Marsh

Welcome to Marsh's earnings conference call. Today's call is being recorded. First quarter 2026 financial results and supplemental information were issued earlier this morning. They are available on the company's website at corporate.marsh.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 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 touchtone 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 touchtone phone.

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

Good morning, and thank you for joining us today to discuss our first quarter results. I'm John Doyle, President and CEO of Marsh. On the call with me is Mark McGivney, our COO and CFO, and the CEOs of our businesses, Nick Studer of Marsh Risk, Dean Klasura of Guy Carpenter, Pat Tomlinson of Mercer, and Ted Moynihan of Marsh Management Consulting. Also with us this morning is Jay Gelb, Head of Investor Relations. Let me start by highlighting recent changes to our executive committee. Mark was named Chief Operating Officer of Marsh in addition to serving as our CFO. In this expanded role, Mark will take on more responsibility for evolving our strategy and working across our business to drive execution of top priorities, support collaboration, and accelerate pace. We also announced Nick as the CEO of Marsh Risk. Nick is a proven growth leader, as demonstrated by his record as CEO of Oliver Wyman. His experience advising corporate and public sector leaders on the topics of risk and strategy positions Nick well to deliver on our growth ambitions. Nick succeeded Martin South, who is now our chief client officer. Martin will focus on elevating the client experience across the company and help us better leverage AI to support clients. And Ted succeeded Nick as CEO of Marsh Management Consulting. Ted has more than three decades of leadership experience at Oliver Wyman, and he is a respected advisor to business and government leaders. I look forward to him driving continued growth at Marsh Management Consulting. Congratulations to Mark, Nick, Martin, and Ted. These leadership changes are all about growth, enhancing the client experience, and helping us capture the benefits of Thrive. Turning to results, our performance in the first quarter reflects solid execution despite challenging market conditions. Overall, we grew revenue 8% in the quarter. Underlying revenue increased 4% despite lower fiduciary interest income and continued downward pricing pressure in insurance and reinsurance. We are seeing strong sales across our business, and we are pleased with the sequential improvement in the growth at Marsh Risk. Adjusted operating income grew 8% from a year ago, and adjusted EPS also grew 8%. Turning to the ongoing conflict in the Middle East, our primary concern has been the safety and well-being of our colleagues and clients and helping them navigate the challenges in the region. The impact on our business and the broader insurance industry has been limited. The economic issues related to the conflict in the Gulf are not about insurance. While certain lines, like marine coverage, may experience price spikes for war risks, ultimately the gating issue is de-escalation. A sustained conflict in the region will create more uncertainty and risk for the global economy. Broadly, Marsh is advising clients on how to build greater resilience in their business planning We're helping them address supply chain issues, review their cyber exposure, and we're advising on investment decisions. And of course, we are working with clients to manage insurable risks, particularly in marine, aviation, and energy. We've also engaged with governments as they work to minimize economic disruption and maintain global trade, particularly in energy, fertilizer, and other commodities. Challenging events like this underscore the purpose of our work. It's also why we believe Marsh provides a unique value to clients who need strategy, talent, investment, and risk advice in complex times. I'd like to take a moment to discuss our AI strategy and why we believe Marsh will be an AI winner. Our strategy leverages our scale and capacity to invest in AI to drive even greater value from our proprietary data assets and our role as our client's trusted advisor. We are focused on three main pillars. The first is growth. We are building AI-enabled applications and services that are generating new revenue streams, as well as enhancing world-class capabilities and data-driven insights in insurance, health, human capital, and investments. Examples of these products include Ada, Centrisk, Euclid, and GC QuoteBox, and many more of these applications are in development. We also see significant AI growth opportunity in consulting. Oliver Wyman's AI Quotient team, created to help clients deploy their own AI strategies, is its fastest-growing practice. We're advising clients in multiple sectors, such as banking, energy, government, and manufacturing around AI and workforce transformation. We've already advised on more than $50 billion of capital investment in AI deployment. And Mercer is working with clients to assess and inventory skills and redesign jobs as AI is integrated into ways of working. Our second pillar is productivity, which focuses on deploying AI capabilities to boost the performance of our colleagues. This is showing up in hundreds of different ways across a wide variety of roles. A good example of our work is to embed AI in our client management tools and to develop AI agents to help colleagues source and pre-qualify leads to support sales productivity. The final pillar is efficiency. Across our business, we are starting to see the impact of AI automation. A critical reason for creating our Business and Client Services Unit, or BCS, is to exploit the efficiency potential of AI. By consolidating our back office operations and technology into scalable centers, BCS is accelerating the pace of AI-driven automation and process re-engineering. For instance, our document ingestion capability is now handling thousands of documents weekly. already improving efficiency in these processes by 20%, and enhancing the quality of the data and its usability to further support clients with valuable insights. We are beginning to reduce the cost and time associated with upgrading code to modernize applications. For example, we recently used AI to turn a legacy tool into a newly designed broker workbench in days, saving months of team effort. We have deployed agentic AI in our IT help desk, significantly reducing inquiries, improving colleague experience, and creating downstream efficiencies in our support centers. And in our policy renewal center, AI has enabled us to transform a traditionally manual, email-heavy process into a streamlined digital solution in weeks, a project that otherwise would have taken many months. AI-enabled savings will fuel additional growth investments, including in producer talent and new capabilities, while building our confidence in continued margin improvement. It's important to remember that Marsh is not selling commoditized products or simply procuring insurance at the lowest possible price. That's not who we are or what we do. AI will help us serve our clients who have bespoke and complex needs even better. It will not replace the trusted advice, expertise, and capabilities with which we deliver value to clients. In our risk business, we help clients identify and understand their exposures, implement loss prevention strategies, and provide data and insights to make real-time decisions. Then after developing the strategy, we help them finance their risk through self-insurance, traditional insurance, capital markets, or captive management solutions to achieve their goals. Similarly, in consulting, we provide high impact services to help organizations confront their biggest strategy and talent challenges. And we serve as trusted advisors to executive leadership in their company's transformative moments. Our client relationships, data and insights, and the expertise of our professionals worldwide built over 155 years of market leadership is why we see AI as a powerful accelerator and enabler in delivering value to our clients, colleagues, and shareholders. Now, 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 5% in Q1, driven largely by property. This follows a 4% decline in the fourth quarter of 2025. As a reminder, our index skews to large accounts. Rates in the U.S. were down 1%. Europe, Asia, and Canada declined mid-single digits. U.K. and Latin America were down high single digits, and the Pacific region had double-digit decreases. Global property rates decreased 9% year over year, which was the same pace as last quarter. Global financial and professional liability rates were down 5%, while cyber also decreased 5%. Global casualty rates increased 3%, with U.S. excess casualty up 18%, reflecting ongoing pressure in the liability environment. And workers' compensation decreased 1%. In reinsurance, there is substantial capacity to support client demand as reinsurers pursue growth. Throughout the first quarter, market conditions were generally consistent with what we saw at January 1st. Strong reinsurer profitability, high ROEs, and increased capital levels have resulted in ample supply of property CAT capacity and meaningful rate reductions. It was also another active quarter for CAT bond issuance. U.S. property CAT reinsurance rates remain competitive for the April 1 renewal period. Rates for non-loss impacted accounts were down 15% to 20%, a slight acceleration from the January 1 renewal season. In U.S. casualty reinsurance, we continue to see a range of outcomes depending on loss experience, with primary carriers demonstrating limit, rate, and underwriting discipline. In Japan, April 1 property cat rates overall were down 15% to 20% on a risk-adjusted basis. Early signs for June 1 Florida cap renewals point to similar market conditions characterized by rate reductions and excess supply as seen in January and April. There are early indications that Florida's legal reforms will contribute to further risk-adjusted decreases. Our clients are benefiting from the current market conditions, and as always, we continue to advise them on designing the best risk programs aligned to their goals. Now let me turn to our first quarter financial performance and outlook, which Mark will cover in more detail. Consolidated revenue increased 8% to $7.6 billion, growing 4% on an underlying basis with 3% growth in RIS and 5% in consulting. Marsh risk was up 4%. Guy Carpenter grew 2%, Mercer increased 5%, and Marsh Management Consulting grew 6%. Adjusted operating income grew 8%, and adjusted EPS was $3.29, up 8% year over year. We also repurchased $750 million of our stock. Looking ahead, we are well positioned for another solid year, despite headwinds from lower interest rates and decreasing insurance and reinsurance pricing. We continue to expect underlying revenue growth in 2026 to be similar to last year. We also anticipate continued margin expansion and solid adjusted EPS growth. Our outlook is based on current conditions, and the economic and geopolitical environment could change materially from our assumptions. In summary, we're off to a solid start in 2026. Despite challenging market conditions, we remain focused on executing our strategy and continuing 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. We're excited for AI's potential and committed to being an AI winner through growth, productivity, and efficiency gains. Marsh is a resilient business that provides critically important advice and solutions, particularly in complex times such as these. We have proven our ability to deliver across cycles and I am confident in Marcia's future. With that, I'll turn the discussion to Mark for a more detailed review of our results.