Welcome to Marsh McLennan's Earnings Conference Call. Today's call is being recorded. Earlier this morning, we issued the financial results for the first quarter of 2025 along with supplemental information, which can be found on our website at marshmclennan.com. Please be aware that the remarks made today could include forward-looking statements. These statements are subject to risks and uncertainties, and various factors may lead to actual results differing significantly from the predictions made. For a detailed discussion of these factors, please review our earnings release for this quarter and our most recent SEC filings, including the latest Form 10-K, all accessible on the Marsh McLennan website. During this call, we may also talk about certain non-GAAP financial measures. For a reconciliation of these measures to the most recently comparable GAAP measures, please consult the schedule in today's earnings release. I’ll now turn this over to John Doyle, President and CEO of Marsh McLennan.

Good morning, and thank you for joining us to discuss our first quarter results reported earlier today. I'm John Doyle, President and CEO of Marsh McLennan. On the call with me is Mark McGivney, our CFO; and the CEOs of our businesses, Martin South of Marsh; Dean Klisura of Guy Carpenter; Pat Tomlinson of Mercer; and Nick Studer of Oliver Wyman. Also with us this morning is Jay Gelb, Head of Investor Relations. Marsh McLennan had a solid start to 2025. As we said coming into the year, results in Q1 faced headwinds due to several factors and our performance tracked well with our expectations. Overall, we grew revenue 9% in the quarter, reflecting continued momentum in underlying revenue growth and contributions from an active year of acquisitions in 2024. Underlying revenue grew 4% despite lower fiduciary interest income and a tough comparison to a strong Q1 last year, and we saw good growth in all four of our businesses. Adjusted operating income increased 8% from a year ago. Our adjusted operating margin declined 20 basis points compared to the first quarter of 2024, reflecting seasonality at McGriff, and adjusted EPS grew 5%. Turning to the macro picture, clearly the global economic outlook has become more uncertain since the start of the year. Ongoing trade negotiations will continue to create challenges for businesses and this has led to reduced consumer and business confidence, as well as financial market volatility. The outlook is likely to remain uncertain as stakeholders continue to assess the potential impacts on global trade and businesses pause new investments. As a result, expectations for GDP growth, inflation, interest rates, and other factors have become less predictable. As far as the insurance industry is concerned, tariffs would likely be inflationary to the overall cost of risk. This comes on top of the increasing frequency and severity of natural catastrophes and rising social inflation costs. We continue to support our clients by leveraging our expertise and solutions as they navigate challenges and make decisions in this period of extreme uncertainty. In fact, we've been advising clients for years on risks to their global supply chains, which now includes disruptions in trade policy. Our AI-powered supply chain platform is a good example of our work to assess clients' vulnerabilities to ongoing trade negotiations. In addition, through webinars and thought leadership, accessed by thousands of clients, we are helping them understand the complexity of the moment. In times like these, our clients find value in Marsh McLennan’s unique perspectives, talent and capabilities across risk, strategy, and people. And while we are not immune to shocks in the macro economy, we are well positioned to navigate these environments. Our track record of performance across economic cycles is a result of the strength of our business and the consistent demand for our advice and solutions. I would like to share some thoughts on resilience and preparedness for natural disasters and the role of insurance. The earthquake that struck Myanmar and Thailand is just the latest tragic reminder that we live in a time of heightened exposures to catastrophes. This tragedy, along with the California wildfires and recent flooding in the US, highlights the devastating human toll and economic impact caused by natural disasters, especially taking into consideration the significant proportion of losses that are typically uninsured. These events show the urgent need for resilience and risk mitigation planning in disaster-prone areas. Enhancing risk mitigation is essential for sustainable development and reducing the devastating impact of these events on individuals, businesses, and economies. In catastrophe-prone areas, we must invest in ways that strengthen our infrastructure and lessen the impact of future disasters. To put this into perspective, a recent report from the U.S. Chamber of Commerce shows that every dollar spent on resilience saves communities $13 in damages, cleanup costs, and economic impact. U.S. homeowners are increasingly reliant on state-sponsored insurers of last resort in catastrophe-prone areas. In these circumstances, pricing that accurately reflects the true cost of risk can often be compromised in favor of making insurance more available and affordable. Governments and regulators can help by prioritizing resilience and creating the right economic incentives to mitigate losses and foster sustainable improvements in insurance markets. Without increased resilience, the human toll will remain high and the cost of risk will continue to be a significant tax on economies, diverting funds from other important societal priorities. Turning to insurance market conditions, according to the Marsh Global Insurance Market Index, rates decreased 3% in the first quarter despite an elevated risk landscape. This follows a 2% decline in the fourth quarter of 2024. As a reminder, our index skews to large account business. Overall, rates in the US decreased 1%. Latin America was down low single digits. Europe, UK, and Asia were down low to mid-single digits. And Pacific was down high single digits. Global property rates decreased 6% year-over-year, following a 3% decline last quarter. Global casualty rates increased 4%, with US excess casualty up approximately 16% in the quarter. Workers' compensation decreased mid-single digits. Global financial and professional liability rates were down 6%, while cyber also decreased by 6%. In reinsurance, despite the California wildfire losses, capacity remains more than sufficient to support compliant demand, including additional limits in loss-impacted programs. Throughout the first quarter, market conditions were consistent with what we saw at January 1st. Strong reinsurer profitability, high ROEs, and increased capital levels have resulted in ample supply of property cat capacity and rate reductions. It was also a record quarter for cat bond issuance. U.S. property cat reinsurance rates remain competitive for the April 1 renewal period. Non-loss impacted rates were down 5% to 15%, while loss impacted programs typically experienced 10% to 20% rate increases. In U.S. casualty reinsurance, we continue to see a range of outcomes depending on loss experience, with primary carriers demonstrating limit, rate, and underwriting discipline. In Japan, April 1 property cat rates overall were down 10% to 15% on a risk-adjusted basis. Early signs for the June 1 Florida cat risk renewals point to similar market conditions seen in January and April, with an anticipated increase in demand ready to be absorbed by more than adequate supply. As always, our focus is on helping clients navigate these dynamic market conditions. Now let me provide a brief update on our acquisition of McGriff, which closed on November 15th of last year. Our colleagues at McGriff performed well in the quarter, and the integration remains on track. The team is quickly leveraging the broader capabilities of our company while bringing their own distinct advantages to the market. We are already seeing wins from bringing together the best of both. As we said when we announced the transaction, McGriff is a business with outstanding talent and a track record of strong growth, and I'm excited to have them as part of our firm. Now let me turn to our first quarter financial performance and outlook, which Mark will cover in more detail. Revenue grew 4% on an underlying basis, with 4% growth in RIS and 4% in consulting. Marsh was up 5%. Guy Carpenter grew 5%. Mercer 4%. and Oliver Wyman was up 4%. We had adjusted operating income growth of 8% and we generated adjusted EPS in the quarter of $3.06, which was up 5% from a year ago. We also repurchased $300 million of stock in the quarter. Turning to our outlook for 2025, we continue to expect mid-single digit underlying revenue growth, another year of margin expansion, and solid adjusted EPS growth. Of course, this outlook is based on conditions today, and the economic backdrop could turn out to be materially different than our assumptions. In particular, and as discussed earlier, the uncertainty in ongoing trade negotiations and their effect on consumer and business confidence could have a significant impact on the global economy and our results. In summary, we are pleased with our results and are off to a good start in 2025. We are well positioned and have a resilient business that provides critically important advice and solutions and we have proven our ability to deliver across cycles. With that, let me turn it over to Mark for a more detailed review of our results.

Thank you, John. And good morning. Our first quarter results represented a solid start to the year. Consolidated revenue increased 9% in the first quarter to $7.1 billion with underlying growth of 4%. Operating income was $2 billion. And adjusted operating income was $2.2 billion, up 8%. Our adjusted operating margin was 31.8%. GAAP EPS was $2.79 and adjusted EPS was $3.06, up 5% over last year. Looking at risk and insurance services, first quarter revenue was $4.8 billion, up 11% or 4% on an underlying basis. Operating income and RIS was $1.6 billion in the first quarter. Adjusted operating income was $1.8 billion, up 8% over last year, and our adjusted margin was 38.2%. Our margin in RIS reflected the impact of seasonality in McGriff's revenue we previously guided to. At Marsh, revenue in the quarter was $3.5 billion, up 15% from a year ago, or 5% on an underlying basis. This comes on top of 8% underlying growth in the first quarter of last year. In U.S. and Canada, underlying growth was 4% for the quarter. In international, underlying growth was 6%. Latin America up 8%, EMEA up 6%, and Asia Pacific up 4%. Guy Carpenter’s revenue in the quarter was $1.2 billion, up 5% on both a GAAP and underlying basis. Growth remained solid despite softer reinsurance market conditions and came on top of 8% growth in the first quarter of last year. In the consulting segment, first quarter revenue was $2.3 billion up 5% or 4% on an underlying basis. Consulting operating income was $456 million and adjusted operating income was $491 million, up 8%. Our adjusted operating margin in consulting was 21.2%, up 50 basis points from a year ago. Mercer's revenue was $1.5 billion in the quarter, up 5%, or 4% on an underlying basis. Health underlying growth was 7%, reflecting continued solid growth across all regions. Wealth was up 3%, led by investment management. Our assets under management were $613 billion at the end of the first quarter, down 1% sequentially and up 25% compared to the first quarter of last year. Year-over-year growth was driven by our acquisition of Cardano, positive net flows, and the impact of capital markets. Career declined 1% reflecting growth in international, offset by continued slower demand in the U.S. Oliver Wyman's revenue in first quarter was $818 million, an increase of 4% on both a GAAP and underlying basis. Growth in the quarter was led by strength in the U.S. and came on top of 13% growth in the first quarter of last year. Fiduciary income was $103 million in the quarter, down $9 million from the fourth quarter, and $19 million compared with the first quarter last year, reflecting lower interest rates. Looking ahead to the second quarter, we expect fiduciary income will be approximately $100 million. Foreign exchange was a $0.05 headwind in the first quarter. Exchange rates have been volatile over the past several trading days, making it challenging to predict their impact looking forward. However, based on current rates, we anticipate that FX will have an immaterial impact on earnings in the second quarter and the rest of the year. Turning to our McGriff transaction, as John mentioned, our integration continues to go well. As we said last quarter, the first quarter is McGriff's seasonally smallest from a revenue perspective, which resulted in modest dilution to adjusted EPS in the quarter. We continue to expect that McGriff will be modestly accretive to adjusted EPS for full year 2025, becoming more meaningfully accretive in 2026 and beyond. We still expect noteworthy charges associated with McGriff of approximately $450 million to $500 million in total through 2027, with the vast majority of these costs associated with retention incentives, a significant portion of which was put in place by the seller. These costs flowed through our financial statements, but were funded by the seller through a purchase price adjustment. As is our convention, we are excluding McGriff from our underlying growth calculations for the first year. As we mentioned last quarter, we are now excluding acquisition-related intangible amortization and the net benefit credit from our adjusted earnings. Last quarter, we provided a supplement to our press release that recasts historical financial information on this new basis of reporting. Total noteworthy items in the quarter were $91 million, the largest of which was $69 million related to McGriff. Interest expense in the first quarter was $245 million, up from $159 million in the first quarter of 2024. This increase reflects higher levels of debt associated with the McGriff transaction. Based on our current forecast, we expect interest expense will be approximately $250 million in the second quarter. Our adjusted effective tax rate in the first quarter was 23.1%, which compares with 23.9% in the first quarter last year. Our tax rate benefited from favorable discrete items, the largest of which was the accounting for share-based compensation, similar to a year ago. Excluding discrete items, our adjusted effective tax rate was approximately 25.5%. When we give forward guidance around our tax rate, we do not project discrete items, which can be positive or negative. Based on the current environment, we expect an adjusted effective tax rate of between 25% and 26% in 2025. Turning to capital management and our balance sheet, we ended the quarter with total debt of $20.5 billion. In the first quarter of 2025, we repaid $500 million of senior notes that matured in March. Our next scheduled debt maturity is in the first quarter of 2026, when $600 million of senior notes mature. Our cash position at the end of the first quarter was $1.6 billion. Uses of cash in the quarter totaled approximately $800 million and included $405 million for dividends, $95 million for acquisitions, and $300 million for share repurchases. We continue to expect to deploy approximately $4.5 billion of capital in 2025 across dividends, acquisitions, and share repurchases. The ultimate level of share repurchase will depend on how our M&A pipeline develops. Overall, we are pleased with our first quarter results. For the full year, we continue to expect mid-single digit underlying growth, margin expansion, and solid growth and adjusted EPS. However, as John mentioned, this outlook is based on conditions today, and the economic backdrop, especially in light of recent uncertainty around global trade policies, could turn out to be materially different than our assumptions. With that, I'm happy to turn it back to John.

Thank you, Mark. Andrew, we are ready to begin Q&A.

Certainly. We will now begin the question-and-answer session. Our first question comes from Gregory Peters with Raymond James.

Well, good morning, everyone. Probably very appropriate to go back to the commentary around the tariffs and the trade issues and challenges. Maybe you can provide some additional colour on which geographic areas and might it show up inside the risk businesses and does this benefit the consulting business as well as your clients look for more advice?

Yes. Sure, Greg. Look, I think it's difficult to say on a country-by-country basis what parts of our business might be more impacted. Obviously, there's much more in front of us all in terms of those negotiations. And so, it's quite a fluid situation. At this point anyway, I would say there's no real direct impact to our business. But of course, there'll be indirect impacts. Global GDP may slow at least until there's some resolution. As business confidence declines, we'll see market volatility, of course, in our investment business. That could create some challenges in our OCIO business, but also create some possibilities around the advisory work that we do on behalf of our clients. And as I noted in my prepared remarks, it's likely to be inflationary on loss costs. Again, we'll see how things settle out. It remains to be seen, of course, what it might mean to drug costs in the United States and our employee health and benefits clients here in the US. Obviously, for the global economy, a quicker resolution to these negotiations is important, so businesses and consumers can move forward with greater confidence. But as you mentioned, change is generally good for our consulting businesses. And so, again, we're not immune at all to macro GDP pressure, but we are a resilient business. And again, as we see it now, we continue to expect mid-single digit revenue growth, margin expansion, and solid growth and adjusted EPS. Do you have a follow-up, Greg?

Absolutely. My follow-up question, just to pivot back to the capital allocation commentary. One of your peers is also pretty active in the marketplace and encountered some antitrust issues with their pending acquisition. And I know you have a robust record of doing acquisitions in North America and elsewhere. I'm just curious what your view is as you continue to evaluate the landscape of potential opportunities, how that might square or reconcile with growing antitrust potential risks?

Yeah, I'm not familiar with the details, of course, of that particular issue. Obviously, you can check with them. We're very thoughtful and mindful of antitrust risks and have executed very, very effectively. I also think it's pretty unclear where the current administration may come out on our industry and broadly speaking, on M&A. As you point out, for a long time it's been an important value creator for us. We remain quite active in the market. We did four small deals in the first quarter. Our pipeline remains strong. We have a really attractive reputation as a partner in that marketplace. And so, last year, again, was just an outstanding year for us. I talked about McGriff in my prepared remarks, Greg, but I would also note we acquired two other top 100 agencies at MMA last year, Fisher Brown Bottrell and Horton. In addition to that, we acquired Cardano and Vanguard US OCIO business in our investment business. So it was really a terrific year for us in that respect. So we're excited about the possibilities going forward. I'd also note, while we're on this subject, we're more likely to continue what's mostly been a string of pearls type strategy for us. We have the capacity to do something bigger, but we're not just looking to get bigger. We do want to grow, of course, but we want to get better along the way. The businesses that I mentioned make us better, not just bigger. And so, we're really excited and so far so good on all of them. Thank you, Greg. Andrew, next question, please.

Certainly. Our next question comes from the line of Mike Zaremski with BMO Capital Markets.

Thank you, good morning. Referring back to the macro backdrop mentioned in the prepared remarks, the words unpredictability and uncertainty were highlighted. Historically, Marsh's revenue growth has shown sensitivity to macro conditions, and the company has effectively managed its expenses to minimize the impact on profit margins. Over the years, I believe Marsh has worked to make some of its businesses, such as Career, less dependent on macro factors. I'm curious if you are currently adopting a similar approach to manage expenses given the uncertainty, and whether you are using the same strategies as in the past or if the unpredictability of certain factors is making it more challenging now.

Thank you for the question, Mike. Let me discuss the first quarter briefly. It was a solid start to the year and aligned with our expectations. We had anticipated a slower beginning, expecting lower GDP in the first quarter. Fiduciary income faced some pressure from reduced interest rates, as Mark mentioned. We expected softer pricing in the P&C market, which influenced our guidance and expectations for the quarter. Additionally, last year’s first quarter was exceptional, our strongest growth quarter, so we anticipated some macro headwinds and faced tough comparisons. Despite this, our overall growth was good and solid across all businesses. On a GAAP basis, our performance remained strong, bolstered by acquisitions made last year. I believe we executed well during the quarter. While I've shared our outlook, we also consider both downside and upside scenarios for revenue, which is important for our strategic planning. We remain diligent in our capital allocation and expense management, regardless of whether we encounter tailwinds or headwinds. In challenging scenarios, we have strategies we can implement, including adjusting incentives and sales compensation, controlling discretionary spending, and slowing hiring. Compensation is a significant part of our expenses, and we can manage turnover effectively. In more severe situations, we have additional strategies to consider. However, we are committed to maintaining the business's long-term health and being there for our clients. We recognize that better economic times are ahead. Throughout various economic cycles, we have successfully navigated challenges, and we will apply the necessary strategies as new data emerges. Do you have a follow-up, Mike?

Yes, I have a quick follow-up. I'm curious about the Marsh Pricing Index indicating that global property continues to decelerate quarter-over-quarter. Historically, global property pricing has accelerated significantly over the years. While I know your team is working hard to secure better rates for clients, do you anticipate that global property rates will remain in negative territory at a macro level, assuming normal catastrophe levels, considering how challenging that market has been for an extended time? Are there any changes in terms or conditions that are occurring? It seems we all understand that casualties are a significant challenge, but property appears to be continuing to soften, so I'm looking for some insights. Thank you.

Yes. Sure, Mike. Maybe I'll share a couple of high-level comments and then I'll ask both Martin and Dean just to talk about what they see in the market. So as I said, we expected a bit of a softer market. Prices, I'm not declaring it a soft market, just to be clear, but prices softened a bit in the quarter. We expected that. And it is, as you point out, welcome relief to our clients after five years of pricing. I mentioned in my prepared remarks, you've seen strong underwriting results for both insurers and reinsurers. And given those results, they're more growth-oriented maybe than they've been over the course of the last couple of years. Property was the most notable rate of increased decline. On the other side, as you point out, casualty, particularly casualty here in the United States and excess liability, that market is under some stress from our client's perspective. But Martin, maybe you could talk a little bit about the insurance market in the quarter and share some thoughts with Mike.

Of course, delighted to. As we mentioned, our global rate index declined 3% in Q1. It's the third sequential course of rate declines. And overall, though, the composite rate index remains up 1.5 times since its inception in 2012. So to your point, it's been a long period of pain for our clients. Just going through the lines of coverage, casualty saw rates of 4% globally, the most consistent to the last quarter. The U.S. continued to see rate increase at the highest level, 8% across the board and 16% in the umbrella and excess casualty. Property is down 6%, with the US and the Pacific experiencing the largest decreases, followed by the UK at 6%, and all other regions saw low single-digit declines. FinPro is down 6%, Cyber down 6% reflecting previous trends. But keep in mind that our index skews to larger account as we mentioned. We have a diversified business with large exposures to the middle market where pricing tends to be less cyclical. However, our focus is obtaining the best outcome for our clients with the lowest coverages and the best value and we continue to do an excellent job doing that.

Thank you, Martin. Dean, maybe you could share some thoughts on the reinsurance market.

Great. Thanks, John. And Mike, I'll give you a little bit of color on the April 1 reinsurance market, mostly focused on property cat here, which I think is a key driver in the ecosystem of the market. But at April 1, we saw a continuation of market conditions that we experienced in January 1. As John noted, we continue to see a very competitive market with a modest increase in client demand, mostly from personal lines and E&S riders that are both driving underlying primary insurance rate increases. As John noted, capacity in the property market has been ample, driven by very strong reinsurer returns in 2024, reported at 16% as an index. The reinsurer appetite for property cat continues to increase. They're writing more. They've been more aggressive. But I think the real takeaway, the headline, Mike, is that the California wildfires had really little or no impact on pricing terms and conditions in the property cat market at April 1. John talked about US property cat, we saw 5% to 15% rate decreases for non-loss impacted accounts. Turning to Japan, which John touched on. We saw a very orderly property cat renewal at April 1. Again, capacity was strong. Many of our cat programs were oversubscribed in the market. We see stable demand from clients in Japan really offset by greater increases in capacity. Few structural changes, attachment points that were hard fought two years ago literally stayed unchanged in the Japanese marketplace. And property cat rates were down 10% to 15% on average in Japan. Again, really no impact from the California wildfires on the Japanese market. Capital is plentiful in the reinsurance market. We talked about at the January 1 renewal that dedicated reinsurance capital was up 7%. We see capital increasing. We see reinsurers deploying more capital. We see a very strong market. John talked about record cat bond issuance. So, all these things are adding up to additional capital and capital deployment in the property cat market.

Thank you, Dean. Mike, just one last thought is, the market's now pricing in well in excess of $100 billion of insured cat losses. So it's obviously early in the year. Though, as you know, Guy Carpenter's biggest quarters are the first and second quarter, right? So that's really a reflection of treaty renewals and where they are in the calendar. So impacts to us will be really down the road if the cat season turns out to be very different than what we expect. But thank you, Mike. Andrew, next question, please.

Our next question comes from the line of Jimmy Bhullar with JP Morgan.

Hey, Good morning. So I had a question just first on all of our environment. And I'm assuming that the uncertainty and all the trade talk is creating some demand in certain verticals. But overall, is the environment and the increased uncertainty positive or is it overall a negative for Oliver Wyman just as companies are sort of pulling back from budgets and just activities declining?

Yes, thanks Jimmy. We had a strong start to the year for Oliver Wyman with 4% growth on top of 13% last year, which was a significant quarter. It presents a tough comparison. However, sales have remained solid. As you mentioned, it is discretionary spending, so I'll ask Nick to provide more insights into what we're observing in that market.

Thank you, Jimmy. Maybe just a bit of context, which I know I often put in place first, but we do see this through the cycle as a mid to high single digit growth business, and we have been in a bumpier part of the cycle on the demand side. The geopolitical policy and economic uncertainty is not brand new. But also on the supply side, we've had a couple of years where oversupply in the industry has been working its way through. And you'll have noted, we did not appear on the list of large suppliers to the US government, but that has created some increased oversupply. But notwithstanding all of that bumpiness, the market continues to grow. We are very happy with the first quarter, as John said, given the high comp. Within that, as you note, there are some strong areas of growth. The US and Canada Mark called out, but also our insurance and asset management and actuarial practices which are increasingly working closely together have standout growth. We saw good growth in consumer telecoms and technology. Also very strong growth in transportation and advanced industrials. And our banking practice as well did well. And our finance risk and restructuring practices were also in double digits. Less even growth elsewhere. I think to get to the nub of your question, as you know, we have relatively short visibility. When the big questions for our clients change, that tends to be very good for our business. When there's a lot of confusion and short-term uncertainty, that is less so. It can often lead to a little bit of a freeze. I don't think current events necessarily presage a tougher period ahead. It's a bit too early to tell, so we're on watch. But for now, we remain very busy. We're confident in our ability to help our clients in their most transformative moments when the big questions change.

Thank you, Nick. Jimmy, do you have a follow-up?

Yes, maybe just for Dean. You gave some good colour on renewals recently, 1/1 and April as well. Are you expecting media renewals to be similar in terms of terms and changes in attachment points and pricing or do you expect a change one way or the other?

Yes, thanks, John. The answer is yes. We anticipate continued market conditions similar to what we saw on January 1 and April 1. The Florida market remains stable despite the hurricanes last fall. We expect catastrophe pricing to be very similar to January 1 and April 1. There's a sufficient supply of capital in the Florida market, and the active catastrophe bond market has positively influenced capacity. We are observing clients purchasing more property catastrophe limits at the June 1 renewal. Additionally, we are beginning to see the benefits of the Florida legal reforms, which are effectively reducing frequency and severity in the Florida market. So, definitively yes to your question moving forward.

Thank you, Dean. And thank you, Jimmy. Andrew, next question, please.

Certainly. Our next question comes from the line of David Motemaden with Evercore ISI.

Hey, thanks. Good morning. Just another question, just given the macro environment and some of the policy questions. Could you help me think through how much exposure Marsh has across the company to government consulting or government contracts?

Yes, thanks David for the question. Nick talked about it, touched on it a bit in terms of US governments at Oliver Wyman. We do work for governments all over the world and most of that work is in Oliver Wyman, then Mercer, but Marsh and GC have a little bit of it as well. A lot of that work is really important advice. I talked about resilience and sustainable development in my prepared remarks. A lot of the work is around that, those subjects. But what I would say to you David is that, overall, that work is not material to the company overall.

Great, thanks. And then could you just help me think through the underlying revenue growth slowdown in Marsh within US and Canada specifically? I know the comp was tougher, but I'm wondering, was it all just the pricing slowdown, or was there any impact from maybe a little bit of overlap with McGriff and some of the existing Marsh book? Just looking for a little bit of color there. Thanks.

Yeah, for sure and I'll ask Martin to jump in, but unrelated at all to McGriff and as Mark noted, McGriff's not in our underlying revenue calculation, and we couldn't be more pleased with how McGriff has gone to date. We've got a lot of work still in front of us, but so far so good, and remain very, very excited about that. But, Mark, maybe you could talk about growth in the US in particular.

Certainly, John. We had a strong start to the year with 5% growth, which builds on a significant comparison from last year. In the US specifically, we grew at 4% following an 8% growth in the first quarter of 2024, reflecting solid performance in the MMA sector. While McGriff isn't factored into our core growth metrics, we are very pleased with their initial performance. Additionally, our specialty performance was particularly robust, with a rise in FinPro. However, we did experience some challenges in the construction and property sectors. The construction slowdown was driven by uncertainties in the geopolitical climate and the costs associated with rebuilding, while property rates saw a notable decline of 9%. It’s important to note that we don’t rely on a single quarter for assessing overall performance; our US business has demonstrated remarkable growth in the post-pandemic period, and we are well-positioned for the future. Our international business is also performing well, with a 6% growth on top of 8% in Q1 2024. Latin America achieved an 8% growth on top of the 8% from last year, EMEA grew by 6% on top of 9%, and APAC reported a 4% growth on top of 6%, with particularly strong performance in our benefits business globally.

Thank you. Thanks Martin. And thank you David. Andrew, next question please.

Our next question comes from the line of Alex Scott with Barclays.

Hey, good morning. I think a couple of different times you mentioned how much your indices kind of skewed towards the larger end of the market. So I was wondering if you could give maybe some color on what you're seeing in your middle market business and just if there is a divergence, how big is that divergence you're seeing in terms of how cyclical the businesses are to pricing.

Yes, Alex, thanks for the question and good morning to you as well. It's interesting and I think it's not a recent phenomenon, but really over a long period of time where the middle market tends to provide much more consistent pricing from year-to-year. So middle market pricing was essentially up a couple of points in the quarter. You'll hear underwriters, of course insurers, report on rate change throughout the earning season here. The biggest difference between what they report and what we report is new business. And so, we have a view, because it was our client a year ago, of how that rate change materialized. And typically, new business will trade at a slightly better price from the client's perspective than a business that has renewed. But the gap is what you see. A couple of points favorable in the middle market is what we observed here in the United States. And large account market can move much more in a cyclical fashion. Do you have a follow up Alex?

Yes, thank you for your response. I wanted to inquire about the pricing trends we are observing. There seems to be a challenge in the property sector, although clients are experiencing some relief. Should we anticipate that the second quarter will feature a higher concentration of property renewals? How should we factor in the year-over-year changes specific to property in the second quarter due to this focus?

Yes, look, I think it's hard to predict future markets. Dean talked about it in terms of reinsurance. There is a seasonality to the reinsurance business, right? So with a lot of property cat exposure, of course, being in the United States and because insurance companies want to have some level of certainty around what their reinsurance programs look like as they pursue their goals during the course of the year. The beginning part of the year is where really almost all of the action is from a reinsurance perspective. So, Dean spoke to that. It's been a competitive market and it's really a reflection of what's been very strong underwriting results at insurers and reinsurers. And as I said, many of them are looking to grow, given the results they've printed the last couple of years. So we expected that, for sure. At Marsh, it's going to be in a retail business, it's going to be more account to account and driven by some market forces, of course, but ultimate loss experience by clients. So, again, we continue to see an increase in frequency and severity of natural catastrophes, not just here in the United States. And we see inflation continuing to be a challenge. So over time, we think the cost of risk is continuing to rise. It's why I spent some time in my prepared remarks talking about the need for communities to invest in resilience. There's, in my view, too much discussion about how to find cheap insurance or subsidize insurance. Of course, insurance costs are important to a local economy. I'm not trying to discount the importance of that. But ultimately the way to deal with that is to bend the risk curve and we need investment. We have much more exposure to catastrophe-prone areas than we've had in the past. And so we'll manage through the cycle of pricing. We expect it to be more competitive throughout the year. But over time, those costs are continuing to grow. Thank you, Alex. Andrew, next question, please.

Our next question comes from the line of Meyer Shields with KBW.

Great. Thanks for taking my question. Good morning. From an external perspective, in other words, from our perspective, how should we think about the impact of reinsurance pricing impacting Guy Carpenter’s organic growth? Is it comparable to what we see in primary insurance our dynamics different there? And how does the, I guess, significant amount of lost impacted accounts coming up for renewal at mid-year impact organic growth prospects for Guy Carpenter?

Yes, thanks, Meyer. What I would say is, if you recall when reinsurance pricing was going up meaningfully, we talked a bit about this because I think you all were trying to get a sense of revenue growth to the upside in our business there. We get paid in commission at Guy Carpenter, but of course, we're very transparent with insurance company clients, and so we negotiate essentially an outcome and so in some respects it can act fee-like, but again with pricing pressure that does impact our revenue line overall. We thought we had a terrific start to the year at Guy Carpenter, some of the market forces that helped what's been just an outstanding period of growth over the last couple of years have subsided. But again, we've factored that into our guidance. And the work we do on behalf of insurance companies is absolutely critical, helping them navigate the complexity and the volatility that economies and of course natural catastrophe is a huge part of that. So again, think commission, but also think negotiated outcomes.

Okay. No, that's very helpful.

Do you have a follow-up, Meyer?

Yes, just a quick one. You talked about the overall EPS impact from foreign exchange. Did that impact either of the segment's margins materially?

Mark, maybe you can jump in.

Yes, Meyer, no, FX was not a story for margins in the quarter. And actually, the impact, even on earnings segment to segment was pretty even.

And Meyer, I would just add that the headwinds on margin expansion came from M&A, right? And primarily McGriff, but the other deals that I mentioned last year as well, and Mark and I both have mentioned the seasonality of McGriff revenues. All those businesses clearly make us better. So happy to trade, a quarter of margin contraction for what will become a bigger and better business as a result of those deals. Thank you. Andrew, next question, please.

Our next question comes from the line of Elyse Greenspan with Wells Fargo.

Hi, thanks. Good morning. My first question, I wanted to go back to Guy Carpenter. On the 5% organic growth in the quarter, I was just trying to get a better sense of what's driving that. I know you guys are talking about pricing demand, et cetera, but what kind of drove the slowdown there in the quarter? And I'm particularly interested if you can give us a sense of new business as well as renewal trends in the Q1 within that 5%.

Sure, sure. So, Elyse, again, we're pleased with the start to the year at Guy Carpenter with 5% growth. We had an excellent start to the year. Last year, we had 8% underlying growth in the quarter. Client demand for our services remains quite strong. Obviously, as we just talked about with Meyer, pricing impacts growth, at least in the near term. But, Dean, maybe you could share some thoughts on where we see opportunities for growth and some of the contributing factors aside from price that impacted us in the quarter.

Yes, thanks, John and good morning, Elyse. As John noted, property cat is a growth headwind in the quarter and moving forward. But again, we saw very balanced growth globally across our regions and our global specialty business. We're driving outstanding growth in Latin America and the Middle East where we've invested heavily. To your point, Elyse, we had very strong new business in the quarter, including record cat bond issuance. Guy Carpenter placed eight discrete bonds in the quarter, totaling $1.8 billion of limit, maybe our strongest quarter ever in the cat bond market. We're seeing great opportunities from our new capital and advisory practice. And we started a small boutique banking practice for raising capital for clients, for providing M&A advisory, for designing side cars, reciprocals and other capital structures for clients and that business is really going well. And we do see clients purchasing additional property cat limit, given favorable market conditions. And so, as you know, and Meyer asked the same question, the first quarter is 50% of our year revenue-wise, so that's out of the way. And we feel solid about our prospects for growth through the balance of the year.

Thank you. Dean. Elyse, do you have a follow-up?

Yes. My follow-up question, I was hoping that maybe you'd be willing to disclose the revenue growth McGriff saw in the quarter. And then is there seasonality we need to think about in the other three quarters of the year, or is it more consistent revenue and margins relative to obviously there was a negative seasonality in the Q1?

Yes, I'm not going to get into disclosing revenue by sub-business and sub-business quarter to quarter, but as we said, it was a good start to the year for McGriff. We're very, very pleased with the results to date. And while on McGriff, again, it's a business we admired for a long time. They've had a similar approach to really creating client value to our company. Colleague retention and notably producer retention has been outstanding to date. So it was a good start. It extends our reach into the middle market, which we really like. They had industry and specialty capability that we know can strengthen MMA as well. And now positions MMA as about a $5 billion business on an annual basis. And so, possibilities for us to bring scale benefits to middle market clients is a real opportunity there. So, I don't think there's any kind of big lumps up and down, Mark, but maybe you could talk more about the seasonality for McGriff for the rest of the year.

Yes, Q1 is their softest quarter from a revenue perspective. Q2, Q4 tend to be their biggest, so Q3 will be a little bit of a seasonal lull as well but nothing on the order of what we saw in Q1. So the trend we saw in Q1 will moderate as we go through the year.

Terrific. Thank you, Mark. Thanks, Elyse. Andrew, next question, please.

Our next question comes from the line of Paul Newsome with Piper Sandler.

Good morning. I was hoping to focus a little bit more on M&A. And if you had any thoughts if the increased uncertainty will change the M&A outlook, either for you or for the market.

Thank you, Paul, for the question. I don't think so. We are quite active in that market. There are businesses out there, similar to McGriff, that we've admired for a long time and believe can enhance our capabilities. We also think we can provide benefits to those businesses. When we acquire companies, we carefully consider their culture, fit, and the potential for mutual growth. We maintain a long-term perspective on this. The macro environment may affect the cost of capital and investor interest in these businesses, but we are 154 years old this year. We have been a consolidator for all those years and continue to view that as an opportunity. This approach benefits our shareholders as well. We aim to achieve growth for all of you. As I mentioned earlier, we can leverage scale benefits in the middle market, leading to greater economic sustainability and success for those clients. Our focus starts with client value and acquiring talent to make that happen. Do you have a follow-up, Paul?

Great. I have a more detailed question. There’s a lot of great commentary about the property cat reinsurance market. I was wondering if you believe that the tort reform in Florida is having any impact, especially since that region is currently experiencing peak conditions for property cat.

Thanks, Paul. Dean mentioned it briefly, but it's still early, and the initial signs have been positive. I took some time in my remarks to discuss resilience and the need for communities to invest in it. In Florida, they are mainly focused on reforms in the property catastrophe market. There are also significant reforms in Georgia addressing liability issues. I noted the increasing cost of risk and referred to social inflation in my remarks. Some insurance companies we work with dislike that term and prefer to call it legal system abuse. The litigation environment in the United States is evidently a burden on our economy. We are advocating for sensible reforms at both the state and federal levels since this remains a challenge. I think the changes in Florida are beneficial, and we will see how things develop. It's also important to monitor the situation in Georgia, as it represents significant progress too. Each state faces unique challenges, and the legislative landscape varies by state. We are investing in these issues to assist our clients in navigating the costly litigation environment in the U.S. Thank you, Paul. Andrew, we are ready to conclude now. I want to express my gratitude to everyone for joining the call this morning. In closing, I appreciate our colleagues for their hard work and dedication and our clients for their ongoing support. Thank you all, and we look forward to speaking with you next quarter.