The operator welcomes listeners to Marsh McLennan's earnings conference call and reminds them that the call is being recorded. The company's second quarter 2024 financial results and supplemental information are available on their website. The speakers may discuss forward-looking statements and non-GAAP financial measures, and listeners can refer to the earnings release and SEC filings for more information. President and CEO, John Doyle, and other business leaders will discuss the results. Doyle also comments on the recent attempted assassination of former US President, Donald Trump, and condemns violence.

Marsh McLennan had a successful second quarter, with 6% revenue growth and a 15% increase in quarterly dividend. They also completed several acquisitions, including Cardano and Veritas Total Solutions, to enhance their position in the market and expand their capabilities. Marsh McLennan is focused on delivering in the short term while investing for long-term growth.

AC Risk Management, Perkins Insurance Agencies, and MMA's recent acquisition of Horton, AmeriStar, and Hudson Shore have contributed to the company's $3.5 billion annual revenue. The company also invests in innovation, such as Marsh's Blue[i] Risk Appetite Analytics, Guy Carpenter's CatStop+, and Mercer's SelectRx, to provide clients with new solutions and help them navigate complex environments. These solutions use data and analytics to generate insights for clients and lower costs for employers and employees.

Oliver Wyman is helping clients innovate with the launch of Quotient, which combines AI expertise and industry knowledge to deliver real value. The company's approach balances near-term performance with investment and innovation, leading to sustained growth and exceptional performance for shareholders. Despite global uncertainty, the company sees continued economic growth and rising costs in healthcare and tight labor markets. Insurance and reinsurance market conditions were relatively flat in the second quarter, with rates increasing in some regions and decreasing in others.

Global property rates were flat in the second quarter, with casualty rates increasing in the low-single digits and workers' compensation rates decreasing. Reinsurance renewals showed increased demand for property cat with easing rates. The cat bond market was active, with over 30 new bonds issued. Casualty programs faced underwriting scrutiny, but there was adequate capacity in the market. The company had a strong financial performance in the second quarter, with adjusted EPS up 10% and underlying revenue growing 6%. The adjusted operating margin also expanded. The company expects to continue this growth in 2024, but acknowledges potential uncertainty due to the current economic conditions.

The speaker expresses pride in the company's second-quarter performance, thanking colleagues for their hard work. Mark then gives a detailed review of the results, highlighting strong revenue and margin growth, as well as a 10% increase in adjusted EPS. He specifically mentions the success of Risk and Insurance Services, with 14 consecutive quarters of 7% or higher growth and a 35.3% adjusted operating margin. Marsh also saw growth of 8% in revenue, with 7% underlying growth.

In the second quarter, Marsh saw strong growth in new business and renewals, with a 6% increase in the US and Canada and 7% internationally. Guy Carpenter also had a successful quarter, with a 10% increase in revenue and 11% underlying growth. The Consulting segment had a 2% increase in revenue and 4% underlying growth, with a 6% increase in operating income. Mercer had flat revenue, but a 5% increase on an underlying basis, driven by growth in Wealth and Health. Overall, Mercer has had 13 consecutive quarters of 5% or higher underlying growth.

In the second quarter, career revenue at Mercer and Oliver Wyman increased by 2% and 3% respectively, with underlying growth of 6% and 8%. Foreign exchange was a $0.02 headwind and noteworthy items totaled $73 million, including restructuring costs and transaction-related expenses. Interest expense and adjusted effective tax rate also increased compared to the same period last year. For the full year, the company expects an adjusted effective tax rate of between 25.5% and 26.5%.

The company expects to see mid-single-digit or better underlying growth, margin expansion, and strong growth in adjusted EPS for the full year. They feel confident about their momentum and the current environment, and are well-positioned for another successful year in 2024. They also announced a 15% increase in their quarterly dividend and have plans to deploy approximately $4.5 billion in capital in 2024. Their cash position at the end of the second quarter was $1.7 billion and they have already used $1.2 billion in cash for dividends, acquisitions, and share repurchases. Despite uncertainty in the global economy, the company remains optimistic about their outlook.

The speaker, John Doyle, is responding to a question about the company's 8% revenue growth in the first half and why they are not increasing their projected range. He explains that they are pleased with their growth and have seen improvements in all of their businesses, but there may be some quarter-to-quarter volatility. He also mentions that the macro environment is supportive of growth and they have the best talent in their markets. The other speaker, Mark McGivney, confirms that they are still expecting greater margin expansion in the second half.

The speaker, John Doyle, is pleased with the 130 basis points and believes it validates their statements about first-quarter margin expansion facing headwinds. They are on track for solid margin expansion for the year. In response to a question about Oliver Wyman's growth, the speaker and Nick Studer mention that it is a combination of tough comps and normal volatility in the business. They note that year-to-date growth is at 8%, which is in line with their expectations. The Asia and India, Middle-East, and Africa regions are seeing strong growth, as well as their communications, media, and technology practice. Overall, they are satisfied with the company's performance in the first half of the year.

The company has a variety of capabilities, including economic research and a strong finance and risk practice. However, the market is uncertain and there is pricing pressure due to excess capacity from competitors. The fiduciary investment income has been flat and will largely depend on the outlook for interest rates. The company has balances all over the world, not just in the US, which will affect the revenue mix.

John Doyle thanks Elyse for her question and Mark provides some insight on the expenses and how they have helped with margins. Elyse asks about the organic growth in Marsh and Martin responds by stating that there was a 7% growth in the second quarter, on top of a tough comparison to the previous year's 10% growth.

The company experienced balanced growth in both the international and US markets, with the US business performing well and Canada lagging due to macroeconomic factors. The benefits business drove strong performance internationally, with double-digit growth in construction, energy, and power. The US capital markets showed signs of improvement, which has been a headwind for new business growth in the past. Renewal base growth and new business were strong, and the company's focus on building stronger relationships with clients has led to improved retention. The mix of premium in the US will be more weighted towards casualty, while international will be more balanced in property-casualty. The liability environment in the US is reflected in this trend. Due to the strong M&A activity, there may be a deceleration in share buybacks in the second half of the year compared to the first half.

The speaker, John Doyle, is responding to a question about the company's approach to capital management and their M&A tracking. He states that their philosophy has not changed and they aim to invest in their business rather than buybacks, but they also don't want cash to build up on the balance sheet. The company has $4.5 billion to deploy and they recently increased their dividend and bought back $300 million in shares. The company is pleased with the M&A market and will continue to be active in it. The questioner also asks about the strong organic growth in Mercer's Health sector compared to the slower growth in Career and Wealth, and Doyle attributes this to rising healthcare costs. He then asks Pat to comment further.

The company is delivering great value to clients in a tough market, with a 5% growth in the second quarter. All practices are contributing to growth, with health showing the highest growth at 9%. This is due to investments in talent, thought leadership, digital tools, and client segmentation. Wealth and Career also saw growth, with Wealth growing 3% due to project work and regulatory requirements.

The paragraph discusses the performance of Mercer, a company in the volatile capital markets. The OCIO business has seen strong demand due to a transaction with Vanguard and a lift in revenue from the capital markets. However, the IMS business, which includes advisory work and DC administration, is only partially impacted by AUM and has a more diversified portfolio. The Career practice has had modest growth due to lower wage inflation and reduced employee turnover, but is still 20% larger than pre-pandemic. Overall, the company remains positive about the outlook for Mercer.

The speaker, John Doyle, responds to a question about the property and casualty insurance market. He notes that the Marsh index has decreased to zero from one, indicating a more competitive environment. There are two different trends in the market, with larger accounts experiencing more volatility and mid-market accounts being more stable. Insurance and reinsurance markets are settling after years of increases, but some segments, like US Excess Casualty, are still showing signs of stress. Cyber and FinPro prices are moderating, but loss cost inflation in the US Excess Casualty market remains challenging.

The market is currently providing an opportunity for clients to revisit financing decisions due to tighter market conditions. This has led to increased demand for Guy Carpenter's services in the second quarter. The company has seen 26 quarters of rate increases, but rates are now flat. Casualty and property rates are mostly flat, with some increases in certain regions. Core FinPro and cyber rates have seen slight decreases. Exposure growth has been significant, which helps counteract the rate decreases. The reinsurance market is also experiencing similar trends.

The property cat reinsurance market has been more stable and predictable compared to last year's hard market. There is adequate capacity and increased reinsurer appetite due to high ROEs. There has been record cat bond issuance and moderating cat rates, but overall premium spend is still up year-over-year. Client demand for additional property cat limit has significantly increased, with two-thirds of US clients buying more coverage. Retrocession coverage is also seeing improved pricing and appetite. However, there is caution in the market due to the high amount of insured losses in the first half of the year.

The speaker discusses the current state of the insurance market and how it is evolving to be more favorable to buyers. They mention specific events that have caused significant insured losses, leading to caution in the market. They also mention divestitures and foreign exchange as factors that may have impacted the company's total revenue growth and EBITDA. The speaker also briefly mentions the sale of two admin businesses and the positive outlook for their new owner. Finally, the speaker discusses Blue[i], a data analytics business, and its importance within the company.

Marsh uses a suite of analytics tools called Blue[i] to help their clients manage and finance risk. These tools analyze various types of risks and help clients determine which risks to retain or transfer. They also help clients identify and settle losses early. These tools are built on an enormous lake of data that Marsh has access to, giving them a competitive advantage. The tools are also used for clients who do not purchase insurance, and Marsh continues to invest in them. These tools are used upfront to help clients understand their risks and develop strategies to manage them. While most of the conversation around Marsh is about financing risk, these tools are an important part of their value proposition and demonstrate their scale benefits in the market.

In the paragraph, the speaker discusses the approach to clients in the market at Guy Carpenter and provides additional information on the operating cash flow and free cash flow for the six months. They caution against focusing too much on a quarter's results and mention factors that have affected the cash flow, such as higher compensation payouts and growth in the business. The speaker also mentions a long track record of double-digit growth in free cash flow and addresses a question about margins.

The speaker clarifies that margin expansion is still expected to be better in the second half of the year compared to the first half. They also mention that margin is an outcome of how the business is run and that they are continuously making investments to support growth. They mention specific efforts in workflow and automation and testing AI at scale. The speaker expects margin expansion to continue in the future.

During a conference call, John Doyle, CEO of an insurance company, was asked about how the recent overturning of the Chevron doctrine would affect clients' exposure to casualty lines. Doyle responded by discussing the troubling signs of loss cost inflation and the suite of analytics used to help clients make decisions about their risks. When asked about the company's organic growth in Career, Doyle stated that there was no significant change from the first quarter.

John Doyle, CEO of Marsh, discusses the dynamics of the company's less active labor markets, lower compensation, and expectations for growth in the business. He also mentions that Marsh accesses most of its excess and surplus (E&S) market solutions directly, rather than through third-party wholesalers, but there has been some growth in intermediated wholesale premium in recent years. The company's focus is to bring the best solutions to its clients and manage their outcomes directly.

The speaker thanks everyone for joining the call and expresses gratitude to the company's colleagues and clients. They also mention the different economics between cat bonds and traditional reinsurance placement and the contribution of the record cat bond quarter to organic growth.

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