Marsh Reports 8% Q3 Revenue Growth and Raises Savings Target

On Thursday, Marsh (NYSE: MRSH ) discussed third-quarter financial results during its earnings call. The full transcript is provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

The full earnings call is available at Summary Marsh's third-quarter revenue increased 8% to $6.9 billion, with underlying growth of 5%. Adjusted EPS grew 10% to $2.03. The company raised its savings target from the Thrive program to $600 million, aiming for greater efficiency and investment in growth areas like AI and technology. Marsh launched the Competitive Resilience Coalition with Bloomberg to enhance business resilience amid global uncertainties.

AI is a focus area, with initiatives like Marsh Risk Companion and the Stratus Exchange supporting digital infrastructure growth. Market conditions reflected a decrease in primary commercial insurance rates by 5% in Q3, with Marsh seeing mixed performance across its segments. The company expects continued underlying revenue growth and margin expansion in 2026, despite economic and geopolitical uncertainties. Full Transcript OPERATOR Hello and welcome to Marsh's earnings conference call.

Today's call is being recorded. Third quarter 2026 financial results and supplemental information were issued earlier this morning. They are available on the company's website at 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-K, 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 are 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 will now turn this over to John Doyle, President and CEO of Marsh. John Doyle, President and CEO of Marsh Good morning and thank you for joining us to discuss our third quarter results. I'm John Doyle, President and CEO of Marsh. On the call with me is Mark McGivney, our COO and CFO, and our business CEOs: Nick Studer from Risk, Dean Klisura, Reinsurance, Pat Tomlinson of People and Investments, and Ted Moynihan from Management Consulting.

Also with us is Jay Gelb, Head of Investor Relations. Let me start by commenting on the conditions confronting businesses today. We're clearly in a period of change and uncertainty in the world. This change is structural, not cyclical, and it's happening at pace and all at once.

Wars, geoeconomics, extreme weather and AI advances are challenging long established norms. Businesses require a new playbook, better insights and perspectives, and the flexibility to adapt as never before. At the same time, access to information and technology as well as greater focus on resilience offers businesses great opportunity. It's why Marsh and Bloomberg announced the Competitive Resilience Coalition.

As knowledge partner for the Bloomberg New Economy, Marsh will co-chair the coalition and bring together business and government leaders to strengthen resilience and help organizations in an increasingly complex environment. Marsh's vision and capabilities as a professional services firm across risk, strategy, people and investments have us well positioned to help clients be more resilient and to thrive in this moment. When it comes to AI, we believe it will be good for our country and the global economy. However, we need to deploy the technology responsibly to avoid potentially severe systemic or irreversible risks.

We're particularly concerned about the potential for heightened cyber exposure from AI, and we are working with governments, insurance companies and businesses to create awareness and resilience to this risk. Responsible AI implementation begins with the developers, but businesses and governments have a role to play in ensuring safeguards are in place. Marsh will be active in helping clients manage the risks and capture the opportunities from AI. Turning to results, Marsh had a strong quarter reflecting our market leading positions, the value we deliver to clients and the commitment of our colleagues around the world.

In our consulting segment, growth was strong in People and Investments and Management Consulting. In Risk, growth accelerated in our risk business while Reinsurance faced continued market headwinds but executed well. Overall revenue grew 8% in the quarter, underlying revenue growth was 5%, adjusted operating income grew 6% and adjusted EPS grew 10%, and we repurchased $500 million of stock in the quarter, bringing us to $2 billion year to date. We also made meaningful progress executing our Thrive program and successfully completed our brand transition.

When we launched Thrive a year ago, we targeted $400 million in savings. We're now seeing greater opportunities coming from Business and Client Services, or BCS, and advances in technology. As a result, we are increasing our Thrive savings target to $600 million. The expanded savings will create additional capacity to invest in sales, new capabilities, our brand and technology.

Let me touch on some of the progress from our reinvestments. Thrive has enabled us to invest in sales capacity at a higher rate this quarter and year to date, and we're hiring producers and consultants in areas where we see the greatest opportunity for growth. Our colleague value proposition is strong and we remain the destination for top talent in our business. I've been pleased with the strong positive reaction from colleagues and clients to our new brand strategy, the efficiencies we've captured from it, and our progress marketing Marsh to prospective clients.

As a result of very favorable market research, we accelerated the transition of Guy Carpenter and Mercer to Marsh several months ahead of schedule. We believe we can be the most impactful professional services firm in the world and we're investing in our new brand to reflect that ambition. Since its introduction last year, BCS has fundamentally changed how we work. An important part of the team's mission is to build shared services for greater efficiency, including in areas such as client onboarding, data ingestion, commercial enablement and operational excellence.

BCS is also re-engineering our processes and moving work to our capability centers, which is generating additional savings. Overall, our execution of Thrive has been excellent to date and we're excited about the investments in growth it's enabling. Turning to AI in our business, we're not thinking about it as something that will be a factor in our business; it already is a factor in our business. It's enhancing our client relationships, how we manage operations and how colleagues work every day.

We are focused currently on several areas where AI is driving growth, including building AI-enabled products, consulting on AI transformation, serving the digital infrastructure ecosystem and adding to capabilities and productivity for our producers and consultants. We've already deployed several AI-enabled products for clients that deliver valuable insights. These solutions tap into our large and expanding proprietary data sets in risk, health and talent. Marsh Risk Companion is a good example.

This AI-enabled analytics suite provides actionable insights for client risk programs. We can more easily model and optimize client risk scenarios with a new platform. This is leading to faster, more informed decision making and reduced administrative burden for the client's risk management team. We're also advising clients on AI transformation.

For example, Oliver Wyman's fastest growing practice, Quotient, is working with private equity firms to serve their portfolio companies. They're engaging us on everything from agentic commerce and commercial effectiveness to cost reduction and technology transformation. Digital infrastructure continues to be a growth driver for Marsh. More and more clients across broad sectors of the economy are asking for our help in risk, capital, advisory, credit and consulting.

In the wake of extensive growth in digital infrastructure, we are also working to bring the insurance capacity needed to support digital infrastructure. Marsh recently launched the Stratus Exchange, which offers access up to $10 billion in property coverage for the ongoing operations of digital facilities. Stratus is a natural follow up to Nimbus, our $2.7 billion insurance facility for construction risks. We're also focused on growth from greater colleague productivity, notably Broker Workbench.

Launched in Q3 for our UK wholesale business, it uses our data and analytics to place the client's risks faster, matching risk and capital more efficiently. In fact, 93% of our wholesale trading in London is now digital and the time to process placements has reduced from two to four weeks to a couple of hours. With Workbench, although it's early—and it is early—AI is making us better now in delivering new perspectives and insights more efficiently and with greater impact for our clients. Now turning to market conditions.

According to the Marsh Global Insurance Market Index, primary commercial insurance rates decreased 5% in Q3. This follows a 6% decline in the second quarter. As a reminder, our index skews to large accounts. Rates in the US decreased 1%.

Canada, Europe and Asia declined mid single digits, the UK and Latin America decreased in the high single digits, and the Pacific region had double digit decreases. Global property rates decreased 10%, global financial and professional liability rates were down 3% while cyber decreased 4%. Global casualty rates increased 1% with US excess casualty up 13% reflecting inflationary pressure. Loss costs and workers compensation decreased 5%.

In reinsurance, market conditions, led by short tail lines, remain soft, driven by abundant capacity from both traditional reinsurers and alternative capital. Property cat reinsurance losses have been relatively benign this year and capital is increasing, adding to a competitive market environment. We expect these conditions to persist through the January 1st renewal cycle. In casualty, reinsurance capacity is generally adequate.

Reinsurers are focused on loss development and they're differentiating terms based on claims experience, exposure data and portfolio quality. Our clients continue to explore alternative options to complement traditional strategies, including greater use of third-party capital solutions such as sidecar vehicles for their liability portfolios. Market conditions remain supportive of our insurance and reinsurance clients even as the cost of risk continues to rise. We are committed to helping clients optimize their risk financing and strengthen resilience in an uncertain environment.

Now to our third quarter financial performance, which Mark will cover in more detail. Consolidated revenue increased 8% to $6.9 billion, or an increase of 5% on an underlying basis, with 3% growth in Risk and 8% in consulting. Risk up 5%. Reinsurance declined 6%, People and Investments increased 5% and Management Consulting grew 14%.

Adjusted operating income grew 6% and adjusted EPS was $2.03, up 10% year over year. Looking ahead, we continue to expect underlying revenue growth in 2026 similar to last year. We also anticipate another year of margin expansion and solid adjusted EPS growth. Our outlook is based on current market conditions, but the economic and geopolitical environment could change materially from our assumptions.

This is an exciting time for us. We have a new market brand and a Business to Client Services team optimizing how we work. We have long standing trusted client relationships and the advantage of large proprietary data sets. We're upsizing the THRIVE program to drive greater efficiency and investment and we see new possibilities from AI to better serve clients who strive to manage risk and capitalize on the opportunity of this moment.

With that, I'll turn the discussion to Mark for a more detailed review of our results. Mark McGivney, CFO Thank you, John, and good morning. We had a strong third quarter that showed continued momentum in underlying revenue growth and double-digit EPS growth, reflecting our strong position and great execution. Consolidated revenue increased 8% to $6.9 billion with underlying growth of 5%.

Operating income was $1.2 billion and adjusted operating income was $1.5 billion, up 6%. Our adjusted operating margin was 22.7%. GAAP EPS was $1.69 and adjusted EPS was $2.03, up 10% over last year. For the first nine months of 2026, underlying revenue growth was 5%.

Adjusted operating income grew 7% to $6.1 billion. Our adjusted operating margin was 28.1% and adjusted EPS increased 9% to $8.29. As part of our previously announced brand change, we've updated several business categories in our earnings release. Guy Carpenter results are now reported as Reinsurance, and Mercer results are reported as People and Investments.

Wealth is reported as Investments & Retirement, Health as Health & Benefits, and Career as Workforce & Reward. Looking at Risk and Insurance Services, third quarter revenue was $4.2 billion, up 7% from a year ago, or 3% on an underlying basis. Operating income in RIS was $745 million. Adjusted operating income was $1 billion, up 4% over last year, and the adjusted operating margin was 24.6%.

For the first nine months, revenue in RIS was $14.1 billion, reflecting underlying growth of 3%. Adjusted operating income increased 5% to $4.6 billion, and the adjusted operating margin was 33.2%. At Risk, revenue in the quarter was $3.7 billion, up 10% from a year ago, or 5% on an underlying basis. Despite the headwind from a soft pricing environment, sales and new business growth remain solid, and areas such as digital infrastructure and transactional risk are creating demand.

In US and Canada, underlying growth was 4%. In International, underlying growth was 6%, with EMEA up 7%, Asia Pacific up 4%, and Latin America flat. For the first nine months of the year, Risk’s revenue was $11.5 billion, with underlying growth of 4%. US and Canada grew 4% and International was up 5%.

In Reinsurance, revenue in the quarter was $374 million, down 6% on both a reported and underlying basis. Q3 is a small quarter for Reinsurance, and revenue was impacted by continued softness in property reinsurance rates as well as a tough comparison to a strong third quarter last year that benefited from non-recurring items. Through nine months, Reinsurance is down 1% on an underlying basis, which better reflects our top-line performance this year. Significant rate pressure has more than offset strong new business growth and excellent client retention, which remains in the high 90s.

In the Consulting segment, third quarter revenue was $2.7 billion, up 9% or 8% on an underlying basis. Operating income was $563 million and adjusted operating income was $593 million, up 9%. Our adjusted operating margin in Consulting was 22.1%. For the first nine months, Consulting revenue was $7.8 billion, reflecting underlying growth of 7%.

Adjusted operating income increased 11% to $1.7 billion. The adjusted operating margin was 21.4%. People and Investments revenue was $1.7 billion in the quarter, up 6% or 5% on an underlying basis. Health & Benefits grew 5%, reflecting continued growth across our regions.

Investments & Retirement was up 8%, led by our Investments business. Our assets under management were $843 billion at the end of the third quarter, flat sequentially and up 23% from the third quarter last year. Year-over-year growth was driven by new business and the impact of capital markets. Workforce & Rewards was down 1%, with growth in the US and most of International offset by the impact of a challenging environment in the Middle East.

For the first nine months of the year, revenue at People and Investments was $4.9 billion with 5% underlying growth. Management Consulting generated revenue of $1 billion in the third quarter, up 14% on both a reported and underlying basis. This great result reflected strong demand and delivery across the business, especially in AI-related work. The quarter also benefited from favorable timing on success fees that we had expected in the fourth quarter.

For the first nine months of the year, revenue at Management Consulting was $2.9 billion, an increase of 11% on an underlying basis. For the full year, Management Consulting is on pace for high single-digit growth, which would imply a roughly flat top line in Q4, due in part to the timing I mentioned. Fiduciary interest income was $100 million in the quarter, down $9 million from the third quarter last year. Looking ahead, we expect fiduciary interest income will be approximately $94 million in the fourth quarter.

Foreign exchange was a $0.01 benefit in the third quarter. Based on current exchange rates, we expect FX will have an immaterial effect on earnings in the fourth quarter. Corporate expenses in the third quarter were $68 million on an adjusted basis compared to $71 million a year ago. Looking ahead to the fourth quarter, we expect adjusted corporate expense of approximately $80 million.

Building on John’s comments on Thrive, the program is going well and our early success has resulted in us seeing more opportunities.