80 basis points year-over-year. Turning to our outlook, we are very well-positioned for another good year in 2024. We continued to expect mid-single digit or better underlying revenue growth, another year of margin expansion, and strong growth and adjusted EPS.
Our outlook assumes current macro conditions persist. However, meaningful uncertainty remains and the economic backdrop could be materially different than our assumptions. In summary, the first quarter was a great start to the year for Marsh McLennan. Our business delivered strong performance, and we continued to execute well on our strategic initiatives. I'm proud of the focus and determination of our colleagues and the value they deliver to our clients and shareholders.
With that, let me turn it over to Mark for a more detailed review of our results.
