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    MRSH
    Earnings call· Dec 2025(Q4 FY25)

    MARSH & MCLENNAN COMPANIES, INC. MRSH

    Jan 29, 2026 Source

    Executive summary

    Marsh & McLennan Q4 FY25 — Strong Performance Driven by Thrive Program and Digital Infrastructure Growth

    Marsh & McLennan delivered a solid Q4 and FY25, driven by broad-based underlying revenue growth and strong capital deployment. The company is leveraging its new Thrive program to fuel efficiency, accelerate investments in AI and talent, and capitalize on significant opportunities in digital infrastructure. Despite headwinds from softening insurance pricing and lower interest rates, management anticipates continued margin expansion and solid adjusted EPS growth in FY26.

    Highlights

    5

    • Total revenue grew 10% to $27 billion in FY25, with underlying revenue growth of 4%.

    • Adjusted operating income increased 11% to $7.3 billion in FY25, marking 18th consecutive year of margin expansion.

    • Adjusted EPS grew 9% to $9.75 in FY25.

    • Free cash flow grew 25% to $5 billion in FY25.

    • Returned significant capital to shareholders in FY25, including a 10% dividend increase and $2 billion in share repurchases.

    Concerns

    5

    • Primary commercial insurance rates decreased 4% in Q4, driven largely by property.

    • Global property rates decreased 9% year-over-year.

    • Reinsurance property cat market continued to soften, with cedents achieving double-digit rate reductions at January 1 renewals.

    • Fiduciary interest income was $92 million in Q4, down $20 million compared to last year, reflecting lower interest rates.

    • Medical costs are expected to rise 7% in the U.S. in 2026, with high single to low double-digit increases in other regions.

    Guidance & targets

    7
    CategoryTargetConfidence
    Underlying revenue growth
    Similar to last year
    high materiality
    High
    Adjusted operating margin
    Continued expansion
    high materiality
    High
    Adjusted EPS growth
    Solid growth
    high materiality
    High
    Fiduciary interest income
    $83 million
    medium materiality
    High
    Interest expense
    $240 million
    medium materiality
    High
    Adjusted effective tax rate
    24.5% to 25.5%
    medium materiality
    High
    Total capital deployment
    Approximately $5 billion
    high materiality
    High

    Segment performance

    14
    SegmentRevenueYoYQoQMargin
    Consolidated
    Solid finish to the year despite a headwind from fiduciary interest income. Adjusted operating income was up 12%.
    Underlying growth: 4%Adjusted operating margin: 23.7%Adjusted operating margin change: +40 bpsGAAP EPS: $1.68Adjusted EPS: $2.12Adjusted EPS growth: 10%
    		$6.6 billion9%—$1.6 billion adjusted operating income
    Consolidated (Full Year)
    Another good year for Marsh, executing well against strategic objectives and delivering solid financial results. Adjusted operating margin improved for the 18th consecutive year.
    Underlying growth: 4%Adjusted operating income growth: 11%Adjusted operating margin improvement: 30 bpsAdjusted EPS growth: 9%Adjusted EPS: $9.75
    		$27 billion10%—$7.3 billion adjusted operating income
    Risk & Insurance Services (RIS)
    Revenue growth came despite a headwind from fiduciary interest income.
    Underlying growth: 2%Operating income: $830 millionAdjusted operating income growth: 11%Adjusted operating margin: 27.6%Adjusted operating margin change: +60 bps
    		$4 billion9%—$1.1 billion adjusted operating income
    Risk & Insurance Services (RIS) (Full Year)
    Strong full-year performance.
    Underlying growth: 4%Adjusted operating income growth: 12%Adjusted operating margin: 32%
    		$17.3 billion——$5.5 billion adjusted operating income
    Marsh Risk
    Underlying growth faced tough comparisons due to elevated claims activity in Torrent flood business and renewal of 18-month policies in Latin America.
    Underlying growth: 3%Underlying growth (U.S. and Canada): 3%Underlying growth (International): 4%Underlying growth (EMEA): 6%Underlying growth (Asia Pacific): 2%Underlying growth (Latin America): -4%
    		$3.7 billion10%——
    Marsh Risk (Full Year)
    Strong full-year performance.
    Underlying growth: 4%Underlying growth (U.S. and Canada): 3%Underlying growth (International): 5%
    		$14.4 billion———
    Guy Carpenter
    Growth remains solid despite softer reinsurance market conditions and came on top of 7% underlying growth in the prior year's fourth quarter.
    Underlying growth: 5%
    		$215 million7%——
    Guy Carpenter (Full Year)
    Strong full-year performance.
    Underlying growth: 5%
    		$2.5 billion———
    Consulting
    Strong performance driven by solid demand across most regions and sectors.
    Underlying growth: 5%Operating income: $483 millionAdjusted operating income growth: 10%Adjusted operating margin: 20.8%Adjusted operating margin change: +10 bps
    		$2.6 billion8%—$550 million adjusted operating income
    Consulting (Full Year)
    Strong full-year performance.
    Underlying growth: 5%Adjusted operating income growth: 10%Adjusted operating margin: 21.1%Adjusted operating margin change: +40 bps
    		$9.8 billion——$2.1 billion adjusted operating income
    Mercer
    Health grew reflecting continued growth across regions, especially international. Wealth was led by investments business. Career was down due to softness in project-related work in U.S. and Canada, partially offset by international demand and workforce products.
    Underlying growth: 4%Health growth: 6%Wealth growth: 5%Career growth: -2%Assets under management (AUM): $692 billion (end Q4)AUM sequential growth: 1%AUM YoY growth: 12%
    		$1.6 billion9%——
    Mercer (Full Year)
    Strong full-year performance.
    Underlying growth: 4%
    		$6.2 billion———
    Marsh Management Consulting (Oliver Wyman)
    Reflecting solid demand across most regions and sectors.
    Underlying growth: 8%
    		$1 billion8%——
    Marsh Management Consulting (Oliver Wyman) (Full Year)
    Strong full-year performance.
    Underlying growth: 6%
    		$3.6 billion———

    Operational metrics

    28
    Acquisitions spend
    $850 million
    FY25

    Invested in acquisitions during the year.

    Share Repurchases
    $2 billion
    FY25

    Largest annual amount in company history.

    Share Repurchases
    $1 billion
    Q4 FY25

    Executed during the quarter, a function of the M&A pipeline.

    Adjusted EPS
    $9.75up 9%
    FY25

    Full year adjusted earnings per share.

    GAAP EPS
    $1.68
    Q4 FY25

    GAAP earnings per share for the quarter.

    Adjusted EPS
    $2.12up 10% year-over-year
    Q4 FY25

    Adjusted earnings per share for the quarter.

    Fiduciary Interest Income
    $92 milliondown $20 million
    Q4 FY25

    Compared with the fourth quarter of last year, reflecting lower interest rates.

    Interest Expense
    $235 million
    Q4 FY25

    Interest expense for the quarter.

    Adjusted Effective Tax Rate
    22.1%vs 21.3% last year
    Q4 FY25

    Adjusted effective tax rate for the quarter.

    Adjusted Effective Tax Rate (ex-discrete)
    25.3%vs 25.9% in 2024
    FY25

    Full year adjusted effective tax rate, excluding discrete items.

    Total Debt
    $19.6 billion
    end Q4 FY25

    Total debt balance at the end of the quarter.

    Cash Position
    $2.7 billion
    end Q4 FY25

    Cash balance at the end of the quarter.

    Uses of Cash
    $1.9 billion
    Q4 FY25

    Total cash deployed in the quarter.

    Uses of Cash
    $4.6 billion
    FY25

    Total cash deployed for the full year.

    Thrive Program Total Savings
    $400 million
    Next 3 years

    Expected total savings from the Thrive program, a portion of which will be reinvested for growth.

    Thrive Program Charges
    $500 million
    Next 3 years

    Expected total charges to generate the Thrive program savings.

    Noteworthy Items
    $210 million
    Q4 FY25

    Total noteworthy items in the fourth quarter, including costs associated with the Thrive program.

    Data Center Construction Values
    $205 billion
    2025

    Marsh U.S. had the leading market share of data center construction values.

    Existing Data Centers needing AI-enablement
    90%
    Current

    Refers to the proportion of existing data centers that need to become AI-enabled.

    Oliver Wyman Growth
    75%
    Last 5 years

    Growth rate for Oliver Wyman over the past five years, from $2 billion to over $1 billion per quarter.

    Oliver Wyman Work using Advanced Analytics/AI
    30%
    Current

    Proportion of Oliver Wyman's work that draws on advanced analytics and AI.

    Dedicated Reinsurance Capital
    $660 billionup 9%
    end 2025

    Projected increase in dedicated reinsurance capital, driven by growth in traditional and alternative capital.

    Cat Bond Limits
    $24 billion
    2025

    Record year for the cat bond market with new bonds issued.

    Medical Cost Increase
    7%
    2026

    Estimated increase in medical costs for the U.S.

    Medical Cost Increase
    high single to low double-digit increases
    2026

    Estimated increase in medical costs for other regions of the world.

    Digital Infrastructure Investment
    $3 trillion
    Next 5 years

    Expected investment in digital infrastructure over the next five years.

    New Premium from Data Centers
    $10 billion
    2026

    Estimated new premium entering the market due to data center opportunities.

    Nimbus Facility Capacity
    $2.7 billiondoubled
    Current

    Capacity of Marsh's Nimbus facility, which doubled recently to support digital infrastructure.

    Industry KPIs

    5
    MetricValueDetails
    Capital returns$2 billionUSD
    Net investment income$92 millionUSD
    Retention persistencystrong
    Renewal rate change pricing-4%%
    Broker specific when present4%%

    Product announcements

    2
    ProductTypeDetails
    New Marsh Brandlaunch
    Sentrisk and Aidaupdate

    Deals & partnerships

    2
    McGriffLargest acquisition ever for Marsh

    Successfully completed the integration of McGriff, which was Marsh's largest acquisition ever.

    Unnamed businesses in HawaiiAcquisition of three businesses related to MMA

    Closed on three acquisitions-related businesses in Hawaii on December 1st, which are now part of MMA.

    Risks & headwinds

    6
    Competitive insurance and reinsurance marketQ4 FY25 and Q1 FY26

    Primary commercial insurance rates decreased 4% in Q4; global property rates decreased 9% year-over-year; reinsurance property cat market continued to soften with double-digit rate reductions at January 1 renewals.

    Mitigation: Focus on diverse new business opportunities, capital and advisory services, and growth in casualty market.

    Headwinds from lower interest rates and decreasing pricingFY26

    Fiduciary interest income down $20 million in Q4 YoY; expected to be $83 million in Q1 FY26.

    Mitigation: Well-positioned for another solid year, with focus on underlying revenue growth, margin expansion, and adjusted EPS growth.

    Uneven economy and geopolitical environmentOngoing

    Growth ex-digital infrastructure is 'not inspiring'; 'polycrises' environment (ground wars, trade wars, culture wars, social unrest, AI disruption, extreme weather).

    Mitigation: Leveraging unique capabilities, investing in specific growth sectors (digital infrastructure, healthcare, energy), and providing expert advice to clients navigating complexity.

    Rising cost of riskFY26

    U.S. excess casualty rates up 19%; medical costs expected to rise 7% in U.S. in 2026.

    Mitigation: Advising clients to buy more coverage, particularly in casualty, given inflation in liability-related costs and extreme weather exposure.

    Unethical talent acquisition practices by competitorsOngoing

    Not quantified, but described as 'unethical and often illegal practices' by some PE-backed businesses.

    Mitigation: Focus on building a strong colleague value proposition, fostering a collaborative culture, and competing fairly in the market.

    M&A bid-ask gap due to lower public company valuationsOngoing

    Public company comps down over last 6-9 months, bid-ask gap grown, some assets off market, some deals at disappointing outcomes.

    Mitigation: Leveraging strong reputation and relationships, maintaining an active M&A pipeline, and focusing on high-quality, accretive acquisitions.

    What to watch in Q1 FY26

    5

    Underlying Revenue Growth

    Next quarter (Q1 FY26)
    Current4% (FY25)
    TargetSimilar to last year (FY26)

    Why it matters

    Core indicator of business health and market share gains in a competitive environment.

    We expect underlying revenue growth in 2026 to be similar to last year.

    Q&A highlights

    6

    How will client investments in AI and digital infrastructure affect long-term revenue for RIS, Consulting, and Health, especially with potential employment volatility?

    Management is excited about the $3 trillion digital infrastructure investment over 5 years. Marsh U.S. leads in data center construction, Guy Carpenter sees $10 billion in new premium, Mercer addresses talent needs, and Oliver Wyman helps with AI-enablement and grid strategy. They highlighted their unique breadth of capabilities to capitalize on this opportunity across all segments.

    “We expect roughly $3 trillion of investment over the course of the next 5 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.”

    asked by Gregory Peters · answered by John Doyle

    2 min read6 chapters

    Detailed Narrative

    01

    Thrive Program Progress and Strategic Vision

    The Thrive program, launched last quarter, is a 3-year growth initiative designed to provide greater financial flexibility and organizational agility. It is expected to generate $400 million in total savings, with approximately $500 million in associated charges, a portion of which will be reinvested for growth. Thrive is unlocking capacity to invest in emerging areas like digital infrastructure, healthcare, private capital, insurance capital strategies, and energy, while also increasing investment in frontline talent and integrated solutions across businesses.

    02

    New Marsh Brand and Global Presence

    Marsh officially launched its new expanded brand and ticker symbol MRSH two weeks prior to the call, aiming to better support its business strategy and simplify its value proposition. This rebranding was highlighted at the World Economic Forum in Davos, where Marsh colleagues engaged with global leaders on critical topics such as geoeconomic confrontation, AI, digital infrastructure, health, and investment strategies, showcasing the firm's comprehensive capabilities.

    03

    AI and Technology Ecosystem Development

    A key component of Thrive is the formation of Business and Client Services (BCS), which is building a data and technology ecosystem to harness AI and advanced analytics. BCS aims to improve client outcomes and drive operational excellence, accelerating expense savings and investment in AI and automation. The company has already introduced dozens of AI-driven productivity tools and is focused on ramping up adoption, alongside launching client-facing technologies like Sentrisk and Aida, with strong growth potential in virtual agents and chatbots.

    04

    Dynamic Market Conditions and Sector Opportunities

    The insurance and reinsurance markets remain competitive, with primary commercial insurance rates decreasing 4% in Q4 and global property rates down 9% year-over-year. However, global casualty rates increased 4%, with U.S. excess casualty up 19%. The property cat reinsurance market softened, leading to double-digit rate reductions at January 1 renewals, while the cat bond market saw a record $24 billion in limits issued. Dedicated reinsurance capital is projected to increase 9% to $660 billion by the end of 2025, indicating ample capacity.

    05

    Digital Infrastructure as a Key Growth Driver

    Marsh & McLennan sees significant opportunity in digital infrastructure, anticipating roughly $3 trillion in investment over the next five years. Marsh U.S. held the leading market share in 2025 for data center construction values, estimated at $205 billion. Guy Carpenter projects up to $10 billion of new premium entering the market in 2026 from these opportunities, while Mercer and Marsh Management Consulting are addressing talent, risk, and operational challenges within this ecosystem.

    06

    Navigating a 'Polycrises' Environment

    CEO John Doyle described the current global environment as an era of 'polycrises,' characterized by ground wars, trade wars, social unrest, AI disruption, and extreme weather. He emphasized Marsh's 155-year history of helping clients navigate complexity, seeing opportunity in these challenges by anticipating the environment, leveraging AI, and providing expert advice and solutions across risk, reinsurance, capital, health, and talent strategies.

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