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    MRSH
    Earnings call· Sep 2025(Q3 FY25)

    MARSH & MCLENNAN COMPANIES, INC. MRSH

    Oct 16, 2025 Source

    Executive summary

    Marsh & McLennan Q3 FY25 — Thrive Program to Drive $400M Savings and Margin Expansion

    Marsh & McLennan delivered solid Q3 FY25 results, navigating an uneven economic environment and softening P&C pricing with 4% underlying revenue growth and 11% adjusted EPS growth. The company announced a rebranding to Marsh and launched the "Thrive" program, aiming for $400 million in savings over three years through operational efficiencies and AI adoption, which will support continued margin expansion and strategic investments. Management anticipates current market conditions to persist into 2026, but remains confident in its ability to execute across cycles.

    Highlights

    5

    • Consolidated revenue grew 11% to $6.4 billion, with underlying growth of 4%.

    • Adjusted operating income increased 13% from a year ago, with adjusted operating margin up 30 basis points to 22.7%.

    • Adjusted EPS grew 11% to $1.85.

    • The new Thrive program is expected to generate $400 million in savings over 3 years, with a portion reinvested for growth.

    • Assets under management (AUM) at Mercer reached $683 billion, up 25% year-over-year.

    Concerns

    5

    • Underlying revenue growth of 4% was impacted by lower fiduciary interest income and declining P&C pricing.

    • Commercial insurance rates decreased 4% in Q3 FY25, following a 4% decline in Q2 FY25, driven by property.

    • Fiduciary interest income was $109 million, down $29 million compared to Q3 FY24, with Q4 FY25 expected to be approximately $85 million.

    • Oliver Wyman's strong Q3 growth benefited from favorable timing, with moderating growth expected in Q4 FY25.

    • Total noteworthy items in Q3 FY25 were $136 million, including restructuring costs for Thrive.

    Guidance & targets

    10
    CategoryTargetConfidence
    Thrive program savings
    $400 million
    high materiality
    High
    Thrive program charges
    $500 million
    medium materiality
    High
    Fiduciary interest income
    $85 million
    medium materiality
    Medium
    Adjusted EPS FX benefit
    $0.04
    low materiality
    Medium
    Adjusted effective tax rate (excluding discrete items)
    25% to 26%
    medium materiality
    High
    Total capital deployment
    $4.5 billion
    high materiality
    Medium
    Underlying revenue growth
    mid-single-digit
    high materiality
    Medium
    Margin expansion
    expansion
    high materiality
    Medium
    Adjusted EPS growth
    solid growth
    high materiality
    Medium
    Debt maturity
    $600 million senior notes
    medium materiality
    High

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    Consolidated
    Solid third quarter results despite a more challenging environment, reflecting strong position and execution.
    Underlying Revenue Growth: 4%Adjusted Operating Income Growth: 13%Adjusted Operating Margin Change: 30 bpsAdjusted EPS: $1.85Adjusted EPS Growth: 11%
    		$6.4 billion11%—Adjusted Operating Margin: 22.7%
    Risk & Insurance Services (RIS)
    Strong performance driven by Marsh and Guy Carpenter.
    Underlying Revenue Growth: 3%Operating Income: $750 millionAdjusted Operating Income: $965 millionAdjusted Operating Income Growth: 13%9M Revenue: $13.3 billion9M Underlying Revenue Growth: 4%9M Adjusted Operating Income: $4.4 billion9M Adjusted Operating Income Growth: 12%9M Adjusted Operating Margin: 33.3%
    		$3.9 billion13%—Adjusted Operating Margin: 24.7%
    Marsh
    16% GAAP growth reflects contribution from McGriff acquisition. Good new business growth in U.S. and Canada, solid international growth.
    Underlying Revenue Growth: 4%U.S. and Canada Underlying Growth: 3%International Underlying Growth: 5%EMEA Underlying Growth: 5%Asia Pacific Underlying Growth: 6%Latin America Underlying Growth: 3%9M Revenue: $10.7 billion9M Underlying Revenue Growth: 5%9M U.S. and Canada Growth: 4%9M International Growth: 6%
    		$3.4 billion16%——
    Guy Carpenter
    Growth remains solid despite softer reinsurance market conditions, building on 7% underlying growth in Q3 FY24.
    Underlying Revenue Growth: 5%9M Revenue: $2.3 billion9M Underlying Revenue Growth: 5%
    		$398 million5%——
    Consulting
    Strong performance across Mercer and Oliver Wyman.
    Underlying Revenue Growth: 5%Operating Income: $501 millionAdjusted Operating Income: $545 millionAdjusted Operating Income Growth: 11%Adjusted Operating Margin Change: 40 bps9M Revenue: $7.2 billion9M Underlying Revenue Growth: 4%9M Adjusted Operating Income: $1.5 billion9M Adjusted Operating Income Growth: 9%9M Adjusted Operating Margin: 21.2%
    		$2.5 billion9%—Adjusted Operating Margin: 22.1%
    Mercer
    Health and Wealth segments showed strong growth, AUM driven by acquisitions and capital markets. Career was flat due to U.S./Canada project softness offset by international demand.
    Underlying Revenue Growth: 3%Health Growth: 6%Wealth Growth: 3%Career Growth: flatAssets Under Management (AUM): $683 billionAUM Growth (sequential): 2%AUM Growth (YoY): 25%9M Revenue: $4.6 billion9M Underlying Revenue Growth: 3%
    		$1.6 billion9%——
    Oliver Wyman
    Strong growth across all regions, benefited from favorable timing in Q3, moderating growth expected in Q4.
    Underlying Revenue Growth: 8%9M Revenue: $2.6 billion9M Underlying Revenue Growth: 5%
    		$886 million9%——

    Operational metrics

    16
    GAAP EPS
    $1.51
    Q3 FY25
    Adjusted Operating Income
    $5.7 billionup 11%
    9M FY25
    Adjusted EPS
    $7.63up 9%
    9M FY25
    Fiduciary interest income
    $109 milliondown $29 million YoY
    Q3 FY25
    Total noteworthy items
    $136 million
    Q3 FY25

    Included charges related to McGriff and restructuring costs associated with Thrive.

    Interest expense
    $237 millionup from $154 million in Q3 FY24
    Q3 FY25
    Adjusted effective tax rate
    24.8%vs 26.8% in Q3 FY24
    Q3 FY25
    Total debt
    $19.6 billion
    End of Q3 FY25
    Cash position
    $2.5 billion
    End of Q3 FY25
    Uses of cash
    $1 billion
    Q3 FY25
    Uses of cash
    $2.6 billion
    9M FY25
    Dedicated reinsurance capital
    $650 billion
    Year-end 2025

    Projected dedicated reinsurance capital.

    CAT bond market issuance
    $17.5 billion
    First 9 months

    Limit generated by new CAT bonds, on pace for a record year.

    LenAI inquiries
    1 million
    per week

    Proprietary GenAI tool for colleagues, fueling efficiency and automation.

    Colleagues in cost-effective locations
    19,000
    Current

    Across BCS and global functions, with plans to further optimize this model.

    MMA annualized revenue
    $5 billion
    Annualized

    More than $5 billion in annualized revenue for the MMA business.

    Industry KPIs

    3
    MetricValueDetails
    Capital returns$400 millionUSD
    Renewal rate change pricing-4%%
    Broker specific when present4%%

    Product announcements

    3
    ProductTypeDetails
    Aidalaunch
    Sentrisklaunch
    LenAIupdate

    Deals & partnerships

    2
    McGriffAcquisition of an insurance brokerage firm, contributing to Marsh's growth.

    Integration continues to go well, contributing to Marsh's growth. A new desk in London was created to bring in business from third-party wholesalers, serving as a revenue synergy for McGriff.

    Cardano and SECORAcquisitions contributing to Mercer's Assets Under Management (AUM) growth.

    Acquisitions of Cardano and SECOR were key drivers for the year-over-year growth in Mercer's assets under management.

    Risks & headwinds

    5
    Changing macro environment and economic uncertaintyQ3 FY25, expected to continue into 2026

    Underlying revenue growth of 4% impacted by lower fiduciary interest income and declining P&C pricing; uneven economy, especially in the U.S.

    Mitigation: Thrive program to drive efficiency and growth, focus on unique capabilities and solutions, disciplined approach to investing for the future.

    Declining P&C pricingQ3 FY25, expected to continue into 2026

    Commercial insurance rates decreased 4% in Q3 FY25 (following 4% in Q2 FY25), driven by property. Global property rates decreased 8% YoY. U.S. rates down 1%, Canada down 3%, U.K., EMEA, Latin America and Asia down mid-single digits, Pacific down double digits.

    Mitigation: Advising clients on proactive strategies that reflect risk environment and market conditions, tailored to their tolerance for volatility.

    Lower fiduciary interest incomeQ3 FY25, Q4 FY25

    $109 million in Q3 FY25, down $29 million compared to Q3 FY24. Expected to be approximately $85 million in Q4 FY25.

    Mitigation: Focus on underlying business growth and efficiency programs like Thrive to support overall profitability.

    Unlawful and unethical hiring practices by competitorsOngoing

    Not quantified, but described as a deliberate strategy by some competitors to encourage talent to violate covenants.

    Mitigation: Protecting rights, sustaining trust, strong colleague value proposition, collaborative team-based model, and being an employer of choice.

    Growing cost of riskOver time, current trend is unsustainable.

    Cost of risk (extreme weather, liability, healthcare) increasing at a rate much higher than GDP.

    Mitigation: Demand for services and solutions to help clients navigate these issues is resilient.

    What to watch in Q4 FY25

    5

    Thrive program savings realization

    Next quarter (Q4 FY25) and over the next 3 years
    Current$400 million expected savings over 3 years, $500 million charges. Modest benefit in Q4 FY25.
    TargetInitial realization of savings

    Why it matters

    Key program for margin expansion and reinvestment into growth and AI.

    Although we will see a modest benefit in the fourth quarter, the vast majority of the savings will be realized over the next 3 years.

    Q&A highlights

    6

    Will underlying revenue growth remain low-to-mid single digits for the next 24-36 months due to macro uncertainty and P&C pricing?

    John Doyle stated that the company is confident in its ability to execute across different economic and P&C cycles, noting the current uneven economy but not being pessimistic about growth. He deferred specific 2026/2027 guidance.

    “I wasn't trying to project into 2026 or 2027. Of course, every year comes with its different opportunities, different challenges. But as we guided earlier this year, we knew there would be some pressures from the macro environment and P&C-related pricing pressure.”

    asked by Greg Peters · answered by John Doyle

    2 min read6 chapters

    Detailed Narrative

    01

    New Brand Strategy and Thrive Program

    Marsh & McLennan announced a rebranding to "Marsh" effective January, with the stock ticker changing to MRSH. This is part of the "Thrive" program, which also introduces Business and Client Services (BCS) to consolidate operations and technology. Thrive aims to generate approximately $400 million in savings over the next three years, with $500 million in charges, by optimizing scale, specialization, and leveraging AI, supporting investments in talent and technology.

    02

    AI and Technology Innovation

    The company has invested in large language models for over two years, with proprietary GenAI tool "LenAI" responding to about 1 million inquiries per week for colleagues. New market-facing AI tools include Mercer's "Aida" for HR decision-making and "Sentrisk" for supply chain risk assessment. BCS will accelerate efforts to extract insights from the company's vast data set through AI and analytics.

    03

    Insurance and Reinsurance Market Conditions

    The market is characterized by slower growth, stronger carrier ROEs, and continued decreases in overall rates, particularly in property reinsurance and property CAT reinsurance. Commercial insurance rates decreased 4% in Q3 FY25, driven by property, following a similar decline in Q2 FY25. Dedicated reinsurance capital is projected to reach $650 billion by year-end 2025, with increased competition driving reinsurers to deploy capacity.

    04

    Talent and Competitive Landscape

    The company emphasizes its unmatched talent depth of over 90,000 colleagues and a collaborative, team-based model leading to strong retention. Management noted that some competitors engage in "unlawful and unethical hiring practices" by encouraging talent to violate covenants, which Marsh & McLennan intends to protect against.

    05

    Oliver Wyman Performance

    Oliver Wyman reported 8% underlying revenue growth in Q3 FY25, its best quarterly growth in six quarters, driven by work on performance transformation, consumer telecoms and technology, insurance and asset management, and transportation practices. The growth was also supported by work on AI-related work for clients, though moderating growth is expected in Q4 due to favorable timing in Q3.

    06

    Middle Market and M&A

    The middle market segment, particularly MMA, is performing well with good growth, benefiting from the company's scale, analytics, and global reach. While the company will continue its "string of pearls" acquisition strategy, it remains open to larger-scale deals if they align culturally and strategically. The bid-ask spread in M&A might be widening due to the slower growth environment.

    AI-generated summary of the company’s earnings call. Not investment advice.