Marsh & McLennan Companies, Inc.

Marsh McLennan's earnings conference call. Today's call is being recorded. Second quarter 2025 financial results and supplemental information were issued earlier this morning. They are available on the company's website at marshmclennan.com. Please note that today's remarks 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 touch zone please press star 11 again. If you're 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 11 on your touchtone phone.

I'll now turn this over to John Doyle, President and CEO of Marsh McLennan.

Good morning, and thank you for joining us to discuss our second quarter results reported earlier today. I'm John Doyle, President and CEO of Marsh McLennan. On the call with me is Mark McGivney, our CFO, and the CEOs of our businesses, Martin South of Marsh, Dean Klasura of Guy Carpenter, Pat Tomlinson of Mercer, and Nick Studer of Oliver Wyman. Also with us this morning is Jay Gelb, head of investor relations. Marsh McLennan had a solid second quarter. As we said coming into the year, we anticipated impacts from a changing macro environment, and our performance continues to track well with our expectations. Overall, we grew revenue 12% in the quarter, reflecting continued momentum in our business and contributions from an active year of acquisitions in 2024. Underlying revenue increased 4% for the quarter. I was pleased with our execution, especially given the impact of lower fiduciary interest income, declining P&C pricing, and market uncertainty affecting our clients, especially here in the U.S. Adjusted operating income increased 14% from a year ago. Our adjusted operating margin increased 50 basis points compared to the second quarter of 2024, and adjusted EPS grew 11%. Turning to the macro environment, the global economic outlook remains uncertain as we move into the second half of the year. Ground wars, culture wars, trade wars, extreme weather, and the opportunities and risks from the rapid development of AI are creating complex operating conditions. Oliver Wyman recently teamed up with the New York Stock Exchange to see how CEOs are thinking about and responding to the challenges they face. 165 CEOs responded on topics ranging from managing geopolitical instability and supply chain disruption to capturing value from AI. In all, 89% of CEOs rated geopolitics, along with trade and industrial policies, as a risk to their company, up 20 percentage points from 2024. CEOs are focused on extracting growth in a slowing economy and a more complex geopolitical environment, while tightly managing costs and spending more time on near-term issues. While the environment presents challenges for our clients, it also provides Marsh McLennan with an opportunity to support them. We're advising clients on near and long-term strategies and guiding them on growth and building resilience during this dynamic period. This includes analyzing supply chain risks and helping them consider the impacts of AI on their workforce. Together, we can transform these challenges into opportunities. I also want to take a moment to address the current litigation environment in the U.S. Excessive litigation and the abuse of our legal system are effectively imposing attacks on our economy and causing a surge in U.S. liability insurance costs. The U.S. already has the highest liability insurance rates in the world, and escalating costs will only make it harder for companies to decide to invest and grow here. And for those that do, they will ultimately have to pass along these increased costs to consumers. Our tort system is intended to provide fair compensation to injured parties who have been wrong. But too often, we see tort litigation backed by a vast and growing industry with outside investors. The result in many cases is that aggrieved parties see less than half of the settlement awards. Our clients are feeling the effects of this growing problem. Consider the rise of so-called nuclear verdicts. Cases exceeding $100 million have grown 400% over the past decade, according to the U.S. Chamber of Commerce. This trend is encouraging more lawsuits and blockbuster verdicts, which drive up insurance costs. In fact, in 2024, U.S. liability insurance experienced the most severe adverse reserve development of any single line of coverage since the 2008 global financial crisis. This was more than double the amount from the previous year. And over the past decade, U.S. excess casualty insurance rates have increased by a cumulative 150%. Addressing these tort abuses will be challenging and take time. We are committed to working with the business community and policymakers to tackle this challenge. Now, turning to insurance market conditions, overall rates continue to decrease, particularly in property insurance and property cat reinsurance. According to the Marsh Global Insurance Market Index, commercial insurance rates decreased 4% in the second quarter, driven by property, despite a surge in cat losses in the first six months of the year. This follows a 3% decline in the first quarter of 2025. As a reminder, our index skews to large account business. Overall, rates in the US were flat. Latin America, Europe, UK, and Asia were all down mid-single digits, and Pacific was down double digits. Global casualty rates increased 4%, with US excess casualty up 18%, reflecting the previously mentioned liability environment. Workers' compensation decreased by 4%, global property rates decreased by 7% year over year, compared to a 6% decrease last quarter. Global financial and professional liability rates were down 4%, while cyber decreased 7%. In reinsurance, mid-year renewal rates decreased by 5% to 15% for non-loss impacted programs. A moderate increase in client demand was offset by reinsurers' increase in capacity, as well as increased seed and cap bond issuance. the cap bond market is on pace for a record year of issuance, with over 50 new bonds in the first half involving approximately $17 billion of limit. In U.S. casualty reinsurance, renewals were largely stable with sufficient capacity, reflecting the underwriting actions of primary carriers. As always, we continue to help our clients navigate a range of market conditions. Now let me turn to our second quarter financial performance and outlook, which Mark will cover in more detail. Consolidated revenue increased 12% to $7 billion and grew 4% on an underlying basis, with 4% growth in RIS and 3% growth in consulting. Marsh was up 5%, Guy Carpenter grew 5%, Mercer 3%, and Oliver Wyman was up 3%. We had adjusted operating income growth of 14%, and we generated adjusted EPS in the quarter of $2.72, which is up 11% from a year ago. We also announced a 10% increase to our quarterly dividend to 90 cents and completed $300 million of share repurchases during the quarter. Turning to our outlook for 2025, we continue to expect to deliver mid-single-digit underlying revenue growth solid growth in adjusted EPS, and our 18th consecutive year of reported margin expansion. Of course, this outlook is based on conditions today, and the economic backdrop could turn out to be materially different than our assumptions. In summary, we are pleased with our first half performance in a complex and dynamic macro environment. We're confident that the enduring value we provide to clients makes our business resilience even during times of economic uncertainty. Our collection of capabilities is unique, and there is strong client demand around the world for our advice and solutions. We believe we are the best positioned company in our markets, and we've earned our leadership position through 154 years of innovation and growth. Our discipline to invest for the future while delivering consistent results is not new. It's a fundamental philosophy that guides our planning and capital allocation. With that, let me turn it over to Mark for a more detailed review of our results.