MARSH & MCLENNAN COMPANIES, INC.

Marsh & McLennan Companies, now operating under the updated brand name Marsh, stands as a preeminent global professional services firm, specializing in risk, reinsurance, capital, people, investments, and management consulting. The company advises clients across 130 countries, generating an annual revenue of $27.0 billion in 2025 and employing over 95,000 colleagues worldwide. Its integrated business model is primarily structured into two distinct segments: Risk and Insurance Services, and Consulting. The Risk and Insurance Services segment, which accounted for approximately 64% of Marsh's total revenue in 2025, generating $17.3 billion, encompasses Marsh Risk and Guy Carpenter. Marsh Risk, recognized as the world's leading insurance broker and risk advisor, contributed about 54% of the company's total revenue with $14.4 billion, while Guy Carpenter, the company's reinsurance intermediary, generated approximately 10% of total revenue with $2.5 billion. Both segments are compensated through a combination of commissions and fees, with Marsh Risk also receiving additional compensation from insurers for various services.

The Consulting segment, responsible for approximately 36% of Marsh's total revenue in 2025, generating $9.8 billion, operates primarily through Mercer and Marsh Management Consulting. Mercer, a leading provider of advice, solutions, and products for workforce health, wealth, and career needs, contributed about 23% of the company's total revenue with $6.2 billion, overseeing approximately $692 billion in assets worldwide as of December 31, 2025. Marsh Management Consulting, formerly Oliver Wyman Group, offers specialized management consulting and advisory services across various industries, generating approximately 13% of the company's total revenue with $3.6 billion. Compensation in the Consulting segment primarily consists of client fees, with Mercer also receiving commissions and fees based on assets or members in its Health and Investments businesses.

In 2025, Marsh demonstrated robust financial performance, with consolidated revenue increasing by 10% to $27.0 billion from 2024, or 4% on an underlying basis, reflecting strong demand and the impact of strategic acquisitions. Consolidated operating income grew by 7% to $6.2 billion, leading to a net income attributable to the company of $4.2 billion and diluted earnings per share of $8.43, a 3% increase from the prior year. The company's global footprint is significant, with approximately 51% of its total revenue in 2025 derived from operations outside the U.S. Marsh actively pursues growth through strategic acquisitions, completing 20 acquisitions totaling $857 million in 2025, following the substantial $7.75 billion acquisition of McGriff Insurance Services, LLC in 2024. Operating cash flows provided $5.3 billion in 2025, underscoring the company's strong cash generation capabilities.

Marsh's strategic outlook is anchored by a clear focus on accelerating growth, enhancing operational efficiency, and leveraging technological advancements. A significant initiative is the three-year "Thrive" program, launched in 2025, which aims to refine brand strategy, deliver greater client value, and improve efficiency. This program, anticipated to incur $500 million in costs over three years, is expected to yield annualized savings of $400 million through targeted workforce actions, technology rationalization, and real estate portfolio adjustments. As part of this, the company established Business Client Services (BCS) to centralize investments in innovation, operational excellence, data, artificial intelligence, and other analytics, signaling a strong commitment to digital transformation.

Acquisitions remain a cornerstone of Marsh's growth strategy, with 102 acquisitions and investments made between 2021 and 2025, including the notable McGriff acquisition and $857 million in purchases in 2025. This aggressive inorganic growth strategy is expected to continue expanding the company's global footprint and specialized capabilities across both its Risk and Insurance Services and Consulting segments. Furthermore, Marsh is making significant investments in human capital, emphasizing a "Colleague Value Proposition" and talent development through initiatives like AI Academies, which have credentialed over 46,000 colleagues, and the Leadership Mindset Academy, completed by nearly 15,000 colleagues, to attract and retain top talent in a competitive market.

From a capital allocation perspective, Marsh is committed to returning value to shareholders, evidenced by its robust share repurchase program, with $2.0 billion in shares repurchased in 2025 and a remaining authorization of $5.7 billion. The company also maintains consistent dividend payments, declaring a quarterly dividend of $0.900 per share in early 2026. While the "Thrive" program and acquisition strategy present clear growth avenues, structural headwinds and execution risks include the potential for integration failures from numerous acquisitions, the challenge of realizing anticipated savings from the "Thrive" program, and the rapid evolution of the competitive landscape, particularly from "Insurtech" startups and technology companies leveraging AI. The company's significant non-U.S. operations also expose it to exchange rate fluctuations and geopolitical instability, which could impact financial performance.

Marsh operates within a complex and dynamic risk environment, facing a comprehensive array of material challenges. Macroeconomic and geopolitical conditions, including global conflicts, social unrest, trade policy changes, GDP fluctuations, foreign exchange rates, interest rate volatility, inflation, and insurance premium rate changes, pose significant threats to demand, pricing, and investment values. The company is also exposed to substantial legal and regulatory risks, particularly from errors and omissions (E&O) claims, breaches of fiduciary duty, and contract disputes, with ongoing litigation related to Greensill Capital across multiple jurisdictions involving collective claims totaling approximately $5 billion. Compliance with a complex and rapidly evolving landscape of U.S. federal and state laws, as well as international regulations covering licensing, data privacy, cybersecurity, artificial intelligence, sanctions, anti-corruption, and anti-money laundering, demands considerable resources and presents risks of non-compliance, investigations, and penalties. Cybersecurity, data protection, and technology risks are paramount, given the vast amounts of sensitive electronic information collected and transmitted, making the company vulnerable to sophisticated cyberattacks and the increasing use of AI by threat actors. Operational risks include intense competition for talent, reliance on numerous third-party vendors, business resiliency threats from disasters and cyberattacks, and the inherent risks of integration failures and goodwill impairment from its aggressive acquisition strategy. Furthermore, segment-specific risks include volatility in insurance and reinsurance premium rates for Risk and Insurance Services, and capital market fluctuations impacting Mercer's Wealth and Investments businesses, alongside sensitivity to economic conditions for the Consulting segment's profitability.

Management's forward-looking statements convey a proactive and confident tone, emphasizing strategic growth, robust risk management, and a commitment to financial transparency. The launch of the "Thrive" program underscores a strategic priority to enhance operational efficiency, accelerate growth, and refine brand strategy, with an explicit target of $400 million in annualized savings. Management highlights its strong focus on human capital, guided by a "Colleague Value Proposition" and significant investments in talent development, including AI Academies, as critical to the company's success. The disciplined capital allocation strategy, evidenced by the substantial share repurchase program of $2.0 billion in 2025 and consistent dividend payments, signals management's confidence in the company's financial health and its dedication to returning value to shareholders. Furthermore, management acknowledges the complexity of operationalizing various privacy, data security, data protection, and AI laws, while actively investing in generative AI tools like its internal "LenAI," designed with data security standards in mind, demonstrating a balanced approach to innovation and risk mitigation.