Earnings call transcript: Marsh & McLennan Q3 2025 earnings beat expectations

Marsh & McLennan Companies reported strong financial results for the third quarter of 2025, surpassing Wall Street expectations with an earnings per share of $1.85 against a forecast of $1.79. Revenue also exceeded projections, reaching $6.4 billion compared to the anticipated $6.34 billion. Despite these positive results, the company’s stock fell 8.25% in pre-market trading, reflecting broader market concerns.

Key Takeaways

• Marsh & McLennan reported an EPS of $1.85, beating forecasts by 3.35%.
• Revenue reached $6.4 billion, surpassing expectations and marking an 11% year-over-year increase.
• Stock price declined 8.25% in pre-market trading, despite positive earnings results.
• The company launched new AI initiatives and operational programs to drive future growth.
• Economic uncertainty and market conditions remain a concern for investors.

Company Performance

Marsh & McLennan demonstrated robust performance in Q3 2025, with an 11% increase in consolidated revenue and a 13% growth in adjusted operating income. The company’s strategic focus on technology and operational efficiency has contributed to a 4% underlying revenue growth year-to-date. Key segments such as Consulting and Risk Services reported strong growth, underscoring the company’s competitive position in the market.

Financial Highlights

• Revenue: $6.4 billion, up 11% year-over-year
• Earnings per share: $1.85, up 11% year-over-year
• Adjusted operating income: $1.4 billion, up 13%
• Adjusted operating margin: 22.7%, a 30 basis point increase

Earnings vs. Forecast

Marsh & McLennan exceeded expectations with an EPS of $1.85 against a forecast of $1.79, marking a 3.35% positive surprise. Revenue also surpassed forecasts, achieving $6.4 billion compared to the expected $6.34 billion. This strong performance highlights the company’s effective cost management and strategic initiatives.

Market Reaction

Despite the positive earnings report, Marsh & McLennan’s stock fell 8.25% in pre-market trading, closing at $192.87. This decline reflects investor caution amid broader economic uncertainties and sector-specific challenges, including declining commercial insurance rates.

Outlook & Guidance

Looking forward, Marsh & McLennan expects mid-single-digit underlying revenue growth and continued margin expansion. The company remains cautious about economic uncertainty, yet optimistic about its strategic initiatives, including the Thrive program aimed at generating $400 million in savings.

Executive Commentary

CEO John Doyle emphasized the company’s growth strategy, stating, "Thrive is all about growth." He also expressed confidence in the company’s market position, saying, "We’re not pessimistic about growth. We like how we’re positioned."

Risks and Challenges

• Economic uncertainty and uneven market conditions could impact future performance.
• Declining commercial insurance rates present a potential revenue challenge.
• The company faces charges related to its operational optimization plan.
• Market volatility and investor sentiment may affect stock performance.
• Competition in the professional services sector remains intense.

Q&A

During the earnings call, analysts inquired about the Thrive program’s potential for efficiency and growth, talent market dynamics, and international market performance. The company addressed these concerns, highlighting its strategic initiatives and growth opportunities in the middle market segment.

Full transcript - Marsh & McLennan Companies Inc (MMC) Q3 2025:

Andrew, Conference Call Moderator: Hello, and welcome to Marsh & McLennan Companies’ earnings conference call. Today’s call is being recorded. Third quarter 2025 financial results and supplemental information were issued earlier this morning. They are available on the company’s website at marshmclennan.com. Please note that remarks made today may include forward-looking statements. Forward-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 and to our most recent SEC filings, including our most recent Form 10-K, all of which are available on the Marsh & McLennan Companies 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.

If you have a question, please press 11 on your touch-tone phone. If you wish to be removed from the queue, please press 11 again. If you are using a speaker phone, you may need to pick up the handset before pressing the numbers. Once again, if you have a question, please press 11 on your touch-tone phone. I’ll now turn this over to John Q. Doyle, President and CEO of Marsh & McLennan Companies.

John Doyle, President and CEO, Marsh & McLennan Companies: Thanks, Andrew. Good morning, and thank you for joining us to discuss our third quarter results reported earlier today. I’m John Doyle, President and CEO of Marsh & McLennan Companies. 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 Jay Gelb, Head of Investor Relations. Marsh & McLennan Companies had a solid third quarter. As we said coming into the year, we anticipated impacts from a changing macro environment, and our performance continues to track with our expectations. Overall, we grew revenue 11% in the quarter, reflecting continued momentum in our business and contributions from an active year of acquisitions in 2024.

Underlying revenue increased 4% for the quarter, reflecting the impact of lower fiduciary interest income, declining P&C pricing, and economic uncertainty affecting our clients, especially in the U.S. Adjusted operating income increased 13% from a year ago. Our adjusted operating margin increased 30 basis points compared to the third quarter of 2024, and adjusted EPS grew 11%. Earlier this week, we announced that we will change our brand in January from Marsh & McLennan Companies to Marsh. Also in January, our stock ticker symbol on the New York Stock Exchange will change from MMC to MRSH. Our businesses will adopt the Marsh brand after a transition period. We also introduced Business and Client Services, or BCS. This unit brings together our operations and technology teams from across the company under Paul Beswick, our Chief Information and Operations Officer.

Our new brand strategy, the creation of BCS, and the efficiencies we expect to gain are core parts of a new program we call Thrive. Thrive will also include automation efforts and workforce actions to optimize our scale and specialization. The program is designed to deliver greater value to clients, accelerate growth, and improve efficiency. The efficiencies we gain through the program will support investments in talent and technology. As we increasingly deploy AI, we can deliver even greater value for clients and colleagues. Thrive will also help us continue to expand margins. Let me take a moment to comment on our brand strategy. Marsh will be our new brand and represent our vision to be the most impactful professional services firm in the world. This change will increase our visibility, strengthen our value proposition, and support our business strategy.

The Marsh brand is highly regarded and has the broadest global reach among our businesses. Today, Marsh stands for excellence in risk advising and insurance broking. Going forward, the new Marsh will represent the full value of our offerings in risk, strategy, and people. Turning to BCS, our company has a long history of innovation, which has been an important factor in our success for over 150 years. We continue to innovate in the AI era, having invested in large language models for more than two years. While the full impact of AI is still emerging, we are seeing an increase in opportunities from our use cases. We are focused on developing tools that boost colleague productivity to better support our clients. For example, LEN AI, our proprietary GenAI tool for colleagues, responds to about 1 million inquiries per week, fueling efficiency and automation.

We are also rolling out new market-facing AI tools, including most recently ADA. This is Mercer’s proprietary AI-powered assistant within the Talent All Access portal, which is a global intelligence platform supporting HR decision-making. Prior to ADA, we introduced Centrisc, our AI-enabled supply chain risk assessment platform. We have a vast data set as the global leader in risk, strategy, and people, and BCS will accelerate our efforts to extract valuable insights through AI and analytics. This enables us to better serve our clients, empower our colleagues, and increase our efficiency. Over the next three years, we expect Thrive will generate approximately $400 million in savings, with a portion being reinvested to drive additional growth. We will incur around $500 million in charges to achieve these savings. Now, I’d like to take a moment to talk about talent in the insurance and reinsurance markets.

This is a people business, and we have an unmatched depth of talent with over 90,000 colleagues, and we’d love to compete because it makes us better. Colleague mobility is good for our industry and has served us well because we are an employer of choice with a strong colleague value proposition. Our colleagues can be their best at our company because they work with the top talent in our industry, they manage meaningful client issues, and they have access to market-leading analytics and technology. We make a point of differentiating ourselves through a collaborative team-based model. This is reflected in strong colleague retention and excellent engagement scores. A few competitors have engaged in unlawful and unethical hiring practices and encouraged talent to violate their covenants as a deliberate strategy to build their businesses.

In these cases, I believe it’s important to call out this behavior and to protect our rights. It’s also the right thing to do to sustain the trust that we’ve built with our clients over a long time. Turning to insurance and reinsurance market conditions, we continue to see a competitive market characterized by slower growth from an uneven economy, stronger carrier ROEs, and continued decreases in overall rates, particularly in property reinsurance and property CAT reinsurance. According to the Marsh Global Insurance Market Index, commercial insurance rates decreased 4% in the third quarter, driven by property. This follows a 4% decline in the second quarter of 2025. As a reminder, our index skews the large account business. Overall, rates were down in the U.S. by 1%. Canada was down 3%. The UK, EMEA, Latin America, and Asia were all down mid-single digits, and Pacific was down by double digits.

Global casualty rates increased 3%, with U.S. excess casualty up 16%, reflecting continued pressure in the liability environment. Workers’ compensation decreased by 5%. Global property rates decreased by 8% year over year, compared with a 7% decline last quarter. Global financial and professional liability rates were down 5%, while cyber decreased 6%. In reinsurance, the market remains resilient. It has responded to an extended period of elevated natural catastrophe losses, as well as ongoing geopolitical and macroeconomic uncertainty. Dedicated reinsurance capital is projected to reach approximately $650 billion by year-end 2025. With ample capacity, increased competition is driving reinsurers to look for profitable ways to deploy capacity. The cap bond market is on pace for a record year of issuance, with over 60 new bonds in the first nine months generating approximately $17.5 billion of limit. In casualty reinsurance, renewals were largely stable with sufficient capacity.

This outcome reflects underwriting actions of primary carriers and increased reinsurer appetite. Across both insurance and reinsurance, we advise our clients on proactive strategies that reflect the risk environment and market conditions, and of course, tailored to their tolerance for volatility. Today, we see decreasing property and casualty prices, but also a growing cost of risk. Over time, this trend is unsustainable. With that being said, barring significant changes in large loss activity, as well as the broader macro environment, we anticipate insurance and reinsurance market conditions seen so far this year will likely continue in 2026. Now, let me turn to our third quarter financial performance and outlook, which Mark will cover in more detail. Consolidated revenue increased 11% to $6.4 billion and grew 4% on an underlying basis, with 3% growth in risk and insurance services and 5% growth in consulting. Marsh was up 4%.

Guy Carpenter grew 5%. Mercer, 3%, and Oliver Wyman was up 8%. We had adjusted operating income growth of 13%, and we generated adjusted EPS in the quarter of $1.85, which was up 11% from a year ago. We also repurchased $400 million of our stock in the quarter. Turning to our outlook for 2025, we continue to expect to deliver mid-single-digit underlying revenue growth, solid growth in adjusted EPS, and our 18th consecutive year of reported margin expansion. Of course, this outlook is based on conditions today, and the economic backdrop could turn out to be materially different than our assumptions. In summary, we’re pleased with our year-to-date performance in a complex environment. Thrive will amplify our value proposition for clients across all our businesses, and it creates opportunities to invest in talent, growth, AI deployment, and our new brand.

Our capabilities are unique, and there is strong demand for our advice and solutions. We’ve earned our leadership position in our markets through 154 years of innovation and growth. Our disciplined approach to investing for the future, while delivering results in the near term, remains a guiding principle for our planning and capital allocation. Our announcements today and earlier this week align with this philosophy. With that, I’ll hand the discussion over to Mark for a more detailed review of our results.

Mark McGivney, CFO, Marsh & McLennan Companies: Thank you, John, and good morning. Our third quarter results were solid, reflecting our strong position and execution despite a more challenging environment. Consolidated revenue increased 11% to $6.4 billion, with underlying growth of 4%, which came despite a headwind from fiduciary interest income. Operating income was $1.2 billion, and adjusted operating income was $1.4 billion, up 13%. Our adjusted operating margin increased 30 basis points to 22.7%. GAAP EPS was $1.51, and adjusted EPS was $1.85, up 11% over last year. For the first nine months of 2025, underlying revenue growth was 4%. Adjusted operating income grew 11% to $5.7 billion. Our adjusted operating margin increased 20 basis points, and adjusted EPS increased 9% to $7.63. Looking at risk and insurance services, third quarter revenue was $3.9 billion, up 13% from a year ago, or 3% on an underlying basis.

Operating income in risk and insurance services was $750 million. Adjusted operating income was $965 million, up 13% over last year, and the adjusted operating margin was 24.7%. For the first nine months of the year, revenue in risk and insurance services was $13.3 billion, with underlying growth of 4%. Adjusted operating income increased 12% to $4.4 billion, and the adjusted operating margin was 33.3%. At Marsh, revenue in the quarter was $3.4 billion, up 16% from a year ago, or 4% on an underlying basis. The 16% growth at Marsh is impressive and reflects the contribution from McGriff, where our integration continues to go well. In the U.S. and Canada, underlying growth was 3% for the quarter, reflecting good new business growth overall and continued momentum in MMA. In international, underlying growth remains solid at 5%, with EMEA up 5%, Asia-Pacific up 6%, and Latin America up 3%.

For the first nine months of the year, Marsh’s revenue was $10.7 billion, with underlying growth of 5%. U.S. and Canada grew 4%, and international was up 6%. Guy Carpenter’s revenue in the quarter was $398 million, up 5% from a year ago on both a GAAP and underlying basis. Growth remains solid despite softer reinsurance market conditions and came on top of 7% underlying growth in the third quarter of last year. For the first nine months of the year, Guy Carpenter generated $2.3 billion of revenue and 5% underlying growth. In the consulting segment, third quarter revenue was $2.5 billion, up 9% or 5% on an underlying basis. Consulting operating income was $501 million, and adjusted operating income was $545 million, up 11%. Our adjusted operating margin in consulting was 22.1%, up 40 basis points from a year ago.

For the first nine months, consulting revenue was $7.2 billion, reflecting underlying growth of 4%. Adjusted operating income increased 9% to $1.5 billion, and the adjusted operating margin increased 50 basis points to 21.2%. Mercer’s revenue was $1.6 billion in the quarter, up 9% or 3% on an underlying basis. Health grew 6%, reflecting continued strong growth across all regions. Wealth was up 3%, led by investment management. Our assets under management were $683 billion at the end of the third quarter, up 2% sequentially and up 25% compared to the third quarter of last year. Year-over-year growth was driven by our acquisitions of Cardano and C Corp, positive net flows, and the impact of capital markets. Career was flat year-over-year on an underlying basis, reflecting continued softness in project-related work in the U.S. and Canada, offset by sustained demand in international and good growth in our workforce products.

For the first nine months of the year, revenue at Mercer was $4.6 billion, with 3% underlying growth. Oliver Wyman’s revenue in the third quarter was $886 million, up 9% or 8% on an underlying basis, reflecting growth in each of our regions. The third quarter benefited from favorable timing, so we expect moderating growth for Oliver Wyman in the fourth quarter. For the first nine months of the year, revenue at Oliver Wyman was $2.6 billion, an increase of 5% on an underlying basis. Fiduciary interest income was $109 million in the quarter, down $29 million compared with the third quarter last year, reflecting lower interest rates. Looking ahead to the fourth quarter, based on the current environment, we expect fiduciary interest income will be approximately $85 million. Foreign exchange had a de minimis impact on adjusted EPS in the third quarter.

Based on current rates, we anticipate FX will be a $0.04 benefit to adjusted EPS in the fourth quarter. Turning to our Thrive program, as John mentioned, we are excited about this significant new step in the evolution of our firm, which should enable us to continue to deliver exceptional results while we invest for sustained growth. We began executing the program in the third quarter and expect to generate $400 million of total savings, a portion of which will be reinvested for growth. Although we will see a modest benefit in the fourth quarter, the vast majority of the savings will be realized over the next three years. We expect to incur approximately $500 million of charges to generate the savings. The majority of savings will result from efficiencies created by BCS, with a significant portion coming from further optimization of our global operating model.

We have mature capability centers in locations around the world, and our plans over the next three years will accelerate this journey. Today, we have over 19,000 colleagues in cost-effective locations across BCS and our global functions. Through this program, we expect to further optimize our model by shifting more work to these locations. In addition, we’re excited about the possibilities of AI-enabled enhancements in client service, insights, and efficiency, as we look to take our AI journey from experimentation at scale to business impact. A substantial portion of the work in BCS will be driving savings through efficiency in process and automation, including through the use of AI. This will also be an area where we increase investment. These initiatives in BCS are closely linked. In order to capitalize on the full value of emerging technology, we need to concentrate more of our operations work in locations with scale.

A critical enabling step in this journey is combining the distributed operations units across our businesses into a single team. We also anticipate significant savings by continuing to streamline our organization. We have a long track record of executing for efficiency and have consistently demonstrated our ability to drive near-term results while investing for sustained growth. The Thrive program will enable us to continue to invest while we drive earnings and margins higher. Total noteworthy items in the third quarter were $136 million and included charges related to McGriff, as well as restructuring costs associated with Thrive. Interest expense in the third quarter was $237 million, up from $154 million in the third quarter of 2024. Based on our current forecast, we expect interest expense will be approximately $235 million in the fourth quarter. Our adjusted effective tax rate in the third quarter was 24.8%.

This compares with 26.8% in the third quarter last year. Excluding discrete items, our adjusted effective tax rate was approximately 25.5%. We continue to expect an adjusted effective tax rate of between 25% and 26% in 2025, excluding discrete items. Turning to capital management and our balance sheet, we ended the quarter with total debt of $19.6 billion. Our next scheduled debt maturity is in the first quarter of 2026, when $600 million of senior notes mature. Our cash position at the end of the third quarter was $2.5 billion. Uses of cash in the quarter totaled $1 billion and included $445 million for dividends, $200 million for acquisitions, and $400 million for share repurchases. For the first nine months, uses of cash totaled $2.6 billion and included $1.3 billion for dividends, $366 million for acquisitions, and $1 billion for share repurchases.

We continue to expect to deploy approximately $4.5 billion of capital in 2025 across dividends, acquisitions, and share repurchases. The ultimate level of share repurchase will depend on how our M&A pipeline develops. For the full year, we continue to expect mid-single-digit underlying revenue growth, margin expansion, and solid growth in adjusted EPS. Note that this outlook is based on conditions today, and the economic backdrop could be materially different than our assumptions. Overall, we are pleased with our third quarter and year-to-date results and are excited about the opportunity that our new brand and Thrive will bring. With that, I’m happy to turn it back to John.

John Doyle, President and CEO, Marsh & McLennan Companies: Thank you, Mark. Andrew, we are ready to begin Q&A.

Andrew, Conference Call Moderator: Certainly. We will now begin the question and answer session. If you have a question, please press 11 on your touch-tone phone. If you wish to be removed from the queue, please press 11 again. If you are using a speaker phone, you may need to pick up the handset before pressing the numbers. Once again, if you have a question, please press 11 on your touch-tone phone. In the interest of addressing questions from as many participants as possible, we ask that participants limit themselves to one question and one follow-up question. One moment, please. Our first question comes from the line of Greg Peters with Raymond James.

Martin South, CEO, Marsh: Morning everyone. I’d like to, for the first question, focus on the comment during the call and in your branding press release about the lower growth environment. John, I know you mentioned that you expect mid-single-digit growth this year. Do you think, with the government shutdown, with the uncertainty, that we might be on this glide path to low to mid-single-digit as we look out over the next 24 or 36 months, especially in the face of a more challenging pricing environment from property and casualty?

John Doyle, President and CEO, Marsh & McLennan Companies: Good morning, Greg, and thank you for the question. I wasn’t trying to project into 2026 or 2027. Of course, every year comes with its different opportunities and different challenges. As we guided earlier this year, we knew there would be some pressures from the macro environment and P&C-related pricing pressures. We guided to mid-single-digit underlying revenue growth. I like how we’re positioned. I am very excited about Thrive and what that can mean for our growth over time. We’re confident in our ability to execute across different economic cycles and different P&C cycles. We have a playbook and, again, a real track record of doing it. We’ll see what next year brings, and we’ll guide to our thoughts at that point. It feels like a pretty uneven economy to me. For sure, that’s kind of what our data suggests. We’re not pessimistic about growth. We like how we’re positioned.

We’ve been reshaping the mix of business in the company over a long period of time and focused on being a better growth company. Do you have a follow-up, Greg?

Martin South, CEO, Marsh: Okay, yes, I do, of course. In one of the previous announcements from your company, I think the company announced its intention to start a wholesale business. Maybe you could spend a minute and talk about what you’re thinking about that. Is it just for internal-related opportunities, or do you think you might branch that off and do other, you know, work with other retailers and other organizations as well?

John Doyle, President and CEO, Marsh & McLennan Companies: Were you talking about MMA or more broadly or either?

Martin South, CEO, Marsh: Yeah, MMA. MMA is London Wholesale.

John Doyle, President and CEO, Marsh & McLennan Companies: Let me address it kind of more broadly. Maybe I’ll start with that and then get to MMA. We’re not looking to build a third-party wholesale business here. We have exceptional specialty talent inside of this company, the market-leading specialty talent. We just want, we don’t want to be outsourcing an important part of our value proposition when it’s not necessary. Some E&S markets require us to go through a wholesale broker to access them, so we’ll build some of that capability. Where we need access and in very unique circumstances, we need capability, we’ll use third-party wholesalers. We do that today, and they serve us and our clients well. As it relates to MMA, yes, we’ve created a new desk in London. Reed Davis, the CEO of McGriff, is working with Lizzie Howe in London.

We have just absolutely top specialty talent in the London market, of course, have been there for a long, long time serving our clients and serving Marsh clients globally, but particularly in the U.S. We bring a lot of risk that originates in the U.S. that we bring to the London market. When we were coming together with the team at McGriff, we saw an opportunity to bring in some of that business from third-party wholesalers. Again, that’s an important part of what Reed is focused on. It’s a revenue synergy for us at McGriff, and we’re excited about those possibilities in 2026. Thank you, Greg. Andrew, next question.

Andrew, Conference Call Moderator: Our next question comes from the line of Mike Zaremski with BMO.

Mark McGivney, CFO, Marsh & McLennan Companies: Hey, great. Good morning. Thanks for the details on the Thrive expense program. Just the math, $500 million of costs for $400 million of savings. I think that’s a really good ratio versus many of your peers and maybe even you all historically. Is there, maybe you can, you know, usually, like, there’s more costs for the savings ratio. Any kind of things you can unpack on why you’re going to get so much savings for that level of cost? Also, historically, how much have you reinvested into the business on the savings? I know you said you mentioned you’re going to reinvest some as well.

John Doyle, President and CEO, Marsh & McLennan Companies: Yeah, yeah. Thanks, Mike, for the question and for taking note of the program details. Maybe I’ll have Mark talk a little bit about the cost estimates and charge estimates at this point.

Mark McGivney, CFO, Marsh & McLennan Companies: Sure. Hi, Mike. As you pointed out, we’ve got a pretty good track record in terms of payback on these programs. As I described, this is a lot of continuation of work that we’ve been doing. I talked about we’ve got a meaningful amount of low-cost location penetration today, and this is extending it. A lot of the costs are just associated with severance and the costs associated with transitioning work and other things we’re doing to simplify the organization. We’ve got a pretty high degree of confidence in the savings and charges, although over time, these estimates might move a little bit. We’re going to get good payback on the investment that we’re making.

John Doyle, President and CEO, Marsh & McLennan Companies: The majority will go to earnings.

Mark McGivney, CFO, Marsh & McLennan Companies: Yeah. As I said earlier, there’s some reinvestment, but as we’ve demonstrated before, we generate a lot of value out of these programs, and we expect the majority of the savings is going to flow through the bottom line.

Martin South, CEO, Marsh: Okay, great. My quick follow-up is honing in on organic in the U.S., probably on the RIS side. John, in your prepared remarks, you talked again about economic uncertainty, especially in the U.S.A. You mentioned some unlawful and unethical business practices. You talked about pricing likely decelerating a bit. I guess, are you kind of telling us we should be expecting at least the U.S. side of organic to be running along the current trend line for the near term?

John Doyle, President and CEO, Marsh & McLennan Companies: I guess, first, the talent headlines over the summer, we’re nearly 95,000 people. It’s more than 90,000 people, $25 billion in revenue annualized for the company overall. Not a material impact at all. As it relates to the U.S., we’re seeing a bit of hesitancy from our larger clients in the U.S. I like to think certainly as some of the possible tail risk scenarios around trade and the economy begin to come in a little bit. I think you’re beginning to see it a bit with the pickup in the M&A market, that things will clear up. There’s still a lot, obviously, out in the macro economy. There’s still a lot to settle out from a trade perspective. Overall, I’m very pleased with our growth. We had 11% growth in the quarter. I think Marsh’s GAAP growth was 16%, right? Absolutely terrific.

4% growth at Marsh, 5% year to date. Again, given all the pricing pressures and other challenges in the economy, I feel good about that. I know we’re positioned well, and we’re executing well in the market. Thank you, Mike. Andrew, next question, please.

Andrew, Conference Call Moderator: Our next question comes from the line of Jimmy Bhullar with JP Morgan.

Martin South, CEO, Marsh: Hey, good morning. First, just had a question on maybe start with Oliver Wyman. I think everybody’s been assuming that there would be a slowdown there given economic uncertainty and geopolitical issues. The business continues to perform well. Maybe talk a little bit about the pipeline that you’re seeing there, and do you feel that you could continue this level of growth despite the environment?

John Doyle, President and CEO, Marsh & McLennan Companies: Yeah, thanks, Jimmy. Given all the uncertainty, we’re quite pleased with the growth at Oliver Wyman to date this year. Obviously, we had a very, very strong quarter. Mark talked a bit about the timing, flattering the third quarter a bit. We have an outstanding team at Oliver Wyman. It is a complex operating environment for our clients, and in many cases, they’re looking for a team at Oliver Wyman to help them navigate it. Nick, maybe I’ll ask you to talk a little bit about what you see in the demand funnel and pipeline.

Nick Studer, CEO, Oliver Wyman: Thank you, John. Thank you, Jimmy. Yeah, best quarterly growth in six quarters. I would point out the comp was a one, and as Mark said, we did benefit from some favorable timing on things like success fees. I do think we expect moderating growth in the fourth quarter. Overall, we’re pleased, and we think we’re executing well in what is generally a slower market. As Mark indicated, we grew across all of our regions, fastest growth in Asia-Pacific, but the Americas grew pretty well. Some of that is fueled by work on performance transformation, both top-line and bottom-line efficiency work, which tends to be a little bit kind of cyclical. From a practice perspective, our consumer telecoms and technology practice, which we newly brought together at the beginning of the year, is growing very, very strongly.

Our insurance and asset management practice, alongside our actuarial practice, which I’ve talked about a lot on these calls, is working really well together, continuing very high growth. They keep up at this rate. They’re becoming a real juggernaut. Our transportation and advanced industrials practice also went into double digits. On the capability side, customer innovation and growth, interestingly, we see work in restructuring. We see work in finance risk. We also see work in customer innovation and growth growing well. I think some of that really rests on the work we’re doing in our quotient platform around AI. I’m sure we’ll talk about that maybe later on the call. We’re helping a lot of clients think through how to both enhance their capabilities and reduce costs driven by AI.

Our sort of, you know, how do you increase your AI quotient as a client is how we came up with our quotient name, and that’s how we go to market on AI, all of which is looking pretty good. For the pipeline, sales continue at a decent rate. We go up and down every quarter, every month. I’m pretty optimistic going through the rest of the year and into next year.

John Doyle, President and CEO, Marsh & McLennan Companies: Terrific, Nick. Thank you. Jimmy, do you have a follow-up? Jimmy, are you there? Maybe we lost Jimmy.

Pardon me, Jimmy Bhullar.

Oh, there he is.

I’m here. Yeah, along similar lines, maybe on Marsh and MMA, is the environment for your business improving a little bit given the uptick in capital markets, M&A, IPOs, or is that not enough of a tailwind to where investors would see that in your reported results over the next few quarters?

We definitely saw an uptick in M&A activity in the quarter. That was certainly helpful to growth in the quarter. Our middle market businesses, MMA, not just in the U.S. but all over the world, are performing a bit better. Growth in the middle market is better than growth up market. We feel good about how we’ve deployed capital and have invested in our capabilities and our exposure to markets. MMA had a good quarter of growth, and we expect that that’ll continue. Thanks, Jimmy. Andrew, next question, please.

Andrew, Conference Call Moderator: Our next question comes from the line of David Motemaden with Evercore ISI.

Mark McGivney, CFO, Marsh & McLennan Companies: Hey, thanks. Good morning. Just had a question on the Thrive program and, you know, thinking through some of the $400 million of gross saves and how you’re thinking about whatever portion of that you’re going to reinvest. I guess I’m thinking, how are you thinking about, you know, how what you will be reinvesting in? I think some of your peers have been a little bit more front-footed on adding talent. You mentioned, John, in your prepared remarks, some noise with your existing talent base. You guys have been prolific in the past on adding talent. We haven’t heard much on that front, especially given McGriff. Is that something where you guys think about adding talent heading into next year, using some of the gross cost saves associated with the Thrive program?

John Doyle, President and CEO, Marsh & McLennan Companies: Yes. That’s where the investment will come. The investment will also be in accelerating our AI journey as well. We’ve continued to invest in talent, both organically and inorganically. It doesn’t necessarily generate the headlines that you see through the tactics that others use. We’ve continued to invest in 2025. Thrive is all about growth. I’m excited about, David, I’m excited about Thrive and all the components of it. It’s, by the way, not a strategic shift for us, nor is it about organizational or structural changes. We’re always looking to improve. Our vision to be that most impactful professional services firm in the world, all these changes that we announced this week support that. We’re very proud of our legacy brands for sure, but we have the opportunity to build a new Marsh and simplify our story to show up in the market in a better connected way.

I talked about the complexity of the environment today. We didn’t do this for today, but I think the timing of it, given the complex operating environment, is great. We’re going to showcase the unique attributes of the firm, the breadth of capability we have, the depth of our talent. I talked about data. Part of what we’re investing in is we’ve got a new data leader across the firm. We’ve got some exciting new tools around data ingestion that will accelerate our already market-leading analytics. Adding all this to a culture that is, as I said in my prepared remarks, team-based and client-first. I’m really excited about it. BCS, Paul Beswick is a really critical leader in our company, bringing together ops and tech under his leadership and working with the business leaders that you know well from this call.

It’s all about leveraging the best technology and automation across our businesses. As Mark talked about in his remarks, optimizing that operating model. We see a lot of possibility there. It’ll allow for more efficient CapEx across the company. There’s a lot for us to dig into. We’re excited about how that can accelerate our growth over time.

Mark McGivney, CFO, Marsh & McLennan Companies: Great, thanks. Just to follow up, on Marsh in the U.S. and Canada, it feels like things are pretty stable, economically, at least. I had thought the economy kind of ticked up a little bit in 3Q. I think pricing may be a little worse, M&A a little bit of a tailwind. The comp was the same. Can you help me think through what was causing the deceleration in organic in the U.S. and Canada this quarter? Is it some of that talent stuff that’s really just coming through a little bit? I know it’s not a huge impact on the entire company, but specifically within that business.

John Doyle, President and CEO, Marsh & McLennan Companies: Yeah, for the company overall, it’s not an impact at all. I think we had a 4% growth at Marsh in the quarter. We have 5% year to date, kind of given the pricing pressure. It doesn’t feel like an economy that is better than 90 days ago. It feels quite uneven. We’ll see, obviously, what happens. I think you saw a softening of labor markets in the quarter. It is quite uneven out there. I think, again, up market, which is where we see more softness in growth. We have a client on average that’s being a bit more defensive in this environment, and that’s okay.

As I talked about as well, I was trying to highlight, while pricing may be down and the economy may be slowing and interest rates may be declining, the cost of risk, whether it’s the economy’s exposure to extreme weather, the rapidly rising cost of liability in some markets, including here in the U.S., healthcare costs, those are big pressure points. Those are all increasing at a rate much higher than GDP, and that’s good for our business over time. It may not be good for the overall U.S. economy, but that’s a different story. The demand for our services and helping clients navigate those issues will be quite resilient. I’m very confident in that. Thank you, David. Andrew, next question.

Andrew, Conference Call Moderator: Our next question comes from the line of Rob Cox with Goldman Sachs.

Hey, thanks. Good morning. I just wanted to ask about the international versus the U.S. It seems like pricing is sort of decelerating in a lot of geographies, but I was curious if you’re more sensitive to pricing in certain geographies versus others.

John Doyle, President and CEO, Marsh & McLennan Companies: Yeah, it’s a good question. I’ll ask Martin to comment on it a bit, Rob. There’s no question. It’s a competitive market. In my prepared remarks, I talked about insurance ROEs being quite strong. As a result, insurers are looking to grow, and they’re looking to grow in an economy that’s, again, uneven and perhaps softening in a few places. Over time, price will have to catch up with the growth and risk. I’d also note before I hand it off to Martin to talk about markets around the world, we’re really working with our clients about thinking medium to longer term. Again, there’s a mismatch between price today and loss cost inflation. I think the earlier that our clients can get ahead of that and manage proactively, they’ll be better positioned when markets do turn. Martin, maybe you could talk about rates overall.

Martin South, CEO, Marsh: Sure.

John Doyle, President and CEO, Marsh & McLennan Companies: Around the world.

Martin South, CEO, Marsh: I’ll just put it into context of our international growth, which I was very pleased with during the quarter. It’s 5% on top of 7% in Q3 2024, and underlying growth year to date is 6%. Asia-Pacific growing 6% in the quarter and 5% year to date. Really strong performance there from Japan and Korea, where we’ve been investing and see great opportunities for us to play a bigger role in the market there. EMEA grew 5% and 7% year to date, with really interesting country growth in the United Arab Emirates, Saudi, India, France, Spain, all growing in nearly double digits. Latin America grew 3% on top of 8% in Q3 2024, slightly impacted by 18-month policies in Q3 2024, but year to date, Latin America grew 5%.

In the quarter, it saw strong double-digit new business growth, capital markets growth across international credit specialties and cyber, very strong growth. We’re very well positioned, confident in our strategy, and a lot of market share and opportunity for us to take. You’re right, the rates are slightly more down in international. The outlier, I think, is the Pacific, down 11% for the second quarter in a row, but we have a lot of share to take and great positions in our marketplace. You know, not overwhelmingly does rate play through to our revenue at all.

John Doyle, President and CEO, Marsh & McLennan Companies: Thanks, Martin. Rob, do you have a follow-up?

Yes, and thanks for all the color there. I just wanted to follow up on the Thrive program. Clearly, there’s a lot of growth ambitions underlying the Thrive program in addition to the savings. I’m curious if you think this program, combined with the environment over the next couple of years, gives you guys an opportunity to expand margins at an above-average rate, or is this more like this helps in the context of potentially slowing organic to deliver similar levels of margin expansion as the past?

I think the challenge in your question is what is the average margin expansion, right? Look, I mean, we all know we’re operating in a lower growth environment, for sure, at least in 2025. We’ll again talk about 2026 in January when we meet again in about 90 days. There’s no question Thrive will help support margin expansion into the future. We’re excited about some of the things we’ve learned already as Paul has worked with the teams from each of the businesses in bringing them together and really leveraging the best technology, the best solutions. Mark talked about talent, moving talent to our capability centers that are lower cost. As we continue to deploy AI in our workflow, I’m very excited about the possibilities around that. We’ve got 18 consecutive years of margin expansion when we round out this year.

We’ve got a track record through economic and E&C cycles to continue to deliver. Thrive will be an important element and an important part of our focus as a leadership team over the course of the next couple of years. Thank you, Rob. Andrew, next question.

Andrew, Conference Call Moderator: Our next question comes from the line of Brian Meredith with UBS.

Mark McGivney, CFO, Marsh & McLennan Companies: Yeah, thanks. John, a couple first here. First, I wonder if you could talk a little bit about the insurance brokerage M&A environment right now. Given we’re kind of in the softening market, are you seeing bid-ask bets continue to narrow? Maybe on that as well, we’re kind of almost a year into the McGriff. Do you still have appetite and willingness to do, call it, larger scale M&A at this point?

John Doyle, President and CEO, Marsh & McLennan Companies: Yeah, thanks, Brian. By the way, just a quick update on McGriff. Everything’s moving according to plan. I continue to be incredibly excited. I mean, it’s just a passionate, talented group of people coming together within our M&A operation. As I mentioned before, Reed Davis is working with Dave and Matt Stadler on some really important opportunities for us as a company. I’m very, very pleased about that. Do we have the appetite and ability to do a larger scale deal? Absolutely. I think it’s more likely that we’ll continue our string of pearls approach to the market. We work hard at examining all possibilities. It’s not just about getting bigger, of course. It’s about getting better and finding the right fit, fits for us on a cultural basis. We remain very active in the market. We’ve done a bunch of small deals this year.

It was a quiet quarter in the third quarter. We’re working on a number of different possibilities, and we’ll continue to do that. In terms of the bid-ask spread, given the slower growth environment, I don’t know, maybe the bid-ask spread might be widening, Brian. It’s kind of what comes to mind, at least in a couple of conversations that we’ve had. Not just in insurance brokerage, I think in the MGA market as well. I’m seeing some dynamics there emerge. I think PE buyers seem to be maybe more willing to pay a higher multiple than some strategics. At least that’s what I’m taking for the moment. I hope that’s helpful, Brian. Yeah, yeah, follow up.

Mark McGivney, CFO, Marsh & McLennan Companies: Yeah, very, very helpful. Absolutely. Just back on the McGriff, you know, we’re going to see it, I guess, partially in organic in the fourth quarter. What does organic look like at McGriff right now? Is it similar to what’s going on in the Marsh U.S. Canada business, or better or worse?

John Doyle, President and CEO, Marsh & McLennan Companies: Yeah, we won’t report separately on McGriff’s organic or, for that matter, MMA’s either, right? It’s an important part of our U.S. business. It’s a huge part of our U.S. business, with MMA now more than $5 billion in annualized revenue. What we see every time we do a deal, pretty much, is slowing organic in the first couple of quarters, two, three quarters. It’s a lot for people to digest. System changes, even broader technology changes, right? New laptops, all this kind of stuff. In some cases, real estate changes. Our folks can be, our new folks can be a bit distracted during that period of time. That’s what we’ve seen with McGriff as well. We expect it to be a really important contributor to MMA as we go forward.

As Martin and I both mentioned, MMA had a really good quarter in the third quarter, and we expect that to continue. We feel great about how we’re positioned in the middle market in the United States. Thank you, Brian. Andrew, next question, please.

Andrew, Conference Call Moderator: Our next question comes from the line of Elyse Greenspan with Wells Fargo.

Speaker 5: Hi, thanks. Good morning. My first question, I guess, just given your commentary on market conditions this year persisting into next year, and I think you were also just talking about the slowing economy as well, does this mean just from a high-level perspective that the organic revenue target for next year just feels like it should, it would probably be similar to this year, right? Mid-single digit. I know in the past it’s been mid-single digit or greater. I’m just trying to think about your view. It seems like if we think about everything kind of staying the same, that the guidance would be consistent this year to next year.

John Doyle, President and CEO, Marsh & McLennan Companies: Good morning, Elyse. We’ll talk about 2026 in 90 days. We thought this year was quite prudent. When you go back to 2024, our guidance was mid-single digits or better. As we were doing planning this time 12 months ago, looking at a likely softening insurance and reinsurance market, looking at likely impacts from fiduciary interest income in likely softening the economy. Remember, we’re coming out of an unusual period of growth and all the stimulus in markets all over the world coming out of a pandemic. To us, it was quite prudent. I think we caught a little bit of criticism for it, particularly throughout the first quarter, but to guide to mid-single digits underlying revenue growth. We’re doing all that work right now for next year.

As it relates to insurance markets and reinsurance markets, it’ll be a year again with more than $100 billion of insured CAT again this year. Pretty quiet third quarter. I suspect you’ll see some of that in the underwriting results that are released over the course of the next few weeks. There’s still obviously a quarter to play, but it looks to us like January 1 in reinsurance was likely to look like it did entering about 12 months ago. That’s what we see at the moment. We’ll give you a broader update. A lot’s happening in the world too, right? Things continue to evolve. It’s a very dynamic and complex environment. Do you have a follow-up, Elyse?

Speaker 5: Yeah, I guess my second question, just going back to the rebranding of the company. I know the Thrive program outlined today, I guess, in conjunction with that, looks as a way to drive incremental revenue. With getting rid of some of the other brands away from Marsh, is this, are you trying to drive more cross-sell, say, between Marsh and Mercer? Because I always thought just in general, the cross-sells were not super large there. I’m just trying to think about how that angle fits into the rebranding that you guys are outlining.

John Doyle, President and CEO, Marsh & McLennan Companies: Yeah, thanks. I don’t like the way you said get rid of the other. We love our legacy brands. We’re quite proud of them and what they’ve represented in the market. The reason, by the way, there’s a transition period of 2026 is to make sure that we transition the equity in those brands, in Guy Carpenter, in Mercer, into the new Marsh brands. We’re going to build a new Marsh brand. What that’s about is not about cross-selling per se. We cross-sold before, and we actually cross-sell quite a bit. It’s an important part of how we show up today. It’s not about a cross-sell program. It is about simplifying our story, showing up in a more connected way to our clients.

Too many markets aren’t aware of the breadth of capability that we have, some of the unique attributes of our firm, the depth of talent, the vast data set, market-leading analytics, and building that brand in the market and showcasing our talent and our culture, the team-based approach that we take. We’re excited about what that can mean for our colleagues. We’re excited about what that means for our clients. We’re excited about what that means for shareholders. It’s obviously a decision we didn’t take lightly. We’ve been working towards this for several years, right? We’ve aligned around a common purpose inside of the company, a common colleague value proposition. We’ve brought together the operations and technology teams. We have a joined-up strategy. I can tell you it was a celebration in the building here over the course of the last couple of days. Our colleagues are excited about it.

They see the possibilities in the future. We look forward to delivering for our key stakeholders. Andrew, next question, please.

Andrew, Conference Call Moderator: Our next question comes from the line of Alex Scott with Barclays.

Speaker 2: Hi, thanks for taking it. I wanted to come back to the Thrive program. I guess the question I have is around how it affects your potential appetite for M&A and just how you’re viewing your ability to probably invest more than maybe some of the more fragmented areas of insurance brokerage and whether this could allow you to accelerate consolidation over the next handful of years.

John Doyle, President and CEO, Marsh & McLennan Companies: No, Alex, I’m not sure I see it as a meaningful impact. We have had operations teams in each of the businesses. Our M&A activity, from time to time, crosses businesses, particularly at Marsh and Mercer, but for the most part, or actually, I should say Marsh and Guy Carpenter too, from time to time. For the most part, they’re within each one of the four businesses. As I said before, we continue to be very active in the market. We’re more likely to continue to do smaller to midsize deals that make us better in markets that we’re underpenetrated. We’re looking for businesses that are well-led, have strong growth fundamentals, and are a good cultural fit for us. We’ve been really successful at building value in that way. We’re going to continue to get at it. Do you have a follow-up, Alex?

Speaker 2: Yeah, I do. I think earlier you mentioned middle market, you’re seeing better growth. It sounds like the pricing in particular is probably holding up better there. I’m just interested in your views on what you’re seeing in the large market, maybe why it’s not going down into the middle market or upper middle market. How do you expect that to progress into 2026?

John Doyle, President and CEO, Marsh & McLennan Companies: Yeah, look, we’re, as I said earlier, very excited about how we’re positioned in the middle market. We’ve got more exposure to that market segment globally. It can be a bit uneven country to country, but globally now, we have more exposure. We’ve learned a lot from building out the MMA business over the last 15 years and how we can perform effectively in that market segment. At a high level, we bring real scale benefits to, I don’t want to oversimplify it, but in many cases, you’ve got a lot of relationship selling carrying the day. While we’re good at that, we can also bring great analytics, great specialty capabilities, a global reach that is unique in those markets. We continue to be excited about that. We bring all those things in the large account market as well. We’re higher penetrated there.

It’s about finding new ways to advise clients. We didn’t talk about AI a lot on the call, but Centris is a great example, right, where we’re really helping clients think through supply chain risk and exposure to global trade negotiations, right? An example of innovation that we bring to a market that we penetrated well. Thank you, Alex. I appreciate that. Andrew, I think it’s time to wrap up. I want to thank everybody 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 confidence and trust in our teams. I want to thank you all very much for taking the time to join us. We look forward to speaking to you again in about 90 days.

Andrew, Conference Call Moderator: This concludes today’s program. You may now disconnect.

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