Welcome to Marsh's Earnings Conference Call. Today's call is being recorded. First quarter 2026 financial results and supplemental information were issued earlier this morning. They are available on the company's website at corporate.marsh.com. Please note that remarks made today may include forward-looking statements. Forward-looking statements are subject to risks and uncertainties, and a variety of factors may cause actual results to differ materially from those contemplated by such statements. For a more detailed discussion of those factors, please refer to our earnings release for this quarter and to our most recent SEC filings, including our most recent Form 10 , all of which are available on the Marsh website. During the call today, we may also discuss certain non-GAAP financial measures. For a reconciliation of these measures to the most closely comparable GAAP measures, please refer to the schedule in today's earnings release. If you have a question, please press star 11 on your touchtone phone. If you wish to be removed from the queue, please press star 11 again. If you're using a speakerphone, you may need to pick up the handset before pressing the numbers. Once again, if you have a question, please press star 11 on your touchtone phone. I'll now turn this over to John Doyle, President and CEO of Marsh.

Thanks, Andrew. Good morning, and thank you for joining us today to discuss our first quarter results. I'm John Doyle, President and CEO of Marsh. On the call with me is Mark McGivney, our COO and CFO, and the CEOs of our businesses, Nick Studer of Marsh Risk, Dean Klosura of Guy Carpenter, Pat Tomlinson of Mercer, and Ted Moynihan of Marsh Management Consulting. Also with us this morning is Jay Gelb, Head of Investor Relations. Let me start by highlighting recent changes to our Executive Committee. Mark was named Chief Operating Officer of Marsh in addition to serving as our CFO. In this expanded role, Mark will take on more responsibility for evolving our strategy and working across our business to drive execution of top priorities, support collaboration, and accelerate pace. We also announced Nick as the CEO of Marsh Risk. Nick is a proven growth leader, as demonstrated by his record as CEO of Oliver Wyman. His experience advising corporate and public sector leaders on the topics of risk and strategy positions Nick well to deliver on our growth ambitions. Nick succeeded Martin South, who is now our chief client officer. Martin will focus on elevating the client experience across the company and help us better leverage AI to support clients. and Ted succeeded Nick as CEO of Marsh Management Consulting. Ted has more than three decades of leadership experience at Oliver Wyman, and he is a respected advisor to business and government leaders. I look forward to him driving continued growth at Marsh Management Consulting. Congratulations to Mark, Nick, Martin, and Ted. These leadership changes are all about growth, enhancing the client experience, and helping us capture the benefits of Thrive. Turning to results, our performance in the first quarter reflects solid execution despite challenging market conditions. Overall, we grew revenue 8% in the quarter. Underlying revenue increased 4% despite lower fiduciary interest income and continued downward pricing pressure in insurance and reinsurance. We are seeing strong sales across our business, and we are pleased with the sequential improvement in the growth at Marsh risk. Adjusted operating income grew 8% from a year ago, and adjusted EPS also grew 8%. Turning to the ongoing conflict in the Middle East, our primary concern has been the safety and well-being of our colleagues and clients and helping them navigate the challenges in the region. The impact on our business and the broader insurance industry has been limited. The economic issues related to the conflict in the Gulf are not about insurance. While certain lines, like marine coverage, may experience price spikes for war risks, ultimately the gating issue is de-escalation. A sustained conflict in the region will create more uncertainty and risk for the global economy. Broadly, Marsh is advising clients on how to build greater resilience in their business planning. We're helping them address supply chain issues, review their cyber exposure, and we're advising on investment decisions. And of course, we are working with clients to manage insurable risks, particularly in marine, aviation, and energy. We've also engaged with governments as they work to minimize economic disruption and maintain global trade, particularly in energy, fertilizer, and other commodities. Challenging events like this underscore the purpose of our work. It's also why we believe Marsh provides a unique value to clients who need strategy, talent, investment, and risk advice in complex times. I'd like to take a moment to discuss our AI strategy and why we believe Marsh will be an AI winner. Our strategy leverages our scale and capacity to invest in AI to drive even greater value from our proprietary data assets and our role as our client's trusted advisor. we are focused on three main pillars. The first is growth. We are building AI-enabled applications and services that are generating new revenue streams, as well as enhancing world-class capabilities and data-driven insights in insurance, health, human capital, and investments. Examples of these products include ADA, Centrisk, Euclid, and GC Quotebox, and many more of these applications are in development. We also see significant AI growth opportunity in consulting. Oliver Wyman's AI Quotient Team, created to help clients deploy their own AI strategies, is its fastest-growing practice. We're advising clients in multiple sectors, such as banking, energy, government, and manufacturing, around AI and workforce transformation. We've already advised on more than $50 billion of capital investment in AI deployment. And Mercer is working with clients to assess and inventory skills and redesign jobs as AI is integrated into ways of working. Our second pillar is productivity, which focuses on deploying AI capabilities to boost the performance of our colleagues. This is showing up in hundreds of different ways across a wide variety of roles. A good example of our work is to embed AI in our client management tools and to develop AI agents to help colleagues source and pre-qualify leads to support sales productivity. The final pillar is efficiency. Across our business, we are starting to see the impact of AI automation. A critical reason for creating our Business and Client Services Unit, or BCS, is to exploit the efficiency potential of AI. By consolidating our back-office operations and technology into scalable centers, BCS is accelerating the pace of AI-driven automation and process re-engineering. For instance, our document ingestion capability is now handling thousands of documents weekly, already improving efficiency in these processes by 20%, and enhancing the quality of the data and its usability to further support clients with valuable insights. We are beginning to reduce the cost and time associated with upgrading code to modernize applications. For example, we recently used AI to turn a legacy tool into a newly designed broker workbench in days, saving months of team effort. We have deployed Agentic AI in our IT help desk, significantly reducing inquiries, improving colleague experience, and creating downstream efficiencies in our support centers. And in our policy renewal center, AI has enabled us to transform a traditionally manual, email-heavy process into a streamlined digital solution in weeks, a project that otherwise would have taken many months. AI-enabled savings will fuel additional growth investments, including in producer talent and new capabilities, while building our confidence in continued margin improvement. It's important to remember that Marsh is not selling commoditized products or simply procuring insurance at the lowest possible price. That's not who we are or what we do. AI will help us serve our clients who have bespoke and complex needs even better. It will not replace the trusted advice, expertise, and capabilities with which we deliver value to clients. In our risk business, we help clients identify and understand their exposures, implement loss prevention strategies, and provide data and insights to make real-time decisions. Then after developing the strategy, we help them finance their risk through self-insurance, traditional insurance, capital markets, or captive management solutions to achieve their goals. Similarly, in consulting, we provide high-impact services to help organizations confront their biggest strategy and talent challenges, and we serve as trusted advisors to executive leadership in their company's transformative moments. Our client relationships, data and insights, and the expertise of our professionals worldwide, built over 155 years of market leadership is why we see AI as a powerful accelerator and enabler in delivering value to our clients, colleagues, and shareholders. Now, turning to market conditions, we continue to see a competitive insurance and reinsurance environment. According to the Marsh Global Insurance Market Index, primary commercial insurance rates decreased 5% in Q1, driven largely by property. This follows a 4% decline in the fourth quarter of 2025. As a reminder, our index skews to large accounts. Rates in the U.S. were down 1%. Europe, Asia, and Canada declined mid-single digits. UK and Latin America were down high single digits, and the Pacific region had double-digit decreases. Global property rates decreased 9% year-over-year, which was the same pace as last quarter. Global financial and professional liability rates were down 5%, while cyber also decreased 5%. Global casualty rates increased 3%, with U.S. excess casualty up 18%, reflecting ongoing pressure in the liability environment. And workers' compensation decreased 1%. In reinsurance, there is substantial capacity to support client demand as reinsurers pursue growth. Throughout the first quarter, market conditions were generally consistent with what we saw at January 1st. Strong reinsurer profitability, high ROEs, and increased capital levels have resulted in ample supply of property cap capacity and meaningful rate reductions. It was also another active quarter for cap bond issuance. U.S. property cap reinsurance rates remained competitive for the April 1 renewal period. Rates for non-loss impacted accounts were down 15 to 20%, a slight acceleration from the January 1 renewal season. 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 15% to 20% on a risk-adjusted basis. Early signs for June 1 Florida cat renewals point to similar market conditions characterized by rate reductions and excess supply as seen in January and April. There are early indications that Florida's legal reforms will contribute to further risk-adjusted decreases. Our clients are benefiting from the current market conditions, and as always, we continue to advise them on designing the best risk programs aligned to their goals. Now let me turn to our first quarter financial performance and outlook, which Mark will cover in more detail. Consolidated revenue increased 8% to $7.6 billion, growing 4% on an underlying basis with 3% growth in RIS and 5% in consulting. Marsh risk was up 4%. Guy Carpenter grew 2%. Mercer increased 5%. And Marsh Management Consulting grew 6%. percent. Adjusted operating income grew eight percent and adjusted EPS was three dollars and twenty nine cents up eight percent year over year. We also repurchased 750 million dollars of our stock. Looking ahead we are well positioned for another solid year despite headwinds from lower interest rates and decreasing insurance and reinsurance pricing. We continue to expect underlying revenue growth in 2026 to be similar to last year. We also anticipate continued margin expansion and solid adjusted EPS growth. Our outlook is based on current conditions and the economic and geopolitical environment could change materially from our assumptions. In summary, we're off to a solid start in 2026. Despite challenging market conditions, we remain focused on executing our strategy and continuing our track record of strong results. The Thrive program will drive growth through investments in talent and AI, strengthen our brand, and generate greater efficiency. We're excited for AI's potential and committed to being an AI winner through growth, productivity, and efficiency gains. Marsh is a resilient business that provides critically important advice and solutions, particularly in complex times such as these. We have proven our ability to deliver across cycles, and I am confident in Marcia's future. With that, I'll turn the discussion to Mark for a more detailed review of our results.

Thank you, Johnny. Good morning. Our first quarter results represented a solid start to the year, reflecting strong execution despite a challenging environment. Consolidated revenue increased 8% to $7.6 billion, with underlying growth of 4%, which came despite a headwind from fiduciary interest income and declining P&C rates. Operating income was $1.8 billion, and adjusted operating income was $2.4 billion, up 8%. Our adjusted operating margin was unchanged at 31.8%. GAP EPS was $2.36, cents, and adjusted EPS was $3.29, up 8% over last year. Looking at risk and insurance services, first quarter revenue was $5.1 billion, up 6% from a year ago, or 3% on an underlying basis. Operating income in RIS was $1.3 billion. Adjusted operating income was $1.9 billion, up 7% over last year, and the adjusted operating margin was 38.3% up 10 basis points from a year ago. At Marsh risk, revenue in the quarter was $3.7 billion, up 8% from a year ago, or 4% on an underlying basis. Growth increased sequentially despite the more challenging market conditions reflecting solid performances in the U.S., including MMA, and across international. In U.S. and Canada, underlying growth was 3%. In international, underlying growth was 5%, with EMEA up 6%, Asia-Pacific up 5%, and Latin America up 2%. Guy Carpenter's revenue in the quarter was $1.2 billion, up 3% or 2% on an underlying basis, a good result considering the current pricing environment. Growth was impacted by softer reinsurance market conditions and a tough comp to 5% underlying growth in the first quarter of last year. However, Guy Carpenter executed well and drove strong new business despite the tough market conditions. In the consulting segment, first quarter revenue was $2.6 billion, up 11% or 5% on an underlying basis. Consulting operating income was $525 million, and adjusted operating income was $552 million, up 13%. Our adjusted operating margin in consulting was 21.6%, up 40 basis points from a year Mercer's revenue was $1.7 billion in the quarter, up 11%, or 5% on an underlying basis. Health grew 6%, reflecting continued growth across our regions, especially in international. Wealth was up 5%, led by our investments business. 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. Year-over-year growth was driven primarily by new wins, the impact of capital markets, and acquisitions. Career was down 2%, reflecting continued softness in project-related work in the U.S., partially offset by sustained demand in international. Marsh Management Consulting generated revenue of $897 million in the first quarter, up 10%, or 6% on an underlying basis, reflecting solid demand across most regions and sectors. Fiduciary interest income was $85 million in the quarter, down $18 million compared with the first quarter of last year, reflecting lower interest rates. Looking ahead to the second quarter, we expect fiduciary interest income will be approximately $80 million. Foreign exchange was an $0.11 benefit in the first quarter. Based on current exchange rates, we expect that FX will have an immaterial impact on earnings in the second quarter and the rest of the year. Corporate expense in the first quarter was $74 million on an adjusted basis compared to $81 million in the fourth quarter. Looking ahead to the second quarter, we anticipate corporate expense of approximately $90 million, which includes some one-off timing items. We're making good progress on executing our Thrive program. We remain on track to generate $400 million of total savings, a portion of which will be reinvested for growth, and incur approximately $500 million of charges to generate the savings. Total noteworthy items in the first quarter were $521 million, including $37 million of costs associated with Thrive. Noteworthy items this quarter also include a $425 million charge relating to litigation stemming from the collapse of Greensill Capital in 2021. As we have previously disclosed, Marsh served as Greensill's insurance broker starting in 2014. The charge in the quarter represents the best estimate of our liability in this case, and it was influenced by a recent court-sponsored mediation among the parties involved. Our 10-Q filed earlier today includes further information on this matter and the charge. As you can appreciate, this litigation is ongoing, so we aren't able to comment further at this time. Interest expense in the first quarter was $240 million. Based on our current forecast, we expect interest expense in the second quarter to be approximately $245 million. Our adjusted effective tax rate in the first quarter was 25.1%. This compares with 23.1% in the first quarter last year, which benefited from discrete items, most notably a meaningful benefit related to share-based compensation. When we give forward guidance around our tax rate, we do not project discrete items. Based on the current environment, we expect an adjusted effective tax rate of between 24.5% and 25.5% in 2026. Turning to capital management in our balance sheet, we ended the quarter with total debt of $20.6 billion. Our next scheduled debt maturity is in the third quarter when $550 million of euro-denominated senior notes mature. Our cash position at the end of the first quarter was $1.6 billion. Uses of cash in the quarter totaled $1.3 billion, included $440 million for dividends, $89 million for acquisitions, and $750 million for share repurchases. We continue to expect to deploy approximately $5 billion of capital in 2026 across dividends, acquisitions, and share repurchases. The ultimate level of share repurchase will depend on how our M&A pipeline develops. Turning to our outlook for 2026, despite the challenging environment, we remain well positioned for another solid year. We continue to expect underlying revenue growth will be similar to the levels we generated in 2025, along with another year of margin expansion and solid adjusted EPS growth. For modeling purposes, we expect to generate more margin expansion in the second half of this year than in the first half. With that, I'm happy to turn

it back to John. Thank you, Mark. Andrew, we're ready to begin the Q&A session. Certainly. We will

now begin the question and answer session. If you have a question, please press star 11 on your touchtone phone. If you wish to be removed from the queue, please press star 11 again. If you're using a speakerphone, you may need to pick up the handset before pressing the numbers. Once again, if you have a question, please press star 11 on your touchtone phone. In the interest of addressing and questions from as many participants as possible, we ask that participants limit themselves to one question and one follow-up question. One moment, please. Our first question comes from the

line of Greg Peters with Raymond James. Good morning, everyone. I wanted for my first question to focus on your margin results. John, I know you're quite proud of the 18 years of consecutive margin expansion, and presumably you're going to hit your 19th year in 2026. But because of these results, it's caught the attention of many about where the ability to generate future margin expansion will come from. And maybe it's embedded in your AI comments, but with your margin results being so high. Curious about the risks of AI disintermediation across the various

businesses that you have. I'm sure, Greg, let me, you know, let me hit the margin part of that and then, you know, maybe I can talk to AI disintermediation risk. So, sure, AI, and I gave you a bunch of examples, right, in my prepared remarks around efficiency gains and some that we're already seeing today. Let me remind everybody, of course, we've guided to year 19 of margin expansion this year, and we fully expect to do that. Bribe, of course, is broadly an important lever for us. BCS, I think in the broader kind of AI discussion in the economy and amongst businesses and governments, AI often is being used as a term for broad-based automation, but, you know, I distinguish the two. So, you know, we still have real possibilities around and are actively building out our capability centers and using, you know, kind of more traditional digitizing strategies to drive efficiency gains. So there's a lot in front of us there. And so, you know, we're excited about, you know, about the path that, you know, that we're on. And, you know, as I said in my prepared remarks, we expect to be an AI winner. We moved early on AI, and we're excited about how it's already making us better and how it's going to make us better in the future. And our scale and data and insights enable us to move more quickly. You know, and I would say to you, we've competed with early-stage tech-enabled startups for a long time. We've competed with direct insurers for a long time. and competed successfully with them. When I think about the attributes that we have as we're in the early days of what's possible around AI, our trusted client relationships matter. Our data matters. Our modeling, it matters. Our ability to advise on risk, not just buy insurance, really matters. Our ability to connect to a complex ecosystem of risk financing really matters. We don't just buy insurance for our clients. We do so much more than that. So 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 start and to begin the early days of what's possible around AI than here.

Do you have a follow-up, Greg? Yeah, I do. Thanks for that answer. And I'm going to pivot to capital management. You know, the public brokers, the stock prices, everyone's reset lower. Or I'm not sure on the M&A side that the prices or valuations of acquisitions have reset lower yet. So I'm just curious on how you're thinking about the allocation or difference between growth through M&A versus repurchase of your own stock, considering the reset in value of the stock price.

Yeah, it's a great question. What I would say is our strategy remains the same. We want a balanced approach to capital management. We favor investing in our business, whether it's organically or inorganically. Our goal remains to increase our dividend each year. And buybacks ultimately will depend on M&A. And as I mentioned in my prepared remarks, we did $750 million of buybacks in the first quarter. And we expect to deploy, Mark mentioned, we expect to deploy about $5 billion worth of capital this year. We're active in the market. Our pipeline is strong. I feel terrific about that. And just as a reminder for everyone, 18 months ago, we closed on the biggest deal in our history, right? So not so long ago. And last year, we deployed about $850 million to M&A. And we did a, you know, a meaningful deal at MMA in the fourth quarter in Hawaii, as most of you would remember. We did a couple of small deals, three small deals, you know, in the first quarter. You know, we also actually closed on the sale of an admin business in the Pacific. You know, I point that out to you. And we announced the acquisition of Altamar Cam. You know, it's a private markets asset manager with about $20 billion of AUM. That's pending regulatory approval. So, you know, expect that to close sometime later in the year.

So, you know, we're likely to continue with our string of pearls approach.

We do have the capacity to do larger deals. You know, who knows what the marks are of, you know, PE-backed assets. You know, I will say, you know, over the course of the last couple of quarters and some conversations we've had, there's been, you know, growing gaps between bidding, bid and ask. We'll see how that materializes over the rest of this year. We've seen financial sponsors be a bit more aggressive than strategics. And, Greg, we're going to, as always, be disciplined about how we deploy our capital. Andrew, next question, please. And thank you, Greg.

Our next question comes from the line of Mike Zaremsky with BMO.

Hey, great. Good morning. Just one question on maybe around the AI conversation, specifically on the value-add services that you offer your clients. Curious, a couple of your peers have talked about the Claims Advocacy Group, and they've offered some stats around how the Claims advocacy group has made sure your clients get their claims paid in a timely manner. Just curious if you see that as one of the bigger value adds, and if yes, if there's any stats or anything you'd

like to share. Yeah, sure, Mike. And maybe what I'll do is I'll ask all of our business leaders just to share some thoughts on how we're investing in AI and how it impacts the value that we deliver. But we have the largest claims advocacy group in the industry by some measure. So maybe I'll start with Nick. Maybe you can share some thoughts, Nick. Yeah, Mike, thank you for the

question. Maybe let me start on the claims advocacy question. As John said, we have a very large team plus additional specialists to handle highly complex claims. And the important thing to state, first of all, is that policy drafting and placement that creates contract certainty is the first stepping point here, so that you don't have rejected claims, which then require advocacy. But when you do, our advocacy is strong. And if you take an example like Claims IQ, which is our AI-enabled toolkit, we've got several thousand colleagues now drawing on AI-enabled analysis of almost $200 billion of lost information, which helps them support much better client advice, decision-making, and advocacy. But if I take a few more examples, tapping into John's prepared remarks, this is a bespoke, fragmented, highly complex ecosystem from client service and advice all the way through to placement. And a lot of the focus is on AI, but this is an ecosystem which is digitizing steadily, and that digitization is critical to deploy the AI. There's lots more work to do just on digitization. We still see human relationships and human judgment continuing to be central. But the AI investments are, I think, massively enabling of growth and of productivity and of efficiency. So value-added services, you said, we're investing heavily in our digital client experience. We have a suite of tools, which you may have seen for many years in Blue Eye and in Centris, which we've talked about before. We're evolving these into what we call the Marsh Risk Companion, which will help clients understand and analyze their risks and their options across a wider range of their activities. But what's really crucial about the suite of tools is they're now all feeding off a new analytics engine. It's built from the ground up to leverage AI at scale. One of the things here is you're able to leapfrog with AI. And we call it the Marsh Risk Cortex. But it really pulls together everything we need from our massive data sets and our most advanced models. And the crucial thing, I think, is not what features have we got, but it's the speed and the flexibility with which we can launch new applications, because our clients' needs are evolving rapidly, and new needs are emerging. And the first applications powered by the risk cortex, including our renewal companion, our captive's companion, are going to be launched in a couple of weeks at RIMS. And then you should expect to see more flowing from that data set and analytical tower. And then maybe just to give a couple more examples. We've talked before about our general proprietary AI suite just within Marsh Rescue now up to more than 2 million prompts a month. So that helps productivity across the organization. But I know you're looking for sort of specific examples too. So if I take something like, you know, we've rolled out tools to aid coverage gap analysis and quote comparison across our risk management and the Marsh agency businesses. And in the areas where we pilot that, we see the amount of work that that takes off our client teams drive a 50% increase in sales velocity in the pilot. And we think some of that gain is scalable across the whole organization. So really lots going on, lots of activity to support our client-facing colleagues and our operations colleagues in their work. Thank you, Nick. You're starting to sound like

an insurance broker. Dean, any thoughts from Guy Carpenter? Thanks, John. And, you know, Mike, You heard John in his prepared remarks mention GC Quotebox, which is an AI-driven document ingestion tool. This is really a game changer for Guy Carpenter and our business. We get huge quantities of unstructured data from our clients, and this tool helps us ingest all of that data and makes it more efficient to match risk and capital through this tool, which will certainly improve turnaround times, make our teams, our brokers more efficient, and deliver better turnaround times and more efficiency for our clients.

Terrific, Gene. Pat, how are we using AI at Mercer?

Let me go a lot of those examples and maybe give you one where we're using it directly with clients. So Mercer Fiber is one of the tools where we're leveraging the broader AI stack that we have at Marsh to kind of further enable our existing digital tools. So health consultants leverage FIBER when they're working directly with a client. It enables them to have these real-time, iterative discussions on all aspects of their benefit programs. On incredibly powerful scenario planning and modeling during strategy sessions, what we do is we use FIBER throughout the year as well to help with budget tracking, with updates, with benchmarking, other plan management activities. And what it does is it allows us to visually display these insights and the data from across our health and benefits practice, and then it combines it with the client's actual population and their actual claims data. And that allows us to understand and show clients directly the geographic differences in health care costs and quality based on their actual data. And we could do that live. And it allows us to really work to identify the most effective healthcare options for a specific population, right? And this is differentiating us in the market really by showcasing, you know, the capabilities we've got, the insights in a single integrated platform to be very client-specific because it's very targeted to them and very client-centric.

Thank you, Pat.

Ted, welcome to the call.

Do you want to share some thoughts on why we're excited about AI at Oliver Wyman? Thank you, John. And you mentioned already that our AI platform, Quotient, is our fastest-growing capability right now. And AI is developing into a very large opportunity for us as a consulting business that works on strategy and transformation. Let me mention a few examples. All of our work around performance transformation, where we're helping our clients improve how their businesses work. And there's a ton of re-engineering of processes and systems around AI. In industries, I would mention like banking, like healthcare, like advanced manufacturing, we're seeing the volume of work there really start to grow quickly. Growth and strategy work where we're helping our clients rethink kind of customer service and distribution channels. We've helped a number of clients already build new apps and chat GPT, a very new change to the way commerce is working, and we think it's going to be very transformational. and industries like media, retail, communications, that's really a big deal. And, you know, you mentioned, I think, in your introductory remarks, but with governments, with investors, we've been helping to mobilize capital, where governments and investors are investing in AI skills and capabilities and new AI startups and new codes. And, look, it's also changing the way we deliver our work, and it's allowing us to – AI is helping us deliver more value to clients. And just to give you one example, in our private capital business where, you know, quotient diligence is changing the way we help our clients invest in businesses. And we're using very sophisticated tools to do market analysis, competitive analysis, growth opportunity analysis. And that allows our clients to make better investments and sometimes, if they want to, quicker investments in the private capital world.

Thank you, Ted. Sorry, Mike, for that long answer. I just want to make sure everyone realizes why we're so excited and why we think we're best positioned to deliver greater value than we ever have to our clients and to our shareholders. Do you have a follow-up, Mike?

Yeah, really quick, that was a helpful follow-up. Just on the pace of Marsh's hiring in terms of the producer level, do you expect that trajectory to change materially in 26 and, if yes, higher or lower? Thanks.

Yeah, no, thanks, Mike. We had a good quarter attracting production talent to the team in key markets. Our brand in the market for talent and in the areas where we compete and deliver for our clients is very, very strong. We start with the best talent and the most talent in the markets that we compete with. It also, maybe not your question, but our colleague retention is strong. Our colleague engagement is outstanding. And so, you know, it's all anchored by a colleague value proposition, which is, you know, a really important way in which we try to convince people to stay and to give big parts of their career to our company. So thank you, Mike.

Next question, Andrew? Our next question comes from the line of Brian Meredith with UBS.

Yeah, thanks. A couple of them here for you, John. First one, I'm just curious, given the level of rate decreases that we're seeing out there, what are you seeing with respect to client demand at Marsh, you know, given this uncertain kind of macro environment? Are they using savings to purchase more coverage? Are they kind of holding back right now to see how the year kind of unfolds?

Yeah, I don't know. Thanks, Brian, for the question. I'm not sure it's a very helpful answer, but sometimes I guess would probably be the, you know, the sum of it. But, you know, the market obviously got modestly more competitive in the first quarter. You know, I talked a bit, you know, about the strong returns on the reinsurance side. But, you know, obviously insurers and reinsurers have posted strong underwriting results. They're all looking for more growth, right, as a, you know, as a result. And so, you know, I mean, maybe another point I'd make here, Brian, it's not directly on your question, is although rates are down, the cost of risk is clearly increasing. And, you know, I would think at a magnitude probably 2x GDP with liability inflation, medical cost inflation, cyber risk, you know, certainly accelerating with with AI, you know, the frequency of extreme weather and how much more of the economy and society is exposed to those events. So, you know, that's a, you know, maybe a more important driver of demand for us over, you know, over the medium term. But maybe I'll ask Nick and Dean to just talk about, you know, a couple of market observations and what clients are doing in terms of purchasing. Nick?

Yeah, I mean, as John said, the answer is sometimes. But in general, I think yes. We've also seen a continued trend and a rising trend in new business growth. And if I look at, say, the U.S. and Canada, highlights there include double-digit new business growth, continued strong growth at Marsh Agency, and double-digit growth in the specialties business. So transaction risk and construction both growing strongly. And, you know, all of that with the across market risk globally, new business trending up for four quarters. We're cautiously optimistic as we go through the rest of the year. Dean?

Yeah, thanks, Sean. And, you know, Brian, maybe I'll just touch on kind of new business opportunities overall. And, you know, despite, you know, the property market and everything that John and Mark talked about, which was a clear growth headwind for Guy Carpenter in the quarter, you know, we're seeing record new business, you know, across our platform. You know, we grew double-digit new business growth in every region and business globally in the quarter. I was really pleased with that. As Mark and John noted, we continue to see a really strong cap bond market and ILS market overall. You know, we issued seven cap bonds in the quarter, a record for Guy Carpenter. You know, we've seen some $2 billion of new third-party capital flown to the market, just chasing casually sidecars, whole account quota shares, and other similar vehicles. you know we've gotten several new mandates around those you know very very promising I've talked in prior calls about our capital and advisory business our investment banking boutique we've never received more M&A mandates M&A advisory mandates forming new sidecars as I mentioned raising capital for MGA's Lloyd's platforms our structured credit business, our NGA business. And in the last call, we talked about data centers, right? And, you know, just a couple of headlines there. I mean, there's 50 deals that have been in the marketplace looking for more than $7.5 billion of capital to put these together. And, you know, all of my clients, Guy Carpenter's clients, want to write more data centers, but they all need additional reinsurance protections. And I think the newest element of it, Brian, is, you know, Our clients now are talking about issuing cap bonds and leveraging third-party capital to write more data center business. And so I would say overall for Guy Carpenter, there's more diverse new business opportunities than we've seen in several years.

Thanks, Dean. Brian, do you have a follow-up?

Yeah, absolutely. So, John, it's clear that AI is going to have productivity benefits. It's going to benefit client experience and growth, et cetera. But one of the debates I'm having with investors is how much of the productivity gains does Marsh going to be able to keep and see benefit from a margin perspective versus, you know, perhaps being competed away or given back to clients? Maybe give us your perspective on that.

Yeah, you know, it's a great question, Brian. And, you know, I talked about, you know, where we see efficiency opportunities, productivity opportunities, new sources of revenue generation. So we don't think anybody's better positioned to capitalize on these developments in technology than we are. And so I'm quite excited about that. Our fees have been for a long time stable as a percentage of premium. And they're quite small compared to the cost of risk that we help our clients manage. and so you know we we feel good again about about how we're positioned and you know what that would mean I think as some of us on this call have you know talked about in the past and you know I mentioned in my prepared remarks if you think we're a discounted insurance broker yeah I might be a little bit worried but we're not that's not what we do and so we feel good about about what this technology will mean to our business. Thanks, Brian. Andrew, next question?

Our next question comes from the line of Rob Cox with Goldman Sachs.

Hey, thanks. Good morning. First question I had for you was just going back to the capital deployment and M&A side. I'm just curious how, if at all, AI is changing the M&A strategy. Are you you know, staying away from certain businesses, pivoting towards others and have your technology

requirements or anything else changed? No, we, you know, it's a good question, Rob. You know, we've had, you know, some opportunities and have looked at some businesses that have pitched kind of ai as part of their value um and i think there was a very significant gap you know between you know how um some of those businesses um portrayed their their tech value relative to how we saw their tech value and so um but uh i i do i i'm and i recognize you can't plan around hope so i say this with that in mind, but I'm hopeful that actually the scale benefits that we bring to investing in AI and the data sets and client relationships and all the advisory work will create opportunities for us, you know, to consolidate smaller brokers over time who are going to struggle to compete and to invest in these technologies. And even where they're able to make space for investment, they just don't have the data assets and the other capabilities that we have. And so, you know, I'm optimistic over time that we'll be a driver of M&A for us. Do you have a follow-up, Rob?

Yeah, that's very helpful. Just how to follow up on the MMA business. I understand you guys don't break that out, but just curious if, you know, you would characterize that business as a tailwind to organic growth for the RIS business. And if it is, like, do you think it could continue to be a tailwind despite more pricing pressure for a commission-based model here?

Yeah, you know, the answer is yes, right? So MMA has been a tailwind to our, you know, to our growth for, you know, for most years and most quarters, not all, but for most, you know, as we've talked about in the past, we still have, you know, relatively modest penetration into the middle market. And so while Dave and the team have made a tremendous amount of progress and we couldn't be more excited about the business we've built, in many respects, I feel like we're just getting started. You know, we absolutely have the possibility for much greater growth. What I would say about pricing for a number of, I think, rational reasons, pricing in the middle market has been more stable through cycles. That continues to be the case right now. It's one of the areas where we're delivering some of the productivity tools to help make our producers even better. And so we're really excited about the opportunity in the middle market. And by the way, not just in the United States. We've learned a great deal in the last 15 years in building out that business from some very talented executives we brought on. And it's helped making us better and capitalize on middle market opportunities in other economies around the world. Thank you, Rob. Andrew, next question?

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

Great. Thanks so much, and good morning. First question for John. I completely get the increasing benefits that you're going to be able to, or increasing value that you're going to be able to bring to clients and carriers through AI. Are commissions still the right way to be compensated for that, or do you expect compensation to become more transparently tied to the individual services?

You know, look, Meyer, we have a broad risk of, or broad range, excuse me, of the way we get compensated today. We have fees, we have commissions, we have success fees, right? I'm sure there are other things I'm not even thinking about. We're very transparent with our clients about how we get paid. And so anyway, I mean, you know, we'll see how those conversations evolve over time. I wouldn't I would suggest you I see no you know zero trend you know kind of around that and so but again we're we're happy to get paid in any form we think we created outstanding value for our clients and we think we get this we deserve to get paid well for that you know assuming we deliver and execute on behalf of them and you know as I mentioned before our commissions and fees are a relatively small part of, you know, the overall cost of risk. And as a percentage of premium, they've been, you know, quite consistent, you know, over a long period of

time. Do you have a follow-up, Mayor? Yeah, just a quick modeling question. Is there a way of teasing out roughly how much of the wealth revenues come directly from assets

under management? You know, we haven't disclosed that, you know, historically, but it's obviously a range of, as we call it, AUDM, or delegated management, AUM, and advisory fees. We're excited about how we're positioned in the investment advice business globally. We advise on close to $17 trillion assets around the world, and as a leading advisor in pension and retirement markets for a long time all over the world. We're very, very well positioned. I would also note we're the largest OCIO, Outsource Chief Investment Office, in the market, and we continue to see a lot of possibilities for growth there. And, you know, I mentioned Altmark Cam. Maybe, Pat, you could talk about Altmark Cam and some of the investment we're making in our businesses to make us even stronger.

Yeah, thanks. Thanks for that. And listen, you know, quickly on the wealth side in our business, Obviously, Mark, I talked about the growth. We're pleased with the growth. It was led by our investments business, in particular, our OCO offering. So I understand the spirit of the question. We also will highlight our really seeing solid growth in our investment consulting business, right, which is not based on AUM, based upon volatility in the market and clients seeing significant demand and need. And we have been, to the point you're asking, diversifying our overall business and our AUM away from BB Vensions, right? So it has been moving, but we've been building out actively our deep, defined contributions, solutions around the world, and we've really been advancing our capabilities around non-pension clients, and that's been a major focus for us, insurers, endowments and foundations, family office, and wealth management. And I think that goes into the spirit of the M&A and the Altamark Cam announcement that John kind of teed up for me, where we agreed to acquire Altamark Cam. They're a specialist in private markets from an asset management solution perspective. They've got about 20 billion euros AUM. We think it's going to significantly increase and expand our capabilities in the private markets platform. It's going to add us certain expertise in secondaries, in co-investments, in bespoke accounts, in evergreen vehicles, and that's going to allow us to offer much more comprehensive multi-asset private market solutions to clients, right? So we definitely feel that this is an area that we've been investing in heavily. You've seen from our announcements over the deal we've done as a firm over the last several years, and we've also been consciously making organic investments in trying to build out our capabilities broadly around being a main investment player. Thanks, Pat.

Thanks, Mayor.

Andrew, next question, please. Our next question comes from the line of Elise Greenspan with Wells Fargo.

Hi, thanks. Good morning. My first question is on Guy Carpenter. So you guys were at 2% for the quarter, and I think you did point out, right, the elevated comp at 5% last Q1. I believe you were at 5% right throughout last year. So does a 2% feel like where this business should trend, I guess, at least in the near term, given, you know, it sounds like your pricing views, you know, or if anything, right, pointing to things getting a little bit worse, you know, post the 1-1 renewals?

Yeah, good morning. Good morning, Elise. You know, as we've talked about, it's a very soft property cat reinsurance market. And so, you know, we're confronting that. We're particularly exposed to that in the first quarter, you know, in the second quarter a bit, you know, as well with Japan and Florida, you know, as we talked about. What I would say to you, at least, is that I'm quite pleased with our execution in spite of the kind of current market headwinds. And, again, these market headwinds are good for our clients, right? So we're delivering for our clients in the moment. But client retention was strong, and we had an excellent new business quarter. And so, you know, I feel terrific about how the team's executing, you know, what's a, you know, what's a challenging market. It's not likely to be Guy Carpenter's best growth year this year, right? And so we've been planning for that and, you know, and guiding to that. Do you have a follow-up, Elise?

Yeah, my second question is just on capital, right? You guys, you know, were more active in the Q1 relative to prior first quarters. Obviously, we've seen, you know, pullback in the stock price and just the group in general. As you guys think about balancing M&A potential as well as where your stock is, could this be a year, I guess, where you continue to front load, I guess, more buybacks, even a little bit more independent of what's going on on the M&A side?

Sure. Maybe I'll ask Mark to jump in here at least.

As John said earlier, there's no change in strategy. Our strategy of balanced capital deployment with a bias to reinvest and grow the business through high-quality acquisitions remains. But as we've consistently said, too, our goal is not to build cash on the balance sheet. We're generating a lot of capital these days. And so where we see M&A light, we'll ramp up share repurchase. We did that in the fourth quarter. we bought back a billion, and we started the year with 750. But the pipeline remains active. Our commitment to growth through M&A remains. It was relatively light M&A spending in the first quarter, but as John mentioned, this Altamar-Cam transaction, which is a nice chunky deal, that'll close sometimes later in the year. So we did start the year with a heavy amount of share repurchase, but ultimately what we end up deploying to share repurchase will depend on how

the M&A pipeline develops through the year. Thanks, Mark, and thank you, Elise. Andrew, maybe time for one more here? Certainly. Our next question comes from the line of David

Mosemainin with Evercore ISI. Hey, thanks. Good morning. Just had another follow-up question on AI, and maybe just a refresher, John. Could you just remind us how much you guys are spending on AI just broadly within the tech budget? And I guess, who are you partnering with? What, you know, LLM providers are you partnering with? What tools are you using? That would be helpful.

Yeah, good morning, David. It wouldn't be a refresher because we've not shared that data in the past. We We have a, you know, a healthy tech, you know, CapEx budget, you know, we take a hard look It's, I think, another example where our scale matters. You know, we're able to spend more and invest more. So, you know, we feel good about the investments we're making. I think, again, AI, I think the community, the broad-based community needs to be careful about what AI even means. But we're investing heavily in improving our tech stack in our utility of LLMs and in other parts of our efforts to digitize workflows and digitize how we engage with our clients. And so, again, we feel good about how we're positioned there. We work with lots of different providers. So we're – and, you know, I think one of the things about AI is it's a lot of different things. There are many different possibilities for us to extract value from these new technologies. So it's not about, you know, pick a hyperscaler and plugging them into our data set And it all of a sudden, you know, solving, you know, every inefficiency or productivity opportunity that exists in the world. And so we're working with a number of different major tech players and trying to pick and choose where, you know, we see the greatest value depending upon what it is we're trying to accomplish. Do you have a follow up, David?

Yeah, maybe just a quick one in the interest of time. um you know in in marsh you know i'm i'm just sort of wondering what's your exposure to um you know in terms of revenues from personal lines brokerage or uh you know micro commercial where like you guys are only placing a single policy or um you know is low dollar value and could be

considered less complex. Yeah. I'm not ready to concede, by the way, that placing somebody's personal insurance isn't complex. If you have a client that's personally exposed and, you know, you're working with them to help manage risk and advise on their most precious assets, We certainly don't approach the client experience kind of in that way where people are trying to buy commoditized products. Those things exist already. I mean, there's direct digital distribution. It's been that way. I would imagine for the direct markets, AI is going to create opportunities for them to improve their client experience with their customers. That's not who we serve. In personalized, it's almost entirely a high net worth personalized client. You know, it's an exciting area of growth for us. It's not a material part of our business, but we continue to grow. So, you know, if you're a restaurant in small town USA, there is a lot of complexity, and I'm not quite sure. By the way, we have very little of this business, almost none of this business. but I'm not ready to concede that it is something that some entrepreneur wants to you know prompt an app for hours and hours and hope that they get it right so so anyway as I said we're we're very excited we don't think anybody's better position to take advantage of the developments on the technology front we have to execute but that's been the case for 150 years and so we're excited about the paths we're on and looking forward to accelerating our growth. Andrew, we have run over. Can you wrap us up here? I want to thank everybody for joining us today and thank our colleagues for their dedication to Marsh and our clients for their continued support and confidence in what we do for them.

Ladies and gentlemen, this does conclude today's conference. You may now disconnect.