Marsh & McLennan Companies (MMC) 28 Jan 212020 Q4 Earnings call transcript

Welcome to Marsh & McLennan's Conference Call. Today’s call is being recorded. Fourth quarter 2020 financial results and supplemental information were issued earlier this morning. They are available on the company’s Web site at mmc.com. Please note that remarks made today may include forward-looking statements, including certain expectations related to COVID-19 and other matters.

to cause uncertainties materially actual contemplated such subject of a from are by may factors results statements. statements risks and and variety those Forward-looking to differ

to of to the and most MMC available XX-K, recent our factors, discussion all this including our detailed filings, Web recent more release for site. a please For on refer most our SEC of earnings quarter are those Form which

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

most reconciliation closely & today’s President GAAP release. over of refer these the a I’ll of this McLennan. the to to For please comparable measures turn Marsh and CEO Glaser, measures, schedule earnings to in Dan now

Glaser, Good us morning, earlier discuss joining President and of our Dan to and & Marsh you results CEO fourth McLennan. thank for quarter I’m reported today.

by call of Wyman. the of John businesses, is Martine Ferland and today of Sarah is our of of Carpenter; Mark us Doyle CEOs the CFO; Guy Oliver on Mercer; me Also McDonald Joining with and this our morning made Marsh; of McLennan’s Hearn Peter McGivney, and Scott DeWitt, & like choices individuals. other The year no XXXX these short was a we business remarkable was Marsh circumstances. year characterized Relations. was that in and and of as performance response a Investor nothing tough as Head

to and of moments purpose colleagues and Our face our clients, pandemic global the exactly Times we that occasion and demonstrated and these matter did that. to social validate empathy colleagues and difference the our rose in a resilience, courage, the communities, in for like collaboration unrest. make agility, the

recessions one growth impressive ever. EPS is adjusted in XXXX of the Our X% worst economic of

us enabled for to invest strong the future. performance Our continue financial to also

year develop million more number with acquired solutions. XXX technologies acquisitions, approximately of digital made record revenue of and hires robust We annualized a client achieved MMA with eight offer a to through continue of strategic We to revenue.

XXXX, there least dominate ahead. are while of first will brighter most the global half pandemic Looking likely days the at forward,

pandemic herd navigator UK predicts a more as normal model the to back the case vaccines of closer out could that through to are immunity, immunity, vaccinations, proprietary infection year. sometime rolled the move half in and return and Our natural U.S. see and we patterns counts

day. landscape climate global climate past of extreme have It clients the while working risks adapt the from week of the preparation a XX for top patterns. and and The This pandemics attention global around global the times And every digital help the of ascended & while challenges, an Annual world risk. as Annual year's secular XXXX, the at most action three of World of some weather navigate emerge as threat Marsh areas XX facing Forum's navigate crisis, expertise, Report on are risk, for the by and the economic has McLennan over with Marsh providing we to to time solutions and and their advice were most continues disease, social, and identified and today, Global the Risks highlight Economic XXXX, first with pressing our the cyber & likely many failure As risk risks, against strategy infectious warned which drew report other rely to prepared inequality same support clients risk that of people. change we and major the Marsh can the Global released the travel edition world flu and critical impact McLennan issues number long-term organization, to as years. impactful report last was years. Risks in in the also McLennan lethal for risks. these in and partners collaborated are with issues. highlights spread & its evolving Report In clients two the risk

third spend me conditions. versus consecutive Global quarter the quarter The the Insurance fourth quarter. and increases in our of global XX% market casualty showed XX%, XXth large insurance rate U.S. in The pricing insurance account price of Market marks modestly. current on was up up on were commercial while lives Index XX% the moment year-over-year Let Marsh PNC professional Global were insurance and PNC workers’ marketplace. global a compensation increases to business. property in skews index declined XX% mind X% and rates up financial Keep average,

pricing However, At for continues price than dedicated face carriers increases lengthy Insurance the middle U.S. losses, rates. January cases rise of challenging reinsurance Risks able at complex while predictions, in are to although magnitude commercial and continue and market for increases push early Traditional market with AM complex to insurance conditions ultimately be on reinsurance pricing and coverage regions. renewals, higher across a At of Carpenter end placed, small the at and some remained and and negotiations accounts. significant as less terms. capital increased in the X Best. slightly large the less Guy settled products coverage of rate is although by to lower prices renewal, as with low the January were insurance structure. and returns well, interest focus stricter and calculated

XX% segments conditions. and ongoing of excess pressures digit remain both improved and social uncertainty more subject critical. present Casualty overall, saw risk challenges loss continue in while EMEA down services and renewals of over to and deploy business. capital low increases insurance advice on underwriting U.S. were teens saw reinsurance up challenging low activity rates. in capital impacted for and be was due interest pricing environment Significant the XXXX single midyear very PNC Asia PNC single activity, willingness casualty value generally levels the to mid and increased property The Price programs the a digits Pacific. in rigor of in was loss both to prices some even historic experience. and and recent pandemic elevated marginally. inflation reasonable. low of rising rates, impacted pervasive drove property to our Non-loss becomes alternative of XXXX providers lines. clients constrained and available However, to Capacity of capital the our Periods of changing markets in

in basis. a fourth ongoing ago quarter basis, Marsh quarter in financial strong turn let grew Guy generated and in jump the the Underlying $X.XX, Marsh performance. to Wyman underlying decline grew the grew underlying versus rose an in We strong. and declined & a X% finishing consulting. the pandemic RIS, year grew basis an an declined X% in fiduciary underlying year Now new adjusted increased quarter X%, revenue in X% revenue XX for picked Mercer Carpenter up excluding on X% margin X% revenue quarter operating or and our X% by Oliver with on the as our capped end business basis consistent X% on year-over-year. in X% down the the saw interest with underlying and quarter. year year prior adjusted the into a overall me recession. points EPS of economic The McLennan of despite which income fourth Total year. operating global

expected employee-related expenses call, due of As uptick see have and in on of other in as reflects taken to the actions expected sequential over strategic we increase The pandemic better accruals than that earnings we increase course our well to Wyman’s the would the place variable in the mentioned hiring thick fourth compensation quarter. investments. last year, Oliver performance, but were in delayed the and as a

over single performance and a longer As overemphasize time. we rather look of to consistently at a say, it quarter is important not period

of points points For consulting the basis operating XXX the RIS operating of points. income XXX expansion. margin full XXXX, year X% basis achieved adjusted operating expansion adjusted for gained with margin adjusted year, while XX increased full basis

by decline in underlying economic EPS X% more sensitivity, year, an Wyman revenue Mercer's revenue in of X% X% Consulting interest. nature RIS for Guy of by Carpenter, X% and or and partially adjusted full growth offset the discretionary grew despite driven underlying with on down a grew growth Overall, down the up revenue revenue year. and Marsh was higher X%. at underlying full X% basis. held of the X% significant For well fiduciary Oliver X%

of well our for the for backdrop. XXXX, to As resilience demand strong we economic business, we and better a expectation look are our our services positioned given

second in EPS. This adjusted year to expect underlying & we McLennan. half. XXXX XXXX, in XXXX recovers full endure, with the in let X% enterprises today, deliver anniversary our based to growth X% century range, for in alone growth on the Few the economy revenue a a is return outlook Marsh a For prosper and the represents of solid positive economic expansion growth and global assumes market XXXth to the quarter. which

major forefront with gap, and we solutions address we and solutions climate world and retirement on ago, depressions society our and healthy tackling helped clients telephone development retirement issues. protection were risk developed the enable to through societies, developed such around cybersecurity, resilience. of by electric From automobile, our innovative Decades unique sectors. that complex markets the we navigate wars, helped pioneered very creating predecessors industries to insurance Our the of security. pension power yes, products enhance We beginning, We pandemics. address partnership the systemic gap working public-private challenges some governments of of We space new boldly from protection world programs. are the at first a Today, also type the the as pandemics. help for

of performance and the financial have Fast in earnings employees and century, to was returns XXX also XXXX, over period we with today, than beginning been XXth XX,XXX of billion growth. growth going XX forward we had million At and revenue. employees significant in less countries our public XX have the financial over exceptional Since outstanding. $X Our of revenue. approximately this over

CAGR our committed neutral our to end, price a be emissions and we and anniversary To a value delivers We meaningfully McLennan company and over our colleagues we announced of with earlier by carbon S&P XX% to the carbon XX% share all occasion our use the for These will clients, the stock reduce to XXXX. returns intend revenues, have the adjusted that month income double our Marsh XXX digit that history, EPS, testament shareholders. XXXX, and to future have celebrate are chart annually. & grown During this as adjusted that in by demonstrate outpaced CAGR community. a operating return indeed XXXth commitment time, this and to by our

will racial other for roll we balance social out year, the initiatives of and fellowships including justice. the Over

review to the foundation of As XXXX learned resilience, in that flexibility best just a we with relentless detailed we and we has that We over do. has shape everything our of thing With never the of importance future. innovation Mark & what about change, let really for a that have to age put XXXX, center then of the more turn begun. will clients empathy, demonstrated, the McLennan on of risk that, spirit the powerfully of it one build And Marsh to me results. want preserve and at

and in of and and Dan, earnings X% strong billion, morning. income was X%. operating with which results, was was to XXXX underlying our increased the growth XXX position. a pleased grew while income delivered the million, revenue We strong sheet fourth fourth you, XXXX. our Operating good quarter quarter adjusted liquidity of top full balance Consolidated growth solid entered We're Thank X.X line, and despite XXX year challenges with reflecting million.

basis EPS adjusted was points was operating XX.X%. and to XX EPS adjusted decreased Our $X.XX GAAP margin $X.XX.

a revenue X.X of or decline was on fourth an risk services, fiduciary and basis, up grew interest. and X%, insurance underlying quarter billion at in X% the excluding to X% impact Looking

pleased are adjusted business to XX.X%, in excellent points and XXX which the the million and finish operating the pandemic. quarter. margin contracted to in of X% our income reflecting resilience the expense demonstrates the Adjusted of this basis XXX strength expected the We in face the decreased fourth increase year, to with

the year revenue was growth X.X was driven U.S. XX.X of solid to in an strength increasing increased Pacific the up America U.S. division, by quarter for adjusted basis income X% operating the year and and straight margin the and basis. and impressive revenue of EMEA rose X%. growth increase in our division, the XXXX on points flat growth year, In the or an underlying Latin X% the portfolio. at Adjusted in with of quarter XX%, X% XXX Marsh, RIS for third was For year, to Canada. X% underlying X% XX%. in revenue full Asia and operating billion Canada In with billion, for was international X% the higher growth underlying the X%. up down X%, underlying X% quarter represents across underlying the At

a quarter in XXX an for For as Securities year, X.X The year. underlying from to performance full revenue X% at the million, on of a renewal as new well of business Guy an basis increase the was the on in representing Carpenter's or revenue GC was and increase benefited strength an across growth X% underlying X% region. quarter, finish billion, strong our Marsh basis. great an of

For billion, an of an with increase decline The well margin revenue the points year of an the X%. operating quarter full of or and million, was was up year, to revenue all with XXX was billion basis. balanced businesses was fourth adjusted underlying year The revenue results. adjusted underlying increase on producing operating XXX versus an XX.X%, ago. Consulting X.X income strong basis XXX X%. XX% income growth X.X a operating segment, X% million X% consulting increased was In

declined was an an Mercer's an quarter, basis, an Adjusted adjusted a X.X year representing X% on underlying decreased DB. Wealth decline For in margin operating the revenue in XX by income XX.X%. our underlying basis while was in the points a increased to X% billion increase year, management to with on billion, decrease X.X offset of a underlying billion, X% X% basis. the for of operating revenue basis. X on decrease investment

under underlying levels work along declined XX% year on fourth a in at on to end for to underlying XXXX. X% revenue unemployment higher a of exceeded Career up quarter, fourth project the quarter billion, from XX% strong X% headwinds tough the reflecting comparison with Health quarter in declined basis. an XXX basis assets and revenue grow, management sequentially and an overall Our continue year-over-year.

Oliver was across year, at of revenue quarter X.X X% were Mercer stronger demand than revenue underlying the the segments billion, The decrease fourth an of basis. expected most X% an basis. by of business. underlying on a increased was Wyman's results million, an in For the XXX client driven increase on

although improvements recognize sequential finish environment the positive the with we uncertain. pleased growth are year, underlying out remains to We of the

are a underlying XXX million For year, financial XXX decrease noteworthy expense back XX of to in latest in majority JLT of the of fourth the to commenced was on revenue already JLT. relates acquisition-related XXXX. a review recorded. transfer costs, had Oliver UK. the on focused the in gross million X% total that a the related full million individuals related in provided date JLT Wyman's reported to corporate XX an E&O X including Adjusted acquisition, industry-wide restructuring update Included of time reflects E&O XX million estimate of the In we This of advice was approximately to an The JLT exercises to enhanced our FCA million been liability. cases best of by the by XXXX. are of of companies, suitability JLT FCA million and in billion, legacy quarter. which number At the relating integration of some JLT, XX basis. ultimate a of the This quarter, liability to value items, XX million this costs, other costs,

offset insurance claims. insurers indemnification from gross recoveries to and We partially JLT’s expect this be by liability

do call, our we fourth a plans. I As typically Cash XXXX to million global were XXX million quarter benefit on contributions our XXXX. plans give will our update global in brief defined on compared to XXX in retirement

be We expect XXXX will roughly cash contributions XXX in million.

GAAP was our will fourth our credits and million we on For XX basis on adjusted increase modestly anticipate year-over-year. quarter income XX on XXXX, current based other the in Investment an net benefit expectations, was million basis. a

remaining in year results. relate approximately from investment exclude between a investment differences on to to and GAAP adjustments loss income which GAAP Forbes million. mark adjusted X and was adjusted XX income was our we full the Alexander market our our primarily gain For of adjusted a of investment XXXX, million The

For we on only expect basis. income modest XXXX, investment adjusted an

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

year compared For full our XX.X% was as XXXX. full XX.X% rate the the tax XXXX, adjusted to for year

XXXX, was be a and we give we our approximately tax the transaction. for for we work full in the can done primarily in We reasonable assume to incurred in discrete date our The savings XXXX. estimated million. integration XXX approximately is on of the the rate, restructuring million remaining on the expect progress have technology the Based Excluding negative. forward achieve application in We tax positive quarter, rate is XXX now XXXX. the consists XX Through between and project further When key tax exceeded it estate. or laid items XXXX of JLT bringing ongoing the integration of when the out XXXX made do have guidance real consolidation the to to savings costs We of great XXX not integration rate in to and milestones fourth to end current discrete our adjusted time year in million. year completed of around announced be we migration items, XX.X%. we XX% by JLT environment, total exceeded which XX% million

expect incur to We generate million of cost XXX savings. these approximately cash to

XX of the of addition, and In expect operations efforts the flow billion to the from year we improve to million due charges. We X.X to strength working of continue made capital. approximately our crisis ended with cash non-cash during cash

of XX.X loan. billion million term of our rate repayment third million remaining the the the on repaid the cash notes, due billion of strong complete of million our the end pace at at McLennan our us XXX a of during end XXX Total acquisition year record plan level quarter. due the with at raise of repayment December year senior generation prepayment notes the floating fourth activity of deleveraging was down enabled XXXX Agency total to the Marsh with XX.X dividend, in the of & and Our debt stay billion, X.X debt on from reflecting and in XXX quarter,

maturity million July Interest mature. XXX of shares was notes scheduled with in Based million quarter we interest is in our fourth the forecast, current expect we XXX expense debt did any prior commentary, first Our the quarter when our in of line XXXX. XXXX. approximately next In million. fourth quarter repurchase of in XXX not senior on expense the of

dividends, we deployment. look positions our well available XXXX, we the combination uncertainty a expect of significant cash expected remains of while expect debt in which for of reduction repurchases. QX, approximately in cash complete outlook across today, amount deploy our capital a modest only X.X to XXXX currently we and on debt share generation high, and As paydown billion Based of reduction, acquisitions Due in our debt deleveraging. capital our will to year to us XXXX,

have We the stated high quality creator over consistently for do better we share over long as acquisitions attractive favor and acquisitions as a the term. that we company repurchases value shareholders

track invested return capital record our is years. by past teens over as good, the Our high on three evidenced

repurchases We XXXX for the million in cash ultimate M&A how of and expect and depend for will Uses to XXX share share quarter level XXX resume fourth on in acquisitions, repurchases of million the dividends. pipeline XXX million included and the develop. totaled

uses acquisitions in for the courage included and year year and and XXX resilience, our unique billion that of we a XXX full million the are dividends. For of X.X summary, colleagues presented of cash totaled XXXX, million challenges. In proud agility for

another to XXXX, Dan. As with strong outlook we is of forward that, I'm happy year back to And to look it turn our performance. for

to we’re to the Operator, ready Q&A. Mark. you, Thank go

Instructions]. [Operator Certainly.

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

for outlook Hi. Thanks. question on Good XXXX. morning. was My first the

X% to X% guys growth. to organic overall revenue You pointed

economy think is for you Just back in in given the expect the that the embedded second assume views consulting. the that quarters versus quarter, than said, trying that, we get to Dan, And should three obviously then but the the better growth I to to you rebound, a guys QX? start what’s in sense RIS

good growth a straight before We Yes, XX underlying XXXX. X% Elyse. were it's on X% question, for an to basis years

demonstrated that XXXX. a we're in happening Obviously, difference And X% believing this higher both X% and business. of so consulting with RIS plan. consulting to basically and strength onwards, revenues and macro a we The the as actually first bit with do year, that and in resilient still feel quarter, in levels We Oliver pre-COVID really that that factors, our the has RIS business we're recurring second the we growth consulting that return you're what's Wyman, between because economy hopeful do XXXX business it's But positive with to confidence. will the to more a more grow actually there comparing quarter would Mercer expect more will is in actually in from be global our world. business COVID we the world that's

But got some will so challenges within momentum And throughout that we be pretty that. built some we've the there year. decent

we're XXXX. so in And expecting year good a

and we growth. expect expect we in for the we year margin that script, EPS solid As expansion mentioned the also adjusted

I Okay, improvement. of that's guess my also the helpful. is on And guidance, margin other then question component the second

and You your guys a job like during of good you pretty expenses quarter. did, managing third the second said, the

Sounds in there I like quarter. said more was you reinvestment, some stuff a think little off put got the that bit fourth

side. consulting It So the the I the about question QX are I comps. tough thinking because and same maybe could on there constraints be I those But margin like guess the sounds pretty on QX, was segments improvement same could in Dan, XXXX? that's And of the both growth that guess see part in implying, both the thing, said, margin RIS since you are and you then one potentially question.

we of second back part margin a quarter, When was good the expenses growth we the in will X% rattled X% we pretty look growth you Our in organic fast. did quarter. in a be where is. My XXXX at it, in God, of third Expense say improvement function the down quarter. job second

a setting high real a remarkable global in business impacting was job. it required crisis, continuing a of for real So the very the business, I the midst invest what itself, expenses aggressively to Not managing think in but our crisis. bar was and a

strategic XXX inside actually fourth the in getting headcount represents fourth the XXX or looking did at we quite quarter baseball do. close not We're clearly we normally normal, number we A the to quarter. hiring to of in but up actually fourth so quarter. the little pacing -- to in of back us a And way would that

not quarter-by-quarter comparisons at a well so XXXX, And I'm bizarre year. such about of is looking we're because a ways lot type unique, XXXX positioned XXXX. in versus for worried of XXXX

usually in and the run almost year business quarter, we're business in going has XX as we to exceeds the do, way revenue our years. certainly every where So run growth as every growth our done expense for last we it

So, XXXX. entire I was XXXX interested best the focusing doing page And what know on to the fourth and that the very in in focus that on mean. firm on our turn quarter, we started really would

we're grow I'm both. think not, I decently or positioned in about to in both up really goes to going right Whether our now. So margin segments not talk

grow is margins. we that expectation Our will

the Now, a we to expenses to extent back and mind are company in ask, margins we that bearing as very an be in the would tall quarter. in overall going all that XXXX? that were Well, pulled did grow second the third

you. Thank

Our Suisse. the Credit Zaremski of question from Mike comes with line next

differently. I'll guess little the question I morning. expense Good Hi. a ask

said You of job pulling kind remarkable expenses. on back

things any of world that hopefully of of saying persist think expenses and up feel of lessons So, goes expense the leverage or and as that or wise kind kind or can I you wise guess old relationship normal? permanently, between revenues just kind do the opens back you to operating or kind the back to can that get are relationship you things

a to It's where I area. at growth I in to X% the think X% is the we answer return more but pattern a to will normal complicated revenue we do look question, both. think

X% of years not was a for XXXX, was number four of – actually before growth five years, expense the growth. was out Our It average. average last

growth our be So expense normally around would been. as X% it's

pattern. is it during things with might think some of ultimately be working but years do think it filled the during I subject this things the years year, where opportunity see learned the a experts, more that's when certain is about that normal X%, workers knowledge to manageable be for business we've like some matter X%, Now year so might and Clearly, us. We continue. XXXX you remote

is returning that. business. of it's offices just to choice. our better So It's a for choice think We the

activity the few We said to in a expect offices would but flexible that benefit think our a offices, having their of be years a over shareholders actually able we remain that, McLennan. & to bit also that really colleagues a would by that and But bit, easier. physical making also it of a we hub reduce period would benefit life bit our and footprint more Marsh

a So that's more real estate footprint is an example. of area certainly, actual having an

much I more also during And efficiency to we we with that and think faster keep. operated COVID We connected there's than want did that T&E. gain don’t previously. an absolutely

it's won't over, going a like jump past because used markets had be COVID to, and talk let's levels well, the people, quite before travel a a used to and we It airplane everybody's at and moment's is to snaps travel while back on to And I think more on to we see do now. the the I like clients, be in like, an crisis this in but maybe we that expect it won't to see maybe much travel Zoom, XXXX. return quite while. could we maybe notice. that clears as will be to once to

lasting in is the post benefit there that will shareholders world. which COVID think efficiency do I So gain

follow actually new some last, parts of to cost will a more cutting great. the Okay, businesses. And to about the succumb of a we little whether are gears bit up I actions kind get consulting some switching questions lot seems guess a of centric the are some tailwind organic could a to can which for taking. administration, corporations which be there to there, out I your of other hand, lot lead a consulting guess businesses. uncertainty of sometimes political be on a

of pluses of through Thanks. kind talk minuses you some you’re the and maybe So can seeing?

who off hand more off I'll then can give a lead little and and bit that Sure. I’ll to Martine Scott detail. you

activity than versus the X, year, minus much year, for usually and and are unexpected was resilience us like But gave mentioned thoughts. a lasting the the that, through performance of Our actually business Wyman's X -- confidence quarters during the the And it plenty of as which minus minus and yes, three said is the in and having and have pop of bit less and consulting retirement and they're crisis. investments, Oliver business there's are canary have Wyman still areas as as before, businesses project a the us recurring revenue I've based. businesses, resilient mine the security actually and to be demonstrated they coal themselves. last of fourth for parts quarter they stronger in Oliver which health and X financial a tend in bit stronger, career was but much

Scott Martine can more then first in me little their bit how growth And you and Martine? to they flavor so give a who business in let go XXXX. see for

the work, Yes. Well, we're as for redefining we've at challenges. of lot record in at seen of we've under said, We've Ben closed and investment what assets needs level the business world about right portfolio. the And at quite billion. our world Dan year terms of solutions that the addressing management in challenging new demand in health a look also $XXX the of now circumstances. the seen pleased, side of current thanks, And question. activities the Mike we Actually a

X%. And terms been communication. resilient health, care, say We workforce solutions for or through for So the bright mental we demand in has see a I'd virtual of spot grew example, health digital there crisis.

in to As market work that project has XXXX. I we've a decline And we but slowed seen said, bit lot of during course, volatility. wealth, down structural related a the benefit, have of defined the

much side back investment our the business, for demand. usually then So career in are most definitely of is discretionary career But work could us, very our strength in remarks, part with pipeline. career and project in some the come as at least And and service particular therefore seeing economy on in We've the HX recovery career. that And economy. we in his said to But continue. rebound solutions seen Dan the QX. -- we expect are of in that

the there. investment, think are we agenda like I a very that watching, administration. we the transition for all-in-all, ESG, particular, to our are of we diversity But Biden services helping address strong very inclusion from the So positioned on in We're carbon are and and low consulting the course, also think responsible and In relevant times. clients economy. well

I So good comes economy soon we should as a I think see rebound. think back, as the

talk a Martine. you, see you Thank XXXX. how Scott, little bit about let’s

and Yes, living in digital sure, sector of a it ranged of we And from services, like perspective, business end of real underlying very the and the type segments an Dan and strategies cost strong actuarial the had restructuring strong the and the our and bankruptcy. other we're transformation all business strengths to particular health, growth and really across doing way businesses. public QX based. and was And had financial Mike. broad we most business areas From activity

have transform. lot also I companies, which the evolve, out from to last and that companies big to on they recover Wyman the drawing rebuild, they the I'm they businesses that is a Oliver do pandemic think than over better grow, performed as lesson relatively period. focus there's there after tends small

got least Oliver prospects I about have and challenged grow. they hopefully certainly lot significant Looking beyond managed into good to But between to the But think that, to And our sales Companies are ability business, are leg Mercer, could strong. do. Wyman But year, think the of the be are and our a at in need. have of support. more really need through to challenging. I new uncertainty of they question, or and you also quarter first many things lot in pandemic. your the uncertainty. as new the facing I at whole they But last pipeline the we They the challenge our another they've a year, looking clients quarter and as feel said our

Thanks, Scott.

question Next please.

The the of Deutsche Bank. Stefano Phil question from line comes with next

basis, Yes, up you think I -- year-over-year talk hoping Maybe it around flush was was quarter, better it was there higher for and that or the is that. saw And commentary my to an like to sequentially, could opportunity extent would but I than a moment. not feels expenses investment that it last And thanks. was can we you go the out. hiring. the be suspicion back maybe want a I for on to that

expectation basis. a It's they're in still year-over-year that on but they be year-over-year And a expenses for positive on quarter catch. on a a third good And negative good question, the Phil. actually would fourth our call would My basis. the it's was quarter, kick

expenses X.X% in Our grew fourth X% the quarter. or

surprise. One, to compensation and fourth before, There’s mentioned a expect that. Oliver of grow Oliver the bit variable a And Wyman they the two in model. most quarter was underneath it So Wyman factors we as grew. didn't I've have

so And when we on more they're comp. growing, build in that's when terms of variable

expected. strategic we're I So We what And higher a side did there. the was And nearly the the see on of quarter. a opportunities in on net that in lot recruitment that XXX out than as we did. fourth up we headcount was we fourth basis that something the mentioned, hiring quarter

bit more. a that So was little

point of news of one time So many comp me those with are we as building to as for out it's neither in those the out, to OW and story, a factors attached a because variable in that Certainly done expenses. having the are a result to revenue expect of factors And we've the themselves improvement, us our strategic way. growth. It's headcount contributed good important row. increase two years to over in is

And so that to for we're because signify love line continue, the I in top would it that Oliver Wyman. growing would

to And growth in in different what very term? like dialing the different through significant regions do we I'm to international vaccinations, profiles regions’ in And these businesses, short the short as have and look in manage the various RIS on difference within run? the organic to there adopt the trying think to Okay. stimulus ability programs we Should things see that? regions extent

I'll he also And so the Peter question. as world international in I'll of to it to different can biggest good levels. expectation footprint seeing weigh who's hand the off parts what he's a start and to in got and it's and Yes, then John over

our start, mind, represent XX% in to of XX% top six just revenue. bear Let's countries about to our

So you our of look a company. at the and United part States, that’s Germany, Australia, UK, Canada, big France

you timing different there's be to to it's rollouts when as forward patterns be pretty do But, stuff. going so you regional level to variability, different economies see of you return some we always as John, there's go how and developed going and into to mentioned, have as normal. XXXX? growth But And countries the individual

expect in Look, growth and thank XXXX. for trajectory in the better question. international we a Sure, the you business

And say, economic at Australia, economies. not the a can as What world the of maybe would parts be not too, other more the lot intervention premium developed quite struggled least internationally, more the pandemic UK, to some or a saw many economic I government markets, in many spend discretionary. of of less the markets, maybe matters. from perspective outlook course, course, an byproduct, maybe support Of of

have markets are different the liability rate environments and less those very And we mentioned also so than that very, many And price well. as less earlier. I of that you countries saw in increase

than overall, should think U.S. very, I'm I year. saw, as It premium less internationally again, from perspective had we revenue I the in So very But what an saw growth year. insurer where growth better expect would a about this strong optimistic 'XX. be you we

us Peter, John. you growth Carpenter's regional Thanks, to Guy want perspective of give patterns?

Sure.

subject clients. any have it's fantastic. business. in increased the our had businesses quite same loss weakness frankly, digit because first we Our Asia fascinating reinsurance and for for COVID EMEA XXXX XXXX. America, time all The Latin uncertainty have in in demand And our underlying see created time, in demand potential uncertainty our growth magnitude seen the international business premium operations, digits. the thing has And strong the by of was grown not We international double from we all double Pacific, by But a businesses. our in long operations. the creates And UK basis strong

Thank you.

question Next please.

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

Hi. morning. Good

So on a deployment. first just question capital

will the will offset sort what or consistent I bit, go X.X for active, billion. billion just dividends, past more would for done Should about with which assume -- or on retirement, And a debt think the deal constant stock keep be used the we billion you've or billion. share your being X you down X.X consider of in guess you the about of I count that mentioned be X based little either so remaining price buybacks the is or that pipeline?

Jimmy. Sure. Thanks,

thinking Mark, and philosophy deploy how we’re about So to give want XXXX. you little that Mark billion that of we capital our will X.X approximately take a mentioned question that? of in bit And

math billion in your X.X Jimmy, your debt X is Sure. of for paydown remainder billion. good. dividends, X The X.X your billion; and billion

As earlier I consistently, said we've as and acquisitions. we favor said

M&A. $X to as that, so lean we think be And billion bucket, about is the going that

a meaningful Our is pipeline good. share But expect we do amount of I M&A would repurchases. say

the strength through exact going as pipeline year. of Just the we on really the M&A amount is to depend go the

ongoing deals market? be competition sort just is interest to consolidation there's of for of does and of the availability the lot because attractive there how properties, and seem a in And

were on ours. Yes. that At & an of going or marketplace assets in majority any in come we’re private. of their negotiations. works lot McLennan compete kind it of will And processes. end, Marsh oftentimes don't Jimmy, they for the We exclusive the the remain That acquire the decision market competitive with awful the is are leader. how is, in we companies to bidding majority they

And give colleague better into not private ready as combined really a to if were what on would enable equity them as and transactions sell which then us and doing frankly, deals. company combination So an in for for we're chasing end, their grow not selling combination that better not go-forward the that they’re a we basis. will base as themselves. an example, career as whether should we're path to is conversation. flow alternative, debating like together they At We're the they help that about selling deciding more that in they're a ourselves not and operation working viewing

of of market. We're I some in dozens of doing you see discussion. deals, And So acquisitions our selected. as as in there place said, exclusive the and most that takes dozens element were highly we're out not

question please. Next

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

increase before fourth missed headcount you I Dan, RIS was weighted the this nearly that quarter, consulting? don't the or XXX mentioned and know in if towards but I Thanks. it, more

number the But in Yes. view for intend look precise would be we overall in don't at our consulting, RIS it weighted. the XXXX. At headcount I have the My for -- it slightly versus total up I company is XXXX, end, if you.

achieved in we've to our that's way and cupboard that the then us not we've emptied going future. expansion it's in negatively margin a into the So XXXX impact

And RIS the leader. rebound. We strong well had certainly and year a are is a prepared very for market

lot as opportunities have go a our quality matter headcount producing experts and of we forward. And employer to really so in choice people we and are of the the industry build we with subject

Okay, different that about the that's us you you framework mentioned Martine management. record impacting earnings? should under I think and for a guess a give we Can helpful. On topic, how assets

generally us that. Sure. Obviously, go as story. a earn bit much with a from forward. more also more growing, revenue It news But we to we AUM a not very it's good It's volatility direct read-through. creates

CAGR the five on the so. or last years AUM over think XXs mid I

should how it comes for think Meyer and Martine, it down about AUM to mean when So, others does business? Mercer's what

us, this. the Yes. and agility through seeing the Well, the really drive We’ve on and same it's demand for definitely crisis. demand seen financial the more for has transaction also a the very for us, COVID governance crisis uncertain, the global When increased. market suit strong and we're improved demand becomes

business very, that So the also itself, capital for in impacts market of XXXX. within always but Meyer, very revenue. in inflows aspect good strong there's we there's the then different a AUM offering, types. the pipeline course, had of seeing XXXX. And, And We're very that

the asset there's we have actually think itself – the on to mix, decide the of private of So way assets, deploy the that equity assets or bonds we the whether or and have we and markets. risk exposure or because non-pension these that so just pension really assets, there's portfolio. the a We client mitigation diversification in

year, that so far. story success AUM flows been funds growth the depends it's revenue in on would I So and when say a the the but

Thanks, Martine.

Next question please.

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

on morning. think the bit to to wanted follow and it. just a how Hi. up just about Thanks. underlying I Good expenses

the or had quarter. in I it as up I is a it growth below you we be look in Based that some it as Dan, XQ we kind XXXX. thinking above range X% bit look in in 'XX, was of 'XX? impact how Would So, to guess mentioned you third looks that on it expect of what earlier, expected expense X% we calculate, like to would range had the into be underlying still bring or to underlying expenses that 'XX? -- least you about were in X% how maybe the expected you timing should forward at what

question expense an answer amount in it's impossible knowing of Well, our our growth to businesses, because of each variable rate the growth with fair XXXX is organic linkage without for underlying or a comp.

increased Our bonus pool in XXXX.

because In been McLennan higher profitability fact, pool & has considerably. the never than Marsh was XXXX, in bonus overall up

And certainly year. so for or next last is revenue a say, I what every has year almost and I going business the for as in be that's it quarter, growth look rather, it forward not the years. but run look at to It to XXXX may XX exceed how certainly expense we

in of think rate. pop was our lot non-run I the quarter fourth a expense

but Some was, of of lot wasn't. it a it

simply. it I pretty And at look so

prior delivered we decade EPS revenue CAGR COVID, that XX%. of to over years close an and we X% XX grew and For adjusted X% to underlying between

to run how So strong business way we playing as kind side develop EPS of can the think business we and as our idea in long revenue, ultimately, growth, for of that's we XXXX. that underlying expense what grow and our adjusted that's a the I were about

so maybe question not quick, Okay, That's Dan. a or a maybe And question great. helpful, Thanks. but quick just John. for

how sense And been there's environment. you long environment continue? pricing the discussion are hardening be may more think with Just thoughts start get market the line trend, just primary rate some the terms to out wondering what in end your wanted maybe I market. on there the PNC and current I of do will direction this that of the think guess taper but loss it that year, of your to in at off

take you John, that. want to

about XXXX cat Sure, obviously low the challenging year a our quarter. inflation, versus the social increase in insurers; at overall losses, losses, David, very quarter. XX% remains for really the clients interest for the talked market rates. was difficult in COVID XX% third Dan price

certainly XXXX. for rising -- accelerated most our the the trend Australia and certainly clients. are generally So, it U.S., throughout prices UK accelerated for speaking COVID difficult markets

primarily pricing U.S. D&O in concerned, I'm from clients’ most and about the the forward, pricing, liability market excess Looking again, perspective, liability our here excess

a growing social there. claim longer pricing But growing community about about again, for it’s part, severity remains inflation. comp frequency, down lot I’ve underwriting been discussion our down adequacy on concerns clients. Just by driven of in candidly claim other and remains, expecting, the been Work good rate broad but bit ongoing than the hand in just a

prices in line And it the like some as fourth that's in that example, or seeing wasn't quarter. third in increase rate up were of of to to not increase down, our property flattened We lines for are the say book, moderate. but began where the kind the was average much out quarter, business as

pricing. from on will my the of clients’ time about view, of of business wears think XXXX, I do most and again, liability point likely concerned rest excess So overall, as other moderate a I'm lines D&O throughout bit.

& like back to you. of now turn President Thank would remarks. closing over call I McLennan, the to CEO Dan for Glaser, and any Marsh

support. and everyone Be to a challenging next I thank thank closing, on course, year. I to hard also thank to continued like I'd their very was all like I'd this morning. work dedication well. to look joining us which, want call in forward In our our quarter. speaking you clients XXXX, for to of their for for the colleagues of

may today's this for conference you participating disconnect. Thank Ladies concludes you call. and and gentlemen, now