Marsh & McLennan Companies, Inc.

Welcome to Marsh McLennan's earnings conference call. Today's call is being recorded. Fourth quarter 2022 financial results and supplemental information were issued earlier this morning. They are available on the company's website at marshmclennan.com. Please note that remarks made today may include forward-looking statements. Forward-looking statements are subject to risks and uncertainties, and a variety of factors may cause actual results to differ materially from those contemplated by such statements. For a more detailed discussion of those factors, please refer to our earnings release for this quarter and to our most recent SEC filings, including our most recent Form 10-K, all of which are available on the Marsh McLennan website. During the call today, we may also discuss certain non-GAAP financial measures. For a reconciliation of these measures to the most closely comparable GAAP measures, please refer to the schedule in today's earnings release. If you have a question, please press star 1-1 on your touchtone phone. If you are using a speakerphone, you may need to pick up the handset before pressing the numbers. Once again, if you have a question, please press star 1-1 on your touchtone phone. I'll now turn this over to Dan Glazer, President and CEO of Marsh McLennan.

Thank you, Andrew. Good morning, and thank you for joining us to discuss our third quarter results reported earlier today. I'm Dan Glazer, President and CEO of Marsh McLennan. Joining me on the call today is John Doyle, our group president and COO, Mark McGivney, our CFO, and the CEOs of our businesses, Martin South of Marsh, Dean Klasora of Guy Carpenter, Martin Furlong of Mercer, and Nick Studer of Oliver Wyman. Also with us this morning is Sarah DeWitt, head of investor relations. Today is my 60th earnings call at Marsh McLennan and 40th at CEO. After 10 years as president and CEO, I will be retiring from Marsh McLennan at the end of the year. Leading this firm over the past decade has been the honor of a lifetime. Before I jump into our results, I'd like to say how pleased I am about the leadership succession we announced. The appointment of John Doyle as president and chief executive officer, effective January 1st, continues to underscore Marsh McLennan's deep trove of industry-leading talent. During John's tenure as President and CEO of Marsh, he drove exceptional revenue and earnings growth. And as Group President and COO, John is finding new ways to harness the capabilities of Marsh McLennan across our business, accelerating impact for clients, colleagues, and communities. John has been an indispensable partner to me and the other members of our executive committee in shaping and executing our strategy. He knows our business well and is focused on delivering outstanding performance for clients and shareholders. I am confident that our extraordinary success will continue under John's leadership. Marshall McLennan's third quarter results demonstrated strength on strength. Top-line momentum continued across our business, extending the best run of quarterly underlying growth in over two decades. We generated strong top- and bottom-line results despite difficult year-over-year comparisons. Underlying growth of 8% in the quarter reflects considerable strength across our organization. It represents the sixth consecutive quarter of 8% or higher top-line growth building on 13% growth a year ago. Adjusted operating income of 851 million was a third quarter record and grew 12% on top of 19% in the third quarter of 2021. Adjusted EPS growth of 9% is excellent, especially given costs related to our strategic talent investments, the rebound of T&E, and 32% growth in the third quarter of 2021. We completed $500 million of share repurchases in the third quarter, bringing year-to-date repurchases to $1.6 billion, which is higher than any full-year level of repurchases in our history. While the economic and geopolitical backdrop is uncertain, we have a proven track record of being resilient through cycles and are well-positioned. Overall, our third quarter performance highlights the strength of Marshall McLennan. the critical nature of what we do for our clients, and the unmatched expertise of our colleagues. With that, let me turn it over to John.

Thanks, Dan, and good morning, everyone. I am honored to become Marsh McLennan's next president and CEO, and grateful for the trust and confidence Dan and the board have placed in me to lead this exceptional company. I'm eager to work with our colleagues in realizing new possibilities to serve our clients, create value for our shareholders, and support our communities. I'm pleased with our third quarter results. We delivered strong growth despite a macro backdrop that is becoming more uncertain. We are delivering solutions to help clients navigate volatile economic, geopolitical, and risk landscape. As we discussed last quarter, there are aspects of the current environment that remain supportive of our growth. Higher inflation offsets lower real GDP growth, Rising interest rates boost our fiduciary income, and the challenging insurance market drives the flight to quality. We also have a track record of success and being resilient through cycles, and I believe Marshall Planet is well positioned to perform. I would like to take a moment to discuss Hurricane Ian, which has had a devastating impact on the people and communities in Florida. Ian has the potential to be the costliest insured event in Florida's history, and the second most damaging insured loss of all time. We are working with insurers to help our clients receive much needed support. Insurance has a critical role to play in building homes and restoring shuttered businesses. Our work reinforces Marsh McLennan's purpose to be there in the moments that matter for our clients and communities. Ian's category four strength, incredible size and slow pace resulted in tremendous damage, the cost of which is exacerbated by the effects of coastal development, the escalation of property values, general inflation, and persistent supply chain challenges. While the ultimate insured loss won't be known for some time, the impact on an already stressed property market will be significant. At mid-year reinsurance renewals, the property market is already exhibiting strains. Following Ian's the property cap market is likely to tighten even further and perhaps see a significant supply-demand imbalance. We are harnessing our collective expertise, scale, and capabilities to bring solutions and help our clients navigate this complex risk environment. Turning to our third quarter financial performance, we generated strong results. Adjusted EPS of $1.18 is up 90% versus a year ago. which is impressive on top of 32% growth in the third quarter of 2021. Total revenue increased 4% versus a year ago and rose 8% on an underlying basis, with 9% in RIS and 8% in consulting. This is a terrific result, especially considering the prior year third quarter underlying growth was 13%. Marsh had an excellent quarter. Growth was 8%, reflecting new business and stronger growth. Guy Carpenter grew 7% in the quarter, continuing its string of terrific results. Mercer grew 5% in the quarter, despite capital market headings. And Oliver Wyman grew 13%, the seventh consecutive quarter of double-digit growth. The third quarter saw adjusted operating income growth of 12%, and our adjusted operating margin expanded 110 basis points year-over-year. Overall, I am proud of our third quarter performance, which demonstrates the strength and resilience of our business. Given our strong third quarter and year-to-date performance, we are on track for an outstanding year. We expect to generate high-sync digit growth, underlying revenue, solid growth and adjusted EPS, and to report margin expansion 15th consecutive year. We are focused, aligned, and succeeding together as our results demonstrate. Before I turn it over to Mark, I'd like to say a few words about Dan. During Dan's tenure at the helm of Marsh McLennan, the company has been transformed. Our revenue has nearly doubled, our adjusted EPS has more than tripled, and our market cap has quadrupled. Our scaling capabilities have been enhanced, and our talent is unmatched. Dan led our expansion into new client segments and launched Marsh McLennan Agents, which has grown to $2.5 billion of annual revenue, closed 100 acquisitions in just over a decade. Dan also successfully led the company's $5.6 billion acquisition of JLT in 2019, the largest in our history. Most importantly, Dan has led our firm with vision, courage, and integrity. Faced with the consequences of the pandemic, his values-first leadership ensured that the tough choices were made to safeguard our colleagues, to protect jobs and incomes, deliver for clients, bolster liquidity, and still produce significant growth. His decisions were an inspiration to our colleagues and an example to the broader business community. Our financial performance speaks for itself, with Marsh McLennan's total shareholder return more than doubling the S&P 500 during Dan's stewardship as CEO. Less visible, but even more significant, is the sense of pride and the culture that Dan has instilled in the firm. Under his leadership, we are not only a great stock, but a great company. We owe him our gratitude. So on behalf of our 86,000 colleagues, I thank Dan for his leadership. And with that, I'll turn the call over to Mark for further detail on our financial results and a discussion of our outlook for the rest of 2022.