Marsh & McLennan Companies Q2 Earnings Call Highlights

Key Points

• Marsh & McLennan posted solid Q2 results, with revenue up 6% to $7.4 billion and adjusted EPS rising 9% to $2.96. Management said demand remained strong across risk, insurance and consulting services despite pricing pressure in parts of the market.
• Consulting was a standout, as revenue rose 10% and operating income increased 11%. Mercer’s wealth business had its best growth quarter since 2016, while Marsh Management Consulting delivered its fastest quarterly growth in more than two years.
• Commercial insurance and reinsurance pricing stayed weak, with primary commercial insurance rates down 6% and Guy Carpenter revenue falling 2% as reinsurance rates continued to decline. Even so, the company said new business, retention and catastrophe bond activity remained strong.

Marsh & McLennan Companies NYSE: MRSH reported higher second-quarter revenue and earnings, with management pointing to continued demand for its risk, insurance and consulting services despite pricing pressure in commercial insurance and reinsurance markets.

John Doyle, President and CEO of Marsh, said consolidated revenue rose 6% in the quarter to $7.4 billion, while underlying revenue growth accelerated to 5% from 4% in the prior quarter. Adjusted operating income increased 5%, and adjusted earnings per share rose 9% to $2.96.

“We had a solid second quarter as demand for our advice and capabilities remained strong,” Doyle said. He added that the company repurchased $200 million of stock during the quarter, bringing first-half repurchases to $1.5 billion.

Risk and insurance services pressured by pricing

Mark McGivney, Marsh’s COO and CFO, said risk and insurance services revenue was $4.8 billion in the quarter, up 4% from a year earlier and 3% on an underlying basis. Adjusted operating income for the segment rose 3% to $1.7 billion, with an adjusted operating margin of 35.3%.

Marsh Risk generated $4.1 billion of revenue, up 6% on a reported basis and 4% on an underlying basis. McGivney said the business saw “solid performances in the U.S. and across international.” U.S. and Canada underlying growth improved sequentially to 4%, while international underlying growth was 5%, including 8% growth in Latin America and 5% growth in both EMEA and Asia-Pacific.

Guy Carpenter, the company’s reinsurance business, reported revenue of $664 million, down 2% on both a reported and underlying basis. McGivney said growth was affected by a difficult comparison to the prior year and continued declines in reinsurance rates, especially in property lines. He said rate pressure had a roughly 6 percentage point impact on Guy Carpenter’s underlying growth in the quarter.

Dean Klisura, CEO of Guy Carpenter, said during the question-and-answer session that the company’s property catastrophe rate-on-line index was down 16% at midyear, “the steepest year-over-year decline” observed since the index was created 25 years ago. He said property represents about half of Guy Carpenter’s global portfolio and that the firm has the largest property catastrophe book in the global marketplace.

Despite the pricing pressure, Klisura said Guy Carpenter delivered double-digit new business growth in the first half, high-90s client retention and record catastrophe bond activity, leading 20 issuances totaling $5 billion of limit.

Consulting growth accelerates

Consulting revenue rose 10% to $2.6 billion in the second quarter, or 8% on an underlying basis. Adjusted operating income in consulting increased 11% to $533 million, and the adjusted operating margin was 20.5%.

Mercer reported $1.6 billion of revenue, up 7% reported and 5% underlying. Within Mercer, health grew 3%, wealth grew 8% and career grew 2%. McGivney said Mercer’s wealth business posted its best quarter of growth since the company began reporting on that basis in 2016. Assets under management were $846 billion at quarter-end, up 16% sequentially and 26% from a year earlier, driven by new business and capital markets.

Marsh Management Consulting generated $1 billion of revenue, up 15% reported and 13% underlying, which McGivney described as the fastest quarterly growth in more than two years. Ted Moynihan, CEO of Marsh Management Consulting, said growth was broad-based across regions and most business lines, with strength in Europe and Asia and in industries including energy, insurance, telecom and transportation. He said the strongest service offering growth came from Quotient, the company’s AI strategic advisory team.

Commercial insurance rates decline

Doyle said the Marsh Global Insurance Market Index showed primary commercial insurance rates declined 6% in the second quarter, following a 5% decline in the first quarter. He noted that the index skews toward large accounts.

• U.S. rates decreased 2%.
• Europe and Asia declined by mid-single digits.
• Canada, the U.K. and Latin America were down by high single digits.
• The Pacific region saw double-digit decreases.
• Global property rates declined 12% year over year.
• Global financial and professional liability rates fell 3%, while cyber decreased 4%.
• Global casualty rates rose 2%, with U.S. excess casualty up 15% and workers’ compensation down 4%.

In reinsurance, Doyle said abundant capacity and growing reinsurer appetite have created a favorable market for insurers. He said June 1 Florida catastrophe renewals saw rate reductions in the 15% to 20% range due to excess supply, partly offset by a modest increase in demand.

Thrive, AI and brand strategy remain priorities

Doyle said the company continues to execute its Thrive program, which is intended to create capacity for investments in the Marsh brand, sales capabilities and operations and technology. McGivney said the company remains on track to deliver $400 million of total savings, with a portion reinvested for growth, and still expects to incur approximately $500 million of charges to generate those savings.

Doyle said the company has seen a strong response to the new Marsh brand and is accelerating the transition of Guy Carpenter and Mercer to Marsh in September. He also highlighted the company’s role as the official risk partner of Formula 1, saying the partnership expands visibility among Formula 1’s more than 800 million global fans and its concentration of C-suite leaders and decision-makers.

Management also emphasized AI initiatives. Doyle said Marsh is focused on AI development in growth, productivity and efficiency. He cited Marsh Risk Companion, an AI-enabled client platform introduced at the RIMS Conference; a coverage intelligence platform for middle-market producers; Atlas, a reinsurance strategy platform; and Claims IQ for claims professionals. He also described Lenwork, an internal agentic assistant, as a more secure and cost-efficient way to support enterprise large language model usage.

Capital deployment and outlook

McGivney said the company ended the quarter with $20.6 billion of total debt and $1.7 billion of cash. Second-quarter uses of cash totaled $1.4 billion, including $438 million for dividends, $230 million for acquisitions and $750 million for share repurchases. First-half uses of cash totaled $2.7 billion.

The company now expects to deploy approximately $5.5 billion of capital in 2026 across dividends, acquisitions and share repurchases, up from its prior expectation of $5 billion. McGivney said the ultimate level of share repurchase will depend on how the company’s mergers and acquisitions pipeline develops. He also noted a 10% increase in the quarterly dividend, marking the company’s 17th consecutive year of dividend increases.

For 2026, Doyle and McGivney said the company continues to expect underlying revenue growth similar to 2025, another year of margin expansion and solid adjusted EPS growth. McGivney said, for modeling purposes, the company expects more margin expansion in the fourth quarter than in the third quarter.

About Marsh & McLennan Companies (NYSE:MRSH)

Marsh & McLennan Companies NYSE: MMC is a global professional services firm headquartered in New York City that provides advice and solutions in the areas of risk, strategy and people. Founded in 1905, the company has grown into a diversified group of businesses focused on insurance brokerage and risk management, reinsurance, human capital and investment consulting, and management consulting. Its long history and scale position it as a prominent adviser to corporations, governments and other institutions seeking to manage risk and optimize human and financial capital.

The firm operates through several well-known subsidiaries and business units that specialize in distinct services.

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