How is Marsh balancing M&A versus share repurchases given the recent stock price reset and potential valuation gaps in M&A?

John Doyle reiterated a balanced capital management approach, prioritizing business investment (organic/inorganic) and annual dividend increases. Buybacks are flexible, depending on M&A. He noted a strong M&A pipeline, recent small deals, and the pending AltamarCAM acquisition, while acknowledging growing bid-ask gaps for PE-backed assets. “Our goal remains to increase our dividend each year. And buybacks ultimately will depend on M&A.”

Does Marsh view Claims Advocacy as a key value-add, and how does AI enhance this or other value-added services?

John Doyle confirmed Marsh has the industry's largest Claims Advocacy Group. Nick Studer explained that AI-enabled tools like Claims IQ, leveraging $200 billion of loss information, enhance advice and advocacy. He also detailed the Marsh Risk Cortex, a new analytics engine powering applications like Renewal Companion and Captives Companion, which will be launched soon. Dean Klisura highlighted GC Quotebox for efficient ingestion of unstructured client data in reinsurance. Pat Tomlinson described Mercer Fiber, an AI-enabled tool for real-time client discussions on benefit programs and scenario planning. Ted Moynihan noted Oliver Wyman's AI Quotient as its fastest-growing practice, helping clients with AI strategy and transformation. “The first application is powered by the risk cortex, including our renewal companion, our captives companion, they're going to be launched in a couple of weeks at RINs.”

How is client demand at Marsh responding to current rate decreases and the uncertain macro environment? Are clients purchasing more coverage or holding back?

John Doyle stated the answer is "sometimes," noting the market became more competitive due to strong reinsurer profitability. He highlighted that while rates are down, the cost of risk is increasing (liability inflation, cyber, extreme weather). Nick Studer reported continued new business growth, with double-digit new business in the U.S. and Canada, and strong growth in specialties. Dean Klisura mentioned record new business across Guy Carpenter's platform globally, with diverse opportunities including cat bonds and M&A advisory. “Although rates are down, the cost of risk is clearly increasing.”

MRSH

Marsh & McLennan Companies (MRSH) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Financials· Apr 16, 2026

Source: earnings call transcript

Executive summary

Marsh & McLennan Companies, Inc. Q1 FY26 — Solid Start Amidst Challenging Market Conditions and AI Investments

Marsh & McLennan delivered a solid Q1 FY26, navigating competitive insurance markets and lower interest rates with 4% underlying revenue growth and 8% adjusted EPS growth. The company is actively investing in AI across growth, productivity, and efficiency pillars, leveraging its scale and data to enhance client value and drive future margin expansion. Capital deployment remains balanced, with significant share repurchases and a strong M&A pipeline.

Highlights

Consolidated revenue grew 8% to $7.6 billion, with underlying revenue up 4%.
Adjusted operating income increased 8% and adjusted EPS grew 8% to $3.29.
Marsh Risk saw sequential improvement in underlying growth to 4%, with strong sales.
Guy Carpenter achieved 2% underlying growth despite a challenging reinsurance market, driven by strong new business and record cat bond issuance.
The company repurchased $750 million of stock in Q1 and expects to deploy $5 billion in capital for 2026.

Concerns

Lower fiduciary interest income, down $18 million year-over-year.
Continued downward pricing pressure in insurance and reinsurance, with primary commercial rates decreasing 5% in Q1.
A $425 million charge related to litigation stemming from the collapse of Greenfield Capital in 2021.
Softness in project-related work in Mercer's Career business, down 2%.

Guidance & targets

Category	Target	Timeline	Confidence
Underlying revenue growth	similar to last year high materiality	FY26	High
Margin expansion	continued margin expansion high materiality	FY26	High
Adjusted EPS growth	solid adjusted EPS growth high materiality	FY26	High
Fiduciary interest income	approximately $80 million medium materiality	Q2 · FY26	High
Adjusted effective tax rate	between 24.5% and 25.5% medium materiality	FY26	High
Corporate expense (adjusted)	approximately $90 million medium materiality	Q2 · FY26	High
Total capital deployment	approximately $5 billion high materiality	FY26	High
Thrive program total savings	$400 million high materiality	Ongoing	High
Thrive program total charges	approximately $500 million high materiality	Ongoing	High
Margin expansion timing	more margin expansion in the second half of this year than in the first half medium materiality	H2 FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Consolidated Solid start to the year despite challenging environment, reflecting strong execution. Underlying revenue growth: 4%Adjusted operating margin: 31.8% (unchanged)	$7.6 billion	8%	—	$2.4 billion adjusted operating income
Risk & Insurance Services (RIS) Growth increased sequentially despite more challenging market conditions, reflecting solid performances in the U.S., including MMA and across international. Underlying revenue growth: 3%Adjusted operating margin: 38.3% (up 10 bps)	$5.1 billion	6%	—	$1.9 billion adjusted operating income
Marsh Risk Strong sales across the business, with sequential improvement in growth. Underlying revenue growth: 4%	$3.7 billion	8%	—	—
Marsh Risk - U.S. and Canada Solid performance contributing to overall Marsh Risk growth. Underlying growth: 3%	—	—	—	—
Marsh Risk - International Strong performance across international regions. Underlying growth: 5%EMEA underlying growth: 6%Asia Pacific underlying growth: 5%Latin America underlying growth: 2%	—	—	—	—
Guy Carpenter Good result considering the current pricing environment, impacted by softer reinsurance market conditions and tough prior-year comparison, but drove strong new business. Underlying revenue growth: 2%	$1.2 billion	3%	—	—
Consulting Strong growth driven by Mercer and Marsh Management Consulting. Underlying revenue growth: 5%Operating income: $525 millionAdjusted operating margin: 21.6% (up 40 bps)	$2.6 billion	11%	—	$552 million adjusted operating income
Mercer Growth led by Health and Wealth segments. Underlying revenue growth: 5%	$1.7 billion	11%	—	—
Mercer - Health Continued growth across regions, especially international.	—	6%	—	—
Mercer - Wealth Led by investments business, with year-over-year growth driven by new wins, capital markets impact, and acquisitions. Assets under management (end Q1): $727 billion (up 5% sequentially, up 19% YoY)	—	5%	—	—
Mercer - Career Reflecting continued softness in project-related work in the U.S., partially offset by sustained demand in International.	—	-2%	—	—
Marsh Management Consulting Reflecting solid demand across most regions and sectors. Underlying revenue growth: 6%	$897 million	10%	—	—

MRSH operating KPIs by quarter

MRSH operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Sep 2026 Q3 FY26	Change vs prior quarter
Assets under management (AUM) Mercer	$683B Our assets under management were $683 billion at the end of the third quarter, up 2% sequentially and up 25% compared to the third quarter of last year. Source: earnings call transcript	$692B 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. Source: earnings call transcript	$727B Our assets under management were $727 billion at the end of the first quarter, up 5% sequentially and up 19% compared to the first quarter of last year. Source: earnings call transcript	$846B Our assets under management were $846 billion at the end of the second quarter, up 16% sequentially and up 26% compared to the second quarter of last year. Source: earnings call transcript	$843B Our assets under management were $843 billion at the end of the third quarter, flat sequentially and up 23% from the third quarter last year. Source: earnings call transcript	-0.4%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline
Marsh Risk Companion (including Renewal Companion, Captives Companion)	launch	in a couple of weeks at RINs
GC Quotebox	launch	—
Mercer Fiber	launch	—
Oliver Wyman's AI Quotient	milestone	—

Deals & partnerships

AltamarCAM acquisition

Acquisition of a private market asset manager, pending regulatory approval. It will allow Marsh to offer more comprehensive multi-asset private market solutions to clients.

Undisclosed divestiture

Sale of an admin business in the Pacific region.

Risks & headwinds

Lower fiduciary interest income Q1 FY26 and ongoing

down $18 million in Q1 FY26 compared to Q1 FY25

Mitigation:Not explicitly stated, but implies focus on other growth drivers.

Declining P&C Rates Q1 FY26 and near-term

Primary commercial insurance rates decreased 5% in Q1 FY26 (following 4% decline in Q4 FY25). Property rates down 9%, Financial and Professional liability down 5%, Cyber down 5%. Non-loss impacted property cat reinsurance rates down 15-20% at April 1 renewals.

Mitigation:Strong new business, diverse opportunities, and focus on value-added services; clients benefiting from current market conditions.

Challenging Reinsurance Market Q1 FY26 and near-term

Guy Carpenter's underlying growth impacted, 2% in Q1 FY26.

Mitigation:Strong new business, record cat bond issuance, diverse new business opportunities (capital and advisory, M&A mandates, data centers).

Litigation Charge (Greenfield Capital) Q1 FY26

$425 million charge in Q1 FY26.

Mitigation:Represents best estimate of liability after court-sponsored mediation; litigation is ongoing.

Softness in Mercer's Career Business Q1 FY26

Down 2% in Q1 FY26.

Mitigation:Partially offset by sustained demand in International.

Middle East Conflict Ongoing

Impact on business and broader insurance industry has been limited.

Mitigation:Advising clients on resilience, supply chain, cyber, investment decisions, and managing insurable risks (marine, aviation, energy). Engaging with governments to minimize economic disruption.

Q&A highlights

How will Marsh achieve future margin expansion, especially with high current margins, and what are the risks of AI disintermediation across its businesses?

John Doyle affirmed the expectation of a 19th year of margin expansion, driven by the Thrive program and traditional digitization efforts alongside AI. He emphasized Marsh's unique position as an "AI winner" due to its scale, data, trusted client relationships, and complex ecosystem involvement, differentiating it from tech-enabled startups or direct insurers.

“When I think about all the attributes that we have and what our ability is to be an AI winner, I can't think of a better place to be -- to start and to begin the early days of what's possible around AI than here.”

asked by Greg Peters · answered by John Doyle

2 min read 6 chapters

Detailed narrative

AI Strategy and Impact

Marsh & McLennan is pursuing an AI strategy focused on growth, productivity, and efficiency. This includes building AI-enabled applications like ADA, Centrus, UCLI, and GC Quotebox, enhancing client management tools, and automating back-office operations through its Business and Client Services (BCS) unit.

Oliver Wyman's AI Quotient team is its fastest-growing practice, advising clients on AI deployment and workforce transformation, having already advised on over $50 billion of capital investment in AI deployment.

Leadership Changes

The company announced several executive committee changes, including Mark McGivney as COO in addition to CFO, Nick Studer as CEO of Marsh Risk, Martin South as Chief Client Officer, and Ted Moynihan as CEO of Marsh Management Consulting. These changes are aimed at driving growth, enhancing client experience, and accelerating the benefits of the Thrive program, leveraging proven leadership across the organization.

Market Conditions and Pricing Trends

The insurance and reinsurance markets remain competitive, with primary commercial insurance rates decreasing 5% in Q1, following a 4% decline in Q4 2025. Property rates were down 9%, Financial and Professional liability down 5%, and Cyber down 5%. Global Casualty rates increased 3%, with U.S. excess casualty up 18%.

Reinsurance markets show substantial capacity, leading to rate reductions, particularly for non-loss impacted accounts (down 15-20% at April 1 renewals), benefiting clients.

Thrive Program Progress

The Thrive program is on track to generate $400 million in total savings, with approximately $500 million in associated charges. In Q1, $37 million of costs were incurred for Thrive. The program aims to drive growth through talent and AI investments, strengthen the brand, and generate greater efficiency, contributing to continued margin improvement, with more expansion expected in the second half of the year.

Capital Management & M&A Activity

The company maintains a balanced approach to capital management, prioritizing investments in the business (organic and inorganic) and annual dividend increases. Share repurchases are flexible, depending on M&A pipeline development. In Q1, $750 million in share repurchases were executed. The acquisition of AltamarCAM, a private market asset manager with $20 billion AUM, is pending regulatory approval and expected to close later in the year, enhancing private markets capabilities.

Greenfield Capital Litigation

Marsh incurred a $425 million charge in Q1 related to litigation stemming from its role as insurance broker for Greenfield Capital, which collapsed in 2021. This charge represents the best estimate of the liability following court-sponsored mediation, with further details available in the 10-Q filing. The litigation is ongoing, and the company is limited in further commentary at this time.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.