The operator welcomes listeners to Marsh McLennan's earnings conference call and reminds them that the call is being recorded. Third quarter financial results and supplemental information are available on the company's website. The CEO, John Doyle, introduces other executives and acknowledges the ongoing violence in Israel, expressing support for colleagues affected by the situation. He also mentions the company's condemnation of all acts of terror and violence.

The company is supporting their clients during the current conflict and has reported strong third quarter results, with 10% revenue growth and a 24% increase in adjusted operating income. They have also completed share repurchases and made two significant acquisitions. The company continues to invest in talent, operations, and new technologies to better serve their clients.

Guy Carpenter and Marsh have recently launched new platforms and solutions to help clients manage catastrophe exposure and cybersecurity risks. They are also investing in technologies to improve internal productivity and support clients in developing their own AI capabilities. The combined value proposition of their businesses is gaining traction with clients in industries such as healthcare and private equity and M&A. The teams at Marsh and Mercer are working together to address emerging challenges in these industries.

In the paragraph, the speaker provides an update on leadership changes at Mercer and expresses excitement to work with the new CEO, Pat Tomlinson. The speaker also thanks the retiring CEO, Martine Ferland, for her leadership and highlights the company's strong third quarter performance with increased revenue, operating income, and adjusted EPS. The adjusted operating margin also saw significant expansion.

The company's adjusted EPS grew 25% in the third quarter, even without a $0.10 discrete tax benefit. Revenue in Risk and Insurance Services increased by 12% and operating income by 21%. Marsh saw a 9% increase in revenue, led by strong growth in MMA. For the first nine months of the year, Marsh's revenue was $8.5 billion, with underlying growth of 9%. Guy Carpenter's revenue also grew by 9% in the quarter.

Guy Carpenter, a consulting company, saw a 10% growth in revenue for the first nine months of the year. In the consulting segment, third quarter revenue increased by 13% or 9% on an underlying basis. Mercer, a subsidiary of Guy Carpenter, had its best quarter of underlying growth in 15 years with a 8% increase in revenue. Assets under management also grew by 19% compared to last year. Oliver Wyman, another subsidiary, saw a 12% increase in revenue in the third quarter and 8% for the first nine months. Foreign exchange had a minor impact on earnings in the third quarter and is not expected to significantly affect fourth quarter earnings.

The company ended the quarter with $13.6 billion in total debt, including $1.6 billion in senior notes issued in September. They have scheduled debt maturities in 2024 and 2028 and recently increased their borrowing capacity. Moody's upgraded their senior unsecured debt rating to A3. The company expects to deploy $4 billion in capital in 2023 and had a cash position of $2.9 billion at the end of the third quarter. Uses of cash in the quarter totaled $1 billion, including dividends, acquisitions, and share repurchases. They expect a strong 2023 with 9-10% revenue growth, strong EPS growth, and margin expansion. The company is now ready for Q&A.

In response to a question about the slowdown in growth, John Doyle, CEO of Marsh & McLennan, provided more details on the company's performance in the quarter. He noted strong growth at Marsh and Mercer, as well as at Guy Carpenter and Oliver Wyman. He also mentioned that Marsh U.S., including MMA and the MGA operation, had a good quarter. Martin South, President of Marsh, added that there was strong growth in both international and North America, but cautioned against looking at growth on a quarter-over-quarter basis. In regards to the revised savings program, Doyle mentioned that it came from rationalizing tech, real estate, and realigning the workforce, but did not provide specific numbers for each category.

John Doyle, CEO of Marsh & McLennan, discusses the company's expected savings this year and how they will affect the bottom line. He mentions opportunities for cost savings in areas such as workforce realignment, talent, real estate, and technology. He also discusses the reinsurance market and mentions that prices are expected to be firm, but there are concerns about rising loss costs. The team at Guy Carpenter has done a good job in helping clients navigate the challenging market and the company expects underwriting discipline to remain.

The speaker discusses the current market conditions for property cat and casualty insurance, noting that firm pricing is expected to continue in property cat due to elevated cat losses and political instability. However, there will be some variation in different regions. Reinsurers are expected to exhibit discipline in terms of attachment points, pricing, and terms. The market is also expected to have adequate capacity and be more manageable for clients compared to last year. In the casualty market, there is concern about prior year loss development and downward pressure on seating commissions, but capacity is expected to remain adequate. The speaker emphasizes the need to find the best solutions for clients in the rising cost of risk.

The speaker discusses the performance of Oliver Wyman, a part of Marsh McLennan, in light of economic uncertainty. While traditionally sensitive to GDP, Oliver Wyman has shown strong growth this year and has a diverse portfolio that includes public sector, communications, media and technology, banking, and transportation and services. The company is well-positioned to continue this growth despite potential economic slowdown.

The speaker discusses the wide range of industry sectors that their company works with, highlighting the success of their private equity practice. They mention their efforts to broaden their offerings through different economic cycles, and express optimism for long-term growth prospects while planning for mid to high single-digit growth. The next question asks about the decoupling of their company's growth from nominal GDP, and the speaker attributes this to a volatile macro environment.

The speaker believes that nominal GDP is a better indicator of demand and that the company has been working to shift its business mix to better growth markets. They have invested in M&A, the middle market, ROCIO business, and talent, and are confident in their ability to perform over economic cycles. When asked about the potential for larger brokers to get back into the wholesale business, the speaker comments that historically, E&S market volumes have moved with pricing cycles, but may now be more durable due to the volatile risk environment. The company accesses some E&S markets directly and would have to carefully consider whether or not they would be a good owner of a third-party wholesale.

The speaker discusses their business in Victor and their focus on bringing all solutions to their clients, whether standard or non-admitted. They mention making investments for the future, but do not see an acceleration in the quarter. They prioritize delivering value for clients over optimizing margins.

In paragraph 23, John Doyle discusses the benefits of rate increases in the international segment at Marsh. He mentions strong growth in Europe and Latin America, with Martin South providing more details on specific areas of growth. South also mentions the value proposition of their advisory business and the overall positive trajectory of the company. Doyle also mentions recent M&A deals in the quarter.

The speaker discusses the company's M&A pipeline and how it has remained solid in the past few months. They mention the recent acquisitions of Grant and Hanon, which are expected to strengthen their presence in the middle market. The speaker also mentions that they are being selective and disciplined in their acquisitions, but expect to continue deploying capital inorganically. In response to a question about the UBS and Credit Suisse merger, the speaker declines to comment on individual clients and their work.

John Doyle, CEO of Guy Carpenter, discusses the current state of the insurance market and how they are working with Marsh to develop better solutions for clients in the digital economy. He acknowledges that the market has been restricting coverage for systemic events and there is work to be done to help clients manage cyber-related risks. He also mentions that there may be headwinds in the US and Canada due to capital market volatility and declining pricing, but their well-diversified business and ability to help clients manage a wide range of risks will continue to drive growth. He thanks his colleagues for their hard work and dedication.

The speaker is thanking their clients for their ongoing support and looks forward to speaking with them again next quarter. The operator then concludes the program and thanks the participants for their participation.

This summary was generated with AI and may contain some inaccuracies.