Marsh McLennan 2024 Annual Report
3
The Power of
Perspective
2024 Annual Report
Our unique capabilities help clients build the confidence to thrive
through the power of perspective.
Our strengths unite us across disciplines and around the world:
Marsh MCLennan is a global
¨roessiona¤ ser®ices fir¥
with Deep expertise across
Marsh, Guy Carpenter, Mercer
and ¤i®er ±¥an
Being committed
partners
We work with curiosity, care and
integrity to understand our clients’
needs and enable their success.
Applying unique
expertise
We bring a distinct combination of
capabilities to clarify present and
future risks and opportunities.
Delivering actionable
solutions
We provide practical solutions
to pressing challenges that help
businesses and communities thrive.
Our businesses:
Marsh
Provides insurance solutions and
data-driven risk advisory services to
commercial and consumer clients
Guy Carpenter
Develops advanced risk, reinsurance
and capital strategies that help clients
groB profitably and pursue e8erging
opportunities
Mercer
Delivers advice and technology-driven
solutions that help organizations
redefine the Borld of Bork
Oliver Wyman
Serves as a critical strategic, economic
and brand advisor to private sector
and governmental clients
#he oBer of erspective
2
“Marsh McLennan’s
high-performing
team and distinct
capabilities help clients
to understand more
about what they need to
do to succeed—and take
action to drive impact.”
John Q. Doyle
President and Chief Executive Officer,
Marsh McLennan
3
வளவஷ Bas a 8ilestone year for Marsh McLennanற
Our company sustained its growth momentum as
we executed on our strategy, generated excellent
financial perfor8ance and had the largest year
of acquisitions in our historyற
To our
shareholders,
With uncertainty and volatility becoming
the norm, today’s complex environment
presents significant challenges and
opportunities that businesses must be
prepared to 8eetற
Whether it’s navigating geopolitical
events and supply chain risk, mitigating
cyber threats, building climate resilience,
accelerating digital transfor8ation,
or creating talent and investment
strategies to drive future groBth, Marsh
McLennanௐs highரperfor8ing tea8
and distinct capabilities help clients to
understand more about what they need
to do to succeed—and take action to
drive i8pactற
Our more than 90,000 colleagues
worldwide share a singular purpose:
We build the confidence to thrive through
the power of perspectiveற
We are committed to investing in
our business to help our clients find
opportunity, empower our colleagues
to be their best, deliver value for
our shareholders and support the
co88unities Bhere Be live and Borkற
&e are Bell positioned for another
strong year in வளவஸ, reȒecting our unique
capabilities and the enduring value we
bring to clientsற
I am excited to update you on our
progressற
வளவஷ Bas a 8ilesto
To our
shareholders,
The Power of Perspective
4
Financial
performance
*For a reconciliation of non-GAAP results to GAAP results, as related to all non-GAAP measures presented in this letter, please
refer to the Company’s Form 8-K, dated January 30, 2025, available on the Company’s website at marshmclennan.com.
Marsh McLennan delivered
another year of strong
financial results, highlighted
by eCcellent perfor8ance
across our businesses and
geographies and 8eaningful
strategic acquisitionsற
We grew our total revenue by 8% to
வஷறஸ billion in வளவஷ, or ன on an
underlying basis, continuing our best
stretch of groBth in 8ore than tBo
decadesற Our ad5usted operating inco8e
rose ழழன to ஹறவ billion, folloBing ழன
groBth in வளவஶற d5usted earnings per
share increased 10%, and we generated
ள basis points of ad5usted 8argin
eCpansion, our ழth consecutive year
of reported 8argin eCpansionற* This
reȒects our disciplined approach to
keeping underlying expense growth
beloB underlying revenue groBthற
Our Risk and Insurance Services segment
generated 8% underlying revenue growth
in வளவஷ, Bith Marsh producing ன and
uy arpenter னற $nderlying revenue
growth in our Consulting segment was
ஹன, Bith Mercer producing ஸன and
Oliver &y8an ஹனற
n வளவஷ, Be invested றஷ billion in
acquisitions that added to our talent,
capabilities and scale, including Mcriff,
a leading provider of insurance broking
and risk management services in the
$"ற #he fir8ௐs deep specialty and
industry capabilities strengthen the
value proposition and expand the reach
of Marsh McLennan gency MM in
the vast and growing middle-market
seg8entற Our acquisitions of #he
Horton Group and Fisher Brown Bottrell
nsurance, both topரழளள brokers, further
enhance MMௐs footprint and capabilities
across the $"and underscore our focus
on thoughtfully deploying capital into
fasterரgroBing seg8ents of our businessற
Other key acquisitions during the year
included %anguardௐs $" outsourced chief
invest8ent oȲcer OO business and
ardano, strengthening Mercerௐs position
as a leading investment solutions
providerற &e also acquired %eritas
Total Solutions, SeaTec Consulting and
Innopay, which expand Oliver Wyman’s
advisory capabilities in commodity and
energy markets, aviation services and
pay8ents consulting, respectivelyற
eyond acquisitions, Be 8ade targeted
investments in talent, capabilities and
new technologies and solutions that
bring the best of Marsh McLennan to
our clientsற
In 2024, we
invested
$9.4 billion in
acquisitions
that added to
our talent,
capabilities
and scale.
Marsh McLennan வளவஷ nnual !eport
5
Investing in
long-term growth
In 2009, we launched Marsh McLennan
Agency (MMA) with the goal of bringing
best-in-class service and solutions to
middle-market businesses across the
US. More than 15 years and over 100
transactions later, MMA is a leading
provider of business insurance, employee
health and benefits, retirement and
wealth, and private client insurance
solutions in the US and Canada—and
an important part of our company’s
growth strategy.
With the 2024 addition of McGriff and its
excellent leadership, outstanding talent
and record of strong growth, MMA is now
a workforce of 15,000 colleagues with
approximately $5 billion in revenue—
representing roughly a third of Marsh’s
global revenue. On a standalone basis,
MMA would be the fifth-largest broker
by revenue in the US.
As it brings scale benefits and the global
resources of Marsh McLennan to the
middle market, MMA reflects the long-
term impact of thoughtful inorganic
investment and consistent organic
growth. Its growth journey continues.
Investing in
th
long-term growt
cLennan
In 2009, we launched Marsh M
f bringing
Agency (MMA) with the goal of
tions to
best-in-class service and solut
oss the
middle-market businesses acro
er 100
US. More than 15 years and ove
ading
transactions later, MMA is a lea
, employee
provider of business insurance,
t and
health and benefits, retirement
ance
wealth, and private client insura
a—and
solutions in the US and Canada
an important part of
The Power of Perspective
6
How we grow
Marsh McLennan is a
growth company; we’re
well-positioned globally
in market-leading
businesses with
significant opportunitiesற
&e strive for outstanding nearரter8
results while also investing to sustain
our strong perfor8ance over the long
ter8ற &e direct a significant portion of
our cash ȒoB into organic invest8ents,
particularly in talent, technology and
capabilitiesற roprietary innovations
like "entrisk, an online platfor8 that
brings together the capabilities of
tBo of our businesses to help clients
take control of their supply chain
risk, and Len, our generative
tool that provides all the capabilities
of a sophisticated language learning
model while keeping data secure to
Marsh McLennan, are tBo eCa8ples of
investments that are creating value
for our clients and colleaguesற
Investing in data and insights enables us
to Bork s8arter on behalf of our clients,
helping them gain the perspective
needed to pursue their a8bitionsற
We also maintain a balanced approach
to capital 8anage8entற &e look to
8aintain financial ȒeCibility Bhile
8anaging the eȲciency of our capital
structureற &e favor reinvesting the
capital Be generate into highரquality
acquisitions Bhile recogniEing that
returning capital to shareholders creates
8eaningful value over ti8eற &e target
raising our dividend each year and
repurchasing enough stock to reduce our
share countற
ocusing on highரquality acquisitions
is also an i8portant part of our groBth
strategyற Over the past decade, Beௐve
invested approximately $24 billion in
M across 8ore than வளள transactions,
accelerating our growth at attractive
returnsற #hese acquisitions eCtend our
reach, enhance our capabilities and boost
our scaleற
#he groBth plans of our businesses
re8ain at the core of our strategyற t
the same time, we’re working together
better than ever to capture opportunities
at the intersections of our businessesற
We also constantly challenge ourselves to
operate 8ore eȲciently, as reȒected by
the eCpansion of our ad5usted operating
margin by over 900 basis points in the
past decadeற espite these gains, Be still
see opportunities for i8prove8entற
Our approach drives consistent,
eCceptional perfor8ance for our
shareholders, strengthens our ability
to deliver i8pactful client solutions and
empowers colleagues to be their best at
Marsh McLennanற
We’re working
together
better than
ever to capture
opportunities
at the
intersections of
our businesses.
Helping colleagues
be their best here
Marsh McLennan thrives by having a
high-performing, inclusive culture where
all colleagues can be their best.
As an advisory business, it’s critical that
we attract the most talented colleagues
with a wide range of personal and
professional perspectives—and provide
fair access to opportunity. With many
unique clients across geographies and
industries, inclusion is a business and
economic imperative that’s an important
part of our Colleague Value Proposition.
Our 2024 colleague engagement scores,
which are best-in-class across industries,
show that we’re advancing this value
proposition—with opportunities to do
even better.
To enable every colleague to be their
best here and to bring the best of Marsh
McLennan to our clients, we continue to
focus on priority areas such as rewards
that recognize performance; professional
development and growth, supported
by credentialed online learning through
Marsh McLennan University; and
opportunities for collaboration on
innovative ideas and impactful solutions.
Marsh McLennan வளவஷ nnual !eport
*Learn more about how we’re driving impact for our clients, colleagues and communities
in our 2024 Business Responsibility Report on marshmclennan.com
ues
Helping colleagu
re
be their best her
ving a
Marsh McLennan thrives by hav
ure where
high-performing, inclusive cultu
.
all colleagues can be their best
tical that
As an advisory business, it’s crit
olleagues
we attract the most talented co
and
with a wide range of personal a
d provide
professional perspectives—and
#he oBer of erspective
8
“We strive for
outstanding near-
term results while
also investing to
sustain our strong
performance over
the long term. We
direct a significant
portion of our cash
flow into organic
investments,
particularly in
talent, technology
and capabilities.”
Marsh McLennan வளவஷ nnual !eport
9
nnual revenue of
$24.5 billion
Committed nearly
$27 billion
across வளம acquisitions and invest8ents
since 2009
15consecutive years
of underlying revenue groBth and
dividend increases
26.8%
consolidated ad5usted 8arginan increase
of 1,800 basis points since 2008
17consecutive years
of ad5usted " groBth
!ecordரhigh ad5usted operating inco8e of
$6.2 billion
The Power of Perspective
10
Our work
We’re working on challenges
and opportunities to enable
our clients to invest with
confidence in todayௐs co8pleC
environment and drive impact
in ways that matter most to
them—and the world:
Enhancing resilience
gainst a backdrop of tBo 8a5or
hurricanes in the $" and devastating
Ȓooding in urope and the $nited rab
8irates, global insured catastrophe
losses eCceeded ழளள billion for the
fifth year in a roB in வளவஷற nd Bith the
anuary Bildfires in alifornia eCpected to
rank as one of the topரழள largest natural
disasters in history in ter8s of insured
losses, our work advising individuals,
fa8ilies, businesses and public entities
on preparing for the i8pact of Beatherர
related perils—and navigating risk
financingcontinues Bith urgencyற
Our focus eCtends beyond our clientsௐ
physical assets to related concerns such
as business interruption and supply
chain risksற
#he increasing frequency and severity
of natural disasters, along Bith
rising property values and continued
development in catastrophe-prone
areas, also underscore the need for
greater resilience and risk-mitigation
planningற LoBering the risk factors Bould
encourage insurers to enter the market
and create much-needed capacity and
co8petitionற
The insurance sector has a vital role
in this effort, including developing
new and innovative insurance models,
such as community-based catastrophe
insurance solutions that help at-risk
communities mitigate their exposure and
secure insurance coverageற Leveraging
modeling and other new technologies
can also lead to a better understanding
of risk and aggregation potentialற
Public-private partnerships are crucial
to creating conditions where the private
8arket can play the fullest role possible
in financing and incentiviEing risk
reductionற 8id an increase in natural
catastrophes related to a changing
climate, numerous countries
have put in place safety nets that
allow the private market to both
finance and incentiviEe adaptation and
8itigation strategiesற
Marsh McLennan re8ains co88itted
to helping communities build resilient
futures and thriveற long Bith our dayரtoர
day work advising clients, we’ll continue
bringing stakeholders across industries
and governments together to advance
this i8portant conversation and find
sustainable solutionsற
Our focus
extends beyond
our clients’
physical assets
to related
concerns such
as business
interruption
and supply
chain risks.
Our work
We’re working on challenges
and opportunities to enable
our clients to invest with
confidence in todayௐs co8pleC
environment and drive impact
in ways that matter most to
them—and the world:
encourage insurers to enter the market
and create much-needed capacity and
co8petitionற
The insurance sector has a vital role
in this effort, including developing
new and innovative insurance models,
such as community-based catastrophe
i
l
i
h
h l
i k
Marsh McLennan வளவஷ nnual !eport
11
Geopolitical risk
ccording to Oliver &y8anௐs State of Our World
2025 report, geopolitical headwinds, including wars,
sanctions, eCport controls, tariffs and industrial
policies, are at their highest levels in half a centuryற
On a related note, the biggest concern a8ong Os
of eB (ork "tock Cchangeரlisted co8panies,
shared by ஸஷன of those surveyed by Oliver &y8an
oru8 and the (" in வளவஷ, Bas the possibility of
govern8ent interference in the econo8y via regulation,
protectionis8 and industrial policyா ஶன of chief
eCecutives Bere concerned Bith geopolitical instabilityற
We’re working with clients to manage these concerns
through traditional means and data and proprietary
advisory servicesற
Cybersecurity
s a leading cyber advisor Bith our oBn global cyber
data, analytics and 8odeling center of eCcellence, Be
help clients understand, quantify and 8anage cyber
risk—and build resilience into their businesses, people
and strategiesற #hereௐs a large protection gap in cyber
risk, driven by underinsurance or lack of insurance for
s8all businesses, the skyrocketing cost of cybercri8e
and systemic risks like a cyberattack on critical
infrastructureற Marsh McLennan advocates for healthy
dialogue between business and government about
cybersecurity policies and the need for publicர and
private-sector partnerships to backstop cyber risk and
protect societiesற
Longevity
The World Health Organization estimates that by 2050,
roughly வவன of the global population is eCpected to be
over the age of ஹளற n aging population Bill increase
de8and for health and care services, further strain
public retire8ent syste8s and likely require 8easures
such as eCtending the average Borkingரlife lengthற
We’re engaged in the global conversation about
longevity and helping our clients and their people
navigate this de8ographic shift through the lenses of
health, Bealth and careerற
The Power of Perspective
12
s challenging as todayௐs
business environment is, it’s
also filled Bith opportunityற
To thrive, leaders must
balance growth, de-risk
supply chains to reduce
vulnerabilities, modernize
Borkforce strategies, and take
an enterprise-wide approach
to protecting against systemic
risks like cli8ate and cyberற
Greater agility will be key,
aided by scenario planning
to consider all the outcomes
and possibilitiesற
Marsh McLennan is Bellரequipped for this
increasingly co8pleC 8acro environ8entற
With our expertise across the critical
areas of risk, strategy and people, Be
enable clients with the perspectives
and capabilities that help them meet
e8erging challenges and opportunitiesற
s Be continue to Bork collaboratively
across our business, we know that new
partnerships and innovative thinking are
also required to address 8any of todayௐs
challenges, Bhere the scale of risk can be
too great for any one co8pany, industry
or govern8ent to solve on its oBnற
oing this i8portant Bork on behalf of
our clients and co88unities requires
the support and contributions of
many, starting with our Independent
hair8an, d anBay, and the 8e8bers
of our oard of irectorsற #heir counsel
and guidance are indispensable; we
appreciate all they doற
#hank you to the 8e8bers of our
Cecutive o88ittee for their leadership
and co88it8entற &eௐre fortunate to
have so much talent and experience
on one tea8, and ௐ8 grateful for their
continued eCcellenceற
s a people business, our co8pany starts
and stops Bith our tea8ற heartfelt
thanks to all of our colleagues around
the Borld for your hard Bork and
commitment to being your best here—
and bringing the best of Marsh McLennan
to our stakeholdersற
#hank you to our clients for your trust
and partnershipற inally, thank you to our
investors for your belief in the Bork Be
do and the value Be deliverற
We’re optimistic about the possibilities
ahead and excited about the ongoing
opportunity to help our clients, colleagues
and communities strengthen their
organizations and drive change so they
can 8eet challenges, succeed and thriveற
ll 8y best,
John Q. Doyle
resident and hief Cecutive OȲcer
Marsh McLennan
February 10, 2025
Looking ahead
As we continue
to work
collaboratively
across our
business, we
know that new
partnerships
and innovative
thinking are
also required
to address
many of today’s
challenges.
Marsh McLennan வளவஷ nnual !eport
13
The Power of Perspective
14
Our Board of Directors
Standing, from left: Oscar an5ul, Morton Oற "chapiro, udith art8ann, Lloyd Mற (ates, "teven ற Mills
Seated, from left: nthony ற nderson, ane Lute, ohn ற oyle, ற dBard anBay, #a8ara ngra8, eborah ற opkins, an "ieg8und
Anthony K. Anderson
or8er %ice hair and MidBest
rea Managing artner,
rnst (oung LL
John Q. Doyle
President and
hief Cecutive OȲcer,
Marsh McLennan
Oscar Fanjul
%ice hair8an, errovial, "றற,
and Former Vice Chairman,
Omega Capital
H. Edward Hanway
Former Chairman and
hief Cecutive OȲcer,
orporation
Judith Hartmann
Operating Partner,
Sandbrook Capital, and
or8er eputy O and
hief inancial OȲcer of
Deborah C. Hopkins
or8er hief Cecutive OȲcer
of iti %entures and or8er
hief nnovation OȲcer,
Citigroup
Tamara Ingram
Former Global Chairman,
Wunderman Thompson
Jane Lute
Strategic Director,
" orth 8erica
Steven A. Mills
or8er Cecutive %ice resident,
"oftBare "yste8s,
nternational usiness Machines
orporation M
Morton O. Schapiro
Cecutive %ice resident
and "enior dvisor of #& lobal
and resident 8eritus,
orthBestern $niversity
Jan Siegmund
or8er hief inancial OȲcer,
Cognizant Technology Solutions
Lloyd M. Yates
President and
hief Cecutive OȲcer,
i"ource ncற
Marsh McLennan 2024 Annual Report
15
Our Executive Committee
Standing, from left: at #o8linson, ick "tuder, Martin "outh, ean lisura, aul esBick
Seated, from left: ohn ற oyle, ar8en ernandeE, Mark Mcivney, atherine ற rennan, ohn ones
John Q. Doyle
President and
hief Cecutive OȲcer,
Marsh McLennan
Paul Beswick
Senior Vice President and
hief nfor8ation and
Operations OȲcer,
Marsh McLennan
Katherine J. Brennan
Senior Vice President and
General Counsel,
Marsh McLennan
Carmen Fernandez
Senior Vice President and
hief eople OȲcer,
Marsh McLennan
John Jones
Senior Vice President and
hief Marketing and
o88unications OȲcer,
Marsh McLennan
Dean Klisura
President and
hief Cecutive OȲcer,
Guy Carpenter
%ice hair, Marsh McLennan
Mark McGivney
Senior Vice President and
hief inancial OȲcer,
Marsh McLennan
Martin South
President and
hief Cecutive OȲcer, Marsh
%ice hair, Marsh McLennan
Nick Studer
President and
hief Cecutive OȲcer,
Oliver Wyman Group
%ice hair, Marsh McLennan
Pat Tomlinson
President and
hief Cecutive OȲcer, Mercer
%ice hair, Marsh McLennan
Our Executive Committee
The Power of Perspective
16
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains "forward-looking statements," as defined in the Private Securities
Litigation Reform Act of 1995. These statements, which express management's current views concerning future
events or results, use words like "anticipate," "assume," "believe," "continue," "estimate," "expect," "intend," "plan,"
"project" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and
"would".
Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ
materially from those expressed or implied in our forward-looking statements. Factors that could materially affect
our future results include, among other things:
•
the impact of geopolitical or macroeconomic conditions on us, our clients and the countries and industries
in which we operate, including from multiple major wars and global conflicts, slower GDP growth or
recession, lower interest rates, capital markets volatility, inflation and changes in insurance premium
rates;
•
the impact from lawsuits or investigations arising from errors and omissions, breaches of fiduciary duty or
other claims against us in our capacity as a broker or investment advisor, including claims related to our
investment business’ ability to execute timely trades;
•
the increasing prevalence of ransomware, supply chain and other forms of cyberattacks, and their
potential to disrupt our operations or the operations of our third party vendors, and result in the disclosure
of confidential client or company information;
•
the financial and operational impact of complying with laws and regulations, including domestic and
international sanctions regimes, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act, U.K.
Anti Bribery Act and cybersecurity, data privacy and artificial intelligence regulations;
•
our ability to attract, retain and develop industry leading talent;
•
our ability to compete effectively and adapt to competitive pressures in each of our businesses, including
from disintermediation as well as technological change, digital disruption and other types of innovation
such as artificial intelligence;
•
our ability to manage potential conflicts of interest, including where our services to a client conflict, or are
perceived to conflict, with the interests of another client or our own interests;
•
the impact of changes in tax laws, guidance and interpretations, such as the implementation of the
Organization for Economic Cooperation and Development international tax framework, or the increasing
number of challenges by tax authorities in the current global tax environment;
•
the regulatory, contractual and reputational risks that arise based on insurance placement activities and
insurer revenue streams;
•
our failure to design and execute operating model changes that capture opportunities and efficiencies at
the intersection of our business; and
•
our ability to successfully integrate or achieve the intended benefits of the acquisition of McGriff.
The factors identified above are not exhaustive. Further information concerning Marsh McLennan and its
businesses, including information about factors that could materially affect our results of operations and financial
condition, is contained in the Company's filings with the Securities and Exchange Commission, including the "Risk
Factors" section in Part I, Item 1A of this report and the "Management’s Discussion and Analysis of Financial
Condition and Results of Operations" section in Part II, Item 7 of this report. Marsh McLennan and its subsidiaries
operate in a dynamic business environment in which new risks emerge frequently. Accordingly, we caution
readers not to place undue reliance on any forward-looking statements, which are based only on information
currently available to us and speak only as of the dates on which they are made. The Company undertakes no
obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the
date on which it is made.
i
TABLE OF CONTENTS
Information Concerning Forward-Looking Statements
i
PART I
Item 1 —
Business
1
Item 1A —
Risk Factors
13
Item 1B —
Unresolved Staff Comments
33
Item 1C —
Cybersecurity
33
Item 2 —
Properties
35
Item 3 —
Legal Proceedings
35
Item 4 —
Mine Safety Disclosures
35
PART II
Item 5 —
Market for the Company’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
36
Item 6 —
[Reserved]
36
Item 7 —
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
37
Item 7A —
Quantitative and Qualitative Disclosures About Market Risk
57
Item 8 —
Financial Statements and Supplementary Data
59
Item 9 —
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
116
Item 9A —
Controls and Procedures
116
Item 9B —
Other Information
118
PART III
Item 10 —
Directors, Executive Officers and Corporate Governance
119
Item 11 —
Executive Compensation
119
Item 12 —
Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
119
Item 13 —
Certain Relationships and Related Transactions, and Director
Independence
119
Item 14 —
Principal Accountant Fees and Services
119
PART IV
Item 15 —
Exhibits and Financial Statement Schedules
120
Item 16 —
Form 10-K Summary
132
Signatures
133
ii
PART I
Item 1.
Business.
References in this report to "we", "us" and "our" are to Marsh & McLennan Companies, Inc. and its consolidated
subsidiaries (the "Company" or "Marsh McLennan"), unless the context otherwise requires.
GENERAL
Marsh McLennan is the world's leading professional services firm in the areas of risk, strategy and people. We
help clients build the confidence to thrive through the power of perspective of our four market-leading businesses.
With annual revenue of over $24 billion, we have more than 90,000 colleagues advising clients in over 130
countries.
Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients.
Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and
pursue emerging opportunities. Mercer delivers advice and technology-driven solutions that help organizations
redefine the world of work, reshape retirement and investment outcomes, and unlock health and well-being for a
changing workforce. Oliver Wyman Group serves as a critical strategic, economic and brand advisor to private
sector and governmental clients. Our four businesses also collaborate together to deliver new solutions to help
clients manage complex and interconnected risks.
The Company conducts business through two segments:
•
Risk and Insurance Services includes risk management activities (risk advice, risk transfer and risk
control and mitigation solutions) as well as insurance and reinsurance broking and services. The
Company conducts business in this segment through Marsh and Guy Carpenter.
•
Consulting includes health, wealth and career advice, solutions and products, and specialized
management, strategic, economic and brand consulting services. The Company conducts business in this
segment through Mercer and Oliver Wyman Group.
We describe our current segments in further detail below. We provide financial information about our segments in
our consolidated financial statements included under Part II, Item 8 of this report.
OUR BUSINESSES
RISK AND INSURANCE SERVICES
The Risk and Insurance Services segment generated approximately 63% of the Company's total revenue in 2024
and employs approximately 52,400 colleagues worldwide. The Company conducts business in this segment
through Marsh and Guy Carpenter.
MARSH
Marsh is the world's leading insurance broker and risk advisor, serving companies, institutions and individuals.
From its founding in 1871 to the present day, Marsh has demonstrated a commitment to thought leadership,
innovation and insurance expertise to meet its clients’ needs. Marsh’s pioneering contributions include introducing
the practice of client representation through brokerage, the discipline of risk management, the globalization of risk
management services and the development of service platforms that identify, quantify, mitigate and transfer risk.
Currently, approximately 48,800 Marsh colleagues provide risk management, insurance broking, insurance
program management, risk consulting, analytical modeling and alternative risk financing services to a wide range
of businesses, government entities, professional service organizations and individuals in over 130 countries.
Marsh generated approximately 53% of the Company's total revenue in 2024.
Insurance Broking and Risk Advisory
In its core insurance broking and risk advisory business, Marsh employs a team approach to identify, quantify and
address clients' risk management and insurance needs. Marsh’s product and service offerings include risk
analysis, insurance program design and placement, insurance program support and administration, claims
support and advocacy, alternative risk strategies and a wide array of risk analysis and risk management
consulting services. Clients benefit from Marsh’s advanced analytics, deep technical expertise, specialty and
industry knowledge, collaborative global culture and the ability to develop innovative solutions and products.
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The firm’s resources also include nearly three dozen specialty and industry practices, including cyber,
construction, renewable energy, healthcare, and financial and professional service practices.
Marsh provides services to clients of all sizes, including large multinational companies ("Risk Management"), high
growth middle-market businesses ("Corporate"), small commercial enterprises and high net-worth private clients,
and affinity group members ("Commercial & Consumer"). Marsh's segments are designed to build stronger value
propositions and operating models to optimize solutions and services for clients depending on their needs.
Risk Management. Marsh has an extensive global footprint and market-leading advisory and placement services
that benefit large domestic and international companies and institutions facing complex risk exposures. These
clients are also supported by Marsh’s robust analytics and a growing digital experience.
In addition, Marsh’s largest global clients are serviced by Marsh Multinational, a dedicated team of colleagues
from around the world focused on delivering service excellence and insurance solutions to clients wherever they
are located. Marsh is digitizing the client experience through tools such as LINQ, Marsh’s account and service
application; Blue[i], a suite of analytics tools for clients; and Bluestream, a digital brokerage platform that enables
clients to provide insurance to their customers or suppliers in a B2B2C distribution model. Marsh provides global
expertise and an intimate knowledge of local markets, helping clients navigate local regulatory environments to
address the worldwide risk issues that confront them.
•
Marsh Specialty is an integrated and globally coordinated team of experts who provides clients in highly
specialized industry and product areas with data driven insights, service, advice and access to global
insurance markets. These specialists support clients who require advice and support across aviation &
space, credit specialties, construction, energy & power, financial & professional services (FINPRO),
marine & cargo, and private equity, mergers & acquisitions (PEMA).
Corporate. Middle market clients are served by Marsh’s brokerage operations globally; this segment is also
serviced by Marsh & McLennan Agency (MMA) in the United States (U.S.).
•
Marsh McLennan Agency (MMA) provides business insurance, employee health and benefits,
retirement and wealth management, and private client insurance solutions to individuals and mid-market
organizations. MMA advises on insurance program structure and market dynamics, along with industry
expertise and transactional capability. Since its first acquisition in 2009, MMA has acquired more than 125
agencies.
Commercial & Consumer. Clients in this market segment typically face less complex risks and are served by
Marsh’s innovative product and placement offerings and growing capabilities in digitally enabled distribution and
administration.
•
Victor Insurance Managers (Victor) is one of the largest underwriting managers of professional liability,
catastrophe, and other specialty insurance programs worldwide. In the U.S., Victor Insurance Managers
(US) and ICAT Managers underwrite, solicit, sell and service coverages through a national third-party
distribution network of licensed brokers and agents. Through its Victor Small Business platform, Victor
deploys cloud-based technology to enable independent insurance agents, on behalf of their small
business clients, to obtain online quotes from multiple insurance providers and bind property and
casualty and workers compensation insurance policies in real time. Victor also manages Torrent
Technologies, the nation’s largest service provider to the National Flood Insurance Program (NFIP).
Victor Insurance Managers (Canada), a leading managing general agent in Canada, delivers
professional liability and construction insurance and other property and casualty programs and
administers group and retiree benefits programs and claims handling operations for individuals,
organizations and businesses. Victor also has a business in the U.K., the Netherlands, Italy, Germany
and Australia.
•
Marsh Affinity focuses on insurance programs sold to insureds or vendors through a corporate sponsor
using an affinity distribution model.
•
High Net Worth (HNW). Individual high net worth clients and family offices are serviced by MMA in the
U.S. and other Marsh personal lines businesses globally. These businesses provide a single-source
solution for high net worth clients and are dedicated to sourcing protections across a broad spectrum of
risk. Using a consultative approach, Marsh's HNW practices analyze exposures and customize programs
to cover individual clients with complex asset portfolios.
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Additional Services and Adjacent Businesses
In addition to insurance broking, Marsh provides certain other specialist advisory or placement services:
Marsh Advisory is a global practice comprising specialists who use data and analytics, including through Marsh’s
Blue[i] digital analytics platform. Marsh Advisory’s three main service areas (Consulting, Claims, and Analytics)
advise clients on existing and emerging risk exposures, protecting critical business activities and developing
strategies to optimize total cost of risk.
Marsh Captive Solutions, a prominent part of the Marsh Specialty and Global Placement practice, helps
organizations of all sizes retain risks through comprehensive and innovative captive solutions. This team is
comprised of captive consultants, actuaries and captive management professionals which offer complete, end-to-
end captive management services.
Bowring Marsh is an international placement broker. This unit’s core strategy is to modernize risk transfer advice
and solutions for clients. This is executed through a combination of data solutions, capacity creation vehicles,
segmentation, placement platforms (on-shoring solutions within the network), and improved operational efficiency
– all designed to yield a better client outcome and experience. The products Bowring Marsh places include
property, casualty, terrorism, product recall, and special risks.
Mercer Marsh Benefits provides health benefits brokerage and consulting services to clients of all sizes in
numerous countries across the globe, outside of the U.S. As described below, Mercer and Marsh go to market
together to provide strategic advice and services to help clients minimize risk, optimize benefits structure, drive
efficiencies and maximize employee engagement.
Services for Insurers
Marsh's Insurer Consulting Group (ICG) provides services to insurance carriers. Through Marsh's patented
electronic platform, MarketConnect, and sophisticated data analysis, ICG provides insurers with individualized
preference setting and risk identification capabilities, as well as detailed performance data and metrics. Insurer
consulting teams review performance metrics and preferences with insurers and provide customized consulting
services to insurers designed to improve business planning and strategy implementation. ICG services are
designed to improve the product offerings available to clients, assist insurers in identifying new opportunities and
enhance insurers’ operational efficiency. The scope and nature of the services vary by insurer and by geography.
GUY CARPENTER
Guy Carpenter, the Company’s reinsurance intermediary and advisor, generated approximately 10% of the
Company's total revenue in 2024. Currently, approximately 3,600 Guy Carpenter colleagues provide clients with a
combination of specialized reinsurance broking expertise, strategic advisory services and analytics solutions. Guy
Carpenter creates and executes reinsurance and risk management solutions for clients worldwide through risk
assessment analytics, actuarial services, highly-specialized product knowledge and trading relationships with
reinsurance markets. Client services also include contract and claims management, reinsurance accounting and
fiduciary services.
Acting as a broker or intermediary on all classes of reinsurance, Guy Carpenter places two main types of property
casualty and life / health reinsurance: treaty reinsurance, which involves the transfer of a portfolio of risks; and
facultative reinsurance, which involves the transfer of part or all of the coverage provided by a single insurance
policy.
Guy Carpenter provides reinsurance services in a broad range of centers of excellence, segments and specialties
including: Automobile / Motor, Aviation, Captives, Crop/Agriculture, Cyber, Engineering / Construction, Financial
Lines, InsurTech, Life / Accident / Health, Marine and Energy, Medical Professional, Personal Lines, Mortgage,
Political Risk & Trade Credit, Primary & Excess Casualty, Managing General Agents and Program Manager
Solutions, Property, Public Sector, Regional / Mutual, Retrocessional Reinsurance, Surety, Terror, and Workers
Compensation / Employer Liability.
Guy Carpenter also offers clients alternatives to traditional reinsurance, including industry loss warranties and,
through its licensed affiliates, capital markets alternatives such as transferring catastrophe risk through the
issuance of insurance-linked securities. GC Securities, the Guy Carpenter division of MMC Securities LLC and
MMC Securities (Europe) Limited, offers corporate finance solutions, including mergers & acquisitions advice and
private debt and equity capital raising, and capital markets-based risk transfer solutions that complement Guy
Carpenter's strong industry relationships, analytical capabilities and reinsurance expertise.
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Guy Carpenter also provides its clients with reinsurance-related services, including actuarial, enterprise risk
management, financial and regulatory consulting, portfolio analysis and advice on the efficient use of capital. Guy
Carpenter's Global Analytics & Advisory ("GAA") unit helps clients better understand and quantify the uncertainties
inherent in their businesses. Working in close partnership with Guy Carpenter account executives, GAA
specialists help support clients' critical decisions in numerous areas, including reinsurance utilization, catastrophe
exposure portfolio management, new product and market development, rating agency, regulatory and account
impacts, loss reserve risk, capital adequacy and return on capital.
Compensation for Services in Risk and Insurance Services
Marsh and Guy Carpenter are compensated for brokerage and consulting services through commissions and
fees. Commission rates and fees vary in amount and can depend on a number of factors, including the type of
insurance or reinsurance coverage provided, the particular insurer or reinsurer selected, and the capacity in which
the broker acts and negotiates with clients. In addition to compensation from its clients, Marsh also receives other
compensation, separate from retail fees and commissions, from insurance companies. This other compensation
includes, among other things, payments for consulting and analytics services provided to insurers; compensation
for administrative and other services (including fees for underwriting services and services provided to or on
behalf of insurers relating to the administration and management of quota shares, panels and other facilities in
which insurers participate); and contingent commissions, which are paid by insurers based on factors such as
volume or profitability of Marsh's placements, primarily driven by MMA and parts of Marsh's international
operations.
Marsh and Guy Carpenter receive interest income on certain funds (such as premiums and claims proceeds) held
in a fiduciary capacity for others. For a more detailed discussion of revenue sources and factors affecting revenue
in our Risk and Insurance Services segment, refer to Part II, Item 7 ("Management's Discussion and Analysis of
Financial Condition and Results of Operations") of this report.
CONSULTING
The Company's Consulting segment generated approximately 37% of the Company's total revenue in 2024 and
employs approximately 30,500 colleagues worldwide. The Company conducts business in this segment through
Mercer and Oliver Wyman Group.
MERCER
Mercer is a leading provider in delivering advice, solutions and products that help organizations meet the health,
wealth and career needs of a changing workforce. Mercer has approximately 23,300 colleagues based in 48
countries. Clients include a majority of the companies in the Fortune 1000 and FTSE 100, as well as medium- and
small-market organizations, public sector entities and individual customers. Mercer generated approximately 23%
of the Company's total revenue in 2024.
Mercer operates in the following areas:
Health. Mercer helps public and private sector employers design and manage employee health and welfare
programs; administer health benefits and flexible benefits programs, including benefits outsourcing; engage
employees with their health benefits through a digital experience; and comply with local benefits-related
regulations. Mercer provides a range of advice and solutions to clients, which, depending on the engagement,
may include: total health and wellness management strategies; global health brokerage solutions; vendor
performance and audit; life and disability management; and measurement of healthcare provider performance.
These services are provided through fee-based consulting as well as commission-based brokerage services in
connection with the selection of insurance companies and healthcare providers.
Mercer also provides consulting and actuarial services to U.S. state governments to support the purchase of
healthcare through state Medicaid programs. Mercer offers clients tools to enhance employee engagement with
their health benefits through its DarwinSM platform.
Outside of the U.S., Mercer and Marsh go to market together for Health benefits brokerage and consulting under
the Mercer Marsh BenefitsSM (MMB) brand, as described above.
Wealth. Through its Wealth business, Mercer assists clients worldwide in the design, governance and risk
management of defined benefit, defined contribution, hybrid retirement plans and other pools of assets, and with
investment of those assets.
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Mercer provides actuarial consulting, investment consulting, investment management and related services to the
sponsors and trustees of pension plans and master trusts. Mercer also provides investment consulting and
investment management services to foundations, endowments, sovereign wealth funds, U.S. public sector clients,
insurance companies, financial intermediaries, family offices and individuals. Mercer provides retirement plan
outsourcing, including administration and delivery of defined benefit and defined contribution retirement benefits.
The investment consulting and investment management services provided by Mercer and its affiliates (investment
management services may also be referred to as "investment solutions," "delegated solutions," "fiduciary
management" or "outsourced Chief Investment Officer (OCIO) services") cover a range of stages of the
investment process, from investment research (through its Mercer-Insight service), asset allocation and
implementation of investment strategies to ongoing portfolio management services. Mercer provides these
services primarily to institutional and other sophisticated investors including retirement plans (e.g., defined benefit
and defined contribution), master trusts, endowments and foundations, sovereign wealth funds, U.S. public sector
clients, insurance companies and family offices, as well as wealth managers and other financial intermediaries,
primarily through manager of manager strategies and funds sponsored and managed by Mercer. Mercer’s clients
invest in both traditional asset classes (e.g., equities, fixed income and cash equivalents) and alternative or
private market strategies (e.g., private equity, private debt, real estate, other real assets and hedge funds). As of
December 31, 2024, Mercer and its global affiliates had assets under management of approximately $617 billion
worldwide.
Mercer also provides services to individual retail clients, including financial planning, high net worth risk solutions
and other discretionary investment services.
Career. Mercer advises organizations on the engagement, skill assessment, management and reward of
employees; the design of executive remuneration programs; people and workforce strategies during business
transformation; improvement of human resource (HR) effectiveness; and the implementation of digital and cloud-
based Human Resource Information Systems. In addition, through proprietary survey data and decision support
tools, Mercer provides clients with human capital information and analytical capabilities to improve strategic
human capital decision making. Mercer’s Career products include solutions relating to rewards, mobility,
engagement, workforce analytics and assessments. Mercer helps clients plan and implement HR programs and
other organizational changes designed to maximize employee engagement.
Mercer also provides advice relating to people and benefits-related issues to buyers and sellers in a variety of
types of M&A transactions.
OLIVER WYMAN GROUP
With more than 7,200 professionals and offices in over 34 countries, Oliver Wyman Group delivers advisory
services to clients through three operating units, each of which is a leader in its field: Oliver Wyman, Lippincott
and NERA Economic Consulting. Oliver Wyman Group generated approximately 14% of the Company's total
revenue in 2024. Oliver Wyman is a global leader in management consulting and combines deep industry
knowledge with specialized expertise in strategy, operations, risk management and organization transformation.
The firm works with clients around the world to help optimize their business, improve their operations and risk
profile, and accelerate their organizational performance to seize opportunities. Industry groups include:
•
Consumer, Telecommunications, and Technology
•
Energy and Natural Resources
•
Financial Services (including corporate and institutional banking, public policy, and retail and business
banking)
•
Government and Public Institutions
•
Healthcare and Life Sciences
•
Insurance and Asset Management
•
Private Capital
•
Transportation and Advanced Industrials: (including aviation; aerospace and defense; rail; express, postal
and third-party logistics; services, including travel and leisure, environmental and facility management,
and business and tech services; and CAVOK, which provides technical consulting and market forecasting
services)
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Oliver Wyman overlays its industry knowledge with expertise in the following specializations:
•
Actuarial. Oliver Wyman’s Actuarial Practice uses mathematical and statistical modeling skills and
qualitative assessment methodologies to assist clients in evaluating and addressing risk.
•
AI Transformation: Quotient is Oliver Wyman’s global AI offering, bringing specialized experience to help
clients harness the value of AI.
•
Climate and Sustainability. Oliver Wyman assists clients in cutting through complex climate systems and
solving for operational efficiencies. Oliver Wyman helps clients discover new business opportunities,
create new pathways, and respond to climate risk, to make needed changes commercially compelling.
•
Finance and Risk. Oliver Wyman provides leading financial institutions with custom solutions and insights
covering all aspects of risk and finance functions, including credit risk, market risks, asset and liability
management and liquidity risks, and non-financial risks, together with integrated risk management topics,
such as aggregated risk analyses, business applications and culture and organization.
•
Restructuring. Oliver Wyman offers a complete management solution and "one-stop-shop" approach to
turning around companies, providing strategic, operational, and financial restructuring advice.
•
Digital. Oliver Wyman partners with clients to address their digital challenges, blending the power of
digital with deep industry expertise. By building strong capabilities and culture, Oliver Wyman accelerates
and embeds digital transformation, working collaboratively with clients’ leaders, employees, stakeholders,
and customers to jointly define, design, and achieve lasting results.
•
Operations. Oliver Wyman helps organizations leverage their operations for a competitive advantage
using a comprehensive set of capabilities, including performance improvement, digital operations
strategy, and risk management.
•
People and Organizational Performance. Oliver Wyman's People and Organizational Performance
capability brings together deep expertise and industry knowledge to enable organizations to work in
service of its strategic vision and to address the most pressing organizational, people, and change issues.
•
Payments. Oliver Wyman draws on years of industry-shaping work in the Financial Services and Retail
industries using deep digital expertise to help clients - from banks/issuers, to payments providers, to
retailers - to build growth strategies, form effective partnerships, optimize costs, and manage risk.
•
Pricing, Sales, and Marketing. Oliver Wyman helps organizations drive top-line and margin growth
through outstanding strategy and decision making on pricing, marketing optimization, and best practices
on sales effectiveness.
•
Customer First. Oliver Wyman helps bring together capabilities required to identify customer and business
growth, conduct detailed business design, build and launch a business, and maintain a focus on realizing
growth while de-risking delivery.
•
Performance Transformation. Oliver Wyman helps clients to design, realize and sustain value growth via
large-scale transformations.
Lippincott is a creative consultancy specializing in brand and innovation that shapes recognized brands and
experiences for clients globally. Lippincott's strategy and design experts have helped create some of the world's
most recognized brands.
NERA Economic Consulting provides economic analysis and advice to public and private entities to achieve
practical solutions to highly complex business and legal issues arising from competition, regulation, public policy,
strategy, finance and litigation. NERA professionals operate worldwide assisting clients including corporations,
governments, law firms, regulatory agencies, trade associations, and international agencies. NERA's specialized
practice areas include: antitrust, securities, complex commercial litigation, energy, environmental economics,
network industries, intellectual property, product liability and mass torts and transfer pricing.
Compensation for Services in Consulting
Oliver Wyman Group is compensated for advice and services primarily through fees paid by clients. Mercer is
compensated for advice and services through fees paid by clients, commissions and fees based on assets or
members. In the majority of cases, Mercer's Health business is compensated through commissions for the
placement of insurance contracts and supplemental compensation from insurers based on such factors as
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volume, growth of accounts, and total retention of accounts placed by Mercer. Mercer may receive commissions
in other parts of its business, such as its Private Client Services business and certain financial advice businesses.
Mercer's investments business and certain of Mercer's administration services are compensated typically through
fees based on assets under administration or management or fee per member. For a majority of the Mercer-
managed investment funds, revenue received from Mercer's investment management clients as sub-advisor fees
is reported on a gross basis rather than a net basis. For a more detailed discussion of revenue sources and
factors affecting revenue in the Consulting segment, refer to Part II, Item 7 ("Management's Discussion and
Analysis of Financial Condition and Results of Operations") of this report.
REGULATION
The Company's activities are subject to licensing requirements and extensive regulation under U.S. federal and
state laws, as well as laws of other countries in which the Company operates. Across most jurisdictions, we are
also subject to various data privacy and data protection laws and regulations that apply to personal information,
as well as, in certain jurisdictions, cybersecurity laws and regulations and emerging laws and regulations related
to artificial intelligence ("AI"). In addition, we are subject to various financial crime laws and regulations through
our activities, activities of associated persons, the products and services we provide and our business and client
relationships. Such laws and regulations relate to, among other areas, sanctions and export control, anti-bribery,
anti-corruption, anti-money-laundering and counter-terrorist financing. In certain circumstances, we are also
required to maintain operating funds primarily related to regulatory requirements outside the U.S. See Part I,
Item 1A ("Risk Factors") below for a discussion of how actions by regulatory authorities or changes in legislation
and regulation in the jurisdictions in which we operate may have an adverse effect on our businesses and for
more information about the laws and regulations related to data privacy, data protection, cybersecurity and AI and
the associated risks to our businesses.
Risk and Insurance Services. While laws and regulations vary from location to location, every state of the U.S.
and most foreign jurisdictions require insurance market intermediaries and related service providers (such as
insurance brokers, agents and consultants, reinsurance brokers and managing general agents) to hold an
individual or company license from a government agency or self-regulatory organization. Some jurisdictions issue
licenses only to individual residents or locally-owned business entities; in those instances, if the Company has no
licensed subsidiary, it may maintain arrangements with residents or business entities licensed to act in such
jurisdiction. Such arrangements are subject to an internal review and approval process. Licensing of reinsurance
intermediaries is generally less rigorous compared to that of insurance brokers, and most jurisdictions require only
corporate reinsurance intermediary licenses.
In the United Kingdom, our business is regulated by the Financial Conduct Authority ("FCA"). The FCA’s
responsibilities and powers include licensing of insurance and reinsurance intermediaries and related criteria such
as professional competence, financial capacity and the requirement to hold professional indemnity insurance, the
broking of premium finance to consumers, and competition powers that enable it to enforce prohibitions on anti-
competitive behavior in relation to financial services.
Insurance authorities in the U.S. and certain other jurisdictions in which the Company's subsidiaries do business,
including the FCA in the United Kingdom, also have enacted laws and regulations governing the investment of
funds, such as premiums and claims proceeds, held in a fiduciary capacity for others. These laws and regulations
typically provide for segregation of these fiduciary funds and limit the types of investments that may be made with
them, and generally apply to both the insurance and reinsurance business.
Certain of the Company's Risk and Insurance Services activities are governed by other regulatory bodies, such as
investment, securities and futures licensing authorities. In the U.S., Marsh and Guy Carpenter use the services of
MMC Securities LLC, a SEC registered broker-dealer and introducing broker in the U.S. MMC Securities LLC is a
member of the Financial Industry Regulatory Authority ("FINRA"), the National Futures Association and the
Securities Investor Protection Corporation ("SIPC"), primarily in connection with capital markets and other
investment banking-related services relating to insurance-linked and alternative risk financing transactions. Also in
the U.S., Marsh uses the services of MMA Securities LLC, a SEC registered broker-dealer, investment adviser
and member of FINRA, SIPC and the Municipal Securities Rulemaking Board ("MSRB"), and MMA Asset
Management LLC, a SEC registered investment adviser, primarily in connection with retirement, executive
compensation and benefits consulting and advisory services to qualified and non-qualified benefits plans,
companies and executives and personal wealth management. In the United Kingdom, Marsh and Guy Carpenter
use the expertise of MMC Securities Limited, which is authorized and regulated by the FCA to provide advice on
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securities and investments, including mergers & acquisitions in the United Kingdom. In the European Union, Guy
Carpenter uses MMC Securities (Ireland) Limited, which is authorized and regulated by the Central Bank of
Ireland to place certain securities and investments in the European Union. MMC Securities LLC, MMC Securities
Limited, MMC Securities (Ireland) Limited, MMA Securities LLC, and MMA Asset Management LLC are indirect,
wholly-owned subsidiaries of Marsh & McLennan Companies, Inc.
Consulting. Mercer's retirement-related consulting and investment services are subject to pension law and
financial regulation in many countries. Depending on the country, Mercer may rely on licensed colleagues or
registered legal entities to engage in these services, or may utilize other Marsh McLennan entities or third parties.
In addition, trustee services, investment services (including advice to persons, institutions and other entities on
the investment of pension assets and assumption of discretionary investment management responsibilities) and
retirement and employee benefit program administrative services provided by Mercer and its subsidiaries and
affiliates may also be subject to investment and securities regulations in various jurisdictions, including (but not
limited to) regulations imposed or enforced by the Securities and Exchange Commission (SEC) and the
Department of Labor in the U.S., the Ontario Securities Commission in Canada, the FCA in the United Kingdom,
the Central Bank of Ireland and the Australian Prudential Regulation Authority and the Australian Securities and
Investments Commission. In the U.S., Mercer provides investment services through Mercer Investments LLC,
(formerly Mercer Investment Management, Inc.), an SEC-registered investment adviser, which consolidated the
activities of each of Mercer’s affiliated investment adviser entities in the U.S. (including Mercer Investment
Consulting LLC and Pavilion Advisory Group) in 2019. Mercer Trust Company, a limited purpose New Hampshire
chartered trust bank, may also provide services for certain clients of Mercer’s investment management business
in the U.S. The benefits insurance consulting and brokerage services provided by Mercer and its subsidiaries and
affiliates are subject to the same licensing requirements and regulatory oversight as the insurance market
intermediaries described above regarding our Risk and Insurance Services businesses. Depending on the nature
of the client and services performed, Mercer may also be subject to direct oversight by the Department of Health
and Human Services and other federal agencies in the U.S. Mercer provides annuity buy-out advice that is
subject to regulations (for example, in the U.S., state insurance licensing regulations and ERISA). Mercer uses
the services of MMC Securities LLC to provide certain services, including executive benefit and compensation
services and securities dealing services.
FATCA. Regulations promulgated by the U.S. Treasury Department pursuant to the Foreign Account Tax
Compliance Act and related legislation (FATCA) require the Company to take various measures relating to non-
U.S. funds, transactions and accounts. The regulations impose on Mercer and MMA certain client financial
account obligations relating to non-U.S. financial institution and insurance clients.
COMPETITIVE CONDITIONS
The Company faces significant competition in all of its businesses from providers of similar products and services,
including competition with regard to identifying and pursuing acquisition candidates. The Company also
encounters strong competition throughout its businesses from both public corporations and private firms in
attracting and retaining qualified employees. As the Company has clients across various geographies, industries
and sizes, the competitive landscape is complex and varies across numerous markets. In addition to the
discussion below, refer to "Risks Relating to the Company Generally — Competitive Risks," in Part I, Item 1A of
this report.
Risk and Insurance Services. The Company's combined insurance and reinsurance services businesses are
global in scope. Our insurance and reinsurance businesses compete principally on the sophistication, range,
quality and cost of the services and products they offer to clients. The Company encounters strong competition
from other insurance and reinsurance brokerage firms that operate on a global, regional, national or local scale in
every geography in which it operates, from insurance and reinsurance companies that market, distribute and
service their insurance and reinsurance products without the assistance of brokers and from other businesses,
including commercial and investment banks, accounting firms, consultants and online platforms, that provide risk-
related services and products or alternatives to traditional insurance brokerage services. In addition, third party
capital providers have entered the insurance and reinsurance risk transfer market offering products and capital
directly to the Company’s clients. Their presence in the market increases the competitive pressures that the
Company faces.
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Certain insureds and groups of insureds have established programs of self-insurance as a supplement or
alternative to purchasing traditional third-party insurance, thereby reducing in some cases their need for third-
party insurance placements. Certain insureds also obtain coverage directly from insurance providers. There are
also many other providers of managing general agents, affinity programs and private client services that compete
with the Company's offerings.
Consulting. The Company's consulting businesses face strong competition from other privately and publicly held
worldwide and national companies, as well as regional and local firms. These businesses generally compete on
the basis of the range, quality and cost of the services and products they provide to clients. Competitors include
independent consulting, broking and outsourcing firms, as well as consulting, broking and outsourcing operations
affiliated with larger accounting, information systems, technology and financial services firms. Mercer’s Health
business faces additional competition from insurers and from non-traditional competitors seeking to enter or
expand in the health benefits space (for example, payroll firms, large consumer businesses, and digitally oriented
consultancies). Mercer's investments business faces competition from many sources, including investment
consulting firms (many of which offer delegated services), investment management firms and other financial
institutions. In some cases, clients have the option of handling the services provided by Mercer and Oliver Wyman
Group internally, without assistance from outside advisors.
Segmentation of Activity by Type of Service and Geographic Area of Operation.
Financial information relating to the types of services provided by the Company and the geographic areas of its
operations is incorporated herein by reference to Note 17, Segment Information, in the notes to the consolidated
financial statements included under Part II, Item 8 of this report.
HUMAN CAPITAL
As a professional services firm, we believe the health of our business relies on the strength of our workforce.
Our People. As of December 31, 2024, the Company and its consolidated subsidiaries employed more than
90,000 colleagues worldwide, including approximately 52,400 in Risk and Insurance Services and 30,500 in
Consulting.
People Leadership and Governance. The Chief People Officer is responsible for leading the development and
execution of our enterprise people strategy. This includes the attraction, recruitment, hiring, development and
engagement of talent to deliver on our strategy and the design of colleague total rewards programs. The Chief
People Officer is also responsible for leading the development and integration of our inclusion approach into our
strategy.
Our ESG Committee and Compensation Committee of the Board of Directors have oversight responsibility for
various aspects of the Company’s human capital management and are regularly updated by the Chief People
Officer.
Colleague Value Proposition and Engagement. In 2024, we introduced our shared Colleague Value
Proposition (CVP), an articulation of why colleagues choose to work and invest their talents at Marsh McLennan.
You can be your best here captures the unique experience offered to current and prospective colleagues at Marsh
McLennan, and it’s inspired by our own colleagues’ voices. In 2024, we introduced our shared Colleague Value
Proposition (CVP), an articulation of why colleagues choose to work and invest their talents at Marsh McLennan.
You can be your best here captures the unique experience offered to current and prospective colleagues at Marsh
McLennan, and it’s inspired by our own colleagues’ voices. It is embodied in our key pillars: Impact, Leadership,
Culture, Career, and Rewards, all of which support our shared purpose: “We build the confidence to thrive through
the power of perspective.”
Each year since 2011, we have asked our colleagues to share their views on working at Marsh McLennan through
a company-wide engagement survey that is administered by a third party. In 2024, we expanded the survey with
questions on technology and the Company's strategy. The survey enables us to understand the evolution of our
culture and identify opportunities to build on strengths and address challenges, all with the intention of furthering
our productivity through an engaged workforce that can adapt to changing work environments and business
needs.
Talent & Inclusion. Our Company’s greatest strength is the collective talent of our people. We provide resources
to support colleagues to be their best at Marsh McLennan. We are committed to helping colleagues perform at
their best by encouraging regular discussions about their goals, performance, career aspirations and development
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opportunities. We enable all colleagues to advance their skills through professional development, learning from
talented colleagues, and support in taking on new challenges. We deliver professional development via a multi-
lingual, digital-first learning strategy, supplemented by formal programs for key groups. In 2024, we offered 520
developmental workshops comprising of professional skills, people management and leadership development.
Additionally, we launched our AI Academy to promote development of essential new skills. In the six months since
launch, nearly 35,000 colleagues have received their AI Academy credentials.
Health and Well-being. We are committed to enhancing the well-being of our colleagues through a
comprehensive value proposition that prioritizes health, wellness and work-life balance. We offer comprehensive
health insurance, including medical coverage and other core health benefits that are competitive in the market.
Recognizing the importance of mental wellness, we provide personalized tools and support, along with 24/7
access to Employee Assistance Programs for confidential counselling. Our critical incident support ensures that
colleagues receive the help they need in times of crisis, particularly in countries affected by disasters.
In addition to these health benefits, we offer competitive time-off policies, including a paid day off each year to
volunteer, reflecting our commitment to community engagement and personal fulfillment. We understand that life
can bring changing circumstances and we are here to support our colleagues through milestone life events, health
and economic challenges, and the integration of new technologies.
Total Rewards. We offer our colleagues rewards that are designed to be competitive in the market, attract and
retain highly talented individuals and recognize their performance and contributions. Base pay is one component.
We further encourage performance that aligns with the Company’s interests by awarding eligible colleagues with
discretionary incentives. These incentives, such as annual bonuses, sales incentives and long-term incentives are
awarded to colleagues in roles that have a significant impact on our short and long-term success. In addition to
health benefits, our total rewards also include retirement benefits, savings and stock investment plans in most
jurisdictions so that our colleagues can experience a full range of rewards that work for them.
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EXECUTIVE OFFICERS OF THE COMPANY
The executive officers and executive officer appointees of the Company are appointed annually by the Company’s
Board of Directors. The following individuals are the executive officers of the Company as of February 10, 2025:
Paul Beswick, age 50, is Senior Vice President and Global Chief Information and Operations Officer (CIOO) of
Marsh McLennan. As CIOO, Mr. Beswick leads the Business and Client Services team and oversees Marsh
McLennan's Operations and Technology teams in support of the Company's global businesses. Prior to assuming
this expanded role in January 2025, Mr. Beswick served as Chief Information Officer from 2021 to 2025. He was
previously a Partner and Global Head of Oliver Wyman Labs and the Digital Practice at Oliver Wyman where he
worked in various sectors, including financial services, retail, transportation, telecoms, and consumer goods.
Before this, Mr. Beswick headed Oliver Wyman's North American Retail Practice.
Katherine J. Brennan, age 46, is Senior Vice President and General Counsel of Marsh McLennan. In this role,
she leads Marsh McLennan’s global legal, compliance and public affairs function, which supports the Company’s
four businesses, Marsh, Guy Carpenter, Mercer and Oliver Wyman. She also leads the Company’s sustainability
efforts. Ms. Brennan has held several legal and compliance leadership roles at Marsh McLennan, serving most
recently as General Counsel, Marsh LLC. She also served as Deputy General Counsel, Corporate Secretary and
Chief Compliance Officer for Marsh McLennan from 2017 to 2021, and prior to that, as General Counsel of Guy
Carpenter. Ms. Brennan currently serves on the Board of the Red Cross of Greater New York.
John Q. Doyle, age 61, is President and Chief Executive Officer of Marsh McLennan. Previously, from 2021 to
2022 he served as Group President and Chief Operating Officer, responsible for the strategy and operational
objectives of Marsh McLennan’s four global businesses. He joined the firm in 2016 as President of Marsh, then
led Marsh as President and CEO from 2017 to 2021. An industry veteran with more than 35 years of management
experience, Mr. Doyle began his career at AIG, where he held several executive positions. He is a member of the
Board of the New York Police and Fire Widows’ and Children’s Benefit Fund, a Trustee of the Inner-City
Scholarship Fund, a member of the Board of Overseers of the Maurice R. Greenberg School of Risk
Management, Insurance and Actuarial Science at St. John’s University and a director of Catalyst Inc. Mr. Doyle
serves as the Chairman of the U.S. Federal Advisory Committee on Insurance.
Carmen Fernandez, age 51, is Senior Vice President and Chief People Officer for Marsh McLennan. Prior to her
appointment as Chief People Officer in January 2021, Ms. Fernandez held positions within Marsh McLennan for
15 years, most recently Deputy CHRO, CHRO of Guy Carpenter, and HR leadership roles at Mercer, including
North America HR Leader, Global HR Leader for the Career business and Chief of Staff in the Office of the CEO.
Before joining Marsh McLennan, Ms. Fernandez worked in investment banking at Goldman Sachs and Bank of
America. She began her career as a consultant with PricewaterhouseCoopers.
John Jones, age 53, is Chief Marketing and Communications Officer of Marsh McLennan. Previously, he served
as Chief Marketing and Communications Officer of Marsh from 2018 to 2022. Mr. Jones joined Marsh in 2016 as
Senior Vice President of Business Planning, leading strategic planning and global growth initiatives. Prior to that,
Mr. Jones was senior vice president of commercial marketing and strategy for AIG and has more than 25 years of
marketing, communications and strategy experience.
Dean Klisura, age 61, is President and Chief Executive Officer of Guy Carpenter and serves as Vice Chair of
Marsh McLennan. Prior to assuming this role in January 2022, he was President of Guy Carpenter, overseeing
the North America, International, Specialty and Global Analytics & Advisory business units. Prior to joining Guy
Carpenter, Mr. Klisura was President of Marsh Global Placement and Advisory Services, leading property and
casualty placement activities globally, as well as leading Bowring Marsh, the Insurer Consulting Group, and Marsh
Advisory. He joined Marsh in 1993 and held several key global leadership roles including President of Global
Specialties.
Mark McGivney, age 57, is Chief Financial Officer of Marsh McLennan. Prior to assuming this role in January
2016, Mr. McGivney held a number of senior financial management positions since joining the Company in 2007.
Most recently he was Senior Vice President, Corporate Finance of Marsh McLennan, and was responsible for
leading and directing the Company’s Corporate Development, Treasury and Investor Relations functions from
2014 until 2016. Prior to that, he served as Chief Financial Officer of Marsh, and Chief Financial Officer and Chief
Operating Officer of Mercer. His prior experience includes senior positions at The Hanover Insurance Group,
including serving as Senior Vice President of Finance, Treasurer, and Chief Financial Officer of the Property &
Casualty business, and investment banking positions at Merrill Lynch and PricewaterhouseCoopers.
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Martin South, age 60, is President and Chief Executive Officer of Marsh, a position he assumed in January 2022,
and oversees all of Marsh’s businesses and operations globally. He also serves as Vice Chair of Marsh
McLennan. With more than 30 years in the insurance industry, Mr. South joined Marsh for the first time in 1985
with Bowring Marsh, a Marsh McLennan broking unit. His industry experience includes senior leadership roles at
Zurich Financial Services, where he was a member of the Group Management Board, responsible for all of
Zurich’s operations outside of North America and Europe, and CEO of Zurich’s London operations. Since rejoining
Marsh in 2007, Mr. South has served as CEO of Marsh’s Asia-Pacific region, CEO of Marsh U.K. and Ireland,
CEO of Marsh Europe and CEO of Marsh U.S. and Canada.
Nicholas Studer, age 51, is Chief Executive Officer of Oliver Wyman Group, a role he assumed in July of 2021.
He also serves as Vice Chair of Marsh McLennan. From 2017 to 2021, Mr. Studer was the Managing Partner of
the Consumer, Industrial and Services Practice Group, before becoming Managing Partner of Oliver Wyman in
2021. He has held many senior positions at Oliver Wyman including Managing Partner of the Financial Services
Practice Group, Head of the European Finance and Risk Practice and Global head of the Corporate and
Institutional Banking practice. He has over 25 years of experience consulting in the U.K., Continental Europe, and
North America. Mr. Studer was a founding Director of TheCityUK, a founding advisory board member of the FICC
Markets Standards Board and is a member of the Sustainable Markets Initiative.
Pat Tomlinson, age 54, is President and Chief Executive Officer of Mercer and Vice Chair of Marsh McLennan, a
position he assumed in April of 2024. He also serves as CEO of Marsh McLennan US and Canada, with
responsibility for leading across businesses to address clients’ increasingly interconnected risk, strategy and
people challenges. From 2020 to 2024, Mr. Tomlinson served as Mercer's President of U.S. and Canada. Prior to
that, he served as a U.S. and Canada business leader, leading the U.S. East Market, where he guided Mercer's
Health, Wealth, and Career businesses to meet ever-changing client needs. Prior to joining Mercer in 2014, he
spent 17 years with Aon and served as an officer in the U.S. Army.
The Company is subject to the information reporting requirements of the Securities Exchange Act of 1934. In
accordance with the Exchange Act, the Company files with, or furnishes to, the SEC its annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statement for its annual
shareholders' meeting. The Company makes these reports and any amendments to these reports available free of
charge through its website, www.marshmclennan.com, as soon as reasonably practicable after they are filed with
or furnished to the SEC. The SEC also maintains a website at www.sec.gov that contains reports, proxy and
information statements and other information regarding issuers, like the Company, that file electronically with the
SEC.
The Company also posts on its website certain governance and other information for investors.
The Company encourages investors to visit these websites from time to time, as information is updated and new
information is posted. Website references in this report are provided as a convenience and do not constitute, and
should not be viewed as, incorporation by reference of the information contained on, or available through, the
websites. Therefore, such information should not be considered part of this report.
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Item 1A.
Risk Factors.
You should consider the risks described below in conjunction with the other information presented in this report.
These risks have the potential to materially adversely affect the Company's business, results of operations or
financial condition.
SUMMARY RISK FACTORS
Some of the factors that could materially and adversely affect our business, financial condition, results of
operations or prospects, include the following:
•
Our results of operations and investments could be adversely affected by geopolitical or macroeconomic
conditions;
•
We are subject to significant uninsured exposures arising from errors and omissions, breach of fiduciary
duty and other claims;
•
We cannot guarantee that we are or will be in compliance with all current and potentially applicable U.S.
federal and state or foreign laws and regulations, and actions by regulatory authorities or changes in
legislation and regulation in the jurisdictions in which we operate could have a material adverse effect on
our business;
•
Our business or reputation could be harmed by our reliance on third-party providers or introducers;
•
We may not be able to effectively identify and manage actual and apparent conflicts of interest;
•
We could incur significant liability or our reputation could be damaged if our information systems are
breached or we otherwise fail to protect client or Company data or information systems;
•
The costs to comply with, or our failure to comply with, U.S. and foreign laws related to privacy, data
security and data protection, such as the EU's General Data Protection Regulation (GDPR) and the
California Consumer Privacy Act, as amended by the California Privacy Rights Act, (CCPA), Australia's
CPS 234, as well as emerging AI-related laws such as the EU's AI Act, could adversely affect our financial
condition, operating results and our reputation;
•
Our business performance and growth plans could be negatively affected if we are not able to develop
and implement improvements in technology or respond effectively to the threat of digital disruption and
other technological change such as AI;
•
The loss of members of our senior management team or other key colleagues, or if we are unsuccessful
in our efforts to attract, retain and develop talent, could have a material adverse effect on our business;
•
Failure to maintain our corporate culture could adversely affect our business and reputation;
•
Increasing scrutiny and changing laws and expectations from regulators, investors, clients and our
colleagues with respect to our environmental, social and governance (ESG) practices and disclosure may
impose additional costs on us or expose us to new or additional risks;
•
We face significant competitive pressures in each of our businesses, including from disintermediation, as
our competitive landscape continues to evolve;
•
We rely on a large number of vendors and other third parties to perform key functions of our business
operations and to provide services to our clients. These vendors and third parties may act or fail to act in
ways that could harm our business;
•
Our inability to successfully recover should we experience a disaster or other business continuity or data
recovery problem could cause material financial loss, loss of human capital, regulatory actions,
reputational harm or legal liability;
•
We face risks when we acquire or dispose of businesses;
•
If we are unable to collect our receivables, our results of operations and cash flows could be adversely
affected;
•
We may not be able to obtain sufficient financing on favorable terms;
•
Our defined benefit pension plan obligations could cause the Company's financial position, earnings and
cash flows to fluctuate;
13
•
Our significant non-U.S. operations expose us to exchange rate fluctuations and various risks that could
impact our business;
•
Our quarterly revenues and profitability may fluctuate significantly;
•
Credit rating downgrades would increase our financing costs and could subject us to operational risk;
•
Our current debt level could adversely affect our financial flexibility;
•
The current U.S. tax regime has provisions which have unintended consequences and may also impact
our tax rate in varying degrees based on where our global income is earned;
•
We are exposed to multiple risks associated with the global nature of our operations;
•
Results in our Risk and Insurance Services segment may be adversely affected by a general decline in
economic activity;
•
Volatility or declines in premiums and other market trends may significantly impede our ability to grow
revenues and profitability;
•
Adverse legal developments and future regulations concerning how intermediaries are compensated by
insurers or clients, as well as allegations of anti-competitive behavior or conflicts of interest, could have a
material adverse effect on Marsh’s business, results of operations and financial condition;
•
Mercer’s Wealth business is subject to a number of risks, including risks related to public and private
capital market fluctuations, third-party asset managers and custodians, operations and technology risks,
trading and execution risks, conflicts of interest, ESG and greenwashing, asset performance and
regulatory compliance, that, if realized, could result in significant damage to our business;
•
Our businesses are subject to a number of risks related to the U.S. healthcare industry, including risks
related to healthcare regulation and reputational damage from negative publicity;
•
Revenues for the services provided by our Consulting segment may decline for various reasons, including
as a result of changes in economic conditions, the value of equity, debt and other asset classes, our
clients’ or an industry's financial condition or government regulation or an accelerated trend away from
actively managed investments to passively managed investments;
•
Factors affecting defined benefit pension plans and the services we provide relating to those plans could
adversely affect Mercer; and
•
The profitability of our Consulting segment may decline if we are unable to achieve or maintain adequate
utilization and pricing rates for our consultants.
RISKS RELATING TO THE COMPANY GENERALLY
Macroeconomic Risks
Our results of operations and investments could be adversely affected by geopolitical or macroeconomic
conditions.
Geopolitical and macroeconomic conditions, including from multiple major wars and global conflicts, slower GDP
growth or recession, lower interest rates, capital markets volatility, inflation and changes in insurance premium
rates affect our clients' businesses and the markets they serve. These conditions, including inflationary expense
pressure with our clients, may reduce demand for our services or depress pricing for those services, which could
have a material adverse effect on our results of operations.
For example, the war in Ukraine and the conflict throughout the Middle East have resulted in worldwide
geopolitical and macroeconomic uncertainty and may negatively impact other regional and global economic
markets (including Europe, the Middle East and the U.S.), companies in other countries (particularly those that
have done business with Russia or have substantial exposure to, or operations in, impacted countries) and
various sectors, industries and markets for securities and commodities globally, such as oil and natural gas, and
may increase financial market volatility and adversely impact regional and global economic markets, industries
and companies.
Changes in macroeconomic and geopolitical conditions could also shift demand to services for which we do not
have a competitive advantage, and this could negatively affect the amount of business that we are able to obtain.
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More generally, our investments, including our minority investments in other companies as well as our cash
investments and those held in a fiduciary capacity, are subject to general credit, liquidity, counterparty, foreign
exchange, market and interest rate risks. For example, fluctuations in interest rates and foreign exchange rates
between the U.S. dollar and foreign currencies may adversely affect our results of operations. Lower interest rates
may lead to a decline in our fiduciary income.
These risks may be exacerbated by global macroeconomic conditions, market volatility and regulatory, financial
and other difficulties affecting the companies in which we have invested or that may be faced by financial
institution counterparties. During times of stress in the banking industry, counterparty risk can quickly escalate,
potentially resulting in substantial trading and investment losses for corporate and other investors. In addition, we
may incur investment losses as a result of unusual and unpredictable market developments, and we may
experience lower earnings if the yields on investments begin to decline. If the banking system or the fixed income,
interest rate, credit or equity markets deteriorate, the value and liquidity of our investments could be adversely
affected. Finally, the value of the Company's assets held in other jurisdictions, including cash holdings, may
decline due to foreign exchange fluctuations.
Legal and Regulatory Risks
We are subject to significant uninsured exposures arising from errors and omissions, breach of fiduciary
duty and other claims.
Our businesses provide numerous professional services, including the placement of insurance and the provision
of consulting, investment advisory, investment management and actuarial services, to clients around the world. As
a result, the Company and its subsidiaries are subject to a significant number of errors and omissions, breach of
fiduciary duty, breach of contract and similar claims, which we refer to collectively as "E&O claims." In our Risk
and Insurance Services segment, such claims include allegations of damages arising from our failure to assess
clients’ risks, advise clients, place coverage, or notify insurers of potential claims on behalf of clients in
accordance with our obligations to them. For example, these claims could include allegations related to losses
from cyberattacks associated with policies where cyber risk was not specifically included or excluded in policies,
commonly referred to as “silent cyber.” In our Consulting segment, where we may act in a fiduciary capacity
through our investments business, such claims could include allegations of damages arising from the provision of
consulting, investment management (including, for example, from trading execution or other operational errors),
actuarial, pension administration and other services. We may also be exposed to claims related to services or
solutions offered by the Consulting segment in addition to consulting services. These Consulting segment
services frequently involve complex calculations and services, including (i) making assumptions about, and
preparing estimates concerning, contingent future events, (ii) drafting and interpreting complex documentation
governing pension plans, (iii) calculating benefits within complex pension structures, (iv) providing individual
financial planning advice including investment advice and advice relating to cashing out of defined benefit pension
plans, (v) providing investment advice, including guidance on asset allocation and investment strategy, and (vi)
managing client assets, including the selection of investment managers and implementation of a client’s
investment policy and strategies. We provide these services to a broad client base, including clients in the public
sector. Matters may relate to services provided by the Company dating back many years. Such claims may
subject us to significant liability for monetary damages, including punitive and treble damages, negative publicity
and reputational harm, and may divert personnel and management resources. We may be unable to effectively
limit our potential liability in certain jurisdictions, including through insurance, or in connection with certain types of
claims, particularly those concerning claims of a breach of fiduciary duty.
In establishing liabilities for E&O claims in accordance with U.S. generally accepted accounting principles ("U.S.
GAAP"), the Company uses case level reviews by inside and outside counsel, actuarial analysis by Oliver
Wyman, a subsidiary of the Company, and other methods to estimate potential losses. A liability is established
when a loss is both probable and reasonably estimable. The liability is assessed quarterly and adjusted as
developments warrant. In many cases, the Company has not recorded a liability, other than for legal fees to
defend a claim, because we are unable, at the present time, to make a determination that a loss is both probable
and reasonably estimable. Given the judgment involved in estimating and establishing such liabilities, as well as
the unpredictability of E&O claims and the litigation that can flow from them, it is possible that an adverse
outcome in a particular matter could have a material adverse effect on the Company's business, results of
operations or financial condition.
15
We cannot guarantee that we are or will be in compliance with all current and potentially applicable U.S.
federal and state or foreign laws and regulations, and actions by regulatory authorities or changes in
legislation and regulation in the jurisdictions in which we operate could have a material adverse effect on
our business.
Our activities are subject to extensive regulation under the laws of the U.S. and its various states, the United
Kingdom, the European Union and its member states, Australia and the other jurisdictions in which we operate.
We are also subject to trade sanctions laws relating to countries such as Afghanistan, Belarus, Cuba, Iran, North
Korea, Russia, Syria, Ukraine (Russia-controlled territories) and Venezuela, and anti-corruption laws such as the
U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act. We are subject to numerous other laws on matters
as diverse as internal control over financial reporting and disclosure controls and procedures, securities
regulation, data privacy and protection, cybersecurity, taxation, anti-trust and competition, immigration, wage-and-
hour standards and employment and labor relations.
The U.S. and foreign laws and regulations that apply to our operations are complex and may change rapidly, and
our efforts to comply and keep up with them require significant resources. In some cases, these laws and
regulations may decrease the need for our services, increase our costs, negatively impact our revenues or
impose operational limitations on our business, including on the products and services we may offer or on the
amount or type of compensation we may collect. In particular, the financial and operational impact of complying
with laws and regulations has increased in the current global environment of increased regulatory activity and
enforcement. In addition, in the United States, shifts in regulatory priorities, policy approaches or interpretations of
existing laws by federal, state or local governments occur following changes in U.S. presidential administrations,
which often leads to changes involving the level of regulatory oversight and focus on businesses and certain
industries, particularly financial services. Changes or uncertainty with respect to the applicable laws and
regulations may impose additional and unforeseen costs on us or pose new or previously immaterial risks to us.
There can be no assurance that current and future government regulations will not adversely affect our business,
and we cannot predict new regulatory priorities, the form, content or timing of regulatory actions, and their impact
on our business and operations. In addition, geopolitical conflict, such as the war in Ukraine and the conflict
throughout the Middle East, has resulted in, and may continue to result in, new and rapidly evolving trade
sanctions, which may increase our costs, negatively impact our revenues or impose additional operational
limitations on our businesses. Changes to tax laws, trade agreements, tariffs, labor policies, or environmental
standards could also result in increased costs or operational changes.
While we attempt to comply with applicable laws and regulations, there can be no assurance that we, our
colleagues, our consultants and our contractors and other agents are in full compliance with such laws and
regulations or interpretations at all times, or that we will be able to comply with any future laws or regulations. If
we fail to comply or are accused of failing to comply with applicable laws and regulations, including those referred
to above, or new and evolving regulations regarding cybersecurity, AI or sustainability matters, we may become
subject to investigations, criminal penalties, civil remedies or other consequences, including fines, injunctions,
loss of an operating license or approval, increased scrutiny or oversight by regulatory authorities, the suspension
of individual employees, limitations on engaging in a particular business or redress to clients or other parties, and
we may become exposed to negative publicity or reputational damage. Moreover, our failure to comply with laws
or regulations in one jurisdiction may result in increased regulatory scrutiny by other regulatory agencies in that
jurisdiction or regulatory agencies in other jurisdictions. These inquiries consume significant management
attention, and the cost of compliance and the consequences of failing to be in compliance could therefore have a
material adverse effect on our business.
In most jurisdictions, government regulatory authorities have the power to interpret and amend or repeal
applicable laws and regulations, and have discretion to grant, renew and revoke the various licenses and
approvals we need to conduct our activities. Such authorities may require the Company to incur substantial costs
in order to comply with such laws and regulations. In some areas of our businesses, we act on the basis of our
own or the industry's interpretations of applicable laws or regulations, which may conflict from state to state or
country to country. In the event those interpretations eventually prove different from the interpretations of
regulatory authorities, we may be penalized or precluded from carrying on our previous activities. Moreover, the
laws and regulations to which we are subject may conflict among the various jurisdictions and countries in which
we operate, which increases the likelihood of our businesses being non-compliant in one or more jurisdictions.
In addition, we may be responsible for the legal and regulatory liabilities of companies that we acquire.
16
Additional information regarding certain ongoing investigations and certain other legal and regulatory proceedings
is set forth in Note 16, Claims, Lawsuits and Other Contingencies, in the notes to the consolidated financial
statements included under Part II, Item 8 of this report.
Our business or reputation could be harmed by our reliance on third-party providers or introducers.
We currently utilize the services of hundreds of third-party providers to meet the needs of our clients around the
world.
There is a risk that our third-party providers or introducers engage in business practices that are prohibited by our
internal policies or violate applicable laws and regulations, such as the U.S. Foreign Corrupt Practices Act and the
U.K. Anti-Bribery Act.
We may not be able to effectively identify and manage actual and apparent conflicts of interest.
Given the significant volume of our engagements, potential conflicts of interest may arise across our businesses.
There is a risk that we may not effectively identify and manage potential conflicts of interest, including but not
limited to where our services to a client conflict, or are perceived to conflict, with the interests of another client or
our own interests, where we receive revenue or benefits from third-parties with whom we conduct business
(including but not limited to insurers, investment managers and vendors) and where our colleagues have personal
interests.
Cybersecurity, Data Protection and Technology Risks
We could incur significant liability or our reputation could be damaged if our information systems are
breached or we otherwise fail to protect client or Company data or information systems.
In operating our business and providing services and solutions to clients, we collect, use, store, transmit and
otherwise process certain electronic information, including personal, confidential, proprietary and sensitive data
such as financial records, health care, mergers and acquisitions and personal data of our clients, colleagues and
vendors. We rely on the efficient, uninterrupted and secure operation of complex information technology systems
and networks to operate our business and securely process, transmit and store electronic information. In the
normal course of business, we also share electronic information with our vendors and other third parties, which in
some cases is critical to our ability to deliver services to our clients. This electronic information comprises
sensitive and confidential data, including information related to financial records, health care, mergers and
acquisitions and clients’ personal data. Our information technology systems and information security control
systems, and those of our numerous third-party providers, as well as the control systems of critical infrastructure
they rely on, such as power grids, and undersea cables, are potentially vulnerable to unauthorized access,
damage or interruption from a variety of external threats, including software bugs, physical attack, cyberattacks,
computer viruses and other malware, malicious or destructive code, ransomware, social engineering attacks
(including phishing, business e-mail compromise and digital or telephonic impersonation), hacking theft, denial-of-
service attacks and other types of data and systems-related modes of attack. The techniques used to achieve
such unauthorized access, damage or interruption change frequently and new techniques may not be identified
until they are launched against a target, and we may be unable to anticipate these techniques or implement
adequate preventative or remedial measures, resulting in potential data loss, data unavailability, data corruption or
other damage to information technology systems. In addition, remote and hybrid work arrangements have
increased the risk of phishing and other cybersecurity attacks, unauthorized dissemination of personal,
confidential, proprietary or sensitive data, and unauthorized access to company computing assets. Further, a
disruption of physical infrastructure could impact our ability to conduct business and service clients. This may
include deliberate or unintentional disruption of service to electrical systems, satellite communications, undersea
or terrestrial cable systems, Internet services, or other systems our colleagues or third parties rely on us to
conduct business in a multitude of jurisdictions across the globe. Disruptions may be the result of weather, natural
disaster, war, terrorism, pandemic, or other natural or geopolitical events. Our systems are also subject to
compromise from internal threats such as fraud, mistakes, misconduct or other improper action by employees,
vendors and other third parties with otherwise legitimate access to our systems. Moreover, we face the ongoing
challenge of managing access controls in a complex environment. The latency of a compromise is often
measured in months but could be years, and we may not be able to detect a compromise in a timely manner, and
even if detected, there can be no assurance that we can mitigate or remediate such compromise in an adequate
or timely manner. We could experience significant financial and reputational harm if our information systems are
breached, sensitive client or Company data are compromised, surreptitiously modified, rendered inaccessible for
any period of time or maliciously made public, or if we fail to make adequate or timely disclosures to the public,
17
law enforcement agencies or regulators following any such event, whether due to delayed discovery or a failure to
follow existing protocols.
Cyberattacks are increasing in frequency and evolving in nature. We are at risk of attack by a variety of
adversaries, including nation states, state-sponsored organizations, opportunistic attacks, and organized crime
and hackers, through use of increasingly sophisticated methods of attack, including the deployment of AI to find
and exploit vulnerabilities, "deep fakes", long-term, persistent attacks (referred to as advanced persistent threats)
and the use of the IT supply chain to introduce malware through software updates or compromised suppliers
accounts or hardware. In particular, the advance of AI and large language models has given rise to additional
vulnerabilities and potential entry points for cyber threats. With generative AI tools, threat actors may have
additional tools to automate breaches or persistent attacks, evade detection, or generate sophisticated phishing
emails or other forms of digital impersonation, doing so quickly and without requiring deep technical
understanding of potential exploits. In addition, increasing use of generative AI models in our internal systems
may create new attack methods for adversaries. Because generative AI is a new field, understanding of
cybersecurity risks and protection methods continues to develop, and features that rely on generative AI, including
in services provided to us by third parties, may be susceptible to unanticipated cybersecurity threats from
sophisticated adversaries and other cybersecurity incidents. Further, we are at increased risk of a cyberattack
during periods of heightened geopolitical conflict, such as the war in Ukraine and the conflict throughout the
Middle East, as diplomatic events and economic policies may trigger espionage or retaliatory cyber incidents.
Additionally, nation states may deploy threat actors masquerading as potential candidates for hire at target
companies to perform corporate espionage or execute internal cyber threat activities. Despite our efforts to
comply with applicable cybersecurity requirements and mitigate risks of cybersecurity threats, we cannot be
certain that our security measures will definitively prevent, contain, detect, or remediate all cybersecurity threats
or incidents or other instructions from malware currently in existence or developed in the future.
As the breadth and complexity of the technologies we use and the software and platforms we develop continue to
grow, including as a result of the use of mobile devices, cloud services, "open source" software, social media tools
and the increased reliance on devices connected to the Internet (known as the "Internet of Things"), the potential
risk of security breaches and cyber-attacks also increases. Despite ongoing efforts to improve our ability to protect
data from compromise, we may not be able to protect all of our data across our diverse systems. Our efforts to
improve and protect data from compromise may also identify previously undiscovered instances of security
breaches or other cyber incidents. Our policies, employee training (including phishing prevention training),
procedures and technical safeguards may also be insufficient to prevent, detect or remediate improper access to
confidential, personal or proprietary information. In addition, the competition for talent in the data privacy and
cybersecurity space is intense, and we may also be unable to hire, develop or retain suitable talent capable of
adequately detecting, mitigating or remediating these risks.
Should an attacker gain access to our network using compromised credentials of an authorized user, we are at
risk that the attacker might successfully leverage that access to compromise additional systems and data. Certain
measures that could increase the security of our systems, such as data encryption (including encryption of data at
rest), heightened monitoring and logging, scanning for source code errors or deployment of multi-factor
authentication, take significant time and resources to deploy broadly, and such measures may not be deployed in
a timely manner or be effective against an attack. The inability to implement, maintain and upgrade adequate
safeguards could have a material adverse effect on our business.
Our information systems must be continually updated, patched, and upgraded to protect against known
vulnerabilities. The volume of new software and infrastructure vulnerabilities continues to increase markedly, as
has the criticality of patches and other mitigation and remedial measures. In addition to mitigating and remediating
newly identified vulnerabilities, previously identified vulnerabilities must also be continuously addressed.
Accordingly, we are at risk that cyberattackers exploit these vulnerabilities before they have been communicated
by vendors or addressed. Due to the large number and age of the systems and platforms that we operate, the
increased frequency at which vendors are issuing security patches to their products, the need to test patches and,
in some cases, coordinate with clients and vendors, before they can be deployed, we perpetually face the
substantial risk that we cannot deploy patches in a timely manner. Some security patches may not be compatible
with other software running on our systems and therefore may not be able to be deployed. We are also dependent
on third party vendors to keep their systems patched and secure in order to protect our data. Any failure related to
these activities could have a material adverse effect on our business.
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We have numerous vendors and other third parties who receive personal information from us in connection with
the services we offer our clients and our employees. We also use hundreds of IT vendors and software providers
to maintain and secure our global information systems infrastructure. In addition, we have migrated certain data,
and may increasingly migrate data, to the cloud where it is hosted by third-party providers. Some of these vendors
and third parties also have direct access to our systems or data. We are at risk of a cyberattack involving a vendor
or other third parties, which could result in a breakdown of such third party’s data protection processes or the
cyberattackers gaining access to our infrastructure or data through a supply chain attack. Highly publicized data
security breaches, such as the October 2023 attack on Okta, may embolden malicious actors to target the IT
supply chain and providers of business software. In addition, we depend on our third-party vendors to keep
software current. Our systems’ availability could be impacted by poor or improperly tested software code and
updates deployed to our environment by a third-party through normal and expected processes, which occurred
with the CrowdStrike event in July 2024. Our control over and ability to monitor the cybersecurity practices of our
third-party vendors and service providers, and other third parties with whom we do business, remains limited, and
there can be no assurance that we can prevent, mitigate, or remediate the risk of any compromise or failure in the
development processes or cybersecurity infrastructure or IT controls owned or controlled by such third parties.
Additionally, any contractual protections with such third parties, including our right to indemnification, if any, may
be limited or insufficient to prevent a negative impact on our business from such compromise or failure.
We have a history of making acquisitions and investments. The process of integrating the information systems of
any businesses we acquire is complex and exposes us to additional risk. For instance, we may not adequately
identify weaknesses and vulnerabilities in an acquired entity’s information systems, either before or after the
acquisition, which could affect the value we are able to derive from the acquisition, expose us to unexpected
liabilities or make our own systems more vulnerable to a cyberattack. In addition, if we discover a historical
compromise, security breach or other cyber incident related to the target’s information systems following the close
of the acquisition, we may be liable and exposed to significant costs and other unforeseen liabilities. We may also
be unable to integrate the systems of the businesses we acquire into our environment in a timely manner, which
could further increase these risks until such integration takes place.
We have experienced data incidents and cybersecurity breaches, such as malware incursions (including
computer viruses and ransomware), vulnerabilities in the software on which we rely, users exceeding their data
access authorization, employee misconduct and incidents resulting from human error, such as emails sent to the
wrong recipient, loss of portable and other data storage devices or misconfiguration of software or hardware
resulting in inadvertent exposure of personal, sensitive, confidential or proprietary information or reduction of
system availability. Like many companies, we are also subject to social engineering attacks such as WhatsApp
scams and regular phishing email campaigns directed at our employees that can result in malware infections,
fraud and data loss. Although these incidents have resulted in data loss and other damages, to date, they have
not had a material adverse effect on our business or operations. In the future, these types of incidents could result
in personal, sensitive, confidential or proprietary information, including client, employee or Company data, being
lost or stolen, surreptitiously modified, rendered inaccessible for any period of time, or maliciously made public,
which could have a material adverse effect on our business. In the event of a cyberattack, we might have to take
our systems offline, which could interfere with services to our clients or damage our reputation. A cyberattack may
also result in systems or data being encrypted or otherwise unavailable due to ransomware or other malware. We
also may be unable to detect an incident, assess its severity or impact, or appropriately respond in a timely or
adequate manner. In addition, our liability insurance, which includes cyber insurance, may not be sufficient in type
or amount to cover us against claims related to security breaches, cyberattacks and other related data and
system incidents. Further, we cannot be sure that our existing coverage will continue to be available on
acceptable terms or at all or that our insurers will not deny coverage as to any future claim.
The costs to comply with, or our failure to comply with, U.S. and foreign laws related to privacy, data
security and data protection, such as the EU's General Data Protection Regulation (GDPR) and the
California Consumer Privacy Act, as amended by the California Privacy Rights Act, (CCPA), Australia's
CPS 234, as well as emerging AI-related laws such as the EU's AI Act, could adversely affect our financial
condition, operating results and our reputation.
Improper collection, use, disclosure, cross border transfer, retention and other processing of confidential,
personal, or proprietary data could result in regulatory scrutiny, legal and financial liability, or harm to our
reputation. In operating our business and providing services and solutions to clients, we store and transfer
sensitive employee and client data, including personal data, in and across multiple jurisdictions.
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We collect data from clients and individuals located all over the world and leverage systems and teams to process
it. As a result, we are subject to a variety of laws and regulations in the U.S., Europe and around the world
regarding privacy, data protection, data security and cyber security. These laws and regulations are continuously
evolving and developing. Some of these laws and regulations are increasing the level of data handling
restrictions, including rules on data localization, all of which could affect our operations and result in regulatory
liability and high fines. In particular, high-profile data breaches at major companies continue to be disclosed
regularly, which is leading to even greater regulatory scrutiny and significant fines, which are not limited to data
breaches as regulators increasingly focus on other data processing activities, including those related to ad-tech
and “data subject” rights. The number of laws that apply to us keeps increasing and the interpretation of such laws
is often uncertain and may be conflicting.
At the international level, we are subject to an increasing number of comprehensive privacy laws including, for
example, those passed in Indonesia, the Kingdom of Saudi Arabia, India and Australia. Many of these laws, which
are modeled after the GDPR, have greatly increased the jurisdictional reach of privacy laws and added a broad
array of requirements for handling personal data, such as the public disclosure of data breaches, data protection
impact assessments, data portability and the appointment of data protection officers in some cases. Given the
breadth and depth of changes in data protection obligations, including classifying data and committing to a range
of administrative, technical and physical controls to protect data and enable data transfers across borders, our
compliance with such laws will continue to require time, resources and review of the technology and systems we
use. Despite a proliferation of regulatory guidance papers, there remains uncertainty in key areas related to these
laws, and that uncertainty could result in potential liability for our failure to meet our obligations, including the
possibility of significant fines some of which can amount to 4% or more of our global revenue. Further, despite
developments such as the U.S.- EU Data Privacy Framework and the U.S.- U.K. Data Bridge, there remains a
high level of uncertainty concerning the flow of personal information between the U.S. and EU, between the U.S.
and the U.K. and between the U.K. and the EU. This uncertainty may impair our ability to offer our existing and
planned products and services or increase our cost of doing business. Some of the global laws enacted in recent
years, including those in China and the Kingdom of Saudi Arabia, also include data localization elements that will
require that certain personal data stay within their borders. These requirements are complex and our efforts to
comply with them require significant resources, and we cannot guarantee we are or will be in full compliance with
such laws at all times.
At the U.S. federal level, we are subject to various privacy laws and regulations, including those promulgated
under the authority of the U.S. Federal Trade Commission, which has the authority to regulate and enforce
against unfair or deceptive acts or practices in or affecting commerce, including with respect to data privacy and
cybersecurity. At the U.S. state level, we are subject to laws and regulations related to privacy, such as the CCPA,
which introduced concepts such as transparency and rights like access and deletion, that have been enacted by
over twenty states with more such laws expected to pass in future years. These laws establish a privacy
framework for covered businesses, including various obligations imposed on them related to the personal
information they collect and use, and offer various rights for their state residents. Some of these laws provide a
private right of action for violations and in some cases damages may be significant. Many of these laws diverge
from the CCPA and create their own set of rules, and this proliferation of inconsistent state level privacy laws will
add operational complexity and increased risk of noncompliance or violations which could trigger enforcement
action or litigation.
In addition to data protection and data privacy laws, foreign countries and U.S. states are enacting cybersecurity
laws and regulations. For example, in late 2023 the New York State Department of Financial Services (NYDFS)
issued amendments to its previous cybersecurity regulations which imposed obligations on companies such as
Marsh McLennan, including for example, requiring companies to provide evidence of how they are implementing
their data retention, data governance and data classifications policies and procedures. A number of states have
also adopted laws covering data collected by insurance licensees that include security and breach notification
requirements. All of these evolving compliance and operational requirements impose significant costs that are
likely to increase over time, may divert resources from other initiatives and projects and could restrict the way
services involving data are offered, all of which may adversely affect our results of operations. Failure to comply
with some of these obligations, especially those related to data retention requirements, could expose us to
regulatory fines and other penalties.
Many statutory requirements, both in the U.S. and abroad, include obligations for companies to notify individuals
of security breaches involving certain personal information, which could result from breaches experienced by us
or our vendors. For example, laws in all 50 U.S. states generally require businesses to provide notice under
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certain circumstances to consumers whose personal information has been disclosed as a result of a breach. In
addition to government regulation, our agreements with certain third parties may require us to notify them in the
event of a security breach. Further, privacy advocates and industry groups have and may in the future propose
self-regulatory standards. These laws, rules and industry standards may legally or contractually apply to us, or we
may elect to comply with them. We expect that there will continue to be new proposed laws and regulations
concerning data privacy and security, and we cannot yet determine the impact such future laws, regulations and
standards may have on our business. Many of these laws and rules also include strict notification requirements for
organizations related to confirmed or suspected breaches. This narrow notification window is often too short to
fully validate the facts, and there is an increased risk of reporting a false alarm or immaterial breach, which may
lead to reputational damage despite there not being an actual data breach.
We post public privacy notices and other documentation regarding our collection, use, disclosure, cross-border
transfer, retention, and other processing of personal information. Although we endeavor to comply with our
published notices and other documentation, we may at times fail to do so or may be perceived to have failed to do
so. Moreover, despite our efforts, we may not be successful in achieving compliance if our employees,
contractors, service providers, vendors or other third parties with whom we do business fail to comply with our
published notices and documentation. Such failures could carry similar consequences or subject us to potential
enforcement actions or investigations if they are found to be deceptive, unfair or misrepresentative of our actual
practices.
Furthermore, U.S. and global regulators continue to focus their enforcement actions and investigations on
website-related practices, including the proper use of "cookies", pixels and other online trackers, as well as the
use of online session recording tools. As we use such tools in our website environment, we are at risk of being
impacted by such activity, including fines and cease and desist orders.
Additionally, certain foreign, U.S. federal and U.S. state governments are increasingly enacting, or are considering
enacting, AI-related laws and regulations, such as the EU's AI Act, the AI Transparency Act of California and the AI
Act of Colorado, which impose complex new obligations on developers and providers of AI systems. Given the
emerging nature of AI technology, the lack of legal or regulatory precedent, and the ambiguity surrounding key
definitions, complying with these evolving legal and regulatory frameworks is likely to be both challenging and
costly. There is a risk that we may not fully meet the requirements set forth by these laws and regulations,
potentially exposing us to legal, regulatory or financial penalties. Furthermore, as new and divergent AI laws and
regulations continue to emerge globally, they could significantly increase our risk of liability and fines, impact our
ability to deploy and utilize AI tools across different jurisdictions, disrupt operations and prospective business and
increase our compliance burdens.
Privacy or AI-related legal or regulatory violations, including unauthorized use disclosure or transfer of sensitive,
personal or confidential client or Company data, whether through systems failure, employee negligence, fraud or
misappropriation, by the Company, our vendors or other parties with whom we do business (if they fail to meet the
standards we impose) could damage our reputation and subject us to significant litigation, monetary damages,
regulatory enforcement actions, fines and criminal prosecution in one or more jurisdictions where we operate.
Given the complexity of operationalizing the various privacy, data security, data protection and AI laws and
regulations mentioned above, the complexity of proposed compliance frameworks and the continued lack of
certainty on how to implement their requirements, we and our clients are at risk of enforcement actions taken by
applicable regulators or authorities around the world or litigation from third parties, including consumer advocacy
groups acting on behalf of data subjects. Additionally, due to the ongoing fast pace of legislative and regulatory
activity, we may not be able to respond quickly or effectively to new legislative, regulatory and other
developments. These changes may also impair our ability to offer our existing or planned products and services
and increase our cost of doing business in various countries.
Our business performance and growth plans could be negatively affected if we are not able to develop
and implement improvements in technology or respond effectively to the threat of digital disruption and
other technological change such as AI.
We depend in large part on our technology systems for conducting business, as well as for providing the data and
analytics we use to manage our business. As a result, our business success is dependent on maintaining the
effectiveness of existing technology systems and on continuing to develop and enhance technology systems that
support our business processes and strategic initiatives in a cost and resource efficient manner, particularly as our
business processes become more digital. We have a number of strategic initiatives involving investments in or
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partnerships with technology companies as part of our growth strategy, as well as investments in technology,
including generative AI, and infrastructure to support our own systems.
These investments may be costly and require significant capital expenditures, may not be profitable or may be
less profitable than what we have experienced historically. In addition, investments in technology systems may not
deliver the benefits or perform as expected, or may be replaced or become obsolete more quickly than expected,
which could result in operational difficulties or additional costs. In some cases, we also depend on key vendors
and partners to provide technology and other support for our strategic initiatives. If these vendors or partners fail
to perform their obligations or otherwise cease to work with us, our ability to execute on our strategic initiatives
could be adversely affected. If we do not keep up with technological changes or execute effectively on our
strategic initiatives, our business and results of operations could be adversely impacted.
In addition, to remain competitive in many of our business areas, we must anticipate and respond effectively to
the threat of digital disruption and other technological change such as generative AI. The threat comes from
traditional players, such as insurers, through disintermediation as well as from new entrants, such as technology
companies, "Insurtech" start-up companies and others. In the past few years, there has been a substantial
increase in private equity investments into these Insurtech companies. These players are focused on using
technology and innovation, including AI, digital platforms, data analytics, robotics and blockchain, to simplify and
improve the client experience, increase efficiencies, alter business models and effect other potentially disruptive
changes in the industries in which we operate.
We are actively investing in generative AI tools. While our internal generative AI tool, LenAI, was designed to meet
our standards for data security and to address and mitigate the risks associated with this new technology, our use
of generative AI in certain products, services and operations may present risks and challenges that remain
uncertain due to the relative novelty of this technology. These risks may include operational disruptions or failures,
reputational harm, enhanced governmental or regulatory scrutiny, litigation or ethical concerns. The models
underlying AI tools may be incorrectly or inadequately designed or implemented and trained on, or otherwise use,
data or algorithms that are (and the output generated by such AI tools also may be) biased, unethical,
discriminatory, incomplete, inaccurate, misleading or poor-quality, any of which may not be easily detectable. To
the extent that we do not have sufficient rights to use the data used in or output generated by such AI tools, we
may be subject to litigation by holders of third-party intellectual property, privacy, publicity, contractual or other
rights. If any of our employees, contractors, consultants, vendors or service providers use any third-party AI
powered software in connection with our business or the services they provide to us, it may lead to the inadvertent
disclosure or incorporation of our confidential information into publicly available training sets, which may impact
our ability to realize the benefit of, or adequately maintain, protect and enforce our intellectual property or
confidential information, harming our competitive position and business. In addition, the use of AI by other
companies has resulted in, and our use of AI may in the future result in, data incidents and cybersecurity
breaches. While we have implemented certain mitigation measures and governance related to the proliferation of
AI tools, these measures may be inadequate or may not satisfy a growing number of legal and regulatory
requirements related to AI. Moreover, if we are perceived to exaggerate the effectiveness, safety or ethical design
of AI systems, this could lead to regulatory enforcement, litigation or reputational harm. Any misrepresentation,
intentional or unintentional, of our AI-related capabilities or initiatives could also erode trust among clients and
regulators. There can be no assurance that our use of AI will enhance our products, services or operations or
otherwise result in our intended outcomes.
Competitive Risks
The loss of members of our senior management team or other key colleagues, or if we are unsuccessful
in our efforts to attract, retain and develop talent, could have a material adverse effect on our business.
We rely upon the contributions of our senior management team to establish and implement our business strategy
and to manage the future growth of our business. We may be unable to retain them, particularly if we do not offer
employment terms that are competitive with the rest of the labor market. The loss of any of the senior
management team could limit our ability to successfully execute our business strategy or adversely affect our
ability to retain existing and attract new clients. Moreover, we could be adversely affected if we fail to adequately
plan for the succession of members of our senior management team or if our succession plans do not operate
effectively.
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Across all of our businesses, our colleagues are critical to developing and retaining client relationships as well as
performing the services on which our revenues are earned. It is therefore important for us to attract, incentivize
and retain significant revenue-producing employees and the key managerial and other professionals who support
them. We face numerous challenges in this regard, including the intense competition for talent, which has
accelerated in recent years. Such challenges include the increased mobility of colleagues in light of more flexible
working models, market dislocation resulting from proposed and actual combinations in the industry, raids by
competitors, and fostering an inclusive workplace.
Losing colleagues who manage or support substantial client relationships or possess substantial experience or
expertise could adversely affect our ability to secure and complete client engagements, which could adversely
affect our results of operations. If a key employee were to join an existing competitor or form a competing
company, some of our clients could choose to use the services of a competitor instead of our services. If a
colleague joins us from a competitor and is subject to enforceable restrictive covenants, we may not be able to
secure client engagements or maximize the colleague's potential. In addition, regulation or legislation impacting
the workforce, such as the proposed U.S. Federal Trade Commission rule regarding noncompete clauses, may
lead to increased uncertainty and competition for talent.
Failure to maintain our corporate culture could adversely affect our business and reputation.
We strive to foster a culture in which our colleagues act with integrity and feel comfortable speaking up about
potential misconduct. We are a people business, and a well-defined and consistently reinforced corporate culture,
starting with a strong “tone from the top,” is critical to ensuring compliance with laws and regulations, attracting
and retaining top talent and maintaining the trust of our clients, business partners and other stakeholders. As a
multinational company operating across many geographies, failure to effectively align our workforce with our core
values and ethical principles may impair our ability to achieve our strategic objectives, particularly as we execute
operational model changes and integrate acquisitions. If we fail to maintain our corporate culture, there is an
increased risk of unethical behavior or regulatory violations, which could result in legal penalties, reputational
damage and financial harm.
Increasing scrutiny and changing laws and expectations from regulators, investors, clients and our
colleagues with respect to our environmental, social and governance (ESG) practices and disclosure may
impose additional costs on us or expose us to new or additional risks.
There is continued focus, including from governmental organizations, regulators, investors, colleagues and
clients, on ESG and sustainability issues. The regulatory landscape related to these issues continues to evolve,
with new laws and reporting requirements introduced across various jurisdictions, including in the U.S., the U.K.,
the European Union (E.U.) and Australia. These laws and regulations may impose additional compliance or
disclosure obligations on us. Inconsistent or even conflicting requirements across jurisdictions may also increase
compliance challenges, add operational costs, or lead to stakeholder dissatisfaction.
As these ESG reporting requirements and standards evolve, we continue to evaluate and update our public
disclosures in these areas, including refining our disclosure of metrics and sustainability goals in accordance with
the guidance and our own ESG assessments and priorities. These disclosures, metrics and sustainability goals
and any failure to accurately report or comply with federal, state or international ESG laws and regulations, or
achieve progress on our metrics and sustainability goals on a timely basis, or at all, may result in legal and
regulatory proceedings against us and negatively impact our reputation. Implementation of our ESG initiatives
also depends in part on third-party performance or data that is outside the Company's control. In addition,
heightened regulatory scrutiny of ESG and sustainability-related products, funds, investment strategies and
advice has increased the risk that we could be perceived as, or accused of, making inaccurate or misleading
statements, or that we have otherwise run afoul of regulation. Such perceptions or accusations could damage our
reputation, result in litigation or regulatory enforcement actions, and adversely affect our business.
Organizations that provide information to investors on corporate governance and related matters have also
developed ratings processes for evaluating companies on their approach to ESG matters, and unfavorable ratings
of our company or our industries may lead to negative investor sentiment and the diversion of investment to other
companies or industries, exclusion of our stock from ESG-oriented indices or investment funds or harm our
relationships with regulators and the communities in which we operate.
Moreover, public opinion and potential legal actions regarding ESG-related initiatives remain highly dynamic and
can vary across stakeholders and geographies. Balancing these competing expectations globally is complex.
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The impact of new laws and regulations, negative public perception, adverse publicity or negative comments in
social media could damage our reputation, and be costly to defend, if we do not, or are not perceived to,
adequately address these issues. Any harm to our reputation could impact colleague engagement and retention
and the willingness of clients and our partners to do business with us.
We face significant competitive pressures in each of our businesses, including from disintermediation, as
our competitive landscape continues to evolve.
As a global professional services firm, the Company faces competition in each of its businesses, and the
competitive landscape continues to change and evolve. Our ability to compete successfully depends on a variety
of factors, including the quality and expertise of our colleagues, our geographic reach, the sophistication and
quality of our services, our pricing relative to competitors, our clients’ ability to self-insure or use internal resources
instead of consultants, and our ability to respond to changes in client demand and industry conditions. Any failure
by us to design and execute operating model changes that capture opportunities and efficiencies at the
intersections of our businesses and maximize the value we deliver to clients and stakeholders could have an
adverse impact on our business. Additionally, some of our competitors may have greater financial resources, or
may be better positioned to respond to technological and other changes in the industries we serve, and they may
be able to compete more effectively. Furthermore, the competition for talent continues to accelerate.
Across our Risk and Insurance Services segment, we operate in a variety of markets and face different
competitive landscapes. In addition to the challenges posed by capital market alternatives to traditional insurance
and reinsurance, we compete against a wide range of other insurance and reinsurance brokerage and risk
advisory firms that operate on a global, regional, national or local scale for both client business and employee
talent. In recent years, private equity sponsors have invested tens of billions of dollars into the insurance
brokerage sector, transforming existing players and creating new ones to compete with large brokers. We also
compete with insurance companies that market and service their insurance products directly to consumers and
reinsurance companies that market and service their products directly to insurance companies, in each case
without the assistance of brokers or other market intermediaries, and with various other companies that provide
risk-related services or alternatives to traditional brokerage services, including those that rely almost exclusively
on technological solutions or platforms. This competition is intensified by an often "syndicated" or "distributed"
approach to the purchase of insurance and reinsurance brokerage services, where a client engages multiple
brokers to service different portions of the client's account. In addition, third party capital providers have entered
the insurance and reinsurance risk transfer market offering products and capital directly to our clients that serve
as substitutes for traditional insurance.
In our Consulting segment, we compete for business with numerous consulting firms and similar organizations,
many of which also provide, or are affiliated with firms that provide, accounting, information systems, technology
and financial services. Such competitors may be able to offer more comprehensive products and services to
potential clients, which may give them a competitive advantage. Some of our competitors also may be able to
invest more significant capital in technology and digital solutions. In certain sub-segments, we compete in highly
fragmented markets or with start-ups that may be able to offer solutions at a lower price or on more favorable
conditions.
In addition, companies in the industries that we serve may seek to achieve economies of scale and other
synergies by combining with or acquiring other companies. If two or more of our current clients merge, or
consolidate or combine their operations, it may decrease the amount of work that we perform for these clients.
We rely on a large number of vendors and other third parties to perform key functions of our business
operations and to provide services to our clients. These vendors and third parties may act or fail to act in
ways that could harm our business.
We rely on a large number of vendors and other third parties, and in some cases subcontractors, to provide
services, data and information such as technology, information security, funds transfers, business process
management, and administration and support functions that are critical to the operations of our business. These
third parties include correspondents, agents and other brokers and intermediaries, insurance markets, data
providers, plan trustees, payroll service providers, software and system vendors, health plan providers,
investment managers, custodians, risk modeling providers, and providers of human resource functions, such as
recruiters. Many of these providers are located outside the U.S., which exposes us to business disruptions and
political risks inherent when conducting business outside of the U.S.
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As we do not control many of the actions of these third parties, we are subject to the risk that their decisions or
operations may adversely impact us and replacing these service providers could create significant delay in
services or operations and additional expense.
A failure by the third parties to (i) comply with service level agreements in a high quality and timely manner,
particularly during periods of our peak demand for their services, (ii) maintain adequate internal controls that may
impact our own financial reporting, or (iii) adequately maintain the confidentiality of any of our data or trade
secrets or adequately protect or properly use other intellectual property to which they may have access, could
result in economic and reputational harm to us. These third parties also face their own technology, operating,
business and economic risks, and any significant failures by them, including the improper use or disclosure of our
confidential client, employee, or Company information or failure to comply with applicable law, could cause harm
to our reputation or otherwise expose us to liability. An interruption in or the cessation of service by any service
provider as a result of systems failures, capacity constraints, non-compliance with legal, regulatory or contractual
obligations, financial difficulties or for any other reason could disrupt our operations, impact our ability to offer
certain products and services, and result in contractual or regulatory penalties, liability claims from clients or
employees, damage to our reputation and harm to our business.
Business Resiliency Risks
Our inability to successfully recover should we experience a disaster or other business continuity or data
recovery problem could cause material financial loss, loss of human capital, regulatory actions,
reputational harm or legal liability.
If we experience a local or regional disaster or other business continuity event, such as an earthquake, hurricane,
flood, terrorist attack, pandemic, war or other geopolitical tensions, protests or riots, security breach, cyberattack
(including manipulating the control systems of critical infrastructure), power loss or telecommunications failure, our
ability to operate will depend, in part, on the continued availability of our personnel, our office facilities and the
proper functioning of our computer, telecommunication and other related systems and operations. In such an
event, we could experience operational challenges that could have a material adverse effect on our business. The
risk of business disruption is more pronounced in certain geographic areas, including major metropolitan centers,
like New York or London, where we have significant operations and approximately 3,900 and 5,800 colleagues in
those respective locations, and in certain countries and regions, such as India, in which we operate or are
investing additional capabilities that are subject to higher potential threat of terrorist attacks or military conflicts.
Our operations depend in particular upon our ability to protect our technology infrastructure against damage. If a
business continuity event occurs, we could lose client or Company data or experience interruptions to our
operations or delivery of services to our clients, which could have a material adverse effect. Such risks have
increased significantly due to hybrid and remote work environments. A cyberattack or other business continuity
event affecting us or a key vendor or other third party could result in a significant and extended disruption in the
functioning of our information technology systems or operations or our ability to recover data, requiring us to incur
significant expense to address and remediate or otherwise resolve such issues. For example, hackers have
increasingly targeted companies by attacking internet-connected industrial control and safety control systems. An
extended outage could result in the loss of clients and a decline in our revenues. In the worst case, any
manipulation of the control systems of critical infrastructure may even result in the loss of life.
We regularly assess and take steps to improve our existing business continuity, disaster recovery and data
recovery plans and key management succession. However, a disaster or other continuity event on a significant
scale or affecting certain of our key operating areas within or across regions, or our inability to successfully
recover from such an event, could materially interrupt our business operations and result in material financial loss,
loss of human capital, regulatory actions, reputational harm, damaged client relationships and legal liability. Our
business disruption insurance may also not fully cover, in type or amount, the cost of a successful recovery in the
event of such a disruption.
Acquisitions and Dispositions Risks
We face risks when we acquire or dispose of businesses.
We have a history of making acquisitions and investments, including a total of 86 in the period from 2020 to 2024,
including our recent acquisition of McGriff Insurance Services, LLC ("McGriff") and Gerolamo Holding S.À.R.L.
("Cardano"). We may not be able to successfully integrate the businesses that we acquire into our own business,
or achieve any expected cost savings or synergies from the integration of such businesses, including McGriff and
25
Cardano. Subject to standard contractual protections, we may also be responsible for legacy liabilities of
companies that we acquire. Moreover, if we acquire a business operating in regions or industries subject to
heightened regulatory scrutiny, we may face significant costs or risks in bringing their operations into compliance
with applicable laws and our internal policies. Failure to address these compliance risks could result in regulatory
enforcement actions, fines or damage to our reputation.
In addition, if in the future the performance of our reporting units or an acquired business varies from our
projections or assumptions, or estimates about future profitability of our reporting units or an acquired business
change, the estimated fair value of our reporting units or an acquired business could change materially and could
result in an impairment of goodwill and other acquisition-related intangible assets recorded on our balance sheet
or in adjustments in contingent payment amounts. Given the significant size of the Company's goodwill and
intangible assets, an impairment could have a material adverse effect on our results of operations in any given
period.
We expect that acquisitions will continue to be a key part of our business strategy. Our success in this regard will
depend on our ability to identify and compete for appropriate acquisition candidates and to finance and complete
the transactions we decide to pursue on favorable terms with positive results.
When we dispose of businesses, we may continue to be subject to certain liabilities of that business after its
disposition relating to the prior period of our ownership and may not be able to negotiate for limitations on those
liabilities. We are also subject to the risk that the sales price is less than the amount reflected on our balance
sheet.
Financial Risks
If we are unable to collect our receivables, our results of operations and cash flows could be adversely
affected.
Our business depends on our ability to obtain payment from our clients of the amounts they owe us for the work
we perform. As of December 31, 2024, our receivables for our commissions and fees were approximately $6.5
billion, or approximately one-quarter of our total annual revenues, and portions of our receivables are increasingly
concentrated in certain businesses and geographies.
Macroeconomic or geopolitical conditions, such as a slower economic growth or recession, the war in Ukraine and
the conflict throughout the Middle East, inflationary pressures or supply chain challenges, could result in financial
difficulties for our clients, which could cause clients to delay payments to us, request modifications to their
payment arrangements that could increase our receivables balance or default on their payment obligations to us.
We may not be able to obtain sufficient financing on favorable terms.
The maintenance and growth of our business, including our ability to finance acquisitions, the payment of
dividends and our ability to make share repurchases rely on our access to capital, which depends in large part on
cash flow generated by our business and the availability of equity and debt financing. Certain of our businesses
also rely on financings by the Company to fund the underwriting of their client's debt and equity capital raising
transactions. There can be no assurance that our operations will generate sufficient positive cash flow to finance
all of our capital needs or that we will be able to obtain equity or debt financing on favorable terms, particularly in
an environment of rising interest rates. In addition, our ability to obtain financing will depend in part upon
prevailing conditions in credit and capital markets, which are beyond our control.
Our defined benefit pension plan obligations could cause the Company's financial position, earnings and
cash flows to fluctuate.
Our defined benefit pension obligations and the assets set aside to fund those obligations are sensitive to certain
changes in the financial markets. Any such changes may result in increased pension expense or additional cash
payments to fund these plans.
The Company has significant defined benefit pension obligations to its current and former employees, totaling
approximately $11.4 billion, and related plan assets of approximately $12.6 billion, at December 31, 2024 in
accordance with U.S. GAAP. The Company's policy for funding its defined benefit pension plans is to contribute
amounts at least sufficient to meet the funding requirements set forth by law. In the U.S., contributions to these
plans are based on ERISA guidelines. Outside the U.S., contributions are generally based on statutory
requirements and local funding practices, which may differ from measurements in accordance with U.S. GAAP. In
the U.K., for example, the assumptions used to determine pension contributions are the result of legally-
26
prescribed negotiations between the Company and the plan trustees. Currently, the use of these assumptions
results in a lower funded status than determined in accordance with U.S. GAAP and may result in contributions
irrespective of the U.S. GAAP funded status.
The financial calculations relating to our defined benefit pension plans are complex. Pension plan assets could
decrease as the result of poor future asset performance. In addition, the estimated return on plan assets would
likely be impacted by changes in the interest rate environment and other factors, including equity valuations, since
these factors reflect the starting point used in the Company’s projection models. For example, a reduction in
interest rates may result in a reduction in the estimated return on plan assets. Also, pension plan liabilities,
periodic pension expense and future funding amounts could increase as a result of a decline in the interest rates
we use to discount our pension liabilities, longer lifespans than those reflected in our mortality assumptions,
changes in investment markets that result in lower expected returns on assets, actual investment return that is
less than the expected return on assets, adverse changes in laws or regulations and other variables. Finally,
changes in the aggregated, smoothed asset returns as future years replace prior years, has an impact on both the
level and the volatility of pension expense.
While we have taken steps to mitigate the impact of pension volatility on our earnings and cash funding
requirements, these strategies may not be successful. Accordingly, given the magnitude of our worldwide pension
plans, variations in or reassessment of the preceding or other factors or potential miscalculations relating to our
defined benefit pension plans could cause significant fluctuation from year to year in our earnings and cash flow,
as well as our pension plan assets and liabilities, and may result in increased levels of contributions to our
pension plans.
Our significant non-U.S. operations expose us to exchange rate fluctuations and various risks that could
impact our business.
Approximately 52% of our total revenue reported in 2024 was from business outside of the U.S. We are subject to
exchange rate movement because we must translate the financial results of our foreign subsidiaries into U.S.
dollars and also because some of our subsidiaries receive revenue other than in their functional currencies.
Exchange rate movements may change over time, and they could have a material adverse impact on our financial
results and cash flows reported in U.S. dollars. For additional discussion, see "Market Risk and Credit Risk-
Foreign Currency Risk" in Part II, Item 7A ("Quantitative and Qualitative Disclosures about Market Risk") of this
report.
Our quarterly revenues and profitability may fluctuate significantly.
Quarterly variations in revenues and operating results may occur due to several factors. These include:
•
the number of client engagements during a quarter;
•
the possibility that clients may decide to delay or terminate a current or anticipated project as a result of
factors unrelated to our work product or progress;
•
fluctuations in capacity and utilization rates and clients' ability to terminate engagements without penalty;
•
our net colleague hires and related compensation and benefits expense;
•
potential limitations on the clients or industries we serve resulting from increased regulation or changing
stakeholder expectations on ESG issues;
•
the impact of changes in accounting standards or in our accounting estimates or assumptions;
•
the impact on us or our clients of changes in legislation, regulation and legal guidance or interpretations in
the jurisdictions in which we operate, particularly in the U.S. as a result of the shift in the presidential
administration;
•
seasonality due to the impact of regulatory deadlines, policy renewals and other timing factors to which
our clients are subject;
•
the success of our acquisitions or investments;
•
occurrence of any significant natural disaster or other insured events including any potential reputational
harm to the insurance industry following such event;
•
macroeconomic factors such as changes in foreign exchange rates, interest rates and global public and
private capital markets, particularly in the case of Mercer, where fees in its investments business and
27
certain other business lines are derived from the value of assets under management, advisement or
administration; and
•
general economic conditions, including factors beyond our control affecting economic conditions such as
global health crises or pandemics, severe weather, climate change, geopolitical unrest such as the war in
Ukraine and the conflict throughout the Middle East, protests and riots or other catastrophic events, since
our results of operations are directly affected by the levels of business activity of our clients, which in turn
are affected by the level of economic activity in the industries and markets that they serve.
A significant portion of our total operating expenses is relatively fixed in the short term. Therefore, a variation in
the number of client assignments or in the timing of the initiation or the completion of client assignments can
cause significant variations in quarterly operating results for these businesses.
Credit rating downgrades would increase our financing costs and could subject us to operational risk.
Currently, the Company's senior debt is rated A- by S&P, A3 by Moody's and A- by Fitch. The Company's short-
term debt is currently rated A-2 by S&P, P-2 by Moody's, and F-2 by Fitch.The Company carries a Stable outlook
with S&P, Moody's and Fitch.
If we need to raise capital in the future (for example, in order to maintain adequate liquidity, fund maturing debt
obligations or finance acquisitions or other initiatives), credit rating downgrades would increase our financing
costs, and could limit our access to financing sources. A downgrade to a rating below investment-grade could
result in greater operational risks through increased operating costs and increased competitive pressures.
Our current debt level could adversely affect our financial flexibility.
At December 31, 2024, we had total consolidated debt outstanding of approximately $19.9 billion.
The level of debt outstanding could adversely affect our financial flexibility by reducing our cash flows and our
ability to use cash from operations for other purposes, including working capital, dividends to shareholders, share
repurchases, acquisitions, capital expenditures and general corporate purposes. In addition, we are subject to
risks that, at the time any of our outstanding debt matures, we will not be able to retire or refinance the debt on
terms that are acceptable to us.
The current U.S. tax regime has provisions which have unintended consequences and may also impact
our tax rate in varying degrees based on where our global income is earned.
Our effective tax rate may fluctuate in the future as a result of the current U.S. tax regime and the continuing
issuance of interpretive guidance related to the operations of U.S.-based multinational corporations. These
include significant provisions in U.S. income tax law that may have a meaningful impact on our income tax
expense and require significant judgments and estimates in interpretation and calculations. Current tax legislation
includes, among other provisions, limitations on the deductibility of net interest expense, a minimum tax on most
non-U.S. income called Global Intangible Low-Taxed Income ("GILTI"), and the Base Erosion and Anti-Abuse Tax
("BEAT"). In addition, a recently enacted book minimum tax could increase the impact of these provisions on our
income tax expense. Given the significant complexity of the rules, and the potential for additional guidance from
the U.S. Treasury, the Securities and Exchange Commission, the Financial Accounting Standards Board or other
regulatory authorities, recognized impacts in future periods could be significantly different from our current
estimates. Such uncertainty may also result in increased scrutiny from, or disagreements with, tax authorities. As
a U.S.-domiciled company, any such increases would likely have a disproportionate impact on us compared to our
foreign-based competitors.
Global Operations
We are exposed to multiple risks associated with the global nature of our operations.
We conduct business globally. In 2024, approximately 52% of the Company's total revenue was generated from
operations outside the U.S., and over one-half of our employees were located outside the U.S. In addition, we
conduct our operations through four separate businesses. Potential conflicts of interest may arise across our
businesses given the significant volume of our engagements.
The geographic breadth of our activities also subjects us to significant legal, economic, operational, market,
compliance and reputational risks. These include, among others, risks relating to:
•
economic and political conditions in the countries in which we operate;
•
client concentration in certain high-growth countries in which we operate;
28
•
the length of payment cycles and potential difficulties in collecting accounts receivable;
•
unexpected increases in taxes or changes in U.S. or foreign tax laws, rulings, policies or related legal and
regulatory interpretations, including recent changes to the U.K. statutory rate;
•
the implementation of the Organization for Economic Cooperation and Development (OECD) international
tax framework, including the implementation of the Pillar 2 minimum tax regime and the Pillar 1 profit
reallocation regime, potentially resulting in an adverse effect on our effective tax rate, tax payments and
results of operations, particularly as key jurisdictions adopt these changes, either partially or in full,
alongside potential shifts in tax laws in response to such implementation;
•
international initiatives to require multinational enterprises, like ours, to calculate and report profitability on
a country-by-country basis, which could increase scrutiny by, or cause disagreements with, foreign tax
authorities;
•
potential transfer pricing-related tax exposures that may result from the flow of funds among our
subsidiaries and affiliates in the various jurisdictions in which we operate;
•
unexpected reassessment by tax authorities of interpretations of existing rules which may require
companies to defend previously accepted positions and may create both new and prior-year exposures;
•
litigation arising from ongoing and future controversies with tax authorities;
•
permanent establishments created due to colleagues traveling to and doing work in certain countries, or
living in such countries and working remotely post-pandemic, which are not properly compensated
through transfer pricing;
•
our ability to obtain dividends or repatriate funds from our non-U.S. subsidiaries, including as a result of
the imposition of currency controls and other government restrictions on repatriation in the jurisdictions in
which our subsidiaries operate, fluctuations in foreign exchange rates and the imposition of withholding
and other taxes on such payments;
•
geopolitical tensions, such as the war in Ukraine and the conflict throughout the Middle East, in countries
where we operate, international hostilities, international trade disputes, terrorist activities, natural
disasters, pandemics, and infrastructure disruptions;
•
local investment or other financial restrictions that foreign governments may impose;
•
potential lawsuits, investigations, market studies, reviews or other activity by foreign regulatory or law
enforcement authorities or legislatively appointed commissions, which may result in potential
modifications to our businesses, related private litigation or increased scrutiny from U.S. or other
regulators;
•
potential costs and difficulties in complying with a wide variety of foreign laws and regulations (including
tax systems) administered by foreign government agencies, some of which may conflict with U.S. or other
sources of law;
•
potential costs and difficulties in complying, or monitoring compliance, with foreign and U.S. laws and
regulations that are applicable to our operations abroad, including trade sanctions laws relating to
countries such as Afghanistan, Belarus, Cuba, Iran, North Korea, Russia, Syria, Ukraine (Russia-
controlled territories) and Venezuela, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act
and the U.K. Bribery Act 2010;
•
limitations or restrictions that foreign or U.S. governments and regulators may impose on the products or
services we sell, the methods by which we sell our products and services and the manner in which and
the amounts we are compensated;
•
potential limitations or difficulties in protecting our intellectual property in various foreign jurisdictions;
•
limitations that foreign governments may impose on the conversion of currency or the payment of
dividends or other remittances to us from our non-U.S. subsidiaries;
•
engaging and relying on third parties to perform services on behalf of the Company; and
•
potential difficulties in monitoring employees in geographically dispersed locations.
29
RISKS RELATING TO OUR RISK AND INSURANCE SERVICES SEGMENT
Our Risk and Insurance Services segment, conducted through Marsh and Guy Carpenter, represented 63% of the
Company's total revenue in 2024. Our business in this segment is subject to particular risks.
Results in our Risk and Insurance Services segment may be adversely affected by a general decline in
economic activity.
Demand for many types of insurance and reinsurance generally rises or falls as economic growth expands or
slows. This dynamic affects the level of commissions and fees generated by Marsh and Guy Carpenter. To the
extent our clients become adversely affected by declining business conditions, they may choose to limit their
purchases of risk services and insurance and reinsurance coverage, as applicable, which would adversely impact
our commission revenue and other revenue based on premiums placed and services provided by us. Also, the
insurance they seek to obtain through us may be impacted by changes in their assets, property values, sales or
number of employees, which may reduce our commission revenue, and they may decide not to purchase our risk
advisory or other services, which would inhibit our ability to generate fee revenue. Moreover, insolvencies and
combinations associated with an economic downturn, especially insolvencies and combinations in the insurance
industry, could adversely affect our brokerage business through the loss of clients or by limiting our ability to place
insurance and reinsurance business, as well as our revenues from insurers. Guy Carpenter is especially
susceptible to this risk given the limited number of insurance company clients and reinsurers in the marketplace.
Volatility or declines in premiums and other market trends may significantly impede our ability to grow
revenues and profitability.
A significant portion of our Risk and Insurance Services revenue consists of commissions paid to us out of the
premiums that insurers and reinsurers charge our clients for coverage. We do not determine the insurance
premiums on which our commissions are generally based. Our revenues and profitability are subject to change to
the extent that premium rates fluctuate or trend in a particular direction. The potential for changes in premium
rates is significant, due to the normal cycles of pricing in the commercial insurance and reinsurance markets.
As traditional insurance companies continue to rely on non-affiliated brokers or agents to generate premium,
those insurance companies may seek to reduce their expenses by lowering their commission rates. The reduction
of these commission rates, along with general volatility or declines in premiums, may significantly affect our
revenue and profitability. Because we do not determine the timing or extent of premium pricing changes, it is
difficult to accurately forecast our commission revenues, including whether they will significantly decline. As a
result, we may have to adjust our plans for future acquisitions, capital expenditures, dividend payments, loan
repayments and other expenditures to account for unexpected changes in revenues, and any decreases in
premium rates may adversely affect the results of our operations.
In addition to movements in premium rates, our (and Mercer's Health business's) ability to generate premium-
based commission revenue may be challenged by disintermediation and the growing availability of alternative
methods for clients to meet their risk-protection needs. This trend includes a greater willingness on the part of
corporations to self-insure, the expanded use of captive insurers, and the presence of capital markets-based
solutions for traditional insurance and reinsurance needs. Further, the profitability of our Risk and Insurance
Services segment depends in part on our ability to be compensated for the analytical services and other advice
that we provide, including the consulting and analytics services that we provide to insurers. If we are unable to
achieve and maintain adequate billing rates for all of our services, our margins and profitability could decline.
Adverse legal developments and future regulations concerning how intermediaries are compensated by
insurers or clients, as well as allegations of anti-competitive behavior or conflicts of interest, could have a
material adverse effect on our business, results of operations and financial condition.
The ways in which insurance intermediaries are compensated receive scrutiny from regulators in part because of
the potential for anti-competitive behavior and conflicts of interest. The vast majority of the compensation that
Marsh receives is in the form of retail fees and commissions that are paid by the client or paid from premium that
is paid by the client. The amount of other compensation that we receive from insurance companies, separate from
retail fees and commissions, has increased in the last several years, both on an underlying basis and through
acquisition and represented approximately 6% of Marsh's revenue in 2024. This other compensation includes
payment for (i) consulting and analytics services provided to insurers; (ii) administrative and other services
provided to insurers (including underwriting services and services relating to the administration and management
of quota shares, panels and other facilities); and (iii) contingent commissions, primarily at MMA and outside the
30
U.S., paid by insurers based on factors such as volume or profitability. These other revenue streams present
potential regulatory, litigation and reputational risks that may arise from alleged anti-competitive behavior or
conflicts of interest, (including those arising from Guy Carpenter’s role as intermediary and advisor for insurance
companies), and future changes in the regulatory environment may impact our ability to collect such revenue.
Adverse regulatory, legal or other developments could have a material adverse effect on our business and expose
the Company to negative publicity and reputational harm.
RISKS RELATING TO OUR CONSULTING SEGMENT
Our Consulting segment, conducted through Mercer and Oliver Wyman Group, represented 37% of our total
revenue in 2024. Our businesses in this segment are subject to particular risks.
Mercer’s Wealth business is subject to a number of risks, including risks related to public and private
capital market fluctuations, third-party asset managers and custodians, operations and technology risks,
trading and execution risks, conflicts of interest, ESG and greenwashing, asset performance and
regulatory compliance, that, if realized, could result in significant damage to our business.
Mercer’s Investments business provides clients with digital tools, investment consulting and investment
management services. Mercer’s Investments business is subject to a number of risks, including risks related to
litigation (both by clients and by plan participants, particularly when we act in a fiduciary capacity), liquidity and
market volatility, an inability to obtain contractual limitations of liability for errors & omissions in certain jurisdictions
or parts of our business, third-parties, our operations and technology (including the use of AI), trading and
execution errors, conflicts of interest, asset performance and regulatory compliance and scrutiny, which could
arise in connection with these offerings. For example, Mercer’s manager research or due diligence on an asset
manager may fail to uncover material deficiencies or fraud that could result in investment losses to a client. There
is a risk that Mercer will fail to properly or timely implement or execute a client’s investment policy or strategy or
instruction, which could cause an incorrect or untimely allocation of client assets among asset classes, asset
managers, or strategies or result in a trading error. Mercer may also be perceived as making inaccurate or
misleading statements regarding the investment strategies of our offerings or investments with respect to ESG or
sustainability, commonly referred to as “greenwashing,” or recommending certain asset managers to clients or
offering delegated solutions a potential or existing client, solely to enhance its own compensation or due to other
conflicts of interest. Asset classes may perform poorly, or asset managers may underperform their benchmarks,
due to poor market performance, a downturn in the global markets, negligence or other reasons, resulting in poor
returns or loss of client assets. Changes in the value of equity, debt, currency, real estate, commodities,
alternatives or other asset classes, in particular as a result of a downturn in the global markets, could cause the
value of assets under management or advisement, and the fees earned by Mercer to decline. Mercer or its clients
may be subject to claims or class action litigation relating to advice given or investment decisions made by plan
sponsors and plan fiduciaries, particularly relating to 401(k) plans in the U.S. or pension schemes in the U.K.
These risks, if realized, could result in significant liability and damage our business.
Our businesses are subject to a number of risks related to the U.S. healthcare industry, including risks
related to healthcare regulation and reputational damage from negative publicity.
Mercer, MMA and MMB help public and private sector employers design and manage employee health and
welfare programs. Their services include plan design, brokering of insurance programs, administration and other
consulting and specialty services. The healthcare industry, inclusive of health insurance, is regulated by federal,
state and local governments in the U.S., and by regulators and governments in other countries where we do
business. The laws and rules governing the healthcare industry and interpretations of those laws and rules are
subject to frequent and often unpredictable change. For example, legislation or regulatory action that has the
impact of disincentivizing U.S. companies from offering employer-sponsored health insurance could ultimately
reduce the revenue we receive when consulting on and broking these policies on behalf of our corporate clients.
Legislation seeking to regulate pharmacy benefit management services introduced or enacted at the federal or
state level could impact the compensation structure and how much we are paid where we advise clients on
prescription drug coverage. Changes to U.S. government health programs, like Medicaid, could also impact our
consulting and ancillary services for government clients that manage these programs. Moreover, the health care
industry is regularly subject to negative publicity, including as a result of governmental investigations, adverse
media coverage and political debate concerning industry regulation. Negative publicity may adversely affect our
business and damage our reputation, and expose us to unexpected or unwarranted regulatory scrutiny, including
31
as a result of the revenue our businesses receive from healthcare-related services including our consulting advice
to clients from different areas of the healthcare industry.
Revenues for the services provided by our Consulting segment may decline for various reasons,
including as a result of changes in economic conditions, the value of equity, debt and other asset
classes, our clients’ or an industry's financial condition or government regulation or an accelerated trend
away from actively managed investments to passively managed investments.
Global economic conditions, including slower GDP growth or recession, inflationary pressure and foreign
exchange rate volatility, may negatively impact businesses and financial institutions. Many of our clients, including
financial institutions, corporations, government entities and pension plans, have reduced expenses, including
amounts spent on consulting services, and used internal resources instead of consultants during difficult
economic periods. The evolving needs and financial circumstances of our clients may reduce demand for our
consulting services and could adversely affect our revenues and profitability. If the economy or markets in which
we operate experience weakness or deteriorate, our business, financial condition and results of operations could
be materially and adversely affected. If our clients reduce their headcounts, they will have fewer employee lives
covered under their health plans, which may reduce premiums and the commission or supplemental
compensation Mercer may receive.
In addition, some of Mercer's Investments business generate fees based upon the value of the clients’ assets
under management, advisement or administration. Changes in the value of equity, debt, currency, real estate,
commodities, alternatives or other asset classes could cause the value of assets under management, advisement
or administration, and the fees received by Mercer, to decline. Such changes could also cause clients to withdraw
funds from Mercer’s Investments business in favor of other investment service providers. In either case, our
business, financial condition and results of operations could be materially adversely affected. Mercer’s
Investments business also could be adversely affected by an accelerated shift away from actively managed
investments to passively managed investments with associated lower fees, as well as fee compression from the
competitive environment. Further, revenue received by Mercer as investment manager to the majority of the
Mercer-managed investment funds is reported in accordance with U.S. GAAP on a gross basis rather than a net
basis, with sub-advisor fees reflected as an expense. Therefore, the reported revenue for these offerings does not
fully reflect the amount of net revenue ultimately attributable to Mercer.
Demand for many of Mercer's benefits services is affected by government regulation and tax laws, rulings,
policies and interpretations, which drive our clients' needs for benefits-related services. Significant changes in
government regulations affecting the value, use or delivery of benefits and human resources programs, including
changes in regulations relating to health and welfare plans, defined contribution plans or defined benefit plans,
may adversely affect the demand for or profitability of Mercer's services.
Factors affecting defined benefit pension plans and the services we provide relating to those plans could
adversely affect Mercer.
Mercer currently provides plan sponsors, plan trustees, multi-employer and public entity clients with actuarial,
consulting and administration services relating to defined benefit pension plans. The nature of our work is
complex. Many clients, particularly in the public sector, have sizeable pension deficits and are subject to impact
from volatility in the global markets and interest rate fluctuations. A number of Mercer's clients have frozen or
curtailed their defined benefit plans and have moved to defined contribution plans resulting in reduced revenue for
Mercer's retirement business. These developments, fee compression pressures, and a continued or accelerated
rate of decline in revenues for our defined benefit pension plans business could adversely affect Mercer's
business and operating results. In addition, our actuarial services involve numerous assumptions and estimates
regarding future and contingent events, including interest rates used to discount future liabilities, estimated rates
of return for a plan's assets, healthcare cost trends, salary projections and participants' life expectancies. Mercer's
consulting services involve the drafting and interpretation of trust deeds and other complex documentation
governing pension plans. Mercer's administration services include calculating benefits within complicated pension
plan structures. Mercer's investments services include investment advice and management relating to defined
benefit pension plan assets intended to fund present and future benefit obligations. Clients dissatisfied with our
services have brought, and may bring, significant claims against us, particularly in the U.S. and the U.K.
Additionally, a rapid rise in interest rates could result in higher defined benefit pension plan funding levels. In
some markets, this could accelerate clients’ desire to conduct a buyout or third-party risk transfer. Such a
transaction could result in additional short-term revenue for Mercer to the extent we advise the client on the
transaction, but a loss in longer term recurring revenue related to the plan.
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The profitability of our Consulting segment may decline if we are unable to achieve or maintain adequate
utilization and pricing rates for our consultants.
The profitability of our Consulting businesses depends in part on ensuring that our consultants maintain adequate
utilization rates (i.e., the percentage of our consultants' working hours devoted to billable activities).
Our utilization rates are affected by a number of factors, including:
•
general economic conditions;
•
our ability to transition consultants promptly from completed projects to new assignments, and to engage
newly-hired consultants quickly in revenue-generating activities;
•
our ability to continually secure new business engagements, particularly because a portion of our work is
project-based rather than recurring in nature;
•
our ability to forecast demand for our services and thereby maintain appropriate headcount in each of our
geographies and workforces;
•
our ability to retain key colleagues and consulting professionals;
•
unanticipated changes in the scope of client engagements;
•
the potential for conflicts of interest that might require us to decline client engagements that we otherwise
would have accepted;
•
our need to devote time and resources to sales, training, professional development and other non-billable
activities; and
•
the potential disruptive impact of acquisitions and dispositions.
If the utilization rate for our consulting professionals declines, our revenues, profit margin and profitability could
decline.
In addition, the profitability of our Consulting businesses depends in part on the prices we are able to charge for
our services. The prices we charge are affected by a number of factors, including:
•
general economic conditions;
•
clients' perception of our ability to add value through our services;
•
market demand for the services we provide;
•
our ability to develop new services and the introduction of new services by competitors;
•
the pricing policies of our competitors; and
•
the extent to which our clients develop in-house or other capabilities to perform the services that they
might otherwise purchase from us.
If we are unable to achieve and maintain adequate billing rates for our services, our profit margin and profitability
could decline.
Item 1B.
Unresolved Staff Comments.
There are no unresolved comments to be reported pursuant to Item 1B.
Item 1C.
Cybersecurity.
As a professional services firm that processes confidential and sensitive information, such as personal
information, cybersecurity risk management is an integral part of our enterprise risk management strategy. Our
cybersecurity risk management program has been designed based on industry standards, such as the National
Institute of Standards and Technology Cybersecurity Framework, and provides a framework for assessing
cybersecurity risk and identifying and managing cybersecurity threats and incidents, including threats and
incidents associated with our use of services, applications and products provided by third-party vendors and
service providers.
Our cybersecurity risk management program is coordinated by cross-functional teams, including risk
management, legal and compliance, business resiliency management and information security. These teams
develop, implement and maintain our compliance policies, programs and training, business resiliency, disaster
33
recovery and information security frameworks, solutions and procedures. They also work closely with our
business, internal audit, finance and IT staff to identify, assess and mitigate risks, including those associated with
our use of third-party vendors and service providers, and to monitor and take steps designed to prevent security
incidents in our technology environment.
Our cybersecurity risk management framework includes (1) procedures designed to assess the data privacy and
cybersecurity practices of third-party vendors and service providers (including risk assessments and contractual
protections), (2) technical IT controls designed to manage risks associated with cybersecurity incidents (such as
multi-factor authentication and requirements for VPN or private channel access to our systems), and (3) formal
policies and procedures designed to address cybersecurity incidents. Our formal policies and procedures
designed to address cybersecurity incidents include steps for verifying and assessing the severity of a
cybersecurity incident, identifying the source of a cybersecurity incident (including whether it is associated with a
third-party service provider) and implementing cybersecurity countermeasures and mitigation strategies.
Additionally, we have procedures for informing senior management and our Board of Directors of potentially
material cybersecurity incidents. We also periodically engage third-party security consultants to assess our
cybersecurity program and to perform penetration testing on our security environment and controls. In addition,
cybersecurity training is provided to all newly hired colleagues and then at least annually for all colleagues. We
also conduct regular ongoing cybersecurity awareness campaigns and phishing tests and provide training in
response to such tests as appropriate.
Our Board of Directors has overall oversight responsibility for the Company’s risk management and receives
updates from management throughout the year on cybersecurity matters and other material risks facing the
Company. Additionally, the Audit Committee regularly reviews the Company’s policies and practices with respect
to risk assessment and risk management, including cybersecurity risks, and reports to the full Board of Directors
on a regular basis. The Audit Committee is responsible for overseeing the Company’s enterprise risk
management policies and processes, including discussing with management the Company’s major risk exposures
and the steps that have been taken to monitor and control such exposures, including those arising from
cybersecurity risks.
Management is responsible for identifying, assessing and managing material cybersecurity risks on an ongoing
basis. Management’s efforts include establishing processes designed to ensure that potential cybersecurity risks
are monitored, putting in place mitigation and remedial measures and implementing and maintaining cybersecurity
programs. Our cybersecurity programs are under the direction of our Chief Information Security Officer (CISO),
who reports to our Chief Information Officer (CIO). Our CIO has significant expertise and over a decade of
experience working in technology. Our CISO has over twenty years of experience working in cybersecurity and
maintains a Certified Information Systems Security Professional certification. Our CISO and CIO receive reports
from our cybersecurity team and monitor the prevention, detection, mitigation, and remediation of cybersecurity
incidents. Our cybersecurity team is comprised of experienced information systems security professionals and
information security managers with many years of experience and various security certifications.
Management, including the CIO and CISO, regularly reviews with the Board of Directors and the Audit Committee
the Company’s cybersecurity programs, material cybersecurity risks and mitigation strategies and provides
updates on notable developments in the cybersecurity threat landscape. Additionally, management follows a risk-
based escalation process to notify the Audit Committee outside of the cycle of regular updates when an emerging
risk or material issue is identified, such as a potentially significant cybersecurity threat or incident.
In 2024, we did not identify any cybersecurity threats or incidents that have materially affected or are reasonably
likely to materially affect the Company, including with respect to our business strategy, results of operations, or
financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats or
incidents, or provide assurances that we have not experienced an undetected cybersecurity threat or incident. For
more information about these risks, please see “Risk Factors – Cybersecurity, Data Protection and Technology
Risks” in this annual report on Form 10-K.
34
Item 2.
Properties.
The Company maintains its corporate headquarters in New York City. We also maintain other offices around the
world, primarily in leased space. In certain circumstances we may have space that we sublet to third parties,
depending upon our needs in particular locations.
The Company and certain of its subsidiaries own, directly and indirectly through special purpose subsidiaries, a
58% condominium interest covering approximately 900,000 square feet of office space in a 44 story condominium
in New York City. This real estate serves as the Company's headquarters and is occupied primarily by
the Company and its subsidiaries for general corporate use. The condominium interests are financed by a 30-year
mortgage loan that is non-recourse to the Company unless the Company (i) is downgraded below B (stable
outlook) by S&P or Fitch or B2 (stable outlook) by Moody's and such downgrade is continuing or (ii) an event of
default under the mortgage loan has occurred. The mortgage is secured by a first priority assignment of leases
and rents, including the leases which the Company and certain of its subsidiaries entered into with their affiliated
special purpose subsidiaries which own the mortgaged condominium interests. The net rent due under those
leases in effect services the mortgage debt.
Item 3.
Legal Proceedings.
We and our subsidiaries are party to a variety of other legal, administrative, regulatory and government
proceedings, claims and inquiries arising in the normal course of business.
Additional information regarding certain legal proceedings and related matters is set forth in Note 16, Claims,
Lawsuits and Other Contingencies, in the notes to the consolidated financial statements appearing under Part II,
Item 8 ("Financial Statements and Supplementary Data") of this report.
Item 4.
Mine Safety Disclosures.
Not applicable.
35
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
General
Marsh McLennan Companies Inc., and its consolidated subsidiaries (Marsh McLennan or the "Company") a
global professional services firm in the areas of risk, strategy and people. The Company helps clients build the
confidence to thrive through the power of perspective of our four market-leading businesses. With annual revenue
of over $24 billion, the Company has more than 90,000 colleagues advising clients in over 130 countries.
Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients.
Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and
pursue emerging opportunities. Mercer delivers advice and technology-driven solutions that help organizations
redefine the world of work, reshape retirement and investment outcomes, and unlock health and well-being for a
changing workforce. Oliver Wyman Group serves as a critical strategic, economic and brand advisor to private
sector and governmental clients. The four businesses also collaborate together to deliver new solutions to help
clients manage complex and interconnected risks.
The Company conducts business through two segments:
•
Risk and Insurance Services includes risk management activities (risk advice, risk transfer and risk
control and mitigation solutions) as well as insurance and reinsurance broking and services. The
Company conducts business in this segment through Marsh and Guy Carpenter.
•
Consulting includes health, wealth and career advice, solutions and products, and specialized
management, strategic, economic and brand consulting services. The Company conducts business in this
segment through Mercer and Oliver Wyman Group.
The results of operations in the Management Discussion & Analysis ("MD&A") include an overview of the
Company’s consolidated results for fiscal year 2024, compared to the results for fiscal year 2023, and should be
read in conjunction with the consolidated financial statements and notes. This section also includes a discussion
of the key drivers impacting the Company’s financial results of operations both on a consolidated basis and by
reportable segments.
We describe the primary sources of revenue and categories of expense for each reportable segment in the
discussion of segment financial results. A reconciliation of segment operating income to total operating income is
included in Note 17, Segment Information, in the notes to the consolidated financial statements included in Part II,
Item 8, of this report.
For information and comparability of the Company's results of operations and liquidity and capital resources for
fiscal year 2022, refer to "Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations" of the Company's Form 10-K for the fiscal year ended December 31, 2023.
This MD&A contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.
Refer to "Information Concerning Forward-Looking Statements" at the outset of this report.
Non-GAAP Measures
The Company reports its financial results in accordance with accounting principles generally accepted in the
United States (U.S.), referred to as in accordance with "GAAP" or "reported" results. The Company also refers to
and presents a non-GAAP financial measure in non-GAAP revenue, within the meaning of Regulation G and Item
10(e) of Regulation S-K in accordance with the Securities Exchange Act of 1934. The Company has included a
reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated in
accordance with GAAP as part of the consolidated revenue and expense discussion. Percentage changes,
referred to as non-GAAP underlying revenue, are calculated by dividing the period over period change in non-
GAAP revenue by the prior period non-GAAP revenue.
The Company believes this non-GAAP financial measure provides useful supplemental information that enables
investors to better compare the Company’s performance across periods. Management also uses this measure
internally to assess the operating performance of its businesses and to decide how to allocate resources.
However, investors should not consider this non-GAAP measure in isolation from, or as a substitute for, the
financial information that the Company reports in accordance with GAAP. The Company's non-GAAP measure
includes adjustments that reflect how management views its businesses and may differ from similarly titled non-
GAAP measures presented by other companies.
37
Financial Highlights
•
Consolidated revenue in 2024 was $24.5 billion, an increase of 8%, or 7% on an underlying basis.
•
Consolidated operating income increased $535 million, or 10% to $5.8 billion in 2024, compared to 2023.
Net income attributable to the Company was $4.1 billion. Earnings per share on a diluted basis increased
to $8.18 from $7.53, or 9%, compared with 2023.
•
Risk and Insurance Services revenue in 2024 was $15.4 billion, an increase of 9%, or 8% on an
underlying basis. Operating income was $4.4 billion and $3.9 billion in 2024 and 2023, respectively.
•
Marsh's revenue in 2024 was $12.5 billion, an increase of 10%, or 7% on an underlying basis. Guy
Carpenter's revenue in 2024 was $2.4 billion, an increase of 5%, or 8% on an underlying basis.
•
Consulting revenue in 2024 was $9.1 billion, an increase of 5%, or 6% on an underlying basis. Operating
income was $1.8 billion and $1.7 billion in 2024 and 2023, respectively.
•
Mercer's revenue in 2024 was $5.7 billion, an increase of 3%, or 5% on an underlying basis. Oliver
Wyman Group's revenue in 2024 was $3.4 billion, an increase of 9%, or 6% on an underlying basis.
•
The Company's results of operations in 2024 included restructuring activities of $276 million, primarily
related to severance and lease exit charges for activities focused on workforce actions, technology
rationalization and reductions in real estate.
•
The Company completed 17 acquisitions in 2024. On November 15, 2024, the Company completed the
acquisition of McGriff Insurance Services, LLC ("McGriff") for $7.75 billion in cash consideration.
•
On January 1, 2024, the Company completed the sale of its Mercer U.K. pension administration and U.S.
health and benefits administration businesses for approximately $120 million, and recorded a net gain of
$35 million in the current year.
•
In November 2024, the Company issued $7.25 billion of senior notes to fund the acquisition of McGriff
and for general corporate purposes. In February 2024, the Company issued $500 million of 5.150%
senior notes due 2034 and $500 million of 5.450% senior notes due 2054.
•
In 2024, the Company repaid $1.6 billion of senior notes at maturity.
•
In 2024, the Company repurchased 4.3 million shares for $900 million.
38
Acquisition of McGriff
On November 15, 2024, the Company completed the acquisition of McGriff, an affiliate of TIH Insurance Holdings
(the "McGriff Transaction") for $7.75 billion in cash consideration, subject to certain customary adjustments.
McGriff is an insurance broking and risk management services provider in the United States (U.S.), with
approximately $1.3 billion in annual revenue.
In connection with the McGriff Transaction, on September 29, 2024, the Company entered into a Bridge Loan
Commitment Letter (the “Commitment Letter”) to provide the Company under a 364-day unsecured bridge term
loan facility in an amount not to exceed $7.75 billion (the "Bridge Loan Facility"). The Company paid
approximately $23 million for customary upfront fees related to the Commitment Letter, amortized as interest
expense.
On November 8, 2024, the Company issued $7.25 billion of senior notes and terminated the Commitment Letter.
In connection with the acquisition of McGriff, the Company incurred approximately $63 million of acquisition and
retention related costs in 2024. The Company expects to recognize costs of approximately $450 million to $500
million, primarily retention incentives over the next 3 years related to the McGriff acquisition. These costs include
retention plans put in place by the seller and were funded through a purchase price adjustment for McGriff. The
Company continues to refine its integration plans as it relates to the acquisition of McGriff, which may change the
timing and estimates of expected costs and payments.
McGriff's results of operations for the period November 15, 2024 through December 31, 2024 were included in the
Company’s results of operations for 2024, in Marsh, in the Risk and Insurance Services segment.
As of November 15, 2024, the Company assumed the assets and legal liabilities of McGriff. Please see the "Risk
Factors" section of this Annual Report on Form 10-K for risks associated with acquisitions and dispositions.
* * * * *
The macroeconomic and geopolitical environment including multiple major wars and global conflicts, slower GDP
growth or recession, lower interest rates, capital markets volatility, inflation and changes in insurance premium
rates could impact our business, financial condition, results of operations and cash flows. For more information
about these risks, please see “Risk Factors – Macroeconomic Risks” in this annual report on Form 10-K.
For additional details, refer to the Consolidated Results of Operations and Liquidity and Capital Resources
sections in this MD&A.
Acquisitions and dispositions impacting the Risk and Insurance Services and Consulting segments are discussed
in Note 5, Acquisitions and Dispositions, in the notes to the consolidated financial statements.
39
Consolidated Revenue
Consolidated revenue increased $1.7 billion, or 8%, to $24.5 billion in 2024, compared to $22.7 billion in 2023.
Consolidated revenue increased 7% on an underlying basis and 1% from acquisitions. On an underlying basis,
revenue increased 8% and 6% in 2024, in the Risk and Insurance Services and Consulting segments,
respectively.
Consolidated revenue growth in 2024 reflects the continued demand for our advice and solutions.
Consolidated Operating Expenses
Consolidated operating expenses increased $1.2 billion, or 7%, to $18.6 billion in 2024, compared to $17.5 billion
in 2023. Expenses reflect a 2% increase from acquisitions.
Consolidated operating expenses in 2024 increased primarily due to compensation and benefits, driven by higher
base salaries and incentive compensation.
Restructuring activities
The Company incurred a total of $276 million for restructuring activities in 2024, compared to $301 million in 2023.
In the fourth quarter of 2022, the Company initiated activities focused on workforce actions, rationalization of
technology and functional services, and reductions in real estate. These activities were completed at the end of
2024. The Company incurred approximately $660 million of these restructuring costs through December 31, 2024,
primarily severance and lease exit charges, of which $221 million were incurred in 2024. Related estimated
savings are expected to be over $500 million, with over $450 million realized through December 31, 2024. The
remaining savings are expected to be realized in 2025.
Additional details are included in Note 14, Restructuring Costs, in the notes to the consolidated financial
statements.
Risk and Insurance Services
In the Risk and Insurance Services segment, the Company’s subsidiaries and other affiliated entities act as
brokers, agents or consultants for insureds, insurance underwriters and other brokers in the areas of risk
management, insurance broking, insurance program management, risk consulting, analytical modeling and
alternative risk financing services, primarily under the brand of Marsh, and engage in specialized reinsurance
broking expertise, strategic advisory services and analytics solutions, primarily under the brand of Guy Carpenter.
Marsh and Guy Carpenter are compensated for brokerage and consulting services through commissions and
fees. Commission rates and fees vary in amount and can depend on a number of factors, including the type of
insurance or reinsurance coverage provided, the particular insurer or reinsurer selected, and the capacity in which
the broker acts and negotiates with clients. Revenues can be affected by premium rate levels in the insurance and
reinsurance markets, the amount of risk retained by insurance and reinsurance clients, and by the value of the
risks that have been insured since commission-based compensation is frequently related to the premiums paid by
insureds and reinsureds. In many cases, fee compensation may be negotiated in advance, based on the type of
risk, coverage required, and service provided by the Company and ultimately, the extent of the risk placed into the
insurance market or retained by the client. The trends and comparisons of revenue from one period to the next
can be affected by changes in premium rate levels, fluctuations in client risk retention and increases or decreases
in the value of risks that have been insured, as well as new and lost business, and the volume of business from
new and existing clients.
In addition to compensation from its clients, Marsh also receives other compensation, separate from retail fees
and commissions, from insurance companies. This other compensation includes, among other things, payments
for consulting and analytics services provided to insurers; compensation for administrative and other services
(including fees for underwriting services and services provided to or on behalf of insurers relating to the
administration and management of quota shares, panels and other facilities in which insurers participate); and
contingent commissions, which are paid by insurers based on factors such as volume or profitability of Marsh's
placements, primarily driven by Marsh McLennan Agency ("MMA") and parts of Marsh's international operations.
Marsh and Guy Carpenter receive interest income on certain funds (such as premiums and claims proceeds) held
in a fiduciary capacity for others. The investment of fiduciary funds is regulated by state and other insurance
authorities. These regulations typically require segregation of fiduciary funds and limit the types of investments
that may be made. Interest income from these investments varies depending on the amount of funds invested and
43
Operating Expenses
In the Consulting segment, expenses increased $320 million, or 5%, to $7.4 billion in 2024, compared to $7.0
billion in 2023. Expenses reflect a decrease of 1% primarily from dispositions.
Expenses in 2024 increased primarily due to compensation and benefits driven by higher base salaries and
incentive compensation, offset by a decrease from dispositions primarily related to the sale of the Mercer U.K.
pension administration and U.S. health and benefits administration businesses. Expenses in 2023 included a
benefit of $51 million of insurance and indemnity recoveries for a legacy JLT E&O matter relating to suitability of
advice provided to individuals for defined benefit pension transfers in the U.K.
In 2024, the Company incurred $79 million of total restructuring costs in the Consulting segment, compared to $62
million in the prior year, primarily related to the Company's activities initiated in the fourth quarter of 2022, focused
on workforce actions, rationalization of technology and functional services, and reductions in real estate.
Corporate and Other
Corporate expenses decreased $11 million, or 3%, to $318 million in 2024, compared to $329 million in 2023,
reflecting primarily lower restructuring costs in the current year.
Interest Income
Interest income was $83 million in 2024, compared to $78 million in 2023. Interest income increased $5 million in
2024, due to higher average corporate funds compared to the prior year.
Interest Expense
Interest expense was $700 million in 2024, compared to $578 million in 2023. Interest expense increased
$122 million in 2024, reflecting higher levels of debt from new debt issuances and higher interest rates compared
to the prior year. Interest expense in 2024 includes $26 million of financing costs, primarily related to customary
upfront fees for the Commitment Letter.
Investment Income
The caption "Investment income" in the consolidated statements of income comprises realized and unrealized
gains and losses from investments. It includes, when applicable, other than temporary declines in the value of
securities, mark-to-market increases or decreases in equity investments with readily determinable fair values and
equity method gains or losses on its investments in private equity funds. The Company's investments may include
direct investments in insurance, consulting or other strategically linked companies and investments in private
equity funds. The Company recorded net investment income of $12 million in 2024, compared to $5 million in
2023. The increase in 2024 is primarily driven by higher mark-to-market gains from the Company's investments
compared to the prior year.
Income and Other Taxes
The Company's consolidated effective tax rate for 2024 and 2023 was 24.9% and 24.3%, respectively.
The tax rates in both years reflect the impact of discrete tax matters such as excess tax benefits related to share-
based compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments, non-
taxable adjustments related to contingent consideration for acquisitions, return to provision adjustments, and
valuation allowances for certain tax credits. The 2024 effective tax rate reflects the full impact of the previously
enacted change in the U.K. corporate income tax rate from 19% to 25%, which was effective April 1, 2023. The
blended U.K. statutory tax rate for 2023 was 23.5%.
In 2023, the Company released valuation allowances related to its non-U.S. operations. Management determined
that there was sufficient positive evidence to conclude that it was more likely than not that deferred tax assets
were realizable, primarily due to the sustained profitability of its operations. The release of valuation allowances
resulted in a decrease to tax expense of $94 million in 2023.
The effective tax rate may vary significantly from period to period. The effective tax rate is sensitive to the
geographic mix of earnings and the cost to repatriate the Company's earnings, which may result in higher or lower
effective tax rates. Therefore, a shift in the mix of profits among jurisdictions, or changes in the Company's
repatriation strategy to access offshore cash, can affect the effective tax rate. In 2024, pre-tax income in the U.K.,
Canada, Ireland, India, Bermuda, Germany, Australia, United Arab Emirates, Japan, and Singapore accounted for
46
approximately 65% of the Company's total non-U.S. pre-tax income, with effective rates in those countries of
25.0%, 28.0%, 16.3%, 27.9%, 0.0%, 30.9%, 36.7%, 17.6%, 38.2%, and 18.0%, respectively.
In addition, losses in certain jurisdictions cannot be offset by earnings from other operations and may require
valuation allowances that affect the rate in a particular period, depending on estimates of the value of associated
deferred tax assets which can be realized. A valuation allowance was recorded to reduce deferred tax assets to
the amount that the Company believes is more likely than not to be realized. Details are provided in Note 7,
Income Taxes, in the notes to the consolidated financial statements. The effective tax rate is also sensitive to
changes in unrecognized tax benefits, including the impact of settled tax audits and expired statutes of limitations.
The Company has established liabilities for uncertain tax positions in relation to potential assessments in the
jurisdictions in which it operates. In the third quarter of 2024, the Company received closure notices and
assessments from the U.K. tax authority in relation to its 2016-2020 examinations which disallowed certain
interest expense deductions. The Company has appealed the assessments and resolving this matter through
litigation or alternative dispute resolution may take several years. The Company believes the resolution of tax
matters will not have a material effect on the consolidated financial position of the Company. However, an adverse
resolution of tax matters from current or future audits or tax litigation could have a material impact on the
Company's net income or cash flows and on its effective tax rate in a particular future period.
Changes in tax laws, rulings, policies, or related legal and regulatory interpretations occur frequently and may
have significant favorable or adverse impacts on our effective tax rate. In 2021, the Organization for Economic
Cooperation and Development's ("OECD") released model rules for a 15% global minimum tax, known as Pillar
Two. Pillar Two has now been enacted by most key non-U.S. jurisdictions where the Company operates, including
the U.K. and Ireland. This minimum tax is treated as a period cost beginning in 2024 and does not have a material
impact on the Company's financial results of operations for the current period. The Company continues to monitor
legislative developments, as well as additional guidance from countries that have enacted Pillar Two legislation
and will ensure it complies with any changes.
As a U.S.-domiciled parent holding company, the Company is the issuer of essentially all of the Company's
external indebtedness, and incurs the related interest expense in the U.S. The Company’s interest expense
deductions are not currently limited. Further, most senior executive and oversight functions are conducted in the
U.S. and the associated costs are incurred primarily in the U.S. Some of these expenses may not be deductible in
the U.S., which may impact the effective tax rate.
Changes to the U.S. tax law in recent years have allowed the Company to repatriate foreign earnings without
incurring additional U.S. federal income tax costs as foreign income is generally already taxed in the U.S.
However, permanent reinvestment continues to be a component of the Company's global capital strategy. The
Company continues to evaluate its global investment and repatriation strategy considering its capital requirements
and potential costs of repatriation, which are generally limited to local country withholding taxes.
47
Liquidity and Capital Resources
The Company is organized as a legal entity separate and distinct from its operating subsidiaries. As the Company
does not have significant operations of its own, the Company is dependent upon dividends and other payments
from its operating subsidiaries to pay principal and interest on its outstanding debt obligations, pay dividends to
shareholders, repurchase its shares and pay corporate expenses. The Company can also provide financial
support to its operating subsidiaries for acquisitions, investments and certain parts of their business that require
liquidity, such as the capital markets business of Guy Carpenter. Other sources of liquidity include borrowing
facilities discussed below in the Financing Cash Flows section.
The Company derives a significant portion of its revenue and operating profit from operating subsidiaries located
outside of the U.S. Funds from those operating subsidiaries are regularly repatriated to the U.S. out of annual
earnings. At December 31, 2024, the Company had approximately $1.4 billion of cash and cash equivalents in its
foreign operations, which includes $428 million of operating funds required to be maintained for regulatory
requirements or as collateral under certain captive insurance arrangements. The Company expects to continue its
practice of repatriating available funds from its non-U.S. operating subsidiaries out of current annual earnings.
Where appropriate, a portion of the current year earnings will continue to be permanently reinvested.
In 2024, the Company recorded foreign currency translation adjustments which decreased net equity by
$569 million. Continued strengthening of the U.S. dollar against foreign currencies would further decrease the
translated U.S. dollar value of the Company’s net investments in its non-U.S. subsidiaries, as well as the
translated U.S. dollar value of cash repatriations from those subsidiaries.
Cash and cash equivalents on our consolidated balance sheets includes funds available for general corporate
purposes. Fiduciary assets are shown separately in the consolidated balance sheets as cash and cash
equivalents held in a fiduciary capacity, with a corresponding amount in current liabilities. Fiduciary assets cannot
be used for general corporate purposes and should not be considered as a source of liquidity for the Company.
Operating Cash Flows
The Company provided $4.3 billion of cash from operations both in 2024 and in 2023. These amounts reflect the
net income of the Company during those periods, excluding gains or losses from investments, adjusted for non-
cash charges, and changes in working capital which relate primarily to the timing of payments of accrued
liabilities, including incentive compensation, or receipts of receivables and pension contributions. The Company
used cash of $270 million and $271 million related to its restructuring activities in 2024 and 2023, respectively.
Pension Related Items
Contributions
The Company's policy for funding its tax-qualified defined benefit plans is to contribute amounts at least sufficient
to meet the funding requirements set forth in accordance with applicable law. In 2024, the Company contributed
$34 million to its U.S. defined benefit pension plans and $59 million to its non-U.S. defined benefit pension plans.
In 2023, the Company contributed $33 million to its U.S. defined benefit pension plans and $78 million to its non-
U.S. defined benefit pension plans.
In the U.S., contributions to the tax-qualified defined benefit plans are based on Employee Retirement Income
Security Act ("ERISA") guidelines and the Company generally expects to maintain a funded status of 80% or more
of the liability determined in accordance with the ERISA guidelines. In 2024, the Company made contributions of
$32 million to its non-qualified plans and expects to contribute approximately $35 million in 2025. The Company
also made required contributions of $2 million to its U.S. qualified plans in 2024. In 2025, the Company is
expected to be required to make contributions totaling $2 million to its U.S. qualified plans.
Outside the U.S., the Company has a large number of non-U.S. defined benefit pension plans, the largest of
which are in the U.K., which comprise approximately 78% of non-U.S. plan assets at December 31, 2024.
Contribution rates for non-U.S. plans are generally based on local funding practices and statutory requirements,
which may differ significantly from measurements in accordance with U.S. GAAP.
In the U.K., the assumptions used to determine pension contributions are the result of legally prescribed
negotiations between the Company and the plans' trustee that typically occur every three years in conjunction
with the actuarial valuation of the plans. Currently, this results in a lower funded status compared to U.S. GAAP
and may result in contributions irrespective of the U.S. GAAP funded status.
48
In 2021, the JLT Pension Scheme was merged into the MMC U.K. Pension Fund with a new segregated JLT
section created (referred to as the "JLT section").
The Company contributed $21 million to its U.K. plans, including the JLT section, in 2024. The Company's
contributions to its U.K. plans, including the JLT section, for 2025 are expected to be approximately $1 million.
The Company made deficit contributions of $20 million to the JLT section in 2024 and is not required to make any
deficit contributions to the JLT section in 2025.
For the MMC U.K. Pension Fund, excluding the JLT section, an agreement was reached with the trustee in the
fourth quarter of 2022, based on the surplus funding position at December 31, 2021. In accordance with the
agreement, no deficit funding is at the earliest required until 2026. The funding level will be re-assessed during
2025 as part of the December 31, 2024 actuarial valuation to determine if contributions are required in 2026. In
December 2022, the Company renewed its agreement to support annual deficit contributions that may be required
by the U.K. operating companies under certain circumstances, up to £450 million (or $566 million) over a seven-
year period. This is part of an agreement which gives the Company greater influence over asset allocation and
overall investment decisions.
The Company expects to contribute approximately $43 million to its non-U.S. defined benefit plans in 2025,
comprising approximately of $1 million to the U.K. plans and $42 million to plans outside of the U.K.
Changes in Funded Status and Expense
The year-over-year change in the funded status of the Company's pension plans is impacted by the difference
between actual and assumed results, particularly with regard to return on assets, and changes in the discount
rate, as well as the amount of Company contributions, if any. Unrecognized actuarial losses as of December 31,
2024, were approximately $1.4 billion and $3.5 billion for the U.S. plans and non-U.S. plans, respectively,
compared with losses of $1.3 billion and $3.2 billion at December 31, 2023. The increase in the U.S. is primarily
due to lower than expected returns on plan assets. The increase in the non-U.S. plans is primarily due to lower
than expected returns on plan assets partly offset by increases in the discount rates used to measure plan
liabilities and the impact of foreign exchange. In the past several years, the amount of unamortized losses has
been significantly impacted, both positively and negatively, by actual asset performance and changes in discount
rates. The discount rate used to measure plan liabilities for the Company's U.S. and U.K. plans increased in 2024,
decreased in 2023 and increased in 2022. An increase in the discount rate decreases the measured plan benefit
obligation, resulting in actuarial gains, while a decrease in the discount rate increases the measured plan
obligation, resulting in actuarial losses. In 2024, the Company's defined benefit pension plan assets had gains of
2.2% and losses of 5.0% in the U.S. and U.K., respectively, as compared to gains of 9.3% and 4.1% in the U.S.
and U.K., respectively, in 2023.
Overall, based on the measurement at December 31, 2024, net benefit credits related to the Company’s defined
benefit pension plans are expected to be lower by $69 million in 2025, compared to 2024. The decrease is
primarily due to lower expected return on assets and higher recognized actuarial loss.
The Company’s accounting policies for its defined benefit pension plans, including the selection of and sensitivity
to assumptions, are discussed in Management’s Discussion of Critical Accounting Estimates. For additional
information regarding the Company’s retirement plans, refer to Note 1, Summary of Significant Accounting
Policies, and Note 8, Retirement Benefits, in the notes to the consolidated financial statements.
Financing Cash Flows
Net cash provided by financing activities was $4.5 billion in 2024, compared with $1.1 billion used by financing
activities in 2023.
Credit Facilities
In October 2023, the Company increased its multi-currency unsecured five-year revolving credit facility (the
"Credit Facility") capacity to $3.5 billion from $2.8 billion and extended the expiration to October 2028. The
interest rate on the Credit Facility was initially based on LIBOR plus a fixed margin which varied with the
Company's credit rating. In the second quarter of 2023, the Credit Facility was amended that borrowings under
the Credit Facility bear interest at a rate per annum equal, at the Company's option, either at (a) Securities
Overnight Financing Rate ("SOFR") benchmark rate for U.S. dollar borrowings, or (b) a currency specific
benchmark rate, plus an applicable margin which varies with the Company's credit ratings. The Company is
required to maintain certain coverage and leverage ratios for the Credit Facility, which are evaluated quarterly.
49
The Credit Facility includes provisions for determining a benchmark replacement rate in the event existing
benchmark rates are no longer available or in certain other circumstances, in which an alternative rate may be
required. At December 31, 2024 and 2023, the Company had no borrowings under this facility.
In October 2023, the Company terminated its one-year uncommitted revolving credit facility (the "Uncommitted
Credit Facility"). There were no borrowings outstanding under the Uncommitted Credit Facility at December 31,
2023.
The Company also maintains other credit and overdraft facilities with various financial institutions aggregating
$123 million at December 31, 2024, and $113 million at December 31, 2023. There were no outstanding
borrowings under these facilities at December 31, 2024 and 2023.
The Company has outstanding guarantees and letters of credit with various banks aggregating $163 million and
$139 million at December 31, 2024 and 2023, respectively.
Debt
The Company has a short-term debt financing program through the issuance of commercial paper. The proceeds
from the issuance of commercial paper are used for general corporate purposes. In November 2023, the
Company increased its short-term commercial paper financing program (the "Program") to $3.5 billion from $2.8
billion. The Company did not have any commercial paper outstanding at December 31, 2024 and 2023.
In November 2024, the Company issued $7.25 billion in senior notes as follows:
•
$950 million 4.550% senior notes due 2027;
•
$1 billion 4.650% senior notes due 2030;
•
$1 billion 4.850% senior notes due 2031;
•
$2 billion 5.000% senior notes due 2035;
•
$500 million 5.350% senior notes due 2044;
•
$1.5 billion 5.400% senior notes due 2055; and
•
$300 million floating rate senior notes due 2027 (the "Floating Notes")
collectively referred to as the "November 2024 Notes".
For the Floating Notes, interest is calculated based on a compounded SOFR benchmark rate plus 0.700%.
The Company used the net proceeds from the November 2024 Notes offering to fund, in part, the McGriff
Transaction, including the payment of related fees and expenses, as well as for general corporate purposes.
In June 2024, the Company repaid $600 million of 3.50% senior notes at maturity.
In March 2024, the Company repaid $1 billion of 3.875% senior notes at maturity.
In February 2024, the Company issued $500 million of 5.150% senior notes due 2034 and $500 million of 5.450%
senior notes due 2054. The Company used the net proceeds from these issuances for general corporate
purposes.
In October 2023, the Company repaid $250 million of 4.05% senior notes at maturity.
In September 2023, the Company issued $600 million of 5.400% senior notes due 2033 and $1 billion of 5.700%
senior notes due 2053. In March 2023, the Company issued $600 million of 5.450% senior notes due 2053. The
Company used the net proceeds from these issuances for general corporate purposes.
The Company's senior debt is currently rated A- by Standard & Poor's ("S&P"), A3 by Moody's, and A- by Fitch.
The Company's short-term debt is currently rated A-2 by S&P, P-2 by Moody's, and F-2 by Fitch. The Company
carries a Stable outlook with S&P, Moody's and Fitch.
Bridge Loan Commitment Letter
In connection with the McGriff Transaction, on September 29, 2024, the Company entered into a Commitment
Letter to provide the Company with a Bridge Loan Facility. The Company paid approximately $23 million of
customary upfront fees related to the Commitment Letter, amortized as interest expense. On November 8, 2024,
the Company terminated the Commitment Letter. The Bridge Loan Facility agreement is discussed in more detail
in Note 13, Debt, in the notes to the consolidated financial statements.
50
Management’s Discussion of Critical Accounting Estimates
Management makes estimates and judgments that affect reported amounts of assets, liabilities, revenue and
expenses, and disclosure of contingent assets and liabilities. Management considers the following policies to be
critical to understanding the Company’s financial statements because their application places the most significant
demands on management’s judgment and requires management to make estimates about the effect of matters
that are inherently uncertain. Actual results may differ from those estimates.
Revenue Recognition
In the Risk and Insurance Services segment, management makes judgments related to the amount of variable
revenue consideration to ultimately be received on placement of quota share reinsurance treaties and contingent
commission from insurers. Management also makes judgments and estimates to measure the progress toward
completing performance obligations and realization rates for consideration related to contracts as well as potential
performance-based fees in the Consulting segment.
The Company capitalizes the incremental costs to obtain contracts primarily related to commissions or sales
bonus payments. These deferred costs are amortized over the expected life of the underlying customer
relationships. The Company also capitalizes certain pre-placement costs that are considered fulfillment costs that
are amortized at a point in time when the associated revenue is recognized.
Refer to Note 2, Revenue, in the notes to the consolidated financial statements for additional information.
Legal and Other Loss Contingencies
The Company and its subsidiaries are subject to numerous claims, lawsuits and proceedings including claims for
errors and omissions ("E&O"). The Company records a liability when a loss is both probable and reasonably
estimable which requires significant management judgment. The Company utilizes case level reviews by inside
and outside counsel, an internal actuarial analysis by Oliver Wyman Group, a subsidiary of the Company, and
other methods to estimate potential losses. The liability is reviewed quarterly and adjusted based on claims
developments. In many cases, the Company has not recorded a liability, other than for legal fees to defend the
claim, because the Company is unable, at present time, to make a determination that a loss is both probable and
reasonably estimable. Given the unpredictability of E&O claims and of litigation that could arise from such claims,
it is possible that an adverse outcome in a particular matter could have a material adverse effect on the
Company’s businesses, results of operations, financial condition or cash flows in a given quarterly or annual
period.
In addition, to the extent that insurance coverage is available, significant management judgment is required to
determine the amount of recoveries that are probable of collection under the Company’s various insurance
programs.
Retirement Benefits
The Company maintains qualified and non-qualified defined benefit pension and defined contribution plans for its
eligible U.S. employees and a variety of defined benefit and defined contribution plans for its eligible non-U.S.
employees. The Company’s policy for funding its tax-qualified defined benefit retirement plans is to contribute
amounts at least sufficient to meet the funding requirements set forth in the U.S. and applicable foreign laws.
The Company recognizes the funded status of its over-funded defined benefit pension and retiree medical plans
as a net benefit plan asset and its unfunded and underfunded plans as a net benefit plan liability. The gains or
losses and prior service costs or credits that have not been recognized as components of net benefit (credit) cost
are recorded as a component of Accumulated Other Comprehensive Income ("AOCI"), net of tax, in the
Company’s consolidated balance sheets. The gains and losses that exceed specified corridors in accordance with
accounting guidance, of the greater of the projected benefit obligation or the market-related value of plan assets,
are amortized prospectively out of AOCI over a period that approximates the remaining life expectancy of
participants in plans where substantially all participants are inactive or the average remaining service period of
active participants for plans with active participants. The vast majority of unrecognized losses relate to inactive
plans and are amortized over the remaining life expectancy of the participants.
The determination of net periodic benefit (credit) cost is based on a number of assumptions, including an
expected long-term rate of return on plan assets, the discount rate, mortality and assumed rate of salary increase.
The assumptions used in the calculation of net periodic benefit (credit) cost and pension liabilities are disclosed in
Note 8, Retirement Benefits, in the notes to the consolidated financial statements.
53
Income Taxes
Significant judgment is required in determining the annual effective tax rate and in evaluating uncertain tax
positions. The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions
taken or expected to be taken in a tax return. The evaluation of a tax position is a two-step process:
•
First, the Company determines whether it is more-likely-than-not a tax position will be sustained upon tax
examination, including resolution of any related appeals or litigation, based on only the technical merits of
the position. If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of
that position is not recognized in the financial statements.
•
The second step is measurement. A tax position that meets the more-likely-than-not recognition threshold
is measured to determine the amount of benefit to recognize in the financial statements. The tax position
is measured as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate
resolution with a taxing authority. Uncertain tax positions are evaluated based upon the facts and
circumstances that exist at each reporting period and involve significant management judgment.
Subsequent changes in judgment based upon new information may lead to changes in recognition, de-
recognition, and measurement. Adjustments may result, for example, upon resolution of an issue with the
taxing authorities, or expiration of a statute of limitations barring an assessment for an issue.
The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax
expense. The Company’s accounting policy follows the portfolio approach that leaves stranded income tax effects
in accumulated other comprehensive income.
Certain items are included in the Company's tax returns at different times than the items are reflected in the
financial statements. As a result, the annual tax expense reflected in the consolidated statements of income is
different than that reported in the tax returns. Some of these differences are permanent, such as non-deductible
expenses, and some differences are temporary and reverse over time, such as depreciation expense.
Temporary differences create deferred tax assets and liabilities, which are measured using the enacted tax rates
expected to apply to taxable income in the periods in which the deferred tax asset or liability is expected to be
settled or realized. Deferred tax liabilities generally represent tax expense recognized in the financial statements
for which cash tax payments have been deferred, or expense for which a deduction has been taken already in the
tax return but the expense has not yet been recognized in the financial statements. Deferred tax assets generally
represent items that can be used as a tax deduction or credit in tax returns in future years for which a benefit has
already been recorded in the financial statements.
The Company evaluates all significant available positive and negative evidence, including the existence of losses
in recent years and its forecast of future taxable income by jurisdiction, in assessing the need for a valuation
allowance against deferred tax assets. The Company also considers tax planning strategies that would result in
realization of deferred tax assets, and the presence of taxable income in prior period tax filings in jurisdictions that
allow for the carry back of tax attributes pursuant to the applicable tax law. The underlying assumptions the
Company uses in forecasting future taxable income require significant judgment and take into account the
Company's recent performance. The ultimate realization of deferred tax assets is dependent on the generation of
future taxable income during the periods in which temporary differences or carry-forwards are deductible or
creditable. Valuation allowances are established for deferred tax assets when it is estimated that it is more-likely-
than-not that future taxable income will be insufficient to fully use a deduction or credit in that jurisdiction.
Fair Value Determinations
Goodwill Impairment Testing – The Company is required to assess goodwill and any indefinite-lived intangible
assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. The
Company performs the annual impairment assessment for each of its reporting units during the third quarter of
each year. The reporting unit level is defined as the same level as the Company's operating segments. In
accordance with applicable accounting guidance, a company can assess qualitative factors to determine whether
it is necessary to perform a quantitative goodwill impairment test. Alternatively, the Company may elect to proceed
directly to the quantitative goodwill impairment test.
55
In 2024, the Company performed a qualitative impairment assessment. As part of its assessment, the Company
considered numerous factors, including:
•
that the fair value of each reporting unit exceeds its carrying value by a substantial margin based on its
most recent quantitative assessment in 2023;
•
whether significant acquisitions or dispositions occurred which might alter the fair value of its reporting
units;
•
macroeconomic conditions and their potential impact on reporting unit fair values;
•
actual performance compared with budget and prior projections used in its estimation of reporting unit fair
values;
•
industry and market conditions; and
•
the year-over-year change in the Company’s share price.
The Company completed its qualitative assessment in the third quarter of 2024, updated for significant
considerations at year-end, and concluded that goodwill was not impaired.
Purchase Price Allocation
Assets acquired and liabilities assumed, including contingent consideration, as part of a business acquisition are
generally recorded at their fair value at the date of acquisition. The excess of purchase price over the fair value of
assets acquired and liabilities assumed is recorded as goodwill. Determining fair value of identifiable assets,
particularly intangibles, and liabilities acquired also requires management to make estimates, which are based on
all available information and in some cases assumptions with respect to the timing and amount of future revenues
and expenses associated with an asset. These estimates directly impact the amount of identified intangible assets
recognized and the related amortization expense in future periods.
New Accounting Pronouncements
Note 1, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements contains
a summary of the Company’s significant accounting policies, including a discussion of recently issued accounting
pronouncements and their impact or potential future impact on the Company’s financial results, if determinable,
under the sub-heading "New Accounting Pronouncements."
56
net operating income would increase or decrease by approximately $93 million. The corresponding increase or
decrease in net operating income in 2023 was estimated at $80 million.
The Company has exposure to approximately 80 foreign currencies overall. In Continental Europe, the largest
amount of revenue from renewals for the Risk and Insurance Services segment occurs in the first quarter.
Equity Price Risk
The Company holds investments in both public and private companies as well as private equity funds, including
investments of approximately $19 million that are valued using readily determinable fair values and approximately
$16 million of investments without readily determinable fair values. The Company also has investments of
approximately $257 million that are accounted for using the equity method. The Company's investments are
subject to risk of decline in market value, which, if determined to be other than temporary, could result in realized
impairment losses. The Company periodically reviews the carrying value of such investments to determine if any
valuation adjustments are appropriate under the applicable accounting pronouncements.
Other
A number of lawsuits and regulatory proceedings are pending. Refer to Note 16, Claims, Lawsuits and Other
Contingencies, in the notes to the consolidated financial statements included in this report.
58
MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of Significant Accounting Policies
Nature of Operations: Marsh & McLennan Companies, Inc., and its consolidated subsidiaries (the "Company"), a
global professional services firm, is organized based on the different services that it offers. Under this structure,
the Company’s two business segments are Risk and Insurance Services and Consulting.
The Risk and Insurance Services segment ("RIS") includes risk management activities (risk advice, risk transfer
and risk control and mitigation solutions) as well as insurance and reinsurance broking and services for
businesses, public entities, insurance companies, associations, professional services organizations, and private
clients. The Company conducts business in this segment through Marsh and Guy Carpenter. Marsh provides
data-driven risk advisory services and insurance solutions to commercial and consumer clients. Guy Carpenter
develops advanced risk, reinsurance and capital strategies that help clients grow profitably and pursue emerging
opportunities.
The Consulting segment includes health, wealth and career advice, solutions and products, and specialized
management, strategic, economic and brand consulting services. The Company conducts business in this
segment through Mercer and Oliver Wyman Group. Mercer delivers advice and technology-driven solutions that
help organizations redefine the future of work, reshape retirement and investment outcomes, and unlock health
and well-being for a changing workforce. Oliver Wyman Group serves as a critical strategic, economic and brand
advisor to private sector and governmental clients.
Acquisition of McGriff
On November 15, 2024, the Company completed the acquisition of McGriff Insurance Services, LLC ("McGriff"),
an affiliate of TIH Insurance Holdings (the "McGriff Transaction").
McGriff's results of operations for the period November 15, 2024 through December 31, 2024 were included in the
Company’s results of operations for 2024. As of November 15, 2024, the historical McGriff business was
combined into the Company's operations included in Marsh, in the Risk and Insurance Services reporting
segment, and the Company assumed the assets and legal liabilities of McGriff.
Principles of Consolidation: The accompanied consolidated financial statements are prepared pursuant to the
rules and regulations of the Securities and Exchange Commission ("SEC") and in accordance with accounting
principles generally accepted in the United States (U.S.). The consolidated financial statements include all wholly-
owned and majority-owned subsidiaries. All significant inter-company transactions and balances have been
eliminated.
Revenue: The Company provides detailed discussion regarding its revenue policies in Note 2, Revenue.
Cash and Cash Equivalents: Cash and cash equivalents primarily consist of certificates of deposit and time
deposits, with original maturities of three months or less, and money market funds. The estimated fair value of the
Company's cash and cash equivalents approximates their carrying value. The Company is required to maintain
operating funds primarily related to regulatory requirements outside of the U.S. or as collateral under captive
insurance arrangements. At December 31, 2024, the Company maintained $455 million compared to $486 million
at December 31, 2023 related to these regulatory requirements.
Fixed Assets: Fixed assets are stated at cost less accumulated depreciation and amortization. Expenditures for
improvements are capitalized. Upon sale or retirement of an asset, the cost and related accumulated depreciation
and amortization are removed from the accounts and any gain or loss is reflected in income. Expenditures for
maintenance and repairs are charged to operations as incurred.
Buildings, building improvements, furniture, and equipment are depreciated on a straight-line basis over the
estimated useful lives of these assets. Furniture and equipment are depreciated over periods ranging from 3 to 10
years. Leasehold improvements are amortized on a straight-line basis over the periods covered by the applicable
leases or the estimated useful life of the improvement, whichever is less. Buildings are depreciated over periods
ranging from 30 to 40 years. The Company periodically reviews long-lived assets for impairment whenever events
or changes indicate that the carrying value of assets may not be recoverable.
64
to year if, at the measurement date, it is within the range between the 25th and 75th percentile of the expected
long-term annual returns. Historical long-term average asset returns of the most significant plans are also
reviewed to determine whether they are consistent and reasonable compared with the rate selected. The
expected return on plan assets is determined by applying the assumed long-term rate of return to the market-
related value of plan assets. This market-related value recognizes investment gains or losses over a five-year
period from the year in which they occur. Investment gains or losses for this purpose are the difference between
the expected return calculated using the market-related value of assets and the actual return based on the market
value of assets. Since the market-related value of assets recognizes gains or losses over a five-year period, the
future market-related value of the assets will be impacted as previously deferred gains or losses are reflected.
The Company reviews its actuarial assumptions on an annual basis and modifies these assumptions based on
current rates and trends.
The funded status of the Company's pension plans is recorded in the consolidated balance sheets and provides
for a delayed recognition of actuarial gains or losses arising from changes in the projected benefit obligation due
to changes in the assumed discount rates, differences between the actual and expected value of plan assets and
other assumption changes. The unrecognized pension plan actuarial gains or losses and prior service costs not
yet recognized in net periodic benefit (credit) cost are recognized in Accumulated Other Comprehensive Income
(Loss) ("AOCI"), net of tax. These gains and losses are amortized prospectively out of AOCI over a period that
approximates the remaining life expectancy of participants in plans where substantially all participants are
inactive, or the average remaining service period of active participants for plans with active participants. The vast
majority of unrecognized losses relate to inactive plans and are amortized over the remaining life expectancy of
the participants.
The discount rate selected for each U.S. plan is based on a model bond portfolio with coupons and redemptions
that closely match the expected liability cash flows from the plan. Discount rates for non-U.S. plans are based on
appropriate bond indices adjusted for duration. In the United Kingdom (U.K.), the plan duration is reflected using
the Mercer yield curve.
Defined Benefit Pension Plans in the U.K. and certain other countries allow participants an option for the payment
of a lump sum distribution from plan assets before retirement in full satisfaction of the retirement benefits due to
the participant as well as any survivor’s benefit. The Company’s policy is to treat these lump sum payments as a
partial settlement of the plan liability if they exceed the total of interest plus service costs.
Refer to Note 8, Retirement Benefits, for additional information.
Leases: A lease is defined as a party obtaining the right to use an asset legally owned by another party. The
Company determines if an arrangement is a lease at inception. Right-of-use ("ROU") assets and lease liabilities
are recorded at the lease commencement date. Lease liabilities are recognized at the present value of the
contractual fixed lease payments. The Company uses discount rates to determine the present value of future
lease payments. The Company primarily uses its incremental borrowing rate adjusted to reflect a secured rate,
based on the information available for leases, including the lease term and interest rate environment in the
country in which the lease exists. The lease terms used to calculate the ROU asset and lease liability may include
options to extend or terminate when it is reasonably certain that the Company will exercise that option. ROU
assets are recognized equal to lease liabilities, adjusted for prepaid lease payments, initial direct costs and lease
incentives. Operating lease expense is recognized on a straight-line basis over the lease term, while variable
lease payments are expensed as incurred.
Leases are negotiated with third-parties and, in some instances, contain renewal, expansion and termination
options. The Company also sub-leases certain office facilities to third-parties when the Company no longer utilizes
the space. In addition to the base rental costs, the Company's lease agreements generally provide for rent
escalations resulting from increased assessments for real estate taxes and other charges. A portion of the
Company's real estate lease portfolio contains base rents subject to annual changes in the Consumer Price Index
("CPI") as well as charges for operating expenses which are reimbursable to the landlord based on actual usage.
Changes to the CPI and payments for such reimbursable operating expenses are considered variable and are
recognized as variable lease costs in the period in which the obligation for those payments was incurred.
Approximately 98% of the Company's lease obligations are for the use of office space. All of the Company's
material leases are operating leases.
As a practical expedient, the Company has elected an accounting policy not to separate non-lease components
from lease components and instead account as a single lease component. The Company has also elected not to
66
recognize ROU assets and lease liabilities for leases that, at the commencement date, are for 12 months or less.
Refer to Note 12, Leases for additional information.
Capitalized Software Costs: The Company capitalizes certain costs to develop, purchase or modify software for
the internal use of the Company. These costs are amortized on a straight-line basis over periods ranging from 3 to
10 years. Costs incurred during the preliminary project stage and post implementation stage are expensed as
incurred. Costs incurred during the application development stage are capitalized. Costs related to updates and
enhancements are only capitalized if they will result in additional functionality. Capitalized computer software
costs of $474 million and $519 million, net of accumulated amortization of $2.1 billion and $2 billion at
December 31, 2024 and 2023, respectively, are included in other assets in the consolidated balance sheets.
Legal and Other Loss Contingencies: The Company and its subsidiaries are subject to a significant number of
claims, lawsuits and proceedings including claims for errors and omissions ("E&O"). The Company records a
liability when a loss is both probable and reasonably estimable which requires significant management judgment.
Legal and other contingent liabilities recorded are not discounted.
The Company utilizes case level reviews by inside and outside counsel, an internal actuarial analysis by Oliver
Wyman Group, a subsidiary of the Company, and other methods to estimate potential losses, including estimated
legal costs. The liability is reviewed quarterly and adjusted as developments warrant. In many cases, the
Company has not recorded a liability, other than for legal fees to defend the claim, because the Company is
unable, at present time, to make a determination that a loss is both probable and reasonably estimable. Given the
unpredictability of E&O claims and of litigation that could arise from such claims, it is possible that an adverse
outcome in a particular matter could have a material adverse effect on the Company's businesses, results of
operations, financial condition or cash flows in a given quarterly or annual period.
At December 31, 2024, the Company’s liability for E&O was $391 million, compared to $385 million at
December 31, 2023, of which $86 million and $71 million, respectively, were current liabilities and included in
accounts payable and accrued liabilities in the consolidated balance sheets. In addition, to the extent that
insurance coverage is available, significant management judgment is required to determine the amount of
recoveries that are probable of collection in accordance with the Company’s various insurance programs.
Income Taxes: The Company's effective tax rate reflects its income, statutory tax rates and tax planning in the
various jurisdictions in which it operates. Significant judgment is required in determining the annual tax provision
and in evaluating uncertain tax positions and the ability to realize deferred tax assets.
The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or
expected to be taken in a tax return. The evaluation of a tax position is a two-step process. The first step involves
recognition. The Company determines whether it is more-likely-than-not that a tax position will be sustained upon
tax examination, including resolution of any related appeals or litigation, based on only the technical merits of the
position. The technical merits of a tax position derive from both statutory and judicial authority (legislation and
statutes, legislative intent, regulations, rulings, and case law) and their applicability to the facts and circumstances
of the tax position. If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of that
position is not recognized in the financial statements. The second step is measurement. A tax position that meets
the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the
financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely
to be realized upon ultimate resolution with a taxing authority. Uncertain tax positions are evaluated based on the
facts and circumstances that exist at each reporting period. Subsequent changes in judgment based on new
information may lead to changes in recognition, de-recognition, and measurement. Adjustments may result, for
example, upon resolution of an issue with the taxing authorities, or expiration of a statute of limitations barring an
assessment for an issue. The Company recognizes interest and penalties, if any, related to unrecognized tax
benefits in income tax expense.
Tax law may require items be included in the Company's tax returns at different times than the items are reflected
in the financial statements. As a result, the annual tax expense reflected in the consolidated statements of income
is different than that reported in the income tax returns. Some of these differences are permanent, such as
expenses that are not deductible in the returns, and some differences are temporary and reverse over time, such
as depreciation expense. Temporary differences create deferred tax assets and liabilities. Deferred tax assets
generally represent items that can be used as a tax deduction or credit in tax returns in future years for which
benefit has already been recorded in the financial statements. Valuation allowances are established for deferred
tax assets when it is estimated that future taxable income will be insufficient to use a deduction or credit in that
67
Fiduciary Assets and Liabilities: The Company, in its capacity as an insurance broker or agent, generally
collects premiums from insureds and after deducting its commissions, remits the premiums to the respective
insurance underwriters. The Company also collects claims or refunds from underwriters on behalf of insureds.
Unremitted insurance premiums and claims proceeds are held by the Company in a fiduciary capacity. The
Company's fiduciary assets primarily include bank or short-term time deposits and liquid money market funds,
classified as cash and cash equivalents. Since cash and cash equivalents held in a fiduciary capacity are not
available for corporate use, they are shown separately in the consolidated balance sheets as cash and cash
equivalents held in a fiduciary capacity, with a corresponding amount in current liabilities.
Risk and Insurance Services revenue includes interest on fiduciary assets of $497 million, $453 million and $120
million in 2024, 2023 and 2022, respectively.
Net uncollected premiums and claims and the related payables were $15.1 billion and $13.8 billion at
December 31, 2024 and 2023, respectively. The increase reflects $465 million related to the acquisition of McGriff.
The Company is not a principal to the contracts under which the right to receive premiums or the right to receive
reimbursement of insured losses arises. Accordingly, net uncollected premiums and claims and the related
payables are not assets and liabilities of the Company and are not included in the accompanying consolidated
balance sheets.
In certain instances, the Company advances premiums, refunds or claims to insurance underwriters or insureds
prior to collection. These advances are made from corporate funds and are reflected in the accompanying
consolidated balance sheets as receivables.
Foreign Currency: The financial statements of our international subsidiaries are translated from functional
currency to U.S. dollars using month-end exchange rates for assets and liabilities, and average monthly exchange
rates during the period for revenues and expenses. Translation adjustments are recorded in AOCI within the
consolidated statements of equity. Foreign exchange transaction gains and losses resulting from the conversion
of the transaction currency to functional currency are included in operating income in the consolidated statements
of income.
Estimates: The preparation of the consolidated financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosures of assets and liabilities
at the date of the financial statements, and the reported amounts of revenue and expense during the reporting
period. On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The estimates
are based on historical experience and on various other assumptions that the Company believes are reasonable.
Such matters include:
•
estimates of revenue;
•
impairment assessments and charges;
•
recoverability of long-lived assets;
•
liabilities for errors and omissions;
•
deferred tax assets, uncertain tax positions and income tax expense;
•
share-based and incentive compensation expense;
•
the allowance for current expected credit losses on receivables;
•
useful lives assigned to long-lived assets, and depreciation and amortization; and
•
fair value estimates of contingent consideration receivable or payable related to acquisitions or
dispositions.
The Company believes these estimates are reasonable based on information currently available at the time they
are made. The Company also considered the potential impact of macroeconomic factors including from the
multiple major wars and global conflicts, slower GDP growth or recession, lower interest rates, capital markets
volatility, inflation and changes in insurance premiums rates to its customer base in various industries and
geographies. Insurance exposures subject to variable factors are subject to mid-term and end of term
adjustments, as well as policy audits, which may reduce premiums and corresponding commissions. Estimates
were updated based on internal and industry specific economic data. Actual results may differ from these
estimates.
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New Accounting Pronouncements
Recently Issued Accounting Pronouncements Not Yet Adopted:
In November 2024, the FASB issued an accounting standard update on the disaggregated disclosure of income
statement expenses. The new guidance requires disclosures about specific types of expenses included in the
expense captions presented on the face of the income statement, as well as disclosures about selling expenses.
The new standard does not change the requirements for the presentation of expenses on the face of the income
statement. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within
fiscal years beginning after December 15, 2027. Early adoption is permitted. The new guidance will be applied
prospectively with the option for retrospective application. The Company is currently evaluating the guidance and
expects it to only impact disclosures with no impact to results of operations, cash flows, or financial condition.
In December 2023, the FASB issued an accounting standard update on income tax disclosures, primarily related
to the rate reconciliation and income taxes paid information. The new guidance requires public business entities,
on an annual basis, disclose specific categories in the rate reconciliation and provide additional information for
reconciling items that meet a quantitative threshold. In addition, all entities are required to disclose on an annual
basis the amount of income taxes paid, net of refunds received, disaggregated by federal, state and foreign taxes,
and by individual jurisdictions if the amount is equal to or greater than 5% of total income taxes paid, net of
refunds received. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption
is permitted. An entity should apply the amendments in the standard prospectively, even though retrospective
application is permitted. The Company is currently evaluating the guidance and expects it to only impact
disclosures with no impact to results of operations, cash flows, or financial condition.
New Accounting Pronouncement Adopted Effective December 31, 2024:
In November 2023, the Financial Accounting Standards Board ("FASB") issued an accounting standard update on
segment reporting. The new guidance: (1) introduces a requirement to disclose significant segment expenses
regularly provided to the chief operating decision maker("CODM"), (2) extends certain annual disclosures to
interim periods, (3) clarifies disclosure requirements for single reportable segment entities, (4) permits more than
one measure of segment profit or loss to be reported under certain conditions, and (5) requires disclosure of the
title and position of the CODM. The standard is effective for fiscal years beginning after December 15, 2023, and
interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance
applies retrospectively to all periods presented in the financial statements. The Company adopted the new
standard effective December 31, 2024, which impacted disclosures only, with no impact to results of operations,
cash flows, or financial condition.
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2.
Revenue
The core principle of the revenue recognition guidance is that an entity should recognize revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services. To achieve this principle, the entity applies
the following steps: identify the contract(s) with the customer, identify the performance obligations in the
contract(s), determine the transaction price, allocate the transaction price to the performance obligations in the
contract and recognize revenue when (or as) the entity satisfies a performance obligation. In accordance with the
accounting guidance, a performance obligation is satisfied either at a "point in time" or "over time", depending on
the nature of the product or service provided, and the specific terms of the contract with customers.
Other revenue included in the consolidated statements of income that is not from contracts with customers is less
than 1% of total revenue and is not presented as a separate line item.
Risk and Insurance Services
Risk and Insurance Services revenue reflects compensation for brokerage and consulting services through
commissions and fees. Commission rates and fees vary in amount and can depend on a number of factors,
including the type of insurance or reinsurance coverage provided, the particular insurer or reinsurer selected, and
the capacity in which the broker acts and negotiates with clients. For the majority of the insurance and
reinsurance brokerage arrangements, advice and services provided which culminate in the placement of an
effective policy are considered a single performance obligation. Arrangements with clients may include the
placement of a single policy (single performance obligation), multiple policies or a combination of policy
placements and other services. Consideration related to such "bundled arrangements" is allocated to the
individual performance obligations based on their stand alone selling price (multiple performance obligations).
Revenue for policy placement is generally recognized on the policy effective date, at which point control over the
services provided by the Company has transferred to the client and the client has accepted the services. In many
cases, fee compensation may be negotiated in advance, based on the type of risk, coverage required and service
provided by the Company and ultimately, the extent of the risk placed into the insurance market or retained by the
client. The trends and comparisons of revenue from one period to the next can be affected by changes in
premium rate levels, fluctuations in client risk retention and increases or decreases in the value of risks that have
been insured, as well as new and lost business, and the volume of business from new and existing clients. Fees
for non-risk transfer services provided to clients are recognized over time in the period the services are provided,
using a proportional performance model, primarily based on input measures. Revenue is typically recognized over
time using an input measure of time expended to date relative to total estimated time to be incurred at project
completion. Incurred hours represent services rendered and thereby faithfully depicts the transfer of control to the
customer.
Revenue related to reinsurance brokerage for excess of loss ("XOL") treaties is estimated based on contractually
specified minimum or deposit premiums, and adjusted as additional evidence of the ultimate amount of brokerage
is received. Revenue for quota share treaties is estimated based on indications of estimated premium income
provided by the ceding insurer. The estimated brokerage revenue recognized for quota share treaties is
constrained to an amount that is probable to not have a significant negative adjustment. The estimated revenue
and the constraint are evaluated as additional evidence of the ultimate amount of underlying risks to be covered
and are received over the 12 to 18 months following the effective date of the placement.
In addition to compensation from its clients, Marsh also receives other compensation, separate from retail fees
and commissions, from insurance companies. This other compensation includes, among other things, payments
for consulting and analytics services provided to insurers; compensation for administrative and other services
(including fees for underwriting services and services provided to or on behalf of insurers relating to the
administration and management of quota shares, panels and other facilities in which insurers participate); and
insurer revenue, paid by insurers based on factors such as volume or profitability of Marsh's placements primarily
in Marsh McLennan Agency ("MMA") and parts of Marsh's international operations. Revenue for contingent
commissions from insurers is recorded at a point in time, estimated based on historical evidence of the
achievement of the respective contingent metrics and recorded as the underlying policies that contribute to the
achievement of the metric are placed. Due to the uncertainty of the amount of contingent consideration that will be
received, the estimated revenue is constrained to an amount that is probable to not have a significant negative
adjustment. Contingent consideration is generally received in the first quarter of the subsequent year.
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A significant portion of the Company's Risk and Insurance Services revenue is commission revenue for brokerage
arrangements recognized at a point in time on the effective date of the underlying policy. Commission revenue is
estimated using historical information about the risks to be covered over the policy period, some of which are
dependent on variable factors such as number of employees covered, covered payroll, airline passenger miles
flown, shipped tonnage of marine cargo and others. Marsh and Guy Carpenter also receive interest income on
certain funds (such as premiums and claims proceeds) held in a fiduciary capacity for others.
Insurance brokerage commissions are generally invoiced on the policy effective date. Fee based arrangements
generally include a percentage of the total fee due upon signing the arrangement, with additional fixed
installments payable over the remainder of the year. Payment terms range from receipt of invoice up to 30 days
from invoice date.
Reinsurance brokerage revenue is recognized on the effective date of the treaty. Payment terms depend on the
type of reinsurance. For XOL treaties, brokerage revenue is typically collected in 4 installments during an annual
treaty period based on a contractually specified minimum or deposit premium. For proportional or quota share
treaties, brokerage is billed as underlying insured risks attach to the reinsurance treaty, generally over 12 to 18
months.
Consulting
The major component of revenue in the Consulting business is fees paid by clients for advice and services.
Mercer, principally through its health line of business, also earns revenue in the form of commissions received
from insurance companies for the placement of group (and occasionally individual) insurance contracts, primarily
health, life and accident coverages. Revenue for Mercer’s investment management business and certain of
Mercer’s defined benefit and contribution administration services consists principally of fees based on assets
under delegated management or administration. For a majority of the Mercer-managed investment funds, revenue
received from Mercer's investment management clients as sub-advisor fees is reported on a gross basis rather
than a net basis, with the sub-advisor fees included in other operating exepnses.
Consulting projects in Mercer’s wealth and career businesses, and consulting projects in Oliver Wyman Group,
typically consist of a single performance obligation, which is recognized over time as control is transferred
continuously to customers. Therefore, revenue is typically recognized over time using an input measure of time
expended to date relative to total estimated time to be incurred at project completion. Incurred hours represent
services rendered and thereby faithfully depicts the transfer of control to the customer.
On a limited number of engagements, performance fees may also be earned for achieving certain prescribed
performance criteria. Revenue for achievement is estimated and constrained to an amount that is probable to not
have a significant negative adjustment.
For consulting projects, Mercer generally invoices monthly in arrears with payment due within 30 days of the
invoice date. Fees for delegated management services are either deducted from the net asset value of the fund or
invoiced to the client on a monthly or quarterly basis in arrears. Oliver Wyman Group typically bills its clients 30 to
60 days in arrears with payment due upon receipt of the invoice.
Health brokerage and consulting services are components of both Marsh, which includes MMA, and Mercer, with
approximately 54% of such revenues reported in Mercer. Health contracts typically involve a series of distinct
services that are treated as a single performance obligation. Revenue for these services is recognized over time
based on the amount of remuneration the Company expects to be entitled in exchange for these services.
Payments for health brokerage and consulting services are typically paid monthly in arrears from carriers based
on insured lives under the contract.
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5.
Acquisitions and Dispositions
The Company’s acquisitions have been accounted for as business combinations. Net assets and results of
operations are included in the Company’s consolidated financial statements commencing at the respective
purchase closing dates. In connection with acquisitions, the Company records the estimated values of the net
tangible assets and the identifiable intangible assets purchased, which typically consist of customer relationships,
developed technology, trademarks and non-compete agreements. The valuation of purchased intangible assets
involves significant estimates and assumptions. The Company estimates the fair value of purchased intangible
assets, primarily using the income approach, by determining the present value of future cash flows over the
remaining economic life of the respective assets. The significant estimates and assumptions used in this
approach include the determination of the discount rate, economic life, future revenue growth rates, expected
account attrition rates and earnings margins. Refinement and completion of final valuation of net assets acquired
could affect the carrying value of tangible assets, goodwill and identifiable intangible assets.
The Risk and Insurance Services segment completed 10 acquisitions in 2024:
•
January – Marsh acquired NOSCO Insurance Service Company Ltd., a Japan-based insurance broker
that provides affinity type schemes, corporate and personal lines insurance.
•
March – Marsh & McLennan Agency ("MMA") acquired Louisiana-based insurance brokers, Querbes &
Nelson ("Q&N") and Louisiana Companies. Q&N offers business insurance, employee benefits, and
alternative risk financing consulting to a variety of businesses with specific expertise in energy services,
commercial contractors, and transportation. Louisiana Companies provides business and personal lines
insurance to businesses and individuals with specific expertise in the construction, manufacturing,
distributor, healthcare, and hospitality industries.
•
May – MMA acquired AC Risk Management, a New York-based commercial lines insurance broker
primarily offering property and casualty insurance to businesses with a focus on the construction industry;
Perkins Insurance Agencies LLC, a Texas-based insurance broker providing commercial property and
casualty and personal lines coverage to businesses, non-profits and families with expertise in the oil and
gas, trucking, farm and ranch and restaurant industries; and Fisher Brown Bottrell Insurance, Inc.
("FBBI"), a Mississippi-based insurance broker providing commercial property and casualty insurance,
surety and employee benefits services to businesses and individuals.
•
July – MMA acquired AmeriStar Agency Inc., a Minnesota-based insurance broker offering insurance
coverage solutions to high-net-worth individuals and commercial clients; and Hudson Shore Group, a
New Jersey-based public and private sector employee benefits broker, that specializes in public sector
clients providing employee benefits, consulting, and administrative services with a focus on large group
and alternative-funded benefits programs.
•
August – MMA acquired The Horton Group, Inc. (the "Horton Group"), an Illinois-based insurance broker
that offers property and casualty insurance, employee benefits consultation, and personal lines coverage
to businesses and individuals.
•
November – MMA acquired McGriff, a North Carolina-based provider of insurance broking and risk
management services.
•
December – MMA acquired Acumen Solutions Group, LLC, a New York-based insurance broker offering
customized insurance programs to businesses and individuals across the country with specialties in the
construction, real estate and aviation industries.
The Consulting segment completed 7 acquisitions in 2024:
•
February – Oliver Wyman Group acquired SeaTec Consulting Inc., a Georgia-based firm that provides
consulting, engineering, and digital expertise across the aviation, aerospace and defense, and
transportation industries.
•
March – Mercer acquired Vanguard's Institutional Advisory Services business unit ("Vanguard"), a
Pennsylvania-based outsourced chief investment officer ("OCIO") business, that provides investment
management services for not-for-profit organizations and other institutional investors in the U.S.; Mercer
also acquired The Talent Enterprise, a United Arab Emirates-based psychometric and talent assessment
technology company, that provides talent assessment tools and talent capability development solutions.
Oliver Wyman Group acquired Innopay NL B.V., a Netherlands-based consultancy firm that delivers
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incurred exit costs of $18 million in the first quarter of 2024. These costs are included in expenses in the
consolidated statements of income.
Prior year acquisitions
The Risk and Insurance Services segment completed 9 acquisitions in 2023:
•
May – Marsh acquired Austral Insurance Brokers Pty Ltd, an Australia-based insurance broker that
provides risk advice services and business insurance solutions in the labor hire, mining services,
transport, manufacturing, agribusiness, retail and professional services sectors.
•
June – Guy Carpenter acquired Re Solutions, an Israel-based reinsurance broker with actuarial and
analytics capabilities and solutions, including an extensive facultative reinsurance offering, and MMA
acquired SOLV Risk Solutions, LLC, a Texas-based risk management advisory services firm.
•
July – MMA acquired Integrity HR, Inc., a Kentucky-based human resources consulting firm and Trideo
Systems, an Illinois-based risk management information systems provider for health care organizations,
and Marsh acquired Asprose Corredora de Seguros, a Costa Rica-based insurance broker that provides
insurance brokerage and risk advisory services to commercial organizations.
•
August – MMA acquired Graham Company, a Pennsylvania-based risk management consultancy and
insurance and employee benefits broker, specializing in construction, real estate, manufacturing and
distribution, health and human services and professional services.
•
September – MMA acquired Blue Water Insurance LLC, a Kentucky-based employee health and benefits
insurance broker.
•
November – Marsh acquired HIG Australia Holdco Pty Ltd ("Honan Insurance Group"), an Australia-based
insurance broker in the areas of corporate risk, employee benefits, and strata and real estate insurance.
The Consulting segment completed 5 acquisitions in 2023:
•
March – Mercer acquired Leapgen LLC, a Minnesota-based human resources consulting technology
advisory firm focused on digital strategy and transformation, workforce solutions, and improving employee
experience.
•
April – Mercer acquired Westpac's financial advisory business, Advance Asset Management, and
completed the transfer from Westpac of BT Financial Group's personal and corporate pension funds to
the Mercer Super Trust managed by Mercer Australia. Oliver Wyman Group acquired the business of
Gorman Actuarial, Inc., a Massachusetts-based life and health actuarial consultant business.
•
July – Oliver Wyman Group acquired the actuarial consulting business of ISC Strategies Consulting, Inc.,
a Florida-based life insurance and actuarial consulting firm.
•
October – Mercer acquired BT Financial Group's Private Portfolio Management, an Australia-based
wealth management business that provides investment solutions to not-for-profit organizations, high-net
worth clients and their financial advisers.
Total purchase consideration for acquisitions made in 2023 was $1.2 billion, which consisted of cash paid of $1.1
billion and deferred and estimated contingent purchase consideration of $41 million. Contingent purchase
consideration arrangements are generally based primarily on EBITDA or revenue targets over a period of 2 to 4
years. The fair value of the contingent purchase consideration was based on projected revenue and earnings of
the acquired entities. In 2023, the Company also paid $67 million of deferred purchase consideration and $176
million of contingent purchase consideration related to acquisitions made in prior years. Estimated fair values of
assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized.
Prior year dispositions
In January 2023, the Company entered into an agreement for the sale of an individual financial advisory business
in Canada which was completed in May 2023. As a result, the Company recorded a loss of $17 million in 2023,
primarily related to the write-down of the customer relationship intangible assets. The loss is included in revenue
in the consolidated statements of income.
In connection with the disposition of the Mercer U.S. affinity business in 2022, the Company transferred to the
buyer an additional $24 million of cash and cash equivalents held in a fiduciary capacity in the first quarter of
2023.
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accompanying financial statements based on the Plan’s beneficial interest in the underlying net assets of the
partnership as determined by the partnership agreement.
Insurance group annuity contracts (included in Other investments): The fair values for these investments are
based on the current market value of the aggregate accumulated contributions plus interest earned.
Net derivative liabilities: Includes interest rate swaps, inflation swaps, total return swaps, repurchase agreements
and equity based derivatives, primarily related to the U.K. plans. These derivatives are structured to hedge
interest rate, inflation and equity exposure in the U.K. plans. Fair values for interest rate, inflation and equity
based derivatives are calculated using a discounted cash flow pricing model. These models use observable
market data such as contractual fixed rate, spot equity price or index value and dividend data.
Short-term investment funds: Primarily high-grade money market instruments valued at a readily determinable
price.
Registered investment companies: Valued at the closing price reported on the primary exchange.
Defined Contribution Plans
The Company maintains certain defined contribution plans for its employees, including the Marsh & McLennan
Companies 401(k) Savings & Investment Plan ("MMC 401(k) Plan") and the Marsh & McLennan Agency Savings
and Investment Plan (collectively, the "401(k) Plans"), that are qualified under U.S. tax laws. For the 401(k) Plans,
eligible employees may contribute a percentage of their base salary, subject to certain limitations, and the
Company matches a fixed portion of the employees’ contributions. In addition, the Company also amended the
MMC 401(k) Plan for most of its U.S. employees to add an automatic Company contribution equal to 4% of
eligible base pay beginning on January 1, 2017. The 401(k) Plans contain an Employee Stock Ownership Plan
feature under U.S. tax law. Approximately $737 million of the 401(k) Plans' assets at December 31, 2024 and
$726 million at December 31, 2023 were invested in the Company’s common stock. If a participant does not
choose an investment direction for their future contributions, they are automatically invested in a BlackRock
LifePath Portfolio that most closely matches the participant’s expected retirement year. The cost of these defined
contribution plans was $188 million in 2024, $173 million in 2023 and $161 million in 2022. In addition, the
Company has significant defined contribution plans in the U.K. Effective August 1, 2014, a newly formed defined
contribution plan replaced the existing defined contribution and defined benefit plans with regard to future service.
In addition, the Company assumed responsibility for the defined contribution section of the JLT U.K. plan.
Members of the JLT U.K. plan defined contribution section transferred to the MMC U.K. Pension Fund defined
contribution section in 2021. The cost of the U.K. defined contribution plan was $170 million, $158 million and
$140 million in 2024, 2023 and 2022, respectively.
9.
Stock Benefit Plans
The Company maintains multiple stock-based payment arrangements under which employees may be awarded
restricted stock units, stock options and other forms of stock-based benefits.
Marsh & McLennan Companies, Inc. Incentive and Stock Award Plans
On May 21, 2020, the Marsh & McLennan Companies, Inc. 2020 Incentive and Stock Award Plan (the "2020
Plan") was approved by the Company's stockholders. The 2020 Plan replaced the Company's previous equity
incentive plan, the 2011 Incentive and Stock Award Plan.
The types of awards permitted under the 2020 Plan include stock options, restricted stock units payable in
Company common stock or cash, and other stock-based awards. Performance-based restricted stock units are
referred to as performance stock units. The 2020 Plan contains a provision which, in the event of a change in
control of the Company, may accelerate the vesting of awards. This provision requires both a change in control of
the Company and a subsequent specified termination of employment for vesting to be accelerated. There are
20 million shares approved for issuance under the 2020 Plan. The total number of shares issued in connection
with full-value awards may not exceed 12.5 million shares. Full-value awards include awards such as restricted
stock units and performance stock units but exclude stock options.
The Company's current practice is to grant non-qualified stock options, restricted stock units ("RSUs") and/or
performance stock units ("PSUs") on an annual basis to certain employees as part of their annual total
compensation. Senior executives are granted options and PSU awards. In addition, a small group of other
employees are granted options, PSU and RSU awards and a larger group of other employees are granted RSU
awards. RSU awards are also granted to new hires or as retention awards for certain employees.
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shares of the Company's common stock may be sold. Employees purchased 315,548 shares in 2024 and at
December 31, 2024, 3,547,195 shares were available for issuance for the 1999 Plan.
In accordance with the 1995 Company Stock Purchase Plan for International Employees (the "International
Plan"), after reflecting the additional 5,000,000 shares of common stock for issuance approved by the Company's
Board of Directors in July 2002, the addition of 4,000,000 shares due to a shareholder action in May 2007 and
reducing the shares available by 1,000,000 consistent with the Company's Board of Directors' action in March
2018, no more than 11,000,000 shares of the Company's common stock may be sold. Employees purchased
120,435 shares in 2024 and there were 683,776 shares available for issuance at December 31, 2024 for the
International Plan. The plans are considered non-compensatory.
10.
Fair Value Measurements
Fair Value Hierarchy
The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a
three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active
markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). In some
cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. In such
cases, the level in the fair value hierarchy, for disclosure purposes, is determined based on the lowest level input
that is significant to the fair value measurement. Assets and liabilities recorded in the consolidated balance sheets
at fair value are categorized based on the inputs in the valuation techniques as follows:
Level 1.
Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or
liabilities in an active market (examples include active exchange-traded equity securities and
exchange-traded money market mutual funds).
Assets and liabilities measured using Level 1 inputs include exchange-traded equity securities, exchange-traded
mutual funds and money market funds.
Level 2.
Assets and liabilities whose values are based on the following:
a)
quoted prices for similar assets or liabilities in active markets;
b)
quoted prices for identical or similar assets or liabilities in non-active markets (examples
include corporate and municipal bonds, which trade infrequently);
c)
pricing models whose inputs are observable for substantially the full term of the asset or
liability (examples include most over-the-counter derivatives, including interest rate and
currency swaps); and
d)
pricing models whose inputs are derived principally from or corroborated by observable
market data through correlation or other means for substantially the full asset or liability
(for example, certain mortgage loans).
Assets measured using Level 2 inputs relate to an investment in a unit trust fund.
Level 3.
Assets and liabilities whose values are based on prices, or valuation techniques that require
inputs that are both unobservable and significant to the overall fair value measurement. These
inputs reflect management’s own assumptions about the assumptions a market participant would
use in pricing the asset or liability.
Assets and liabilities measured using Level 3 inputs relate to assets and liabilities for contingent purchase
consideration.
Valuation Techniques
Equity Securities, Money Market Funds and Mutual Funds - Level 1
Investments for which market quotations are readily available are valued at the sale price on their principal
exchange or, for certain markets, official closing bid price. Money market funds are valued at a readily
determinable price.
Unit Investment Trust - Level 2
Generally valued at the prices of units in unlisted managed investment trusts that are either published on the
investment manager’s website and/or circulated among market participants as executable quotes.
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Private Equity Investments
The Company's investments in private equity funds were $182 million and $203 million at December 31, 2024 and
2023, respectively. The carrying values of these private equity investments approximates fair value. The
underlying private equity funds follow investment company accounting, where investments within the fund are
carried at fair value. The Company records in earnings its proportionate share of the change in fair value of the
funds in the investment income line in the consolidated statements of income. These investments are included in
other assets in the consolidated balance sheets. The Company recorded net investment income from these
investments of $4 million, $7 million and $18 million in 2024, 2023 and 2022, respectively.
At December 31, 2024, the Company has commitments of potential future investments of approximately $117
million in private equity funds that invest primarily in financial services companies.
Investments in Public and Private Companies
The Company has investments in private insurance brokerage and consulting companies with a carrying value of
$75 million and $63 million at December 31, 2024 and 2023, respectively. These investments are accounted for
using the equity method of accounting, the results of which are included in revenue in the consolidated statements
of income and the carrying value of which is included in other assets in the consolidated balance sheets. The
Company records its share of income or loss on its equity method investments, some of which are on a one
quarter lag basis.
Other Investments
The Company held certain equity investments with readily determinable market values at December 31, 2024 and
2023, of $19 million and $16 million, respectively. The Company recorded a mark-to-market gain on these
investments of $1 million, a mark-to-market loss of $1 million and mark-to-market gains of $11 million in 2024,
2023 and 2022, respectively.
The Company also held investments without readily determinable market values of $16 million and $20 million at
December 31, 2024 and 2023, respectively. In 2023, the Company recorded a net loss of $1 million on these
investments.
At December 31, 2024, the Company held an investment of $83 million in a unit trust fund acquired in the current
year. In 2024, the Company recorded mark-to-market gains from this investment of $7 million.
11.
Derivatives
Net Investment Hedge
The Company has investments in various subsidiaries with Euro functional currencies. As a result, the Company
is exposed to the risk of fluctuations between the Euro and U.S. dollar exchange rates. As part of its risk
management program, the Company designated its €1.1 billion senior note debt instruments ("Euro notes") as a
net investment hedge (the "hedge") of its Euro denominated subsidiaries. The hedge effectiveness is re-assessed
each quarter to confirm that the designated equity balance at the beginning of each period continues to equal or
exceed 80% of the outstanding balance of the Euro debt instrument and that all the critical terms of the hedging
instrument and the hedged net investment continue to match. If the hedge is highly effective, the change in the
debt balance related to foreign exchange fluctuations is recorded in accumulated other comprehensive loss in the
consolidated balance sheets.
The U.S. dollar value of the Euro notes decreased by $75 million in 2024 related to the change in foreign
exchange rates. The Company concluded that the hedge was highly effective and recorded a decrease to
accumulated other comprehensive loss for the year ended December 31, 2024.
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In November 2023, the Company increased its short-term commercial paper financing program (the "Program") to
$3.5 billion from $2.8 billion. The Company did not have any commercial paper outstanding at December 31, 2024
and 2023.
Credit Facilities
In October 2023, the Company increased its multi-currency unsecured five-year revolving credit facility (the
"Credit Facility") capacity to $3.5 billion from $2.8 billion and extended the expiration to October 2028. The
interest rate on the Credit Facility was initially based on LIBOR plus a fixed margin which varied with the
Company's credit rating. In the second quarter of 2023, the Credit Facility was amended so that borrowings under
the Credit Facility bear interest at a rate per annum equal, at the Company's option, either at (a) Securities
Overnight Financing Rate ("SOFR") benchmark rate for U.S. dollar borrowings, or (b) a currency specific
benchmark rate, plus an applicable margin which varies with the Company's credit ratings. The Company is
required to maintain certain coverage and leverage ratios for the Credit Facility, which are evaluated quarterly.
The Credit Facility includes provisions for determining a benchmark replacement rate in the event existing
benchmark rates are no longer available or in certain other circumstances, in which an alternative rate may be
required. At December 31, 2024 and 2023, the Company had no borrowings under this facility.
In October 2023, the Company terminated its one-year uncommitted revolving credit facility (the "Uncommitted
Credit Facility"). There were no borrowings outstanding under the Uncommitted Credit Facility at December 31,
2023.
The Company also maintains other credit and overdraft facilities with various financial institutions aggregating
$123 million at December 31, 2024 and $113 million at December 31, 2023. There were no outstanding
borrowings under these facilities at December 31, 2024 and 2023.
The Company has outstanding guarantees and letters of credit with various banks aggregating $163 million and
$139 million at December 31, 2024 and 2023, respectively.
Senior Notes
In November 2024, the Company issued $7.25 billion in senior notes as follows:
•
$950 million 4.550% senior notes due 2027;
•
$1 billion 4.650% senior notes due 2030;
•
$1 billion 4.850% senior notes due 2031;
•
$2 billion 5.000% senior notes due 2035;
•
$500 million 5.350% senior notes due 2044;
•
$1.5 billion 5.400% senior notes due 2055; and
•
$300 million floating rate senior notes due 2027 (the "Floating Notes"),
collectively referred to as the "November 2024 Notes".
For the Floating Notes, interest is calculated based on a compounded SOFR benchmark rate plus 0.700%.
The Company used the net proceeds from the November 2024 Notes offering to fund, in part, the McGriff
Transaction, including the payment of related fees and expenses, as well as for general corporate purposes.
In June 2024, the Company repaid $600 million of 3.50% senior notes at maturity.
In March 2024, the Company repaid $1 billion of 3.875% senior notes at maturity.
In February 2024, the Company issued $500 million of 5.150% senior notes due 2034 and $500 million of 5.450%
senior notes due 2054. The Company used the net proceeds from these issuances for general corporate
purposes.
In October 2023, the Company repaid $250 million of 4.05% senior notes at maturity.
In September 2023, the Company issued $600 million of 5.400% senior notes due 2033 and $1 billion of 5.700%
senior notes due 2053. In March 2023, the Company issued $600 million of 5.450% senior notes due 2053. The
Company used the net proceeds from these issuances for general corporate purposes.
Scheduled repayments of long-term debt in 2025 and in the 4 succeeding years are $518 million, $1.2 billion, $1.3
billion, $22 million and $1.5 billion, respectively.
107
16.
Claims, Lawsuits and Other Contingencies
Nature of Contingencies
The Company and its subsidiaries are subject to a significant number of claims, lawsuits and proceedings in the
course of our business. Such claims and lawsuits consist principally of alleged errors and omissions in connection
with the performance of professional services, including the placement of insurance, the provision of actuarial
services for corporate and public sector clients, the provision of investment advice and investment management
services to pension plans, the provision of advice relating to pension buy-out transactions and the provision of
consulting services relating to the drafting and interpretation of trust deeds and other documentation governing
pension plans. These claims often seek damages, including punitive and treble damages, in amounts that could
be significant. In establishing liabilities for errors and omissions claims, the Company utilizes case level reviews
by inside and outside counsel, and internal actuarial analysis by Oliver Wyman Group, a subsidiary of the
Company, and other methods to estimate potential losses. A liability is established when a loss is both probable
and reasonably estimable. The liability is reviewed quarterly and adjusted as developments warrant. In many
cases, the Company has not recorded a liability, other than for legal fees to defend the claim, because we are
unable, at the present time, to make a determination that a loss is both probable and reasonably estimable. To the
extent that expected losses exceed our deductible in any policy year, the Company also records an asset for the
amount that we expect to recover under any available third-party insurance programs. The Company has varying
levels of third-party insurance coverage, with policy limits and coverage terms varying significantly by policy year.
Our activities are regulated under the laws of the U.S. and its various states, the U.K., the E.U. and its member
states, Australia and the many other jurisdictions in which the Company operates.
The Company also receives subpoenas in the ordinary course of business, and from time to time requests for
information in connection with government investigations.
Current Matters
Risk and Insurance Services Segment
•
In January 2019, the Company received a notice that the Administrative Council for Economic Defense
anti-trust agency in Brazil had commenced an administrative proceeding against a number of insurance
brokers, including both Marsh and JLT, and insurers "to investigate an alleged sharing of sensitive
commercial and competitive confidential information" in the aviation insurance and reinsurance sector.
•
From 2014, Marsh Ltd. was engaged by Greensill Capital (UK) Limited and its affiliates as its insurance
broker. Marsh Ltd. placed a number of trade credit insurance policies for Greensill. On March 1, 2021,
Greensill filed an action against certain of its trade credit insurers in Australia seeking a mandatory
injunction compelling these insurers to renew coverage under expiring policies. Later that day, the
Australian court denied Greensill’s application. Since then, a number of Greensill entities have filed for, or
been subject to, insolvency proceedings, and several litigations and investigations have been
commenced in the U.K., Australia, Germany, Switzerland and the U.S., including claims brought by
Greensill's administrators and loss payees under Greensill's trade credit insurance policies. In June 2023,
White Oak, one such loss payee, filed a claim in the High Court of Justice in London against Marsh Ltd.,
related to White Oak’s purchase of accounts receivable from Greensill. In November 2023, Credit Suisse,
another loss payee, added Marsh Ltd. as a party to the omnibus trade credit insurance policy litigation
among Greensill and its insurers and loss payees in Australia. In November 2024, Greensill Bank AG (in
insolvency), an affiliate of Greensill and an insured entity under the policies, added Marsh Pty Ltd as a
party to the same omnibus litigation in Australia. The claims by the loss payees allege that Marsh Ltd.
failed to take required steps to make complete and accurate representations to them in their respective
capacities as loss payees and, in the case of White Oak, that Marsh Ltd. either knew certain
representations to be false or was reckless as to the truth or falsity of the same. In February 2025,
Greensill Bank AG circulated an example draft pleading and sought Marsh Ltd.'s consent to amend their
claims in the omnibus litigation to join Marsh Ltd. If Marsh Ltd. does not consent, they indicated their
intention to seek an order from the Australian court to join Marsh Ltd. to the omnibus litigation.
Other Contingencies-Guarantees
In connection with its acquisition of U.K.-based Sedgwick Group in 1998, the Company acquired several
insurance underwriting businesses that were already in run-off, including River Thames Insurance Company
Limited ("River Thames"), which the Company sold in 2001. Sedgwick guaranteed payment of claims on certain
110
policies underwritten through the Institute of London Underwriters (the "ILU") by River Thames. The policies
covered by this guarantee are partly reinsured by a related party of River Thames. Payment of claims under the
reinsurance agreement is collateralized by funds withheld by River Thames from the reinsurer. To the extent River
Thames or the reinsurer is unable to meet its obligations under those policies, a claimant may seek to recover
from the Company under the guarantee.
From 1980 to 1983, the Company owned indirectly the English & American Insurance Company ("E&A"), which
was a member of the ILU. The ILU required the Company to guarantee a portion of E&A's obligations. After E&A
became insolvent in 1993, the ILU agreed to discharge the guarantee in exchange for the Company's agreement
to post an evergreen letter of credit that is available to pay claims by policyholders on certain E&A policies issued
through the ILU and incepting between July 3, 1980 and October 6, 1983. Certain claims have been paid under
the letter of credit and the Company anticipates that additional claimants may seek to recover against the letter of
credit.
* * * *
The pending proceedings described above and other matters not explicitly described in this Note 16 on Claims,
Lawsuits and Other Contingencies may expose the Company or its subsidiaries to liability for significant monetary
damages, fines, penalties or other forms of relief. Where a loss is both probable and reasonably estimable, the
Company establishes liabilities in accordance with the FASB guidance on Contingencies - Loss Contingencies.
The Company is not able at this time to provide a reasonable estimate of the range of possible loss attributable to
these matters or the impact they may have on the Company's consolidated results of operations, financial position
or cash flows. This is primarily because these matters are still developing and involve complex issues subject to
inherent uncertainty. Adverse determinations in one or more of these matters could have a material impact on the
Company's consolidated results of operations, financial condition or cash flows in a future period.
111
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Marsh & McLennan Companies, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Marsh & McLennan Companies, Inc. and
subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income,
comprehensive income, cash flows, and equity for each of the three years in the period ended December 31,
2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024
and 2023, and the results of its operations and its cash flows for each of the three years in the period ended
December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based
on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated February 10, 2025, expressed an unqualified
opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express
an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that (1) relates to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our
opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter
below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it
relates.
Liability for Errors and Omissions — Refer to Notes 1 and 16 to the financial statements
Critical Audit Matter Description
The Company is subject to a significant number of claims, lawsuits and proceedings in the ordinary course of
business. Such claims and lawsuits consist principally of alleged errors and omissions (“E&O”) in connection with
the performance of professional services. These claims may seek damages, including punitive and treble
damages, in amounts that could be significant. The Company uses case level reviews performed by inside and
outside counsel, internal actuarial analysis and other methods to estimate potential losses resulting from reported
and unreported claims.
Given that the determination of the liability for E&O requires management to make significant estimates and
assumptions in projecting ultimate settlement values of reported and unreported claims, performing audit
procedures to evaluate the reasonableness of such estimates and assumptions required a high degree of auditor
judgment, including the need to involve our actuarial specialists.
114
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the determination of the liability for E&O included the following, among others:
•
We tested the effectiveness of internal controls related to the determination of the liability for E&O,
including controls over the projection of ultimate settlement values of reported and unreported claims
determined through internal actuarial analyses, management’s review of the appropriateness of the
assumptions used and calculation of case loss estimates, and management’s independent review of case
level estimates provided by inside and outside counsel, as applicable.
•
For selected E&O matters, we evaluated the reasonableness of management’s case loss estimates and,
as applicable, made inquiries of the Company’s inside and outside counsel regarding the status of these
matters and likelihood of settlement.
•
We compared total incurred losses and current case estimates as of the balance sheet date to amounts
reported in prior periods to evaluate trends and developments in reported cases.
•
With the assistance of our actuarial specialists, we evaluated the reasonableness of the assumptions and
methodologies involved in the development of the liability for E&O by:
–
Testing the underlying data that served as the basis for the actuarial analysis, including historical
claims and case loss estimates, to evaluate whether the inputs to the actuarial estimate were
reasonable.
–
Comparing management’s prior-year assumptions of expected development and ultimate loss to
actual amounts incurred during the current year to identify potential bias in the determination of the
liability for E&O.
–
Developing a range of independent estimates and comparing those to the liability for E&O recorded
by the Company.
/s/ Deloitte & Touche LLP
New York, New York
February 10, 2025
We have served as the Company’s auditor since 1989.
115
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Disclosure Controls and Procedures. Based on their evaluation, as of the end of the period covered by this
annual report on Form 10-K, the Company’s chief executive officer and chief financial officer have concluded that
the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the
Securities Exchange Act of 1934) are effective.
Internal Control over Financial Reporting.
(a)
Management’s Annual Report on Internal Control Over Financial Reporting
MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of Marsh & McLennan Companies, Inc. is responsible for establishing and maintaining
adequate internal control over financial reporting for the Company. The Company’s internal control over financial
reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting
principles.
The Company’s internal control over financial reporting includes those policies and procedures relating to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
the assets of the Company; the recording of all necessary transactions to permit the preparation of the Company’s
consolidated financial statements in accordance with generally accepted accounting principles; the proper
authorization of receipts and expenditures in accordance with authorizations of the Company’s management and
directors; and the prevention or timely detection of the unauthorized acquisition, use or disposition of assets that
could have a material effect on the Company’s consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Management evaluated the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2024 under the supervision and with the participation of the Company’s principal executive and
principal financial officers. In making this evaluation, management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework
issued in 2013. Based on its evaluation, management determined that the Company maintained effective internal
control over financial reporting as of December 31, 2024.
As allowed by SEC guidance, management excluded from its assessment the internal control over financial
reporting at McGriff, which was acquired on November 15, 2024. McGriff accounted for approximately 2% of the
Company’s total assets as of December 31, 2024 and McGriff’s revenue from the acquisition date through
December 31, 2024 comprised 0.6% of the Company’s consolidated revenue for the year ended December 31,
2024.
Deloitte & Touche LLP, the Independent Registered Public Accounting Firm that audited and reported on the
Company’s consolidated financial statements included in this annual report on Form 10-K, also issued an audit
report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024.
116
(b) Audit Report of the Registered Public Accounting Firm.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Marsh & McLennan Companies, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Marsh & McLennan Companies, Inc. and subsidiaries
(the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion,
the Company maintained, in all material respects, effective internal control over financial reporting as of December
31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the
Company and our report dated February 10, 2025, expressed an unqualified opinion on those financial statements.
As described in Management’s Annual Report on Internal Control over Financial Reporting, management excluded
from its assessment the internal control over financial reporting at McGriff Insurance Services (“McGriff”), which was
acquired on November 15, 2024, and whose financial statements constitute approximately 2% of total assets and
0.6% of total revenue of the Company’s consolidated financial statement amounts as of and for the year ended
December 31, 2024. Accordingly, our audit did not include the internal control over financial reporting at McGriff.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an
opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ Deloitte & Touche LLP
New York, New York
February 10, 2025
117
(c) Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting identified in connection with the
evaluation required by Rules 13a-15(d) or 15d-15(d) under the Securities Exchange Act of 1934 that occurred
during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially
affect, the Company’s internal control over financial reporting.
Item 9B.
Other Information.
Rule 10b5-1 Trading Plans
The following Section 16 officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted "Rule 10b5-1
trading arrangements," as defined in Regulation S-K, Item 408, intended to satisfy the affirmative defense
conditions of Rule 10b5-1(c) under the Exchange Act:
•
John Doyle, our Chief Executive Officer, adopted a trading plan on December 2, 2024, which provides for
the exercise and sale of an aggregate of 84,318 options. The plan will terminate on December 2, 2025,
subject to early termination for certain specified events set forth in the plan.
•
Paul Beswick, our Senior Vice President and Chief Information Officer, adopted a new trading plan on
December 6, 2024, which provides for the (1) sale of 2,120 shares, (2) sale up to 7,928 shares subject to
performance stock units ("PSUs") and (3) exercise and sale of 5,000 stock options, in each case excluding
any shares withheld by the company to satisfy its income tax withholding obligations in connection with the
net settlement of equity awards. The plan’s maximum length is until December 5, 2025, subject to early
termination for certain specified events set forth in the plan.
•
Dean Klisura, our President and Chief Executive Officer of Guy Carpenter and Vice Chair, Marsh
McLennan, adopted a new trading plan on December 6, 2024, which provides for the (1) sale of up to
9,910 shares subject to PSUs, (2) sale of up to 6,024 shares subject to restricted stock units ("RSUs") and
(3) exercise and sale of 9,569 stock options, in each case excluding any shares withheld by the company
to satisfy its income tax withholding obligations in connection with the net settlement of equity awards. The
plan’s maximum length is until December 5, 2025, subject to early termination for certain specified events
set forth in the plan.
•
Mark McGivney, our Chief Financial Officer, adopted a new trading plan on December 6, 2024, which
provides for the (1) sale of up to 21,472 shares subject to PSUs and (2) exercise and sale of 67,421 stock
options, in each case excluding any shares withheld by the company to satisfy its income tax withholding
obligations in connection with the net settlement of equity awards. The plan’s maximum length is until
December 5, 2025, subject to early termination for certain specified events set forth in the plan.
•
Stacy Mills, our Vice President and Controller, adopted a new trading plan on December 6, 2024, which
provides for the (1) sale of up to 1,488 shares subject to PSUs, (2) sale of 1,461 shares subject to RSUs
and (3) exercise and sale of 4,207 stock options, in each case excluding any shares withheld by the
company to satisfy its income tax withholding obligations in connection with the net settlement of equity
awards. The plan’s maximum length is until December 5, 2025, subject to early termination for certain
specified events set forth in the plan.
The actual number of shares subject to PSUs that may be sold pursuant to each plan described above is subject to
satisfaction of the applicable performance conditions and may vary from the number above.
118
PART III
Item 10.
Directors, Executive Officers and Corporate Governance.
Information as to the directors and nominees for the board of directors of the Company is incorporated herein by
reference to the material set forth under the heading "Item 1: Election of Directors" in the 2025 Proxy Statement.
The executive officers and executive officer appointees of the Company are Paul Beswick, Katherine J. Brennan,
John Q. Doyle, Carmen Fernandez, John Jones, Dean Klisura, Mark C. McGivney, Martin South, Nick Studer and
Pat Tomlinson. Information with respect to these individuals is provided in Part I, Item 1 above under the heading
"Executive Officers of the Company".
The information set forth in the 2025 Proxy Statement in the sections "Corporate Governance—Codes of
Conduct", "Board of Directors and Committees—Committees—Audit Committee" and "Additional Information—
Transactions with Management and Others" is incorporated herein by reference.
Insider Trading Policies and Procedures
We have adopted insider trading policies and procedures governing the purchase, sale and/or other dispositions
of securities of the Company by our directors, executive officers and employees, and have implemented
processes for the Company, that we believe are reasonably designed to promote compliance with insider trading
laws, rules and regulations, as well as the NYSE Corporate Governance Standards.
Our Trading Securities Policy prohibits our employees and related persons and entities from trading in securities
of the Company and other companies while in possession of material, nonpublic information. Our Trading
Securities Policy also prohibits our employees from disclosing material, nonpublic information to unauthorized
people and certain restricted colleagues from trading in securities of the Company during any applicable
“blackout” period. Our Trading Securities Policy also prohibits our employees from engaging in short sales or
derivative transactions relating to securities of the Company at any time. A copy of our Trading Securities Policy is
filed as Exhibit 19.1 to this Form 10-K.
Our executive officers and directors must also comply with additional trading restrictions. Members of the
Company’s Board of Directors, Executive Committee and other specified employees, and related persons and
entities, must receive approval through the Pre-Clearance Procedures in order to transact in securities of the
Company and are subject to the prohibitions described above.
A copy of our Transactions in Marsh McLennan Securities by Directors and Executive Officers Policy is filed as
Exhibit 19.2 to this Form 10-K.
Item 11.
Executive Compensation.
The information set forth in the sections "Additional Information—Director Compensation" and "Executive
Compensation—Compensation of Executive Officers" in the 2025 Proxy Statement is incorporated herein by
reference.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
The information set forth in the sections "Additional Information—Stock Ownership of Directors, Management and
Certain Beneficial Owners" and "Additional Information—Equity Compensation Plan Information" in the 2025
Proxy Statement is incorporated herein by reference.
Item 13.
Certain Relationships and Related Transactions, and Director Independence.
The information set forth in the sections "Corporate Governance—Director Independence", "Corporate
Governance—Review of Related-Person Transactions" and "Additional Information—Transactions with
Management and Others" in the 2025 Proxy Statement is incorporated herein by reference.
Item 14.
Principal Accountant Fees and Services.
The information set forth under the heading "Item 3: Ratification of Selection of Independent Registered Public
Accounting Firm—Fees of Independent Registered Public Accounting Firm" in the 2025 Proxy Statement is
incorporated herein by reference.
119
(10.74)
Bridge Loan Agreement, dated as of September 18, 2018 by and between Marsh & McLennan
Companies, Inc., the lenders party thereto and Goldman Sachs Bank USA, as administrative
agent (incorporated by reference to the Company’s Current Report on Form 8-K dated September
18, 2018)
(10.75)
Calculation Agency Agreement, dated as of January 15, 2019, between Marsh & McLennan
Companies, Inc. and The Bank of New York Mellon, as calculation agent (incorporated by
reference to the Company's Current Report on Form 8-K filed on January 15, 2019)
(10.76)
Amended and Restated 5 Year Credit Agreement, dated as of October 11, 2023 among Marsh &
McLennan Companies, Inc., the designated subsidiaries as party thereto as borrowers, Citibank,
N.A., as administrative agent, and the lenders from time to time party thereto (incorporated by
reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
2023)
(14.1)
Code of Ethics for Chief Executive and Senior Financial Officers (incorporated by reference to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2002)
(19.1)
Trading Securities Policy
(19.2)
Insider Trading Policy
(21.1)
List of Subsidiaries of Marsh & McLennan Companies, Inc.
(23.1)
Consent of Independent Registered Public Accounting Firm
(24.1)
Power of Attorney (included on signature page)
(31.1)
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
(31.2)
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
(32.1)
Section 1350 Certifications
(97.1)
Marsh & McLennan Companies, Inc. Compensation Clawback Policy as of December 1, 2023.
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema
101.CAL
XBRL Taxonomy Extension Calculation Linkbase
101.DEF
XBRL Taxonomy Extension Definition Linkbase
101.LAB
XBRL Taxonomy Extension Label Linkbase
101.PRE
XBRL Taxonomy Extension Presentation Linkbase
104.
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
131
Item 16.
Form 10-K Summary.
None.
132
Annual Meeting
Information concerning the 2025
Annual Meeting of Stockholders
can be found at proxy.mmc.com.
Investor Information
Stockholders of record
inquiring about reinvestment
and payment of dividends,
consolidation of accounts, stock
certificate holdings, stock certificate
transfers and address changes
should contact:
EQ Shareowner Services
P.O. Box 64854
St. Paul, MN 55164-0854
Telephone: 800 457 8968 or
651 450 4064 (Outside US/Canada)
Mailing Address:
1110 Centre Pointe Curve,
Suite 101
Mendota Heights,
MN 55120-4100
EQ’s website:
shareowneronline.com
Stockholders who hold shares
of Marsh McLennan beneficially
through a broker, bank or other
intermediary organization should
contact that organization for
these services.
Direct Purchase Plan
Stockholders of record and
other interested investors can
purchase Marsh McLennan common
stock directly through
the Company’s transfer agent
and the Administrator for the
Stockholder information
Plan, EQ Shareowner Services.
A brochure on the Plan is available
on the EQ Shareowner Services
website or by contacting EQ
Shareowner Services directly:
EQ Shareowner Services
P.O. Box 64854
St. Paul, MN 55164-0854
Telephone: 800 457 8968 or
651 450 4064 (Outside US/Canada)
EQ’s website:
shareowneronline.com
Financial Information
Copies of Marsh McLennan annual
reports and Forms 10-K and 10-Q
are available on the Company’s
website. These documents also
may be requested by contacting:
Marsh & McLennan Companies, Inc.
Investor Relations
1166 Avenue of the Americas
New York, NY 10036
Telephone: 212 345 1227
Website: mmc.com
Email:
mmc.investor.relations@mmc.com
Stock Listings
Marsh McLennan common stock
(NYSE ticker symbol: MMC) is
listed on the New York and Chicago
Stock Exchanges.
Procedures For Raising
Complaints And
Concerns Regarding
Accounting Matters
Marsh McLennan is committed
to complying with all applicable
accounting standards, internal
accounting controls, audit practices
and securities laws and regulations
(collectively, “Accounting Matters”).
To raise a complaint or concern
regarding Accounting Matters, you
may contact the Company by mail,
telephone or online. You may review
the Company’s procedures for
handling complaints and concerns
regarding Accounting Matters at
marshmclennan.com.
By mail:
Marsh & McLennan Companies, Inc.
Audit Committee
c/o Corporate Secretary
1166 Avenue of the Americas
New York, NY 10036
By telephone or online:
Visit ethicscomplianceline.com
for dialing instructions or to
raise a concern online.
Marsh McLennan
1166 Avenue of the Americas
New York, NY 10036
marshmclennan.com