Marsh & McLennan Companies, Inc.

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 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 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 one one on your touchstone phone. If you wish to be removed from the queue, please press star one one 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 one one on your touchstone phone.

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

Good morning, and thank you for joining us to discuss our fourth quarter results, which we reported earlier today. I'm John Doyle, President and CEO of Marsh. Joining me on the call are Mark McGivney, our CFO, and the CEOs of our businesses, Martin South, Dean Klasura, Pat Tomlinson, and Nick Studer. Also with us this morning is Jay Gelb, head of investor relations. 2025 was another good year for Marsh. We executed well against our strategic objectives and delivered solid financial results. Total revenue grew 10% to $27 billion with underlying revenue growth of 4%. Adjusted operating income increased 11% to $7.3 billion. This is on top of 11% growth in 2024. Our adjusted operating margin improved 30 basis points, marking our 18th consecutive year of reported margin expansion, and adjusted EPS grew 9%. We generated 25% growth in free cash flow and achieved our capital deployment objectives. We invested approximately $850 million in acquisitions and returned significant capital to our shareholders. This included a 10% increase in our quarterly dividend and a $2 billion in share repurchases, the largest annual amount in our history. We also successfully completed the integration of McGriff, our largest acquisition ever, launched our new brand, and announced the Thrive program, all of which improve our growth profile in the years ahead. I want to take a moment to talk about our strategy and the opportunities we see. Marsh is a market leader with a proven track record of growth and exceptional performance. Our success is driven by the unique strengths of our businesses, market leading positions, a data and analytics advantage, and most importantly, the talent and dedication of our colleagues. Looking ahead, we see an opportunity to deliver even greater value to our stakeholders. Our vision is to be the most impactful professional services firm in the world, not just in insurance, but across risk, reinsurance and capital, health and talent strategies, investments, and management consulting. Our clients face increasingly complex challenges and new opportunities. They rely on our expertise across critical areas where we are market leaders and where our scale, and specialization are a distinct advantage. Last quarter, we introduced Thrive, a growth program aligned with our vision and core principles. We expect it to provide greater financial flexibility and organizational agility over the next three years. Thrive is already unlocking the capacity to invest in emerging areas with meaningful economic opportunity, such as digital infrastructure, healthcare, private capital, insurance capital strategies, and energy. It's also enabling us to increase investment in frontline talent and integrated solutions across our businesses. With Thrive, we can more powerfully and efficiently invest in one brand. Two weeks ago, we officially launched the new Marsh, ringing the closing bell at the New York Stock Exchange and introducing our new ticker symbol MRSH. Our new expanded Marsh brand better supports our business strategy and simplifies our value proposition for clients. This was highlighted at the World Economic Forum meeting in Davos last week, where Marsh colleagues met with government and business leaders. Together, we discussed geoeconomic confrontation, AI and digital infrastructure, health and longevity, investment strategies, and resilience and transformation in an uncertain environment. The client and even societal impact that we can have when we bring our full capabilities together under the Marsh brand is a sustainable advantage. Another important part of Thrive is the formation of business and client services. Through BCS, we're building a data and technology ecosystem that harnesses AI and advanced analytics to improve client outcomes and drive operational excellence. While we've improved efficiency through technology and moving workflow to cost-effective locations over the years, BCS is a fundamental change in our operating model, and it accelerates expense savings and investment in AI and automation. BCS has introduced dozens of AI-driven productivity tools, and we're ramping up adoption to give our colleagues an edge. We're also focused on launching one-of-a-kind technologies, client-facing technologies such as Centrisk and Ada, which I've mentioned on prior calls. We see strong growth potential in client-facing technology, virtual agents, and chatbots. I look forward to continuing to share our progress on Thrive in the quarters ahead. Turning to market conditions, we continue to see a competitive insurance and reinsurance environment. According to the Marsh Global Insurance Market Index, primary commercial insurance rates decreased 4% in Q4, driven largely by property. This follows a 4% decline in the third quarter of 2025. As a reminder, our index skews to large account business. Rates in the U.S. were flat. U.K., Canada, and Latin America were all down 7%. Europe and Asia declined mid-single digits. and the Pacific region had double-digit decreases. Global property rates decreased 9% year over year, compared with an 8% decline in the prior quarter. Global financial and professional liability rates were down 4%, while cyber decreased 7%. Global casualty rates increased 4%, with U.S. excess casualty up 19%, reflecting ongoing pressure in the liability environment, and workers' compensation decreased 1%. In reinsurance, the property cap market continued to soften, as reinsurers pursued growth by deploying more capital. Price decreases accelerated at January 1. Seedins achieved double-digit rate reductions for non-loss-impacted cap placements. Demand increased 5% to 10%, depending on region and segment, with buyers seeking better risk sharing, such as aggregate and other covers. In casualty, we continue to see price increases driven by rising rates in the primary market, which has made it an attractive growth opportunity for reinsurers. The cap bond market had another record year. with 86 new bonds issued totaling more than $24 billion in limits. Dedicated reinsurance capital is projected to increase 9% to $660 billion at the end of 2025, driven by growth in traditional and alternative capital. With ample capacity, including new casualty sidecars, reinsurers are seeking profitable ways to deploy capital. Turning to health trends, our surveys indicate medical costs are expected to continue to rise in 2026. In the U.S., we are estimating a 7% increase, while other regions of the world will experience high single to low double-digit increases. We continue to help clients balance cost reduction measures with their need to maintain high-quality benefit plans. As always, our focus remains on helping all of our clients navigate these dynamic market conditions. Now let me turn to our fourth quarter financial performance and outlook, which Mark will cover in more detail. Consolidated revenue increased 9% to $6.6 billion, growing 4% on an underlying basis with 2% growth in RIS and 5% in consulting. Marsh risk was up 3%. Guy Carpenter grew 5%, Mercer increased 4%, and Marsh Management Consulting, which was formerly reported as Oliver Wyman Group, grew 8%. Adjusted operating income grew 12%, and adjusted EPS for the quarter was $2.12, up 10% year over year. We also repurchased $1 billion of our stock in the quarter. Looking ahead, Despite headwinds from lower interest rates and decreasing insurance and reinsurance pricing, we are well positioned for another solid year. We expect underlying revenue growth in 2026 to be similar to last year. We also anticipate continued margin expansion and solid adjusted EPS growth. Of course, this outlook is based on current conditions, and the economic environment could change materially from our assumptions. In summary, we're pleased with our 2025 performance. We executed on our strategic objectives and continued our track record of strong results. The Thrive program will drive growth through investments in talent and AI, strengthen our brand, and generate greater efficiency. I would add that this is my 40th year in the business world, and I've never seen such a complex environment for our clients. While we are not facing one global crisis, We are in an era of poly-crises. Ground wars, trade wars, culture wars, social unrest, AI disruption, and extreme weather are all creating enormous challenges for businesses. But there is also opportunity in the complexity if clients can anticipate the environment, seize the potential of AI while managing the risks, and have the right advisors to guide them. It's why I'm so optimistic about Marsh's future. Our perspective, shaped by 155 years of helping clients build the confidence to thrive, sets us apart. Our ability to see the risks and opportunities and support clients with advice and solutions will benefit them and make our relationship invaluable. With that, I'll turn the discussion to Mark for a more detailed review of our results. Thank you, Johnny.

Good morning. Our fourth quarter results represented a solid finish to the year, reflecting our strong position and execution despite a more challenging environment. Consolidated revenue increased 9% to $6.6 billion, with underlying growth of 4%, which came despite a headwind from fiduciary interest income. Operating income was $1.2 billion, and adjusted operating income was $1.6 billion, up 12%. Our adjusted operating margin increased 40 basis points to 23.7%. Gap EPS was $1.68. And adjusted EPS was $2.12, up 10% over last year. For the full year, underlying revenue growth was 4%. Adjusted operating income grew 11% to $7.3 billion. Our adjusted operating margin increased 30 basis points and adjusted EPS increased 9% to $9.75. Looking at risk and insurance services, fourth quarter revenue was $4 billion, up 9% from a year ago, or 2% on an underlying basis. Operating income in RIS was $830 million. Adjusted operating income was $1.1 billion, up 11% over last year, and the adjusted operating margin was 27.6%, up 60 basis points from a year ago. For the full year, revenue in RIS was $17.3 billion, with underlying growth of 4%. Adjusted operating income increased 12% to $5.5 billion, and the adjusted operating margin was 32%. At March risk, Revenue in the quarter was $3.7 billion, up 10% from a year ago, or 3% on an underlying basis. Marsh Risk's underlying growth in the quarter faced tough comparisons to last year's fourth quarter due to elevated claims activity in our current flood business and the renewal of 18-month policies in Latin America. In U.S. and Canada, underlying growth was 3%, reflecting good new business growth overall and continued momentum in MMA. In international, underlying growth was 4%, with EMEA up 6%, Asia Pacific up 2%, and Latin America down 4%, reflecting the impact of 18-month policy renewals. For the full year, marsh risks revenue was $14.4 billion, with underlying growth of 4%. U.S. and Canada grew 3%, and international was up 5%. Guy Carpenter's revenue in the quarter was $215 million, up 7% or 5% on an underlying basis. Growth remained solid despite softer reinsurance market conditions and came on top of 7% underlying growth in the fourth quarter of last year. For the full year, Guy Carpenter generated $2.5 billion of revenue and 5% underlying growth. In the consulting segment, fourth quarter revenue was 2.6 billion, up 8% or 5% on an underlying basis. Consulting operating income was 483 million, and adjusted operating income was 550 million, up 10%. Our adjusted operating margin in consulting was 20.8%, up 10 basis points from a year ago. For the full year, consulting revenue was 9.8 billion, reflecting underlying growth of 5%. Adjusted operating income increased 10% to $2.1 billion, and the adjusted operating margin increased 40 basis points to 21.1%. Mercer's revenue was $1.6 billion in the quarter, up 9% or 4% on an underlying basis. Health grew 6%, reflecting continued growth across our regions, especially in international. Wealth was up 5%, led by our investments business. Our assets under management were $692 billion at the end of the fourth quarter, up 1% sequentially, and up 12% compared to the fourth quarter of last year. Year-over-year growth was driven primarily by acquisitions and the impact of capital markets. Career was down 2%, reflecting continued softness in project-related work in the US and Canada, partially offset by sustained demand in international, and good growth in our workforce products. For the full year, revenue at Mercer was $6.2 billion, with 4% underlying growth. Marsh Management Consulting generated revenue of $1 billion in the fourth quarter, up 8% on both a gap and an underlying basis, reflecting solid demand across most regions and sectors. For the full year, revenue in Marsh Management Consulting was $3.6 billion, an increase of 6% on an underlying basis. Fiduciary interest income was $92 million in the quarter, down $20 million compared with the fourth quarter of last year, reflecting lower interest rates. Looking ahead to the first quarter, based on the current environment, we expect fiduciary interest income will be approximately $83 million. we're making good progress on executing our Thrive program. We continue to expect to generate $400 billion of total savings, a portion of which will be reinvested for growth and incur approximately $500 million of charges to generate the savings. Total noteworthy items in the fourth quarter were $210 million and included $112 million of costs associated with Thrive. Interest expense in the fourth quarter was $235 million. Based on our current forecast, we expect interest expense will be approximately $240 million in the first quarter. Our adjusted effective tax rate in the fourth quarter was 22.1%. This compares with 21.3% in the fourth quarter last year. For the full year, excluding discrete items, our adjusted effective tax rate in 2025 was 25.3%, compared with 25.9% in 2024. When we give forward guidance around our tax rate, we do not project discrete items. Based on the current environment, we expect an adjusted effective tax rate of between 24.5% and 25.5% in 2026. Also note that our adjusted effective tax rate in the first quarter last year included a meaningful discrete benefit related to share-based compensation. Based on our current estimates, we do not expect to see a benefit in Q1 this year. Earnings capital management in our balance sheet. We ended the quarter with total debt of $19.6 billion. Our next scheduled debt maturity is in the first quarter of 2026, with $600 million of senior notes mature. We generated strong free cash flow in 2025 of $5 billion, up from $4 billion a year ago. This reflects the underlying strength of our business and discipline in managing working capital. Our cash position at the end of the fourth quarter was $2.7 billion. Uses of cash in the quarter totaled $1.9 billion and included $444 million for dividends, $481 million for acquisitions, and $1 billion for share repurchases. For the full year, uses of cash totaled $4.6 billion and included $1.7 billion for dividends, $847 million for acquisitions, and $2 billion for share repurchases. I want to take a minute to reiterate our approach to capital management. We've consistently followed a balanced capital management strategy that helps us deliver solid performance in the near term while investing for sustained growth over the long term. We prioritize investment in our business, both through organic investments and acquisitions. We favor attractive acquisitions over share repurchases and believe they are the better value creator for shareholders and the company over the long term. However, we also recognize that returning capital to shareholders generates meaningful returns for investors over time, and each year we target raising our dividend and reducing our share count. Looking ahead to 2026, based on our outlook today, we expect to deploy approximately $5 billion of capital across dividends, acquisitions, and share repurchases. The ultimate level of share repurchase will depend on how the M&A pipeline develops. Turning to our outlook for 2026, we are well positioned for another solid year. We currently expect underlying revenue growth will be similar to the level we generated in 2025. We also anticipate another year of margin expansion and solid adjusted EPS growth. With that, I'm happy to turn it back to John.

Thank you, Mark. Andrew, we're ready to begin the Q&A session.

Certainly. We will now begin the question and answer session. If you have a question, please press star 11 on your touchstone phone. If you wish to be removed from the queue, 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 touchstone phone. And in the interest of addressing questions from as many participants as possible, we ask that participants limit themselves to one question and one follow-up question.

One moment, please. Our first question comes from the line of Gregory Peters with Raymond James.

Good morning, everyone. So for the first question, I'd like to go back to your comments on AI and digital infrastructure. And I guess I'm curious how you think the trends of investment in these areas by your clients could affect the long-term revenue outlook for RIS, for the consulting business, and the health business, where I guess there could be some potential rising employment volatility. Yeah, thanks, Greg. We're excited about the investment in the digital infrastructure world. You know, we expect roughly $3 trillion of investment over the over the course of the next five years or so. It's been an area of focus for us for some time. We have a digital infrastructure practice and a global leader and head of it. The investment comes from lots of different parts of the economy. It's not just hyperscalers, of course. So we've been focused on it. We're quite excited about the investment there. I think you're right. The job market is soft, right? So at least many labor markets are. are soft, and so this is a good area for us to be focused on. Our focus, of course, risk advisory, risk financing, but also capital management, workforce strategies, energy solutions, community engagement. There's real complexity to the build-out of all this infrastructure, so it is a big opportunity. Maybe, Greg, what I'd do is have our business leaders talk to you a little bit about each area and kind of what we're focused on. Martin, maybe you could talk a little bit about what we're doing at Marsh? Of course, John. Thank you. Marsh Risk, I should say.

Thank you. Yes, Marsh Risk has long been a leader in the technology sector, and we continue to build on that legacy with a very strong presence in the digital infrastructure landscape. This includes the fabrication plants, data centers, ancillary services, builders, designers, communities, and beyond that, power and energy and sporting operations. Over the next five years, it's estimated that between 2,000 to 3,000 data centers will be constructed worldwide, and we're already well on the way to establishing our preeminence in this ecosystem as a trusted partner. From our calculations, in 2025 alone, Marsh U.S. hands the leading market share of the $205 billion in data center construction values. In Asia, we're the clear leader, serving six of the largest foundry businesses, the four largest memory IDMs, and the largest semiconductor tool manufacturer's clients. As a trusted risk advisor, our capabilities support clients with builder's risk and property insurance, ongoing coverage and capital facilitation. We're supporting clients with asset, revenue, and contract, what we're calling our lifecycle work, supply chain issues, assessing revenue streams, and reviewing contractual obligations. We recognize the insurance capital capacity is a critical factor in supporting growth, and to address this, We're collaborating with Guy Carpenter and insurers to develop innovative capacity solutions, for example, Nimbus, our facility, which just this week doubled its capacity to 2.7 billion. All of this underscores our preeminence in the digital infrastructure space and our commitment to helping clients manage the risk in one of the most dynamic and fast-growing sectors globally. We see tremendous possibilities ahead and are very well positioned to capitalize on them.

Thanks, Martin. Dean, how are you supporting the effort at GC?

Thanks, Sean. You know, Greg, as Martin said, I think this is a significant new business opportunity in 2026 for both seedants and reinsurers. You know, there's been estimates of up to $10 billion of new premium entering the market in 2026 because of these opportunities. And the market needs more capacity. You know, no seed is going to put up billions of dollars of capacity for a single location risk. So that's a real issue. You know, all of our clients want to write data centers across 10 plus products globally, but they require additional reinsurance protections. Everybody's concerned with accumulations in portfolios, and we're solving that right now for our clients. And I think we need to bring new capital to the market. It's not going to just be traditional reinsurance capital. The introduction of third-party capital and securitizing some of these risks via sidecars and other vehicles is going to be critical. And these are going to have to be deep-pocketed investors given the size of these risks. But we think this is the single biggest new business opportunity in 2026.

Thanks, Dean. So, Greg, I talked about the abundant capacity in the market driving price down a bit, but there are segments where the industry is stressed. Pat, how about at Mercer? What are we doing there?

Yeah, thanks, John, and thanks, Greg. I appreciate the way you asked the question and how it had to do with employment and talent. On the data center infrastructure side and that ecosystem, what we're seeing is we're seeing employers, they need to think really strategically about their talent to be able to drive these large programs. The unique skills that are involved are evolving fast. critical talent is in limited supply so things that we're doing are things like workforce planning projects skills assessment and development a lot of mobility and rewards and healthcare plan designs all on top of clients minds out in the field right now Martin had mentioned an Asia specifically and I will say that's that's an area where there's heavy heavy focus on this a couple of a couple of examples of some of the things we're doing for clients on project size and We're working in the semiconductor industry around large global mobility policy redesigns to enable overseas expansion. If you think about the expansion inside of the data center ecosystem and the fact that it's going much more global, and whereas a lot of that was more local before for the Asian companies, they're really thinking about those global mobility and how to get people the right skills to the projects that they need all over the world. And then you also think about the talent change that's happening and upskilling the current talent So we've also done some really large technical skills design projects for some of the clients to assess and develop the skills they'll need in the workforce. And that goes across the ecosystem. It's not just the data centers themselves, but if you think about the manufacturers of a lot of the supplies that go to building, building chips, the gases, the raw materials, we're seeing projects really across the spectrum there. Great. Thank you.

And Nick, how about at Marsh Management Consulting? How are we helping our clients?

Yeah, I think it's well covered by my colleagues, but maybe just sort of put a wrapper around it. Our portfolio is totally unique, both in terms of the advisory businesses that exist across all four of our businesses, but also the strength and depth of Marsh Management Consulting, within which sits all of the one in Marsh business. We have the ability to be very integrative, not just in the construction of new data centers, but in the 90% of existing data centers that are needing to become AI-enabled. So we're working with colleagues across our businesses to help manage that transformation, integrating strategy, risk, and execution planning. And we're also seeing strong demand in our energy practice around power, around grid strategy, around supply chain resilience, around the navigation of regulation. And one of our biggest capability practices is around cost. Most of the cost work we're doing at the moment is being done to fund investments in growth and to fund investments in both resilience and in AI and in this whole space. So we really bring a uniquely integrated set of capabilities. Thanks, Nick.

Sorry, Greg, that was probably a little longer than you expected, but we're excited about the space. We have a unique breadth of capability, and we see it as a real meaningful opportunity going forward. Do you have a follow-up? I absolutely do. That was good detail. So I guess I'd like to zero in on the headline in reinsurance in particular and property, more broadly speaking, where we're seeing some pretty strong rate reductions. And of course, that's excellent news for your students. But on the other hand, it When we're sitting back here on the outside looking in, that looks kind of scary from the potential of organic revenue growth. So I'm mindful that you talked about increased demand, but I'm hoping you can just reconcile the moving parts as we process these pretty dramatic rate decreases in reinsurance. Yeah, yeah. You know, thanks, Greg. I'll ask Dean to talk a little bit about it. Obviously, we don't guide by business, but, you know, we're – We had a decent finish to the year, and a good year overall at Guy Carpenter in what was a soft market last year. We expected a challenging market into 2026, and certainly the first of the year would indicate that we're getting what we expected. As you mentioned, it's good for our seeding clients, which is terrific. We have seen demand pick up in some spots, which we didn't see much of last year. So, you know, we're excited about that, but we're also focused on some different areas, you know, to advise clients on, you know, in the reinsurance and capital space. So, Dean, maybe you can talk a little bit about what you're seeing.

Yeah, thanks, Sean. And, you know, Greg, you touched on the headlines. You know, they've been well articulated. Property cat pricing rate environment will certainly be a headwind as we move through 2026. You know, in addition, the interest rate environment That said, I remain really upbeat on the fundamentals of our business with our talent and capabilities. Our data and analytics platform is a key differentiator. We continue to attract top talent at GC. We've grown our headcount for five years in a row and made some really big-time hires in the marketplace that are making an impact on the business. Despite all this, Greg, we had record new business in 2025 and a really strong fourth quarter of new business, and we feel good about that momentum. You know, I would highlight a couple things. You know, we're seeing a lot of diverse areas of new business. I've spoken in the past about capital and advisory, our investment banking group, never more impactful for our clients, giving the flow of of third-party capital into the marketplace right now. I highlighted that in data centers. We're winning impactful engagements from our clients around M&A advisory, raising third-party capital, fairness opinions. You've read a lot about sidecars, billions of dollars of new capital flowing into the market for the creation of casualty sidecars. We're right in the middle of that. a lot of client interest, as you know, around Lloyd's platforms, quite a bit written about that, structured solutions, obviously a red hot cap bond market. So there's a lot to kind of think about that. And we think, you know, more broadly, we think the casualty market now is a clear growth opportunity for brokers and reinsurers. You know, even though renewal outcomes were in line with expectations, you know, we think this is a true area of growth. I mean, you think about Martin talked about 19% rate increases in casualty in the fourth quarter. That's flowing straight through to quarter share contracts in our portfolio, which is the majority of our portfolio. You think about casualty sidecars, third-party capital, everything happening in the casualty world. We're seeing strong growth in our casualty portfolio 1-1. We think we have plenty of sources of new business growth and opportunities for growth that maybe didn't even exist a year ago.

Thanks, Dean. So lots for us to work on there, Greg. And we will have headwinds, obviously, from the pricing market in property cap, but lots of areas of growth for us to get focused on. So Andrew, next question, please.

Thank you.

Our next question comes from the line of Mike Zaremski with BMO.

Hey, great. Good morning. Maybe back to thinking about all your good commentary both today and in the past about AI and just expense initiatives, including Thrive. When we think about Thrive, what do you say that encompasses lot of the new ai technologies uh that you all are uh deploying or or or is there should we kind of expect kind of a more to come you've had a number of companies kind of specifically guide to how ai could change their their headcount numbers so just curious if there's if there's overlap there or maybe you'd expect something a separate announcement in the coming you know quarters or years

Well, Thrive is, as I mentioned, Mike, it's a growth program. It'll certainly fuel efficiency and help us with margin expansion, but it's also going to enable us to accelerate investment. You're asking about AI specifically, but also investment in market-facing talent that will help us continue to grow our company. But bringing VCS together, our operations and technology teams together under the leadership of Paul Beswick and learning from and exploring the best technologies that have existed in each of our businesses, bringing them together, bringing some scale benefits to it will accelerate the path that we're on. We're excited about that path on AI. We've introduced, as I mentioned, dozens of productivity tools to to our colleagues. We're an early mover on this. Paul and his team have done a terrific job. We'll continue to introduce new productivity tools, but also we're quite focused on ramping up production. We need more of our colleagues to become power users of those tools, and that will drive further efficiency for us. And then on the growth side, we're excited about that, too. I mentioned Centrisk and Ada During 2025, two market-facing tools. We have others in development that are SaaS-like models that will drive revenue growth for us over time. So we're excited about that. And also investing in tools that will make our producers more efficient. In terms of jobs, clearly there are job families that will be more impacted than others. But for the most part, these tools are going to make our people better and more efficient and able to serve clients in a better way.

Okay. That's helpful. My follow-up is on your organic growth comments for the coming year. I think good to hear. Sentiment's fairly poor on the overall sector. So is it fair for us, if we look at the current kind of quarterly organic trend line, should we expect consulting to lead the pack on organic while maybe risk runs a bit lower given the backdrop in PNC or, you know, would your enthusiasm about data centers, for example, or et cetera, offer upside to brokerages, 26 progressives? Thanks.

Yeah, no, look, you know, look, you know, obviously, you know, we had a slower growth in the fourth quarter in RIS than we did earlier in the year, but it's a quarter, you know, we had a, we had a good year of growth overall. I mean, You think about Marsh Risk. Excuse me. I've got to make sure I get this right. Marsh Risk, you know, it's a 155-year-old business, maybe more relevant than it's ever been. We had 15% gap growth in Marsh Risk last year and 4% underlying growth. So we know how to grow our businesses. Now, you know, every year creates its kind of different challenges and opportunities. I wasn't trying to guide to, you know, strength in one area. We see good opportunity across all of our businesses. You know, I think maybe a little bit more color on 2026. I mean, as I said, I see a similar environment to 2025. You know, from what I see, it's an uneven economy. I mentioned some areas of focus. We talked about digital infrastructure, for example, but it's about healthcare and energy and some other areas, private capital that, you know, we see areas for real growth there. We will see headwinds from pricing and interest rates. We expected that. It's the good and the bad of the geopolitical environment, right? For any of us who may have hoped for a calmer 2026, I think less than a couple of weeks in, we knew that that wasn't going to be the case, right? But we've all built muscles and skills around navigating those environments. So I'm optimistic about 2026, whether it's, again, the industry sectors that I talked about, MMA is strong and front-footed. We've now got the team from McGriff that makes us better and stronger, and the team has settled there. Thrive, again, is that capacity engine for us to drive earnings growth, but also investment in talent and technology that will sustain our growth over time. The complex macro environment, our unique capability set. As I mentioned, I was in Davos last week. A lot of discussion, of course, about our risk businesses and our clients are quite satisfied with the work that we do there. But a lot of discussion was around our capabilities at Marsh Management Consulting and Mercer. So a lot of good discussion there. And then we have a strong balance sheet, I would point out as well. And as you know, M&A is a core competency of ours. We have a strong pipeline there. So we're excited about that, and I think there's a lot for us to get after in 2026. Thank you, Mike.

Andrew, next question, please. Our next question comes from the line of David Multimated with Evercore ISI.

Hey, thanks. Good morning. John, you spoke last quarter just about the talent situation. You know, some teams that have left, and I'm wondering if we're seeing any of that impact in the results this quarter, specifically within U.S. and Canada, and then how we should think about that in 2026, but also thinking about some of the teams that it sounds like you guys are going to be hiring. So I'd be interested in what are some of the focus areas to maybe offset some of that headwind from the teams that you lost.

Yeah, thanks, David. Look, overall, from a talent perspective, we have an excellent brand in the market. We're 95,000 people strong and growing, by the way. Our colleague retention remains strong. In fact, it's above historic norms. Our colleague engagement scores, and we're in the business of advising clients around colleague engagement, Our colleague engagement scores are exceptional. Our talent strategy, which is supported by a colleague value proposition, it's all about making our colleagues be their best at Marsh, be their best inside of our company. And so I feel terrific about that, and I'm very, very confident that we have the best and deepest teams on the field. We have a culture that sets us apart. We're collaborative and team-based, and our colleagues are supported. with the best teammates in the world, and the best tools in the world. And so we're not a place for mercenaries, you know, to be clear. And we embrace a competitive market for the talent. We added to market-facing talent in the aggregate, you know, last year. Obviously, it's, you know, up and down in different parts of the world. We, you know, we try to manage that according to opportunity. The, you know, the team dynamics, you know, you know, that happened over the course of last summer aren't helpful, of course, but they're not material to our results. And so, you know, it becomes a bit of a distraction. And, of course, again, given our brand, we're able to get back at it. So we added to talent last year. We're going to add again to the market-facing talent on the field. And so I feel good about how we're positioned. And, you know, I would also note that you know, if there are folks out there that are either going to violate their covenants or steal information from us, I'm going to call you out and I'm going to do everything I possibly can to hold you accountable. Do you have a follow-up, David?

Yeah, I do. Thanks for that, John. I appreciate it. And then just on the, I think I heard $205 billion in data center construction values. that Marsh US handled the leading market share in 2025. I mean, was that, it didn't look like that had a meaningful impact on the results with the, call it 3% underlying growth for the year. Is that something, I mean, you know, we can all look at the hyperscaler CapEx and try to do the math, but is that something you think is going to have a material impact? on the growth in 2026, and it's just going to sort of get offset somewhere else. But I guess I'm just trying to kind of square some of the comments that you made just with the sort of stable underlying revenue growth outlook.

Yeah, you know, look, you know, David, you know, it's hard to, in this environment, it's hard to look that far ahead, given, you know, think about all the things that have happened just in the last 30 days. But we're excited about the investment in digital infrastructure more broadly. You know, we very much believe that we're the market leader in it. You know, some of the investment that happened, you know, last year happened, you know, we're 4% or better underlying growth in all of our businesses last year. So it was a factor, you know, in our results overall. but there's much more in front of us than is behind us in that build-out. So we think we're well-positioned to help clients invest and invest in a wise way. So thank you. Andrew, next question.

Thank you. Our next question comes from the line of Brian Meredith with UBS.

Yeah, thanks. John, I was hoping you could talk a little bit about X the whole data infrastructure stuff. What are clients called insurance budgets looking like in 2026? Are they looking to maybe increase the amount of coverage they're buying given some of the price breaks they're getting in property and particularly given a lot of the uncertainty in the world, you know, vis-a-vis 25 or maybe there's some more uncertainty?

You know, Brian, it's, you know, I mentioned that it's an uneven economy, right? And so, you know, obviously there's you know, you look at the U.S. economy, for example, which is where we're most exposed to an economy around the world, you know, the growth X digital infrastructure is, you know, is not inspiring, right? And so I mentioned that as background because our clients are all over the map in terms of what, you know, what they're ready to spend. You know, what I would say more broadly, you know, we talked a bit about pricing in the market and that's, welcome certainly to our retail clients, but also our seedants as well at Guy Carpenter, welcome relief after several years of price increases. But it is quite clear that the cost of risk is continuing to rise. I mentioned excess casualty pricing in my opening comments. That is a market that's obviously exposed to the liability environment in the U.S., So liability costs are going up. More and more of the economy is exposed to extreme weather. And then I talked about health care costs. So all of those factors, while prices may be down, at least in the property casualty markets and reinsurance markets in the moment, eventually those costs will have to catch up with inflation. We're advising our clients to buy more coverage, particularly casualty. given what's happening and the increase in the number of nuclear verdicts, growth in lit funding, and all the factors that are driving meaningful inflation in liability-related costs. So we're advising them, but many don't. Many are looking to harvest the savings, and if they're in an industry that's in a lower growth mode, trying to generate decent earnings in a tougher growth environment. I hope that helps, Brian.

Yeah, that's very helpful. And then the next question, going back to AI, I mean, I'm hearing some in the marketplace that for the management consulting business, formerly Oliver Wyman, that there could be some project-related stuff that actually goes the way of AI and maybe a headwind. Maybe you could kind of talk about that. Is that true? What are the potential maybe revenue losses that you could see at Oliver Wyman?

Sure, sure. Thanks, Brian. So, obviously, Oliver Wyman had a terrific year last year and a very, very strong finish to the year and demand is strong. As I mentioned, we had great conversations with both our commercial clients and government clients last week in Davos. But, Nick, maybe you could talk a little bit about Outlook and also the impact of AI in our business. Yeah, for sure.

Maybe just on Outlook, first of all, Over the last five years, it's been a pretty volatile, fast-changing environment for clients, but also for management consultants. I think I'm tickled that we just registered our first billion-dollar quarter. Five years ago, we were just a smidgen over $2 billion for the year, so 75% growth over that period. And we think the outlook is robust. If anyone else wants to ask a question, I'm happy to talk about the different segments of the business. But in the interests of time, we've had three of our best-ever sales months over the last five months. The pipeline is pretty good. And ultimately, I think, in the whole AI transformation of industry, there's a lot of shenanigans going on. There's a lot of people claiming AI as a driver for different changes, for headcount reductions and so on. What we see in our business is that the use of AI tools and agents has had a significantly positive effect on productivity. We have leveraged our consulting teams better, but frankly, we're not really being paid for the things that AI can do at this stage. We're paid for helping clients deliver outcomes rather than for assembling third-party available information or things like that. So within the business, maybe 30% of our work draws on advanced analytics and AI. We've been using AI in that space pre-LLMs, machine learning, and so on for decades. And we've responded to that piece of the trend by launching our DNA business. It stands for Data Analytics, but we think that this kind of analysis is in our DNA. So there's a pun there. The second piece is our quotient platform, which delivers AI work for clients, AI transformation for clients. And we do that in partnership with many players in AI infrastructure, with hyperscalers, with startups. We have a number of execution and delivery partnerships. And that is the fastest growing part of Oliver Wyman within Marsh Management Consulting. The third is this area you're talking about, which is support for the enhancement and evolution of our own delivery model. through proprietary agents and assistants. That is replacing some tasks, but actually at the moment I expect to hire the same or more junior staff members because they are quite AI literate and they are able to use these tools very, very well in the support of our client work. And then finally, and I think this is a massive trend, we're doing a lot, as I indicated earlier, a lot of work on performance transformation on cost and efficiency, which is driven by the need for firms to invest in growth and invest in AI. So an industry in flux for sure, but not one at the moment which is experiencing revenue headwinds because of this.

Thanks, Nick. Brian, thanks for those questions. Andrew, next question, please.

And our next question comes from the line of Jimmy Buehler with JP Morgan.

Hey, good morning. So, John, you mentioned a couple of times I think you expect organic growth in 26 to be similar to last year. My question is specifically on the marsh risk business. You've seen a slowdown in growth over the last three, four quarters from I think 5% in 1Q to 3% in the fourth quarter. And you had been highlighting the last few quarters some of the headwinds that the business was facing. But it seems like from your comments that you're not expecting an incremental slowdown from here. And I think you're implying that it should be somewhat stable, but is that correct or not?

Good morning, Jimmy, and thanks for the question. Again, we're 4% at March risk for the year. We cautioned you in the past not to over-index on any single quarter index. and, you know, 15% gap growth, you know, at marsh risk for the year. So, you know, we feel good about that and, you know, obviously a tougher environment. You know, there's some ups and downs in different parts of the world, but, you know, as I mentioned earlier, we're adding to the talent on the team. We're using AI to boost productivity, but also to make our producers better. You know, we'll see what the economy brings us. I mentioned a number of sectors where productivity Mars risk and more broadly we're investing in. So we're optimistic about our prospects next year. And as I mentioned earlier, MMA, which is a huge part of our business there now, is very much front-footed and executing very well. Do you have a follow-up, Jimmy?

Yeah, just on buybacks, you did a lot more than you've done on a quarterly basis, I think, the last several years. And not sure if that was partly a function of the stock price being lower, but maybe just give us some insight into why the buyback amount was as high as it was in 4Q.

Yeah, sure. Maybe I'll ask Mark to jump in on it. But we've continued... you know, with our balanced approach to capital management overall and, you know, returning capital to the shareholder is an important part of that. But Mark, maybe you can talk about the buybacks in particular.

Hi, Jimmy. Thank you. So we did ramp up buyback, obviously, in the fourth quarter. It was purely a function of the M&A pipeline. So as you saw, we had an active year on the M&A front. We completed 20 transactions or 20 acquisitions, but they were all relatively small. So we only deployed about $850 million of capital to M&A. One of the reasons I reiterated our capital management philosophy and approach in my script is just to highlight that there's been no change in strategy. So as we think about the $5 billion we're going to deploy this year, we have our targets for reducing our share count, increasing our dividend, but our bias is to deploy a lot of capital to high-quality accretive acquisitions, and our pipeline is very active.

So we're hopeful we're going to have an active year. We did three acquisitions related kind of businesses in Hawaii that we closed on on the 1st of December that are part of MMA. So, you know, very excited about welcoming that team to, you know, to our company. And, you know, as I mentioned briefly earlier, our pipeline, you know, is strong. And so, you know, we're excited to see what opportunities present themselves in 2026. So thank you, Jimmy. Andrew, next question, please.

Our next question comes from the line of Mayor Shields with KBW.

Great, thanks. Good morning. John, sort of a big-picture question. Obviously, there's been a lot of news about team lifts and the like, and I'm wondering, are you seeing any increase in the cost of brokerage talent, assuming that even if it's not impacting Marcia's results terribly, we're seeing a lot more movement between brokers?

No, I, you know, Mayor, thanks for the question. I, you know, I don't see broadly, you know, any, you know, any more pressure, you know, in terms of inflation for, you know, comp and bend related inflation from this. You know, I think what, you know, what we've all seen, you know, over the course of the last year is, you know, some PE backed businesses that, you know, are using, in my view, unethical and often illegal practices to, um, or, uh, yeah, practices to build their businesses out. And so, um, so anyway, it's, uh, you know, it's an unfortunate, you know, it's an unfortunate thing. As I said, I love to compete broadly and, and, you know, we think mobility for talent in the industry is a, you know, is a good thing. Um, there's no question. I mean, we want to have a, um, not just a good front door and a welcoming front door to top talent, but, you know, a measure of turnover is, you know, is useful to the organization. But let's compete in a fair way, you know, ultimately. And, you know, it's been scaled up, you know, of late. And so, you know, the best thing for us to do is continue to focus on our clients, building that colleague value proposition that makes us the most attractive place to work in the markets that we operate in. and win on the field. And, you know, that's what we're focused on.

Okay, that's very helpful. And I guess another pricing question. We've seen, I think, a significant deterioration over the last couple of years in the valuation of publicly traded insurance brokers from an M&A front. How long does it take before that filters into an M&A multiple?

Yeah, that's a really good question. It's a You know, the market has changed a bit, right, as, you know, as public company comps have come down, you know, over the last six to nine months or so. So I would say, you know, the bid-ask gap has probably grown. You know, we've seen some pretty meaningful assets come off the market. We've seen, you know, at least one pretty good size deal trade at a, I think what was a pretty disappointing, you know, outcome for the, um, for the sellers, you know, high, high quality assets though, or, you know, are still, you know, kind of insisting on, you know, on higher multiples. And so, um, yeah, probably contributed to a little less deal flow overall, um, in our, in our sector last year. And yeah, it'll be, it'll be interesting. And, you know, I would say it, you know, to, I mean, it's a generalization, so be careful with it, but financial sponsors versus strategic buyers, that's kind of generally speaking kind of where the gaps, you know, fall out. So we'll see, you know, we'll see what the market brings this year. Again, we're quite excited about our reputation in the market, the relationships we've developed, and, you know, we see a number of different possibilities. So thank you, Mayor. Andrew? We need to bring this call to a close, and I want to thank you all for joining us this morning. I also want to thank the best professional services colleagues in the world for their dedication to March, to one another, and to our clients. So thank you all, and we look forward to speaking to you again next quarter.