John Q. Doyle
President & Chief Executive Officer at Marsh & McLennan Companies
Good morning, and thank you for joining us to discuss our second 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, Pat Tomlinson of Mercer and Nick Studer of Oliver Wyman. Also with us this morning is Sarah DeWitt, Head of Investor Relations.
Before I get into our results, I'd like to comment on the attempted assassination of former U.S. President Donald Trump this past weekend. We're thankful that he is safe and our hearts go out to the victims and their loved ones. Violence has no place in our politics or our society. We condemn it and affirm our commitment to civil discussion, debate and resolution. Our political process and democracy depend on all candidates having the ability to safely convey their visions for our country. We believe that each of us can help shape peaceful public discourse and advocate for a culture of respect and unity.
Now turning to the second quarter. Marsh McLennan delivered strong results across our businesses and geographies. We generated 6% underlying revenue growth on top of 11% in the second quarter of last year, reflecting strong execution in both RIS and Consulting. We grew adjusted operating income 11% from a year ago, our adjusted operating margin expanded 130 basis points and adjusted EPS grew 10%. We also announced a 15% increase to our quarterly dividend to $0.815 and completed $300 million of share repurchases during the quarter.
These results highlight our consistent focus on delivering in the near-term, while investing for sustained growth over the long-term. We're benefiting from organic investments we've made in our talent and capabilities. And we also continue to make high quality acquisitions that build on the scale and breadth of our business.
In the second quarter, we announced several significant transactions. Mercer announced an agreement to acquire Cardano, a long-term savings specialist in the U.K. and Netherlands. With approximately $66 billion in AUM, Cardano operates the third largest U.K master trust platform and serves more than 2 million customers across 27,000 employers. This transaction builds on our leading position in OCIO, enhances our DC offerings and adds important trading capabilities.
Oliver Wyman agreed to acquire Veritas Total Solutions, an advisor in commodity and energy markets. And Marsh McLennan Agency completed three acquisitions in the quarter; Fisher Brown Bottrell, one of the five largest bank affiliate agencies in the United States. Specializing in commercial P&C insurance and employee benefits, FBB expands our presence across the Southeast. AC Risk Management builds on our scale and commercial P&C in the Northeast. And Perkins Insurance Agencies adds to our commercial P&C business in Texas.
Last week, MMA also announced the acquisition of Horton, a top 100 broker with over $100 million in revenue, operating primarily in the Midwest. And we recently announced the acquisitions of AmeriStar, a commercial P&C high net worth agency based in Minnesota; and Hudson Shore, a public sector employee benefits agency in New Jersey. These acquisitions are great examples of our ability to attract the very best insurance agencies to our company. And along with higher rates of sustained underlying growth, they've helped to make MMA a $3.5 billion annual revenue business.
We also continue to help our clients thrive by investing in innovation. Drawing out our expertise, perspective, data and insights, we are creating new solutions for a complex environment. For example, Marsh continues to evolve Blue[i], a digital suite of solutions for insurance strategy decisions that uses our data and analytics to generate insights for clients. This quarter, we had a Blue[i] Risk Appetite Analytics to help clients define the amount and type of risk they're willing to retain. With customizable calculations, our insights help clients navigate a challenging landscape with greater confidence.
Guy Carpenter launched CatStop+, a new solution to address the volatility of cyber risk using GC's proprietary analytics. CatStop+ offers clients protection against cyber cat losses. Mercer launched SelectRx, a technology solution in the U.S. that creates competition amongst pharmacies for high cost specialty medications. Leveraging Free Market Health's cloud-based platform, SelectRx lowers cost for employers and deliver savings to employees by directing prescriptions to a curated network of specialty pharmacies.
And Oliver Wyman is helping our clients innovate in their own businesses with the launch of Quotient, which combines our expertise in AI implementation, deployment and strategic advisory with our deep industry knowledge. Quotient moves clients beyond the hype surrounding AI to deliver real value and meaningful outcomes. Our approach to balancing near-term performance with investment and innovation delivers significant value to our clients. It also enables us to sustain growth over the long-term and drive consistent, exceptional performance for shareholders.
Shifting to the macro picture. We continue to see significant opportunity to help clients navigate the complexity they're facing today. Beyond the shocking assassination attempt in the U.S., the geopolitical backdrop is unsettled with ongoing wars and areas of attention across the globe. Uncertainty also remains around the frequency of extreme weather, escalating cyber attacks and key variables in the economic outlook like the persistence of inflation and the timing of changes to Central Bank policy. Despite this uncertainty, the environment remains supportive of growth in our business.
In general, we see continued economic growth in most of our major markets, the cost of risk in healthcare continues to rise and labor markets remain tight and the consensus probability of a near-term recession for major economies continues to decrease. We have performed well across economic cycles due to the resilience of our business, sustained demand for our advice and solutions and consistent execution for our clients.
Turning to insurance and reinsurance market conditions. The Marsh Global Insurance Market Index was flat overall in the second quarter versus a 1% increase in the first quarter. Generally, rates in the U.S., Europe and Latin America continued to increase in the low-to-mid single-digits, while the U.K., Asia and Pacific saw low-to-mid single-digit decreases. Global property rates were flat versus up 3% in the first quarter. Casualty increased in the low-single-digits with U.S. excess casualty up 10% in the quarter, while workers' compensation decreased low-single-digits. Financial and professional liability rates and cyber pricing were down 5% and 6% respectively.
Mid-year reinsurance renewals reflected increased demand for property cat with easing rates after significant increases in 2023. The majority of property placements were completed at renewal with adequate capacity. The global property cat reinsurance rates were generally flat to down mid-single-digits with greater decreases for upper layers on accounts without losses. The cat bond market had the most active quarter on record with over 30 new bonds issued involving approximately $8 billion of limit. Casualty programs face continued underwriting scrutiny, but there was adequate capacity in the market. Excess of loss programs with U.S. exposure saw upward pricing pressure, while quota-share ceding commissions were flat to down slightly. As always, we are helping our clients navigate these dynamic market conditions.
Now let me turn to our second quarter financial performance. We generated adjusted EPS of $2.41, which is up 10% from a year ago. On an underlying basis, revenue grew 6%. Underlying revenue grew 7% in RIS and 4% in Consulting. Marsh was up 7%, Guy Carpenter 11%, Mercer 5% and Oliver Wyman grew 3%. Overall, the second quarter saw adjusted operating income growth of 11% and our adjusted operating margin expanded 130 basis points year-over-year.
Turning to our outlook. We are well positioned for another great year in 2024. We continue to expect mid-single-digit or better underlying revenue growth, another year of margin expansion and strong growth in adjusted EPS. Our outlook assumes current macro conditions persist, however, meaningful uncertainty remains and the economic backdrop could be materially different than our assumptions. Overall, I'm proud of our second quarter performance, which demonstrates continued execution on key initiatives and momentum across our business. I'm grateful to our colleagues for their focus and determination and the value they deliver to our clients, shareholders and communities.
With that, let me turn it over to Mark for a more detailed review of our results.
