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What changed in MARSH & MCLENNAN COMPANIES, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of MARSH & MCLENNAN COMPANIES, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+416 added−412 removedSource: 10-K (2024-02-12) vs 10-K (2023-02-13)

Top changes in MARSH & MCLENNAN COMPANIES, INC.'s 2023 10-K

416 paragraphs added · 412 removed · 333 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

81 edited+8 added−18 removed79 unchanged
Biggest changeWe strive to create an environment where individuals and teams can perform to their highest potential and where career growth and mobility are encouraged and supported. We are committed to helping colleagues perform at their best by encouraging regular discussions about their goals, performance, career aspirations and development opportunities.
Biggest changeWe are committed to helping colleagues perform at their best by encouraging regular discussions about their goals, performance, career aspirations and development opportunities. We offer programming to support their growth and activate a leadership mindset for all colleagues. We also aim to build a learning culture and deliver a digital-first learning strategy, supplemented by formal programs for key groups.
Industry groups include: • Automotive and Manufacturing Industries • Communications, Media & Technology • Energy and Natural Resources • Financial Services (including corporate and institutional banking, public policy, and retail and business banking) • Insurance and Asset Management • Health and Life Sciences • Public Sector • Private Capital • Retail & Consumer Goods • Transportation Services (including aviation; aerospace and defense; rail; express, postal and third party logistics; services, including travel and leisure, environmental and facility management, and business and tech services; and CAVOK, which provides technical consulting and market forecasting services) Oliver Wyman overlays its industry knowledge with expertise in the following functional specializations: • Actuarial .
Industry groups include: • Automotive and Manufacturing Industries • Communications, Media & Technology • Energy and Natural Resources • Financial Services (including corporate and institutional banking, public policy, and retail and business banking) • Insurance and Asset Management • Health and Life Sciences • Public Sector • Private Capital • Retail & Consumer Goods 5 • Transportation Services (including aviation; aerospace and defense; rail; express, postal and third party logistics; services, including travel and leisure, environmental and facility management, and business and tech services; and CAVOK, which provides technical consulting and market forecasting services) Oliver Wyman overlays its industry knowledge with expertise in the following functional specializations: • Actuarial .
Using a consultative approach, Marsh's HNW practices analyze exposures and customize programs to cover individual clients with complex asset portfolios. Additional Services and Adjacent Businesses In addition to insurance broking, Marsh provides certain other specialist advisory or placement services: Marsh Advisory is a global practice comprising specialists who use data and analytics, including through Marsh’s Blue[i] digital analytics platform.
Using a consultative approach, Marsh's HNW practices analyze exposures and customize programs to cover individual clients with complex asset portfolios. 2 Additional Services and Adjacent Businesses In addition to insurance broking, Marsh provides certain other specialist advisory or placement services: Marsh Advisory is a global practice comprising specialists who use data and analytics, including through Marsh’s Blue[i] digital analytics platform.
The firm’s resources also include nearly three dozen specialty and industry practices, including cyber, construction, renewable energy, healthcare, and financial and professional service practices, along with ESG products such as a D&O insurance initiative recognizing U.S. based clients with superior ESG frameworks, and an established employee health & benefits business.
The firm’s resources also include nearly three dozen specialty and industry practices, including cyber, construction, renewable energy, healthcare, and financial and professional service practices, along with ESG products such as 1 a D&O insurance initiative recognizing U.S. based clients with superior ESG frameworks, and an established employee health & benefits business.
NERA's specialized practice areas include: antitrust; securities; complex commercial litigation; energy; environmental economics; network industries; intellectual property; product liability and mass torts; and transfer pricing. Compensation for Services in Consulting Oliver Wyman Group is compensated for advice and services primarily through fees paid by clients.
NERA's specialized practice areas include: antitrust; securities; complex commercial litigation; energy; environmental economics; network industries; intellectual property; product liability and mass torts; and transfer pricing. 6 Compensation for Services in Consulting Oliver Wyman Group is compensated for advice and services primarily through fees paid by clients.
Oliver Wyman provides leading financial institutions with custom solutions and insights covering all aspects of risk and finance functions, including credit risk, market risks, asset and liability management and liquidity risks, and non-financial risks, together with integrated risk management topics, such as aggregated risk analyses, business applications and culture and organization. 6 • Restructuring.
Oliver Wyman provides leading financial institutions with custom solutions and insights covering all aspects of risk and finance functions, including credit risk, market risks, asset and liability management and liquidity risks, and non-financial risks, together with integrated risk management topics, such as aggregated risk analyses, business applications and culture and organization. • Restructuring.
The Company conducts business in this segment through Marsh and Guy Carpenter. • Consulting includes health, wealth and career solutions and products, and specialized management, strategic, economic and brand consulting services. The Company conducts business in this segment through Mercer and Oliver Wyman Group. We describe our current segments in further detail below.
The Company conducts business in this segment through Marsh and Guy Carpenter. • Consulting includes health, wealth and career advice, solutions and products, and specialized management, strategic, economic and brand consulting services. The Company conducts business in this segment through Mercer and Oliver Wyman Group. We describe our current segments in further detail below.
Through its Victor for Agents small business platform, Victor deploys cloud-based technology to enable independent insurance agents, on behalf of their small business clients, to obtain online quotes from multiple insurance providers and bind property and casualty and workers compensation insurance policies in real time.
Through its Victor Small Business platform, Victor deploys cloud-based technology to enable independent insurance agents, on behalf of their small business clients, to obtain online quotes from multiple insurance providers and bind property and casualty and workers compensation insurance policies in real time.
Mercer advises organizations on the engagement, skill assessment, management and reward of employees; the design of executive remuneration programs; people strategies during business transformation; improvement of human resource (HR) effectiveness; and the implementation of digital and cloud-based Human Resource Information Systems.
Mercer advises organizations on the engagement, skill assessment, management and reward of employees; the design of executive remuneration programs; people and workforce strategies during business transformation; improvement of human resource (HR) effectiveness; and the implementation of digital and cloud-based Human Resource Information Systems.
Mercer helps public and private sector employers design and manage employee health care and welfare programs; administer health benefits and flexible benefits programs, including benefits outsourcing; engage employees with their health benefits through a digital experience; and comply with local benefits-related regulations.
Mercer helps public and private sector employers design and manage employee health and welfare programs; administer health benefits and flexible benefits programs, including benefits outsourcing; engage employees with their health benefits through a digital experience; and comply with local benefits-related regulations.
In addition, third party capital providers have entered the insurance and reinsurance risk transfer market offering products and capital directly to the Company’s clients. Their presence in the market increases the competitive pressures that the Company faces.
In addition, third party capital providers have entered the insurance and reinsurance risk transfer market offering products and capital 8 directly to the Company’s clients. Their presence in the market increases the competitive pressures that the Company faces.
Beswick holds an MA (first class) in chemical engineering from Cambridge University. Katherine J. Brennan , age 44, is Senior Vice President and General Counsel of Marsh McLennan. In this role, she leads Marsh McLennan’s global legal, compliance and public affairs function, which supports the Company’s four businesses, Marsh, Guy Carpenter, Mercer and Oliver Wyman.
Beswick holds an MA (first class) in chemical engineering from Cambridge University. Katherine J. Brennan , age 45, is Senior Vice President and General Counsel of Marsh McLennan. In this role, she leads Marsh McLennan’s global legal, compliance and public affairs function, which supports the Company’s four businesses, Marsh, Guy Carpenter, Mercer and Oliver Wyman.
Clients benefit from Marsh’s advanced analytics, deep technical expertise, specialty and industry knowledge, collaborative global culture and the ability to 1 develop innovative solutions and products.
Clients benefit from Marsh’s advanced analytics, deep technical expertise, specialty and industry knowledge, collaborative global culture and the ability to develop innovative solutions and products.
Brennan currently serves on the Board of the Red Cross of Greater New York. John Q. Doyle , age 59, is President and Chief Executive Officer of Marsh McLennan. Previously, from 2021 to 2022 he served as Group President and Chief Operating Officer, responsible for the strategy and operational objectives of Marsh McLennan’s four global businesses.
Brennan currently serves on the Board of the Red Cross of Greater New York. John Q. Doyle , age 60, is President and Chief Executive Officer of Marsh McLennan. Previously, from 2021 to 2022 he served as Group President and Chief Operating Officer, responsible for the strategy and operational objectives of Marsh McLennan’s four global businesses.
Mercer also provides services to individual retail clients, including financial planning, high net worth risk solutions and other discretionary investment services. 5 Career.
Mercer also provides services to individual retail clients, including financial planning, high net worth risk solutions and other discretionary investment services. Career.
In addition, trustee services, investment services (including advice to persons, institutions and other entities on the investment of pension assets and assumption of discretionary investment management responsibilities) and retirement and employee benefit program administrative services provided by Mercer and its subsidiaries and affiliates may also be subject to investment and securities regulations in various jurisdictions, including (but not limited to) regulations imposed or enforced by the Securities and Exchange Commission (SEC) and the Department of Labor in the United States, the FCA in the United Kingdom, the Central Bank of Ireland and the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission.
In addition, trustee services, investment services (including advice to persons, institutions and other entities on the investment of pension assets and assumption of discretionary investment management responsibilities) and retirement and employee benefit program administrative services provided by Mercer and its subsidiaries and affiliates may also be subject to investment and securities regulations in various jurisdictions, including (but not limited to) regulations imposed or enforced by the Securities and Exchange Commission (SEC) and the Department of Labor in the U.S., the FCA in the United Kingdom, the Central Bank of Ireland and the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission.
Middle market clients are served by Marsh’s brokerage operations globally; this segment is also serviced by Marsh & McLennan Agency (MMA) in the United States. • Marsh McLennan Agency (MMA) provides business insurance, employee health and benefits, retirement and wealth management, and private client insurance solutions to individuals and mid-market organizations.
Middle market clients are served by Marsh’s brokerage operations globally; this segment is also serviced by Marsh & McLennan Agency (MMA) in the United States (U.S.). • Marsh McLennan Agency (MMA) provides business insurance, employee health and benefits, retirement and wealth management, and private client insurance solutions to individuals and mid-market organizations.
Clients in this market segment typically face less complex risks and are served by Marsh’s innovative product and placement offerings and growing capabilities in digitally enabled distribution and administration. • Victor Insurance Managers (Victor ) is one of the largest underwriting managers of professional liability and specialty insurance programs worldwide.
Clients in this market segment typically face less complex risks and are served by Marsh’s innovative product and placement offerings and growing capabilities in digitally enabled distribution and administration. • Victor Insurance Managers (Victor ) is one of the largest underwriting managers of professional liability, catastrophe, and other specialty insurance programs worldwide.
Ferland is a Fellow of the Society of Actuaries and of the Canadian Institute of Actuaries and a member of the Board of Trustees of the New York Academy of Medicine. Carmen Fernandez , age 49, is Senior Vice President and Chief People Officer for Marsh McLennan. Prior to her appointment as Chief People Officer in January 2021, Ms.
Ferland is a Fellow of the Society of Actuaries and of the Canadian Institute of Actuaries and a member of the Board of Trustees of the New York Academy of Medicine. Carmen Fernandez , age 50, is Senior Vice President and Chief People Officer for Marsh McLennan. Prior to her appointment as Chief People Officer in January 2021, Ms.
Fernandez worked in investment banking at Bank of America and Goldman Sachs. She began her career as a consultant with PricewaterhouseCoopers. John Jones , age 51, is Chief Marketing and Communications officer of Marsh McLennan. Previously, he served as Chief Marketing and Communications Officer of Marsh from 2018 to 2022. Mr.
Fernandez worked in investment banking at Bank of America and Goldman Sachs. She began her career as a consultant with PricewaterhouseCoopers. John Jones , age 52, is Chief Marketing and Communications officer of Marsh McLennan. Previously, he served as Chief Marketing and Communications Officer of Marsh from 2018 to 2022. Mr.
Martin South , age 58, is President and Chief Executive Officer of Marsh, a position he assumed in January 2022, and oversees all of Marsh’s businesses and operations globally. He also serves as Vice Chair of Marsh McLennan. With more than 30 years in the insurance industry, Mr.
Martin South , age 59, is President and Chief Executive Officer of Marsh, a position he assumed in January 2022, and oversees all of Marsh’s businesses and operations globally. He also serves as Vice Chair of Marsh McLennan. With more than 30 years in the insurance industry, Mr.
Our offerings also include retirement benefits, savings and stock investment plans in certain jurisdictions. 12 EXECUTIVE OFFICERS OF THE COMPANY The executive officers and executive officer appointees of the Company are appointed annually by the Company’s Board of Directors.
Our offerings also include retirement benefits, savings and stock investment plans in certain jurisdictions. 10 EXECUTIVE OFFICERS OF THE COMPANY The executive officers and executive officer appointees of the Company are appointed annually by the Company’s Board of Directors.
There are also many other providers of managing general agency, affinity programs and private client services that compete with the Company's offerings. 9 Consulting . The Company's consulting businesses face strong competition from other privately and publicly held worldwide and national companies, as well as regional and local firms.
There are also many other providers of managing general agents, affinity programs and private client services that compete with the Company's offerings. Consulting . The Company's consulting businesses face strong competition from other privately and publicly held worldwide and national companies, as well as regional and local firms.
Insurance authorities in the United States and certain other jurisdictions in which the Company's subsidiaries do business, including the FCA in the United Kingdom, also have enacted laws and regulations governing the investment of funds, such as premiums and claims proceeds, held in a fiduciary capacity for others.
Insurance authorities in the U.S. and certain other jurisdictions in which the Company's subsidiaries do business, including the FCA in the United Kingdom, also have enacted laws and regulations governing the investment of funds, such as premiums and claims proceeds, held in a fiduciary capacity for others.
Mercer’s clients invest in both traditional asset classes (e.g., equities, fixed income and cash equivalents) and alternative or private market strategies (e.g., private equity, private debt, real estate, other real assets and hedge funds). As of December 31, 2022, Mercer and its global affiliates had assets under management of approximately $345 billion worldwide.
Mercer’s clients invest in both traditional asset classes (e.g., equities, fixed income and cash equivalents) and alternative or private market strategies (e.g., private equity, private debt, real estate, other real assets and hedge funds). As of December 31, 2023, Mercer and its global affiliates had assets under management of approximately $420 billion worldwide.
Mercer Marsh Benefits provides health benefits brokerage and consulting services to clients of all sizes in numerous countries across the globe, outside of the United States. As described below, Mercer and Marsh go to market together to provide strategic advice and services to help clients minimize risk, optimize benefits structure, drive efficiencies and maximize employee engagement.
Mercer Marsh Benefits provides health benefits brokerage and consulting services to clients of all sizes in numerous countries across the globe, outside of the U.S. As described below, Mercer and Marsh go to market together to provide strategic advice and services to help clients minimize risk, optimize benefits structure, drive efficiencies and maximize employee engagement.
In the United States, where we have the most complete data through workforce self-identification of race and ethnicity, approximately 1 in 4 U.S. colleagues and 17% of U.S. senior leaders identify as non-White. Our Governance. The Chief People Officer is responsible for developing and executing our enterprise people strategy.
In the U.S., where we have the most complete data through workforce self-identification of race and ethnicity, approximately 1 in 4 U.S. colleagues and 18% of U.S. senior leaders identify as non-White. Our Governance. The Chief People Officer is responsible for developing and executing our enterprise people strategy.
Doyle serves as the Chairman of the US Federal Advisory Committee on Insurance. Martine Ferland , age 61, is President and Chief Executive Officer of Mercer. She also serves as Vice Chair of Marsh McLennan. Prior to assuming her current role in March 2019, she was Mercer’s Group President, responsible for leading the firm’s regions and Global Business Solutions.
Doyle serves as the Chairman of the U.S. Federal Advisory Committee on Insurance. Martine Ferland , age 62, is Chief Executive Officer of Mercer. She also serves as Vice Chair of Marsh McLennan. Prior to assuming her current role in March 2019, she was Mercer’s Group President, responsible for leading the firm’s regions and Global Business Solutions.
Individual high net worth clients and family offices are serviced by MMA in the United States and other Marsh personal lines businesses globally. These businesses provide a single-source solution for high net worth clients and are dedicated to sourcing protections across a broad spectrum of risk.
Individual high net worth clients and family offices are serviced by MMA in the U.S. and other Marsh personal lines businesses globally. These businesses provide a single-source solution for high net worth clients and are dedicated to sourcing protections across a broad spectrum of risk.
Also in the United States, Marsh uses the services of MMA Securities LLC, a SEC registered broker-dealer, investment adviser and member of FINRA, SIPC and the Municipal Securities Rulemaking Board ("MSRB"), and MMA Asset Management LLC, a SEC registered investment adviser, primarily in connection with retirement, executive compensation and benefits consulting and advisory services to qualified and non-qualified benefits plans, companies and executives and personal wealth management.
Also in the U.S., Marsh uses the services of MMA Securities LLC, a SEC registered broker-dealer, investment adviser 7 and member of FINRA, SIPC and the Municipal Securities Rulemaking Board ("MSRB"), and MMA Asset Management LLC, a SEC registered investment adviser, primarily in connection with retirement, executive compensation and benefits consulting and advisory services to qualified and non-qualified benefits plans, companies and executives and personal wealth management.
Mercer offers clients tools to enhance employee engagement with their health benefits through its Darwin SM platform. Outside of the United States, Mercer and Marsh go to market together for Health benefits brokerage and consulting under the Mercer Marsh Benefits SM (MMB) brand, as described above. Wealth.
Mercer offers clients tools to enhance employee engagement with their health benefits through its Darwin SM platform. Outside of the U.S., Mercer and Marsh go to market together for Health benefits brokerage and consulting under the Mercer Marsh Benefits SM (MMB) brand, as described above. Wealth.
Clients include a majority of the companies in the Fortune 1000 and FTSE 100, as well as medium- and small-market organizations, public sector entities and individual customers. Mercer generated approximately 26% of the Company's total revenue in 2022. Mercer operates in the following areas: Health.
Clients include a majority of the companies in the Fortune 1000 and FTSE 100, as well as medium- and small-market organizations, public sector entities and individual customers. Mercer generated approximately 24% of the Company's total revenue in 2023. Mercer operates in the following areas: Health.
In the United States, Mercer provides investment services through Mercer Investments LLC, (formerly Mercer Investment Management, Inc.), an SEC-registered investment adviser, which consolidated the activities of each of Mercer’s affiliated investment adviser entities in the United States (including Mercer Investment Consulting LLC and Pavilion Advisory Group) in 2019.
In the U.S., Mercer provides investment services through Mercer Investments LLC, (formerly Mercer Investment Management, Inc.), an SEC-registered investment adviser, which consolidated the activities of each of Mercer’s affiliated investment adviser entities in the U.S. (including Mercer Investment Consulting LLC and Pavilion Advisory Group) in 2019.
Since rejoining Marsh in 2007, Mr. South has served as CEO of Marsh’s Asia-Pacific region, CEO of Marsh UK and Ireland, CEO of Marsh Europe and CEO of Marsh US and Canada. Nicholas Studer , age 49, is Chief Executive Officer of Oliver Wyman Group, a role he assumed in July of 2021.
Since rejoining Marsh in 2007, Mr. South has served as CEO of Marsh’s Asia-Pacific region, CEO of Marsh UK and Ireland, CEO of Marsh Europe and CEO of Marsh U.S. and Canada. Nicholas Studer , age 50, is Chief Executive Officer of Oliver Wyman Group, a role he assumed in July of 2021.
The following individuals are the executive officers of the Company as of February 13, 2023: Paul Beswick , age 48, is Senior Vice President and Global Chief Information Officer (CIO) of Marsh McLennan. In this role, he manages over 5,000 technologists supporting Marsh McLennan’s global businesses. Prior to his appointment as Marsh McLennan CIO in January 2021, Mr.
The following individuals are the executive officers of the Company as of February 12, 2024: Paul Beswick , age 49, is Senior Vice President and Global Chief Information Officer (CIO) of Marsh McLennan. In this role, he manages over 5,000 technologists supporting Marsh McLennan’s global businesses. Prior to his appointment as Marsh McLennan CIO in January 2021, Mr.
While laws and regulations vary from location to location, every state of the United States and most foreign jurisdictions require insurance market intermediaries and related service providers (such as insurance brokers, agents and consultants, reinsurance brokers and managing general agents) to hold an individual or company license from a government agency or self-regulatory organization.
Risk and Insurance Services . While laws and regulations vary from location to location, every state of the U.S. and most foreign jurisdictions require insurance market intermediaries and related service providers (such as insurance brokers, agents and consultants, reinsurance brokers and managing general agents) to hold an individual or company license from a government agency or self-regulatory organization.
Depending on the nature of the client and services performed, Mercer may also be subject to direct oversight by the Departments of Health and Human Services and other federal agencies in the United States. Mercer provides annuity buy-out support that is subject to regulations (for example, in the United States, state insurance licensing regulations and ERISA).
Depending on the nature of the client and services performed, Mercer may also be subject to direct oversight by the Departments of Health and Human Services and other federal agencies in the U.S. Mercer provides annuity buy-out advice that is subject to regulations (for example, in the U.S., state insurance licensing regulations and ERISA).
Marsh Advisory’s four main service areas (Consulting, Claims, Analytics, and Captives) advise clients on existing and emerging risk exposures, protecting critical business activities and developing strategies to optimize total cost of risk. Marsh Captive Solutions , a prominent part of the Marsh Advisory practice, helps organizations of all sizes retain risks through comprehensive and innovative captive solutions.
Marsh Advisory’s three main service areas (Consulting, Claims, and Analytics) advise clients on existing and emerging risk exposures, protecting critical business activities and developing strategies to optimize total cost of risk. Marsh Captive Solutions , a prominent part of the Marsh Specialty and Global Placement practice, helps organizations of all sizes retain risks through comprehensive and innovative captive solutions.
Mercer Trust Company, a limited purpose New Hampshire chartered trust bank, may also provide services for certain clients of Mercer’s investment management business in the United States.
Mercer Trust Company, a limited purpose New Hampshire chartered trust bank, may also provide services for certain clients of Mercer’s investment management business in the U.S.
OLIVER WYMAN GROUP With more than 6,700 professionals and offices in over 30 countries, Oliver Wyman Group delivers advisory services to clients through three operating units, each of which is a leader in its field: Oliver Wyman, Lippincott and NERA Economic Consulting. Oliver Wyman Group generated approximately 14% of the Company's total revenue in 2022.
OLIVER WYMAN GROUP With more tha n 6,800 professionals and offices in over 30 countries, Oliver Wyman Group delivers advisory services to clients through three operating units, each of which is a leader in its field: Oliver Wyman, Lippincott and NERA Economic Consulting. Oliver Wyman Group generated approximately 14% of the Company's total revenue in 2023.
Collective survey outcomes allow us to monitor the evolution of our culture over time and identify opportunities to build on strengths and address challenges, all with the intention of furthering our productivity through an engaged workforce. Health and Well-being .
Collective survey outcomes allow us to monitor the evolution of our culture over time and identify opportunities to build on strengths and address challenges, all with the intention of furthering our productivity through an engaged workforce. Health and Well-being . As a company, our success depends on the health and well-being of our colleagues.
Therefore, such information should not be considered part of this report. 14
Therefore, such information should not be considered part of this report. 12
In the United States, Marsh and Guy Carpenter use the services of MMC Securities LLC, a SEC registered broker-dealer and introducing broker in the United States.
In the U.S., Marsh and Guy Carpenter use the services of MMC Securities LLC, a SEC registered broker-dealer and introducing broker in the U.S.
Prior to that, he served as Chief Financial Officer of Marsh, and Chief Financial Officer and Chief Operating Officer of Mercer. His prior experience includes senior positions at The Hanover Insurance Group, including serving as Senior Vice President of Finance, Treasurer, and Chief Financial Officer of the Property & Casualty business, as well as positions with Merrill Lynch and PricewaterhouseCoopers.
His prior experience includes senior positions at The Hanover Insurance Group, including serving as Senior Vice President of Finance, Treasurer, and Chief Financial Officer of the Property & Casualty business, as well as positions with Merrill Lynch and PricewaterhouseCoopers.
Currently, approximately 45,200 Marsh colleagues provide risk management, insurance broking, insurance program management, risk consulting, analytical modeling and alternative risk financing services to a wide range of businesses, government entities, professional service organizations and individuals in more than 130 countries. Marsh generated approximately 51% of the Company's total revenue in 2022 .
Currently, approxima tely 45,800 Marsh colleagues provide risk management, insurance broking, insurance program management, risk consulting, analytical modeling and alternative risk financing services to a wide range of businesses, government entities, professional service organizations and individuals in over 130 countries. Marsh generated approximately 51% of the Company's total revenue in 2023 .
These services are provided through traditional fee-based consulting as well as commission-based brokerage services in connection with the selection of insurance companies and healthcare providers. Mercer provides solutions for private active and retiree exchanges in the United States. Mercer also provides consulting and actuarial services to U.S. state governments to support the purchase of healthcare through state Medicaid programs.
These services are provided through fee-based consulting as well as commission-based brokerage services in connection with the selection of insurance companies and healthcare providers. Mercer also provides consulting and actuarial services to U.S. state governments to support the purchase of healthcare through state Medicaid programs.
Victor Insurance Managers (Canada), a leading managing general agent in Canada, delivers professional liability and construction insurance and other P&C programs and administers group and retiree benefits programs and claims handling operations for individuals, organizations and businesses. Victor also has a business in the UK, the Netherlands, Italy and Germany.
Victor Insurance Managers (Canada), a leading managing general agent in Canada, delivers professional liability and construction insurance and other P&C programs and administers group and retiree benefits programs and claims handling operations for individuals, organizations and businesses.
Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and identify and capitalize on emerging opportunities. Mercer delivers advice and technology-driven solutions that help organizations redefine the future of work, shape retirement and investment outcomes, and advance health and well-being for a changing workforce.
Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and pursue emerging opportunities. Mercer delivers advice and technology-driven solutions that help organizations redefine the world of work, reshape retirement and investment outcomes, and unlock health and well-being for a changing workforce.
The scope and nature of the services vary by insurer and by geography. 3 GUY CARPENTER Guy Carpenter, the Company’s reinsurance intermediary and advisor, generated approximately 10% of the Company's total revenue in 2022. Currently, approximately 3,400 Guy Carpenter colleagues provide clients with a combination of specialized reinsurance broking expertise, strategic advisory services and analytics solutions.
The scope and nature of the services vary by insurer and by geography. GUY CARPENTER Guy Carpenter, the Company’s reinsurance intermediary and advisor, generated approximately 11% of the Company's total revenue in 2023. Currently, approxi mately 3,500 Guy C arpenter colleagues provide clients with a combination of specialized reinsurance broking expertise, strategic advisory services and analytics solutions.
Mercer's investment consulting and investment management services (investment management services may also be referred to as “investment solutions,” “delegated solutions,” “fiduciary management” or “outsourced Chief Investment Officer (OCIO) services”) cover a range of stages of the investment process, from investment research (through its Mercer-Insight service) strategy, asset allocation and implementation of investment strategies to ongoing portfolio management services.
Mercer's investment consulting and investment management services (investment management services may also be referred to as "investment solutions," "delegated solutions," "fiduciary management" or "outsourced Chief Investment Officer (OCIO) services") cover a range of stages of the investment process, from investment research (through its Mercer-Insight service), asset allocation and implementation of investment strategies to ongoing portfolio management services.
We provide financial information about our segments in our consolidated financial statements included under Part II, Item 8 of this report. OUR BUSINESSES RISK AND INSURANCE SERVICES The Risk and Insurance Services segment generated approximately 61% of the Company's total revenue in 2022 and employs approximately 48,600 colleagues worldwide.
We provide financial information about our segments in our consolidated financial statements included under Part II, Item 8 of this report. OUR BUSINESSES RISK AND INSURANCE SERVICES The Risk and Insurance Services segment generated approximately 62% of the Company's total revenue in 2023 and employs approxi mately 49,300 co lleagues worldwide.
See Part I, Item 1A ("Risk Factors") below for a discussion of how actions by regulatory authorities or changes in legislation and regulation in the jurisdictions in which we operate may have an adverse effect on our businesses. Risk and Insurance Services .
See Part I, Item 1A ("Risk Factors") below for a discussion of how actions by regulatory authorities or changes in legislation and regulation in the jurisdictions in which we operate may have an adverse effect on our businesses and for more information about the laws and regulations related to data privacy, data protection and cybersecurity and the associated risks to our businesses.
For a more detailed discussion of revenue sources and factors affecting revenue in our Risk and Insurance Services segment, refer to Part II, Item 7 ("Management's Discussion and Analysis of Financial Condition and Results of Operations") of this report. 4 CONSULTING The Company's Consulting segment generated approximately 39% of the Company's total revenue in 2022 and employs approximately 30,900 colleagues worldwide.
For a more detailed discussion of revenue sources and factors affecting revenue in our Risk and Insurance Services segment, refer to Part II, Item 7 ("Management's Discussion and Analysis of Financial Condition and Results of Operations") of this report.
We also prioritize our colleagues’ mental wellness, including 24/7 access to 11 an Employee Assistance Program for confidential counselling on personal issues for 99% of our colleagues and their eligible family members, and critical incident support in countries where a disaster has occurred. In addition, we offer competitive time-off benefits, including a paid day off each year to volunteer.
We offer comprehensive health insurance, including medical coverage and other core health benefits based on the market. We also prioritize our colleagues’ mental wellness, including 24/7 access to an Employee Assistance Program for confidential counselling on personal issues for 99% of our colleagues and their eligible family members, and critical incident support in countries where a disaster has occurred.
GC Securities, the Guy Carpenter division of MMC Securities LLC and MMC Securities (Europe) Limited, offer corporate finance solutions, including mergers & acquisitions advice and private debt and equity capital raising, and capital markets-based risk transfer solutions that complement Guy Carpenter's strong industry relationships, analytical capabilities and reinsurance expertise.
GC Securities, the Guy Carpenter division of MMC Securities LLC and MMC Securities (Europe) Limited, offer corporate finance solutions, including mergers & acquisitions advice and private debt and equity capital raising, and capital markets-based risk transfer solutions that complement Guy Carpenter's strong industry relationships, analytical capabilities and reinsurance expertise. 3 Guy Carpenter also provides its clients with reinsurance-related services, including actuarial, enterprise risk management, financial and regulatory consulting, portfolio analysis and advice on the efficient use of capital.
Prior to assuming this role in January 2022, he was President of Guy Carpenter, overseeing the North America, International, Specialty and Global Strategic Advisory business units. Prior to joining Guy Carpenter, Mr.
Dean Klisura , age 60, is President and Chief Executive Officer of Guy Carpenter and serves as Vice Chair of Marsh McLennan. Prior to assuming this role in January 2022, he was President of Guy Carpenter, overseeing the North America, International, Specialty and Global Strategic Advisory business units. Prior to joining Guy Carpenter, Mr.
The Company conducts business in this segment through Mercer and Oliver Wyman Group . MERCER Mercer is a leading provider in delivering advice and solutions that help organizations meet the health, wealth and career needs of a changing workforce. Mercer has approximately 24,200 colleagues based in 48 countries.
MERCER Mercer is a leading provider in delivering advice, solutions and products that help organizations meet the health, wealth and career needs of a changing workforce. Mercer has approximate ly 24,500 colleagues based in 48 countries.
In the European Union, Guy Carpenter uses MMC Securities (Ireland) Limited, which is authorized and regulated by the Central Bank of Ireland to place certain securities and investments in the European Union.
In the European Union, Guy Carpenter uses MMC Securities (Ireland) Limited, which is authorized and regulated by the Central Bank of Ireland to place certain securities and investments in the European Union. MMC Securities LLC, MMC Securities Limited, MMC Securities (Ireland) Limited, MMA Securities LLC, and MMA Asset Management LLC are indirect, wholly-owned subsidiaries of Marsh & McLennan Companies, Inc.
Jones joined Marsh in 2016 as senior vice president of Marsh’s business planning, leading strategic planning and global growth initiatives. Prior to that, Mr.
Jones joined Marsh in 2016 as senior vice president of Marsh’s business planning, leading strategic planning and global growth initiatives. Prior to that, Mr. Jones was senior vice president of commercial marketing and strategy for AIG and has more than 25 years of marketing, communications and strategy experience.
Depending on the country, Mercer may rely on licensed colleagues or registered legal entities to engage in these services, or may utilize other Marsh McLennan entities or third parties.
Consulting . Mercer's retirement-related consulting and investment services are subject to pension law and financial regulation in many countries. Depending on the country, Mercer may rely on licensed colleagues or registered legal entities to engage in these services, or may utilize other Marsh McLennan entities or third parties.
The Company's more than 85,000 colleagues advise clients in over 130 countries. With annual revenue of over $20 billion, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses. Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients.
We help clients build the confidence to thrive through the power of perspective of our four market-leading businesses. With annual revenue of $23 billion, we have more than 85,000 colleagues advising clients in over 130 countries. Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients.
Oliver Wyman Group serves as a critical strategic, economic and brand advisor to private sector and governmental clients. The Company conducts business through two segments: • Risk and Insurance Services includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services.
The Company conducts business through two segments: • Risk and Insurance Services includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services.
Through its Wealth business, Mercer assists clients worldwide in the design, governance and risk management of defined benefit, defined contribution, hybrid retirement plans and other pools of assets, and with investment of those assets.
Through its Wealth business, Mercer assists clients worldwide in the design, governance and risk management of defined benefit, defined contribution, hybrid retirement plans and other pools of assets, and with investment of those assets. 4 Mercer provides actuarial consulting, investment consulting, investment management and related services to the sponsors and trustees of pension plans, master trusts, foundations, endowments, sovereign wealth funds, insurance companies and family offices.
For a more detailed discussion of revenue sources and factors affecting revenue in the Consulting segment, refer to Part II, Item 7 ("Management's Discussion and Analysis of Financial Condition and Results of Operations") of this report. 7 REGULATION The Company's activities are subject to licensing requirements and extensive regulation under U.S. federal and state laws, as well as laws of other countries in which the Company's subsidiaries operate.
For a more detailed discussion of revenue sources and factors affecting revenue in the Consulting segment, refer to Part II, Item 7 ("Management's Discussion and Analysis of Financial Condition and Results of Operations") of this report.
Prior to assuming this role in January 2016, Mr. McGivney held a number of senior financial management positions since joining the Company in 2007. Most recently he was Senior Vice President, Corporate Finance of Marsh McLennan, and was responsible for leading and directing the Company’s Corporate Development, Treasury and Investor Relations functions from 2014 until 2016.
Most recently he was Senior Vice President, Corporate Finance of Marsh McLennan, and was responsible for leading and directing the Company’s Corporate Development, Treasury and Investor Relations functions from 2014 until 2016. Prior to that, he served as Chief Financial Officer of Marsh, and Chief Financial Officer and Chief Operating Officer of Mercer.
This includes the attraction, recruitment, hiring, development and engagement of talent to deliver on our strategy and the design of colleague total rewards programs.
This includes the attraction, recruitment, hiring, development and engagement of talent to deliver on our strategy and the design of colleague total rewards programs. The Chief People Officer is also responsible for developing and integrating our inclusion and diversity approach into our strategy, supported by the Chief Diversity & Social Impact Officer. 9 Talent & Inclusion .
In the United States, Victor Insurance Managers (US) and ICAT Managers deliver risk management and insurance solutions to insureds through a national third-party distribution network of licensed brokers.
In the U.S., Victor Insurance Managers (US) and ICAT Managers underwrites, solicits, sells and services coverages through a national third-party distribution network of licensed brokers and agents.
Klisura was President of Marsh Global Placement and Advisory Services , leading property and casualty placement activities globally, as well as leading Bowring Marsh, the Insurer Consulting Group, and Marsh Advisory. He joined Marsh in 1993 and held several key global leadership roles including President of Global Specialties. Mark McGivney , age 55, is Chief Financial Officer of Marsh McLennan.
Klisura was President of Marsh Global Placement and Advisory Services , leading property and casualty placement activities globally, as well as leading Bowring Marsh, the Insurer Consulting Group, and Marsh Advisory.
These reports and our website are not deemed part of this report and are not incorporated by reference. HUMAN CAPITAL As a professional services firm, we believe the health of our business relies on the strength of our workforce. Our shared purpose is to make a difference in moments that matter, helping clients meet the challenges of our time.
These reports and our website are not deemed part of this report and are not incorporated by reference. HUMAN CAPITAL As a professional services firm, we believe the health of our business relies on the strength of our workforce. For detailed information regarding our human capital management, we encourage investors to visit https://www.marshmclennan.com/about/esg.html for our consolidated ESG Report.
Torrent offers both NFIP and private and excess flood insurance products and services to WYO companies and agents. • Marsh Affinity focuses on insurance programs sold to insureds or vendors through a corporate sponsor using an affinity distribution model. • High Net Worth (HNW).
Victor also has a business in the UK, the Netherlands, Italy, Germany and Australia. • Marsh Affinity focuses on insurance programs sold to insureds or vendors through a corporate sponsor using an affinity distribution model. • High Net Worth (HNW).
Mercer provides retirement plan outsourcing, including administration and delivery of defined benefit and defined contribution retirement benefits.
Mercer also provides investment consulting and investment management services to U.S. public sector clients, financial intermediaries and individuals. Mercer provides retirement plan outsourcing, including administration and delivery of defined benefit and defined contribution retirement benefits.
Such laws and regulations relate to, among other areas, sanctions and export control, anti-bribery, anti-corruption, anti-money-laundering and counter-terrorist financing. In certain circumstances, we are also required to maintain operating funds primarily related to regulatory requirements outside the U.S.
In certain circumstances, we are also required to maintain operating funds primarily related to regulatory requirements outside the U.S.
As of December 31, 2022, the Company and its consolidated subsidiaries employed more than 85,000 colleagues worldwide, including approximately 48,600 in Risk and Insurance Services and 30,900 in Consulting. Two-thirds of our global workforce are located in either North America or Europe.
As of December 31, 2023, the Co mpany and its consolidated subsidiaries employed more than 85,000 colleagues worldwide, including approximately 49,300 in Risk and Insurance Services and 31,300 in Consulting.
Across most jurisdictions, we are also subject to various data privacy laws and regulations that apply to personal information. In addition, we are subject to various financial crime laws and regulations through our activities, activities of associated persons, the products and services we provide and our business and client relationships.
In addition, we are subject to various financial crime laws and regulations through our activities, activities of associated persons, the products and services we provide and our business and client relationships. Such laws and regulations relate to, among other areas, sanctions and export control, anti-bribery, anti-corruption, anti-money-laundering and counter-terrorist financing.
In addition, Victor manages Torrent Technologies, a service provider to Write Your Own (WYO) insurers and direct policy providers participating in the National Flood Insurance Program 2 (NFIP) in the United States.
Victor also manages Torrent Technologies, the nation’s largest service provider to the National Flood Insurance Program (NFIP), serving the NFIP both directly and through the NFIP’s Write Your Own (WYO) program.
Supporting our colleagues as they navigate changing circumstances—health and economic challenges, new technologies and social inequities—has been our priority in 2022. Total Rewards . We recognize how important it is to be financially secure through employment, so we offer competitive rewards to help build colleagues’ personal wealth and improve their financial well-being. Base pay is just the start.
In addition, we offer competitive time-off benefits, including a paid day off each year to volunteer. We support our colleagues as they navigate changing circumstances—milestone life events, health and economic challenges, and new technologies. Total Rewards . We offer competitive rewards to help build colleagues’ personal wealth and improve their financial well-being. Base pay is one component.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) Since 2008, Marsh McLennan has had a framework for overseeing and managing the company’s corporate responsibility initiatives at the Board and senior management levels. ESG is central to who we are and how we serve our clients and communities.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) ) Since 2008, Marsh McLennan has had a framework for overseeing and managing the company’s approach to environmental sustainability, human capital management and corporate governance. Our ESG Report provides more information about our ESG governance, goals and achievements.
Colleague Engagement . Each year we ask our colleagues to share their views on working at Marsh McLennan through a company-wide engagement survey. Developed internally by our Global Talent Development team, the survey methodology has been consistent since 2011, with updates to specific questions as necessary.
Developed internally by our Global Talent Development team, the survey methodology has been consistent since 2011, with updates to specific questions as necessary. In 2023, we expanded the survey with questions on technology and the company's strategy. A third-party administers our survey in order to maintain confidentiality of responses.
Guy Carpenter also provides its clients with reinsurance-related services, including actuarial, enterprise risk management, financial and regulatory consulting, portfolio analysis and advice on the efficient use of capital. Guy Carpenter's Global Strategic Advisory ("GSA") unit helps clients better understand and quantify the uncertainties inherent in their businesses.
Guy Carpenter's Global Strategic Advisory ("GSA") unit helps clients better understand and quantify the uncertainties inherent in their businesses.
We also recognize the importance of our 16,800 people managers to our talent pipeline and have given them increased support and opportunities for promoting the growth of their teams. In 2022 we offered 440 live learning sessions in addition to more than 32,000 individual learning courses to help our colleagues grow and develop.
We also recognize the importance of our nearly 18,000 people managers to our talent pipeline and have given them increased support and opportunities for promoting the growth of their teams. In 2023 we offered 450 development workshops with courses covering professional skills, people management and leadership development. Our People Manager Hub is a one-stop digital source for people managers globally.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeGeneral Data Protection Regulation (GDPR) and the California Privacy Rights Act (CPRA), could adversely affect our financial condition, operating results and our reputation; • Our business performance and growth plans could be negatively affected if we are not able to develop and implement improvements in technology or respond effectively to the threat of digital disruption and other technological change; • We are subject to significant uninsured exposures arising from errors and omissions, breach of fiduciary duty and other claims; • We cannot guarantee that we are or will be in compliance with all current and potentially applicable U.S. federal and state or foreign laws and regulations, and actions by regulatory authorities or changes in legislation and regulation in the jurisdictions in which we operate could have a material adverse effect on our business; • O ur business or reputation could be harmed by our reliance on third-party providers or introducers; • We may not be able to effectively identify and manage actual and apparent conflicts of interest; • The loss of members of our senior management team or other key colleagues, or if we are unsuccessful in our efforts to attract, retain and develop talent, could have a material adverse effect on our business; • Failure to maintain our corporate culture, particularly in a hybrid work environment, could damage our reputation; • Increasing scrutiny and changing laws and expectations from regulators, investors, clients and our colleagues with respect to our environmental, social and governance (ESG) practices and disclosure may impose additional costs on us or expose us to new or additional risks; • We face significant competitive pressures in each of our businesses, including from disintermediation, as our competitive landscape continues to evolve; • We rely on a large number of vendors and other third parties to perform key functions of our business operations and to provide services to our clients.
Biggest changeSUMMARY RISK FACTORS Some of the factors that could materially and adversely affect our business, financial condition, results of operations or prospects, include the following: • Our results of operations and investments could be adversely affected by geopolitical or macroeconomic conditions; • We are subject to significant uninsured exposures arising from errors and omissions, breach of fiduciary duty and other claims; • We cannot guarantee that we are or will be in compliance with all current and potentially applicable U.S. federal and state or foreign laws and regulations, and actions by regulatory authorities or changes in legislation and regulation in the jurisdictions in which we operate could have a material adverse effect on our business; • O ur business or reputation could be harmed by our reliance on third-party providers or introducers; • We may not be able to effectively identify and manage actual and apparent conflicts of interest; • We could incur significant liability or our reputation could be damaged if our information systems are breached or we otherwise fail to protect client or Company data or information systems; • The costs to comply with, or our failure to comply with, U.S. and foreign laws related to privacy, data security and data protection, such as the EU's General Data Protection Regulation (GDPR) and the California Consumer Privacy Act, as amended by the California Privacy Rights Act, (CCPA), could adversely affect our financial condition, operating results and our reputation; • Our business performance and growth plans could be negatively affected if we are not able to develop and implement improvements in technology or respond effectively to the threat of digital disruption and other technological change such as AI; • The loss of members of our senior management team or other key colleagues, or if we are unsuccessful in our efforts to attract, retain and develop talent, could have a material adverse effect on our business; • Failure to maintain our corporate culture, particularly in a hybrid work environment, could damage our reputation; • Increasing scrutiny and changing laws and expectations from regulators, investors, clients and our colleagues with respect to our environmental, social and governance (ESG) practices and disclosure may impose additional costs on us or expose us to new or additional risks; • We face significant competitive pressures in each of our businesses, including from disintermediation, as our competitive landscape continues to evolve; • We rely on a large number of vendors and other third parties to perform key functions of our business operations and to provide services to our clients.
We are at risk of a cyberattack involving a vendor or other third party, which could result in a breakdown of such third party’s data protection processes or the cyberattackers gaining access to our infrastructure through a supply chain attack.
We are at risk of a cyberattack involving a vendor or other third party, which could result in a breakdown of such third party’s data protection processes or the cyberattackers gaining access to our infrastructure or data through a supply chain attack.
In the future, these types of incidents could result in personal, sensitive, confidential or proprietary information being lost or stolen, surreptitiously modified, rendered inaccessible for any period of time, or maliciously made public, including client, employee or Company data, which could have a material adverse effect on our business.
In the future, these types of incidents could result in personal, sensitive, confidential or proprietary information, including client, employee or Company data, being lost or stolen, surreptitiously modified, rendered inaccessible for any period of time, or maliciously made public, which could have a material adverse effect on our business.
Our utilization rates are affected by a number of factors, including: • general economic conditions; • our ability to transition consultants promptly from completed projects to new assignments, and to engage newly-hired consultants quickly in revenue-generating activities; • our ability to continually secure new business engagements, particularly because a portion of our work is project-based rather than recurring in nature; • our ability to forecast demand for our services and thereby maintain appropriate headcount in each of our geographies and workforces; • our ability to retain key colleagues and consulting professionals; • unanticipated changes in the scope of client engagements; • the potential for conflicts of interest that might require us to decline client engagements that we otherwise would have accepted; • our need to devote time and resources to sales, training, professional development and other non-billable activities; and • the potential disruptive impact of acquisitions and dispositions.
Our utilization rates are affected by a number of factors, including: • general economic conditions; 31 • our ability to transition consultants promptly from completed projects to new assignments, and to engage newly-hired consultants quickly in revenue-generating activities; • our ability to continually secure new business engagements, particularly because a portion of our work is project-based rather than recurring in nature; • our ability to forecast demand for our services and thereby maintain appropriate headcount in each of our geographies and workforces; • our ability to retain key colleagues and consulting professionals; • unanticipated changes in the scope of client engagements; • the potential for conflicts of interest that might require us to decline client engagements that we otherwise would have accepted; • our need to devote time and resources to sales, training, professional development and other non-billable activities; and • the potential disruptive impact of acquisitions and dispositions.
Bribery Act 2010; • limitations or restrictions that foreign or U.S. governments and regulators may impose on the products or services we sell, the methods by which we sell our products and services and the manner in which and the amounts we are compensated; • potential limitations or difficulties in protecting our intellectual property in various foreign jurisdictions; • limitations that foreign governments may impose on the conversion of currency or the payment of dividends or other remittances to us from our non-U.S. subsidiaries; • engaging and relying on third parties to perform services on behalf of the Company; and • potential difficulties in monitoring employees in geographically dispersed locations.
Bribery Act 2010; 28 • limitations or restrictions that foreign or U.S. governments and regulators may impose on the products or services we sell, the methods by which we sell our products and services and the manner in which and the amounts we are compensated; • potential limitations or difficulties in protecting our intellectual property in various foreign jurisdictions; • limitations that foreign governments may impose on the conversion of currency or the payment of dividends or other remittances to us from our non-U.S. subsidiaries; • engaging and relying on third parties to perform services on behalf of the Company; and • potential difficulties in monitoring employees in geographically dispersed locations.
Privacy violations, including unauthorized use disclosure or transfer of sensitive or confidential client or Company data, whether through systems failure, employee negligence, fraud or misappropriation, by the Company, our vendors or other parties with whom we do business (if they fail to meet the standards we impose) could damage our reputation and subject us to significant litigation, monetary damages, regulatory enforcement actions, fines and criminal prosecution in one or more jurisdictions.
Privacy violations, including unauthorized use disclosure or transfer of sensitive, personal or confidential client or Company data, whether through systems failure, employee negligence, fraud or misappropriation, by the Company, our vendors or other parties with whom we do business (if they fail to meet the standards we impose) could damage our reputation and subject us to significant litigation, monetary damages, regulatory enforcement actions, fines and criminal prosecution in one or more jurisdictions.
Given the 29 significant complexity of the rules, and the potential for additional guidance from the U.S. Treasury, the Securities and Exchange Commission, the Financial Accounting Standards Board or other regulatory authorities, recognized impacts in future periods could be significantly different from our current estimates. Such uncertainty may also result in increased scrutiny from, or disagreements with, tax authorities.
Given the significant complexity of the rules, and the potential for additional guidance from the U.S. Treasury, the Securities and Exchange Commission, the Financial Accounting Standards Board or other regulatory authorities, recognized impacts in future periods could be significantly different from our current estimates. Such uncertainty may also result in increased scrutiny from, or disagreements with, tax authorities.
Mercer may also be perceived as making inaccurate or misleading statements regarding the investment strategies of our offerings with respect to ESG or sustainability, commonly referred to as “greenwashing,” or recommending certain asset managers to clients or offering delegated solutions to an investment consulting client, solely to enhance its own compensation or due to other perceived conflicts of interest.
Mercer may also be perceived as making inaccurate or misleading statements regarding the investment strategies of our offerings or investments with respect to ESG or sustainability, commonly referred to as “greenwashing,” or recommending certain asset managers to clients or offering delegated solutions to an investment consulting client, solely to enhance its own compensation or due to other perceived conflicts of interest.
Global economic conditions, including slower GDP growth or recession, inflationary pressure and foreign exchange rate volatility, may negatively impact businesses and financial institutions. Many of our clients, including financial institutions, corporations, government entities and pension plans, have reduced expenses, including amounts spent on consulting services, and used internal resources instead of consultants during difficult economic periods.
Global economic conditions, including slower GDP growth or recession, inflationary pressure and foreign exchange rate volatility, may negatively impact businesses and financial institutions. Many of our clients, including 30 financial institutions, corporations, government entities and pension plans, have reduced expenses, including amounts spent on consulting services, and used internal resources instead of consultants during difficult economic periods.
We also may be unable to detect an incident, assess its severity or impact, or appropriately respond in a timely manner. In addition, our liability insurance, which includes cyber insurance, may not be sufficient in type or amount to cover us against claims related to security breaches, cyberattacks and other related data and system incidents.
We also may be unable to detect an incident, assess its severity or impact, or appropriately respond in a timely or adequate manner. In addition, our liability insurance, which includes cyber insurance, may not be sufficient in type or amount to cover us against claims related to security breaches, cyberattacks and other related data and system incidents.
The inability to implement, maintain and upgrade adequate safeguards could have a material adverse effect on our business. Our information systems must be continually updated, patched, and upgraded to protect against known vulnerabilities. The volume of new software vulnerabilities has increased markedly, as has the criticality of patches and other remedial measures.
The inability to implement, maintain and upgrade adequate safeguards could have a material adverse effect on our business. Our information systems must be continually updated, patched, and upgraded to protect against known vulnerabilities. The volume of new software vulnerabilities has increased markedly, as has the criticality of patches and other mitigation and remedial measures.
For example, hackers have increasingly targeted companies by attacking internet-connected industrial control and safety control systems. An extended outage could result in the loss of clients and a decline in our revenues. In the worst case, any manipulation of the control systems of critical infrastructure may even result in the loss of life.
For example, hackers have 24 increasingly targeted companies by attacking internet-connected industrial control and safety control systems. An extended outage could result in the loss of clients and a decline in our revenues. In the worst case, any manipulation of the control systems of critical infrastructure may even result in the loss of life.
In operating our business and providing services and solutions to clients, we collect, use, store, transmit and otherwise process certain electronic information, including personal, confidential, proprietary and sensitive data such as information related to financial records, health care, mergers and acquisitions and personal data of our clients, colleagues and vendors.
In operating our business and providing services and solutions to clients, we collect, use, store, transmit and otherwise process certain electronic information, including personal, confidential, proprietary and sensitive data such as financial records, health care, mergers and acquisitions and personal data of our clients, colleagues and vendors.
As a U.S.-domiciled company, any such increases would likely have a disproportionate impact on us compared to our foreign-based competitors. Global Operations We are exposed to multiple risks associated with the global nature of our operations. We conduct business globally.
As a U.S.-domiciled company, any such increases would likely have a disproportionate impact on us compared to our foreign-based competitors. 27 Global Operations We are exposed to multiple risks associated with the global nature of our operations. We conduct business globally.
In addition, our ability to obtain financing will depend in part upon prevailing conditions in credit and capital markets, which are beyond our control. Our defined benefit pension plan obligations could cause the Company's financial position, earnings and cash flows to fluctuate.
In addition, our ability to obtain financing will depend in part upon prevailing conditions in credit and capital markets, which are beyond our control. 25 Our defined benefit pension plan obligations could cause the Company's financial position, earnings and cash flows to fluctuate.
Our policies, employee training (including phishing prevention training), procedures and technical safeguards may also be insufficient to prevent or detect improper access to confidential, personal or proprietary information.
Our policies, employee training (including phishing prevention training), procedures and technical safeguards may also be insufficient to prevent, detect or remediate improper access to confidential, personal or proprietary information.
If we fail to comply or are accused of failing to comply with applicable laws and regulations, including those referred to above, or new and evolving regulations regarding cybersecurity, artificial intelligence or environmental, social and governance matters, we may become subject to investigations, criminal penalties, civil remedies or other consequences, including fines, injunctions, loss of an operating license or approval, increased scrutiny or oversight by regulatory authorities, the suspension of individual employees, limitations on engaging in a particular business or redress to clients or other parties, and we may become exposed to negative publicity or reputational damage.
If we fail to comply or are accused of failing to comply with applicable laws and regulations, including those referred to above, or new and evolving regulations regarding cybersecurity, AI or environmental, social and governance matters, we may become subject to investigations, criminal penalties, civil remedies or other consequences, including fines, injunctions, loss of an operating license or approval, increased scrutiny or oversight by regulatory authorities, the suspension of individual employees, limitations on engaging in a particular business or redress to clients or other parties, and we may become exposed to negative publicity or reputational damage.
In our Consulting segment, we compete for business with numerous consulting firms and similar organizations, many of which also provide, or are affiliated with firms that provide, accounting, information systems, technology and financial services. Such competitors may be able to offer more comprehensive 25 products and services to potential clients, which may give them a competitive advantage.
In our Consulting segment, we compete for business with numerous consulting firms and similar organizations, many of which also provide, or are affiliated with firms that provide, accounting, information systems, technology and financial services. Such competitors may be able to offer more comprehensive products and services to 23 potential clients, which may give them a competitive advantage.
Certain of 27 our businesses also rely on financings by the Company to fund the underwriting of their client's debt and equity capital raising transactions.
Certain of our businesses also rely on financings by the Company to fund the underwriting of their client's debt and equity capital raising transactions.
These include: • the number of client engagements during a quarter; • the possibility that clients may decide to delay or terminate a current or anticipated project as a result of factors unrelated to our work product or progress; 28 • fluctuations in capacity and utilization rates and clients' ability to terminate engagements without penalty; • our net colleague hires and related compensation and benefits expense; • potential limitations on the clients or industries we serve resulting from increased regulation or changing stakeholder expectations on ESG issues; • the impact of changes in accounting standards or in our accounting estimates or assumptions; • the impact on us or our clients of changes in legislation, regulation and legal guidance or interpretations in the jurisdictions in which we operate, in particular as a result of increased regulatory activity and enforcement; • seasonality due to the impact of regulatory deadlines, policy renewals and other timing factors to which our clients are subject; • the success of our acquisitions or investments; • macroeconomic factors such as changes in foreign exchange rates, interest rates and global public and private capital markets, particularly in the case of Mercer, where fees in its investments business and certain other business lines are derived from the value of assets under management, advisement or administration; and • general economic conditions, including factors beyond our control affecting economic conditions such as global health crises or pandemics, severe weather, climate change, geopolitical unrest such as the war in Ukraine, protests and riots or other catastrophic events, since our results of operations are directly affected by the levels of business activity of our clients, which in turn are affected by the level of economic activity in the industries and markets that they serve.
These include: • the number of client engagements during a quarter; • the possibility that clients may decide to delay or terminate a current or anticipated project as a result of factors unrelated to our work product or progress; • fluctuations in capacity and utilization rates and clients' ability to terminate engagements without penalty; • our net colleague hires and related compensation and benefits expense; • potential limitations on the clients or industries we serve resulting from increased regulation or changing stakeholder expectations on ESG issues; 26 • the impact of changes in accounting standards or in our accounting estimates or assumptions; • the impact on us or our clients of changes in legislation, regulation and legal guidance or interpretations in the jurisdictions in which we operate, in particular as a result of increased regulatory activity and enforcement; • seasonality due to the impact of regulatory deadlines, policy renewals and other timing factors to which our clients are subject; • the success of our acquisitions or investments; • macroeconomic factors such as changes in foreign exchange rates, interest rates and global public and private capital markets, particularly in the case of Mercer, where fees in its investments business and certain other business lines are derived from the value of assets under management, advisement or administration; and • general economic conditions, including factors beyond our control affecting economic conditions such as global health crises or pandemics, severe weather, climate change, geopolitical unrest such as the war in Ukraine and the escalating conflict throughout the Middle East, protests and riots or other catastrophic events, since our results of operations are directly affected by the levels of business activity of our clients, which in turn are affected by the level of economic activity in the industries and markets that they serve.
Improper collection, use disclosure, cross border transfer, and retention of confidential, personal, or proprietary data could result in regulatory scrutiny, legal and financial liability, or harm to our reputation. In operating our business and providing services and solutions to clients, we store and transfer sensitive employee and client data, including personal data, in and across multiple jurisdictions.
Improper collection, use, disclosure, cross border transfer, retention and other processing of confidential, personal, or proprietary data could result in regulatory scrutiny, legal and financial liability, or harm to our reputation. In operating our business and providing services and solutions to clients, we store and transfer sensitive employee and client data, including personal data, in and across multiple jurisdictions.
In particular, heightened demand for, and scrutiny of, ESG and sustainable-related products, funds, investment 24 strategies and advice has increased the risk that we could be perceived as, or accused of, making inaccurate or misleading statements, commonly referred to as "greenwashing" or that we have otherwise run afoul of regulation.
In particular, heightened 22 demand for, and scrutiny of, ESG and sustainable-related products, funds, investment strategies and advice has increased the risk that we could be perceived as, or accused of, making inaccurate or misleading statements, commonly referred to as "greenwashing" or that we have otherwise run afoul of regulation.
We may be unable to effectively limit our potential liability in certain jurisdictions, including through insurance, or in connection with certain types of claims, particularly those concerning claims of a breach of fiduciary duty. In establishing liabilities for E&O claims under U.S. generally accepted accounting principles ("U.S.
We may be unable to effectively limit our potential liability in certain jurisdictions, including through insurance, or in connection with certain types of claims, particularly those concerning claims of a breach of fiduciary duty. In establishing liabilities for E&O claims in accordance with U.S. generally accepted accounting principles ("U.S.
Such perceptions or accusations could damage our reputation, result in litigation or regulatory enforcement actions, and adversely affect our business. Furthermore, perceptions of our efforts to achieve ESG goals or advance ESG and sustainable-related products, funds, investment strategies or advice may differ widely among stakeholders and could present risks to our reputation and business.
Such perceptions or accusations could damage our reputation, result in litigation or regulatory enforcement actions, and adversely affect our business. Furthermore, perceptions of our efforts to achieve ESG goals or advance ESG and sustainable-related products, funds, investment strategies or advice may differ widely among stakeholders and could present risks to our reputation and business, including litigation risk.
Changes in the value of equity, debt, currency real estate, commodities, alternatives or other asset classes, in particular as a 32 result of a downturn in the global markets, could cause the value of our assets under management or advisement, and the fees earned by Mercer to decline.
Changes in the value of equity, debt, currency, real estate, commodities, alternatives or other asset classes, in particular as a result of a downturn in the global markets, could cause the value of assets under management or advisement, and the fees earned by Mercer to decline.
The amount of other compensation that we receive from insurance companies, separate from retail fees and commissions, has increased in the last several years, both on an underlying basis and through acquisition an d represented approximately 6% of Marsh's revenue in 2022.
The amount of other compensation that we receive from insurance companies, separate from retail fees and commissions, has increased in the last several years, both on an underlying basis and through acquisition an d represented approximately 6% of Marsh's revenue in 2023.
In addition to remediating newly identified vulnerabilities, previously identified vulnerabilities must also be continuously addressed. Accordingly, we are at risk that cyberattackers exploit these known vulnerabilities before they have been communicated by vendors or addressed.
In addition to mitigating and remediating newly identified vulnerabilities, previously identified vulnerabilities must also be continuously addressed. Accordingly, we are at risk that cyberattackers exploit these known vulnerabilities before they have been communicated by vendors or addressed.
We provide these services to a broad client base, including clients in the public sector for our investment services. Matters often relate to services provided by the Company dating back many years. Such claims may subject us to significant liability for monetary damages, including punitive and treble damages, negative publicity and reputational harm, and may divert personnel and management resources.
We provide these services to a broad client base, including clients in the public sector. Matters may relate to services provided by the Company dating back many years. Such claims may subject us to significant liability for monetary damages, including punitive and treble damages, negative publicity and reputational harm, and may divert personnel and management resources.
We rely on a large number of vendors and other third parties to perform key functions of our business operations and to provide services to our clients. These vendors and third parties may act in ways that could harm our business.
We rely on a large number of vendors and other third parties to perform key functions of our business operations and to provide services to our clients. These vendors and third parties may act or fail to act in ways that could harm our business.
Some of the laws enacted in recent years, including those in China and the Kingdom of Saudi Arabia, the laws include data localization elements that will require that certain personal data stay within their borders.
Some of the global laws enacted in recent years, including those in China and the Kingdom of Saudi Arabia, also include data localization elements that will require that certain personal data stay within their borders.
Currently, the use of these assumptions results in a lower funded status than determined under U.S. GAAP and may result in contributions irrespective of the U.S. GAAP funded status. The financial calculations relating to our defined benefit pension plans are complex. Pension plan assets could decrease as the result of poor future asset performance.
Currently, the use of these assumptions results in a lower funded status than determined in accordance with U.S. GAAP and may result in contributions irrespective of the U.S. GAAP funded status. The financial calculations relating to our defined benefit pension plans are complex. Pension plan assets could decrease as the result of poor future asset performance.
Outside the United States, contributions are generally based on statutory requirements and local funding practices, which may differ from measurements under U.S. GAAP. In the U.K., for example, the assumptions used to determine pension contributions are the result of legally-prescribed negotiations between the Company and the plan trustees.
Outside the United States, contributions are generally based on statutory requirements and local funding practices, which may differ from measurements in accordance with U.S. GAAP. In the U.K., for example, the assumptions used to determine pension contributions are the result of legally-prescribed negotiations between the Company and the plan trustees.
Our activities are subject to extensive regulation under the laws of the United States and its various states, the United Kingdom, the European Union and its member states, Australia and the other jurisdictions in which we operate.
Our activities are subject to extensive regulation under the laws of the U.S. and its various states, the United Kingdom, the European Union and its member states, Australia and the other jurisdictions in which we operate.
Mercer’s Wealth business is subject to a number of risks, including risks related to public and private capital market fluctuations, third-party asset managers, operational and technology risks, conflicts of interest, ESG and greenwashing, asset perfor mance and regulatory compliance, that, if realized, could result in significant damage to our business.
Mercer’s Wealth business is subject to a number of risks, including risks related to public and private capital market fluctuations, third-party asset managers and custodians, operations and technology risks, conflicts of interest, ESG and greenwashing, asset perfor mance and regulatory compliance, that, if realized, could result in significant damage to our business.
Our business depends on our ability to obtain payment from our clients of the amounts they owe us for the work we perform. As of December 31, 2022, our receivables for our commissions and fees were approximately $5.3 billion, or approximately one-quarter of our total annual revenues, and portions of our receivables are increasingly concentrated in certain businesses and geographies.
Our business depends on our ability to obtain payment from our clients of the amounts they owe us for the work we perform. As of December 31, 2023, our receivables for our commissions and fees were approximately $5.8 billion, or approximately one-quarter of our total annual revenues, and portions of our receivables are increasingly concentrated in certain businesses and geographies.
These include, among others, risks relating to: • economic and political conditions in the countries in which we operate; • client concentration in certain high-growth countries in which we operate; • the length of payment cycles and potential difficulties in collecting accounts receivable; • unexpected increases in taxes or changes in U.S. or foreign tax laws, rulings, policies or related legal and regulatory interpretations, including upcoming changes to the U.K. statutory rate; • the implementation of the Organization for Economic Cooperation and Development (OECD) international tax framework, including the Pillar 2 minimum tax regime and the Pillar 1 profit reallocation regime, which could substantially increase the Company’s effective tax rate; • international initiatives to require multinational enterprises, like ours, to calculate and report profitability on a country-by-country basis, which could increase scrutiny by, or cause disagreements with, foreign tax authorities; • potential transfer pricing-related tax exposures that may result from the flow of funds among our subsidiaries and affiliates in the various jurisdictions in which we operate; • unexpected reassessment by tax authorities of interpretations of existing rules which may require companies to defend previously accepted positions and may create both new and prior-year exposures; • permanent establishments created due to colleagues traveling to and doing work in countries where the company has no presence, or living in such countries and working remotely post-pandemic, which are not properly compensated through transfer pricing; • our ability to obtain dividends or repatriate funds from our non-U.S. subsidiaries, including as a result of the imposition of currency controls and other government restrictions on repatriation in the jurisdictions in which our subsidiaries operate, fluctuations in foreign exchange rates and the imposition of withholding and other taxes on such payments; • geopolitical tensions, such as the war in Ukraine, in countries where we operate, international hostilities, international trade disputes, terrorist activities, natural disasters, pandemics, and infrastructure disruptions; • local investment or other financial restrictions that foreign governments may impose; • potential lawsuits, investigations, market studies, reviews or other activity by foreign regulatory or law enforcement authorities or legislatively appointed commissions, which may result in potential modifications to our businesses, related private litigation or increased scrutiny from U.S. or other regulators; • potential costs and difficulties in complying with a wide variety of foreign laws and regulations (including tax systems) administered by foreign government agencies, some of which may conflict with U.S. or other sources of law; 30 • potential costs and difficulties in complying, or monitoring compliance, with foreign and U.S. laws and regulations that are applicable to our operations abroad, including trade sanctions laws relating to countries such as Afghanistan, Belarus, Cuba, Iran, North Korea, Russia, Syria, Ukraine (Russia-controlled territories) and Venezuela, anti-corruption laws such as the U.S.
These include, among others, risks relating to: • economic and political conditions in the countries in which we operate; • client concentration in certain high-growth countries in which we operate; • the length of payment cycles and potential difficulties in collecting accounts receivable; • unexpected increases in taxes or changes in U.S. or foreign tax laws, rulings, policies or related legal and regulatory interpretations, including recent changes to the U.K. statutory rate; • the implementation of the Organization for Economic Cooperation and Development (OECD) international tax framework, including the implementation of the Pillar 2 minimum tax regime by key jurisdictions in 2024 and the Pillar 1 profit reallocation regime, which could have an adverse effect on our effective tax rate, tax payments and results of operations; • international initiatives to require multinational enterprises, like ours, to calculate and report profitability on a country-by-country basis, which could increase scrutiny by, or cause disagreements with, foreign tax authorities; • potential transfer pricing-related tax exposures that may result from the flow of funds among our subsidiaries and affiliates in the various jurisdictions in which we operate; • unexpected reassessment by tax authorities of interpretations of existing rules which may require companies to defend previously accepted positions and may create both new and prior-year exposures; • litigation arising from ongoing and future controversies with tax authorities; • permanent establishments created due to colleagues traveling to and doing work in countries where the Company has no presence, or living in such countries and working remotely post-pandemic, which are not properly compensated through transfer pricing; • our ability to obtain dividends or repatriate funds from our non-U.S. subsidiaries, including as a result of the imposition of currency controls and other government restrictions on repatriation in the jurisdictions in which our subsidiaries operate, fluctuations in foreign exchange rates and the imposition of withholding and other taxes on such payments; • geopolitical tensions, such as the war in Ukraine and the escalating conflict throughout the Middle East, in countries where we operate, international hostilities, international trade disputes, terrorist activities, natural disasters, pandemics, and infrastructure disruptions; • local investment or other financial restrictions that foreign governments may impose; • potential lawsuits, investigations, market studies, reviews or other activity by foreign regulatory or law enforcement authorities or legislatively appointed commissions, which may result in potential modifications to our businesses, related private litigation or increased scrutiny from U.S. or other regulators; • potential costs and difficulties in complying with a wide variety of foreign laws and regulations (including tax systems) administered by foreign government agencies, some of which may conflict with U.S. or other sources of law; • potential costs and difficulties in complying, or monitoring compliance, with foreign and U.S. laws and regulations that are applicable to our operations abroad, including trade sanctions laws relating to countries such as Afghanistan, Belarus, Cuba, Iran, North Korea, Russia, Syria, Ukraine (Russia-controlled territories) and Venezuela, anti-corruption laws such as the U.S.
Adverse regulatory, legal or other developments could have a material adverse effect on our business and expose the Company to negative publicity and reputational harm. RISKS RELATING TO OUR CONSULTING SEGMENT Our Consulting segment, conducted through Mercer and Oliver Wyman Group, represented 39% of our total revenue in 2022. Our businesses in this segment are subject to particular risks.
Adverse regulatory, legal or other developments could have a material adverse effect on our business and expose the Company to negative publicity and reputational harm. RISKS RELATING TO OUR CONSULTING SEGMENT Our Consulting segment, conducted through Mercer and Oliver Wyman Group, represented 38% of our total revenue in 2023. Our businesses in this segment are subject to particular risks.
Mercer's administration services include calculating benefits within complicated pension plan structures. Mercer's investments services include investment advice and management relating to defined benefit pension plan assets intended to fund present and future benefit obligations. Clients dissatisfied with our 33 services have brought, and may bring, significant claims against us, particularly in the United States and the United Kingdom.
Mercer's administration services include calculating benefits within complicated pension plan structures. Mercer's investments services include investment advice and management relating to defined benefit pension plan assets intended to fund present and future benefit obligations. Clients dissatisfied with our services have brought, and may bring, significant claims against us, particularly in the U.S. and the United Kingdom.
Our business performance and growth plans could be negatively affected if we are not able to develop and implement improvements in technology or respond effectively to the threat of digital disruption and other technological change.
Our business performance and growth plans could be negatively affected if we are not able to develop and implement improvements in technology or respond effectively to the threat of digital disruption and other technological change such as AI.
There is increased focus, including from governmental organizations, regulators (including the SEC in the United States), investors, colleagues and clients, on ESG issues such as environmental stewardship, climate change, greenhouse gas emissions, inclusion and diversity, human rights, racial justice, pay equity, workplace conduct, cybersecurity and data privacy.
There is increased focus, including from governmental organizations, regulators (including the SEC in the U.S.), investors, colleagues and clients, on ESG issues such as environmental stewardship, climate change, greenhouse gas emissions, inclusion and diversity, human rights, racial justice, pay equity, workplace conduct, cybersecurity and data privacy.
A downgrade to a rating below investment-grade could result in greater operational risks through increased operating costs and increased competitive pressures. Our current debt level could adversely affect our financial flexibility. As of December 31, 2022, we had total consolidated debt outstanding of approximately $11.5 billion.
A downgrade to a rating below investment-grade could result in greater operational risks through increased operating costs and increased competitive pressures. Our current debt level could adversely affect our financial flexibility. As of December 31, 2023, we had total consolidated debt outstanding of approximately $13.5 billion.
We collect data from client and individuals located all over the world and leverage systems and teams to process it. As a result, we are subject to a variety of laws and regulations in the United States, Europe and around the world regarding privacy, data protection, data security and cyber security. These laws and regulations are continuously evolving and developing.
We collect data from client and individuals located all over the world and leverage systems and teams to process it. As a result, we are subject to a variety of laws and regulations in the U.S., Europe and around the world regarding privacy, data protection, data security and cyber security. These laws and regulations are continuously evolving and developing.
These vendors and third parties may act in ways that could harm our business; • Our inability to successfully recover should we experience a disaster or other business continuity or data recovery problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability; • We face risks when we acquire businesses; • If we are unable to collect our receivables, our results of operations and cash flows could be adversely affected; • We may not be able to obtain sufficient financing on favorable terms; 15 • Our defined benefit pension plan obligations could cause the Company's financial position, earnings and cash flows to fluctuate; • Our significant non-U.S. operations expose us to exchange rate fluctuations and various risks that could impact our business; • Our quarterly revenues and profitability may fluctuate significantly; • Credit rating downgrades would increase our financing costs and could subject us to operational risk; • Our current debt level could adversely affect our financial flexibility; • The current U.S. tax regime makes our results more difficult to predict; • We are exposed to multiple risks associated with the global nature of our operations; • Results in our Risk and Insurance Services segment may be adversely affected by a general decline in economic activity; • Volatility or declines in premiums and other market trends may significantly impede our ability to grow revenues and profitability; • Adverse legal developments and future regulations concerning how intermediaries are compensated by insurers or clients, as well as allegations of anti-competitive behavior or conflicts of interest more broadly, could have a material adverse effect on Marsh’s business, results of operations and financial condition; • Mercer’s Wealth business is subject to a number of risks, including risks related to public and private capital market fluctuations, third-party asset managers, operational and technology risks, conflicts of interest, ESG and greenwashing, asset performance and regulatory compliance, that, if realized, could result in significant damage to our business; • Revenues for the services provided by our Consulting segment may decline for various reasons, including as a result of changes in economic conditions, the value of equity, debt and other asset classes, our clients’ or an industry's financial condition or government regulation or an accelerated trend away from actively managed investments to passively managed investments; • Factors affecting defined benefit pension plans and the services we provide relating to those plans could adversely affect Mercer; and • The profitability of our Consulting segment may decline if we are unable to achieve or maintain adequate utilization and pricing rates for our consultants.
These vendors and third parties may act or fail to act in ways that could harm our business; • Our inability to successfully recover should we experience a disaster or other business continuity or data recovery problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability; • We face risks when we acquire or dispose of businesses; • If we are unable to collect our receivables, our results of operations and cash flows could be adversely affected; • We may not be able to obtain sufficient financing on favorable terms; • Our defined benefit pension plan obligations could cause the Company's financial position, earnings and cash flows to fluctuate; 13 • Our significant non-U.S. operations expose us to exchange rate fluctuations and various risks that could impact our business; • Our quarterly revenues and profitability may fluctuate significantly; • Credit rating downgrades would increase our financing costs and could subject us to operational risk; • Our current debt level could adversely affect our financial flexibility; • The current U.S. tax regime has provisions which have unintended consequences and may also impact our tax rate in varying degrees based on where our global income is earned; • We are exposed to multiple risks associated with the global nature of our operations; • Results in our Risk and Insurance Services segment may be adversely affected by a general decline in economic activity; • Volatility or declines in premiums and other market trends may significantly impede our ability to grow revenues and profitability; • Adverse legal developments and future regulations concerning how intermediaries are compensated by insurers or clients, as well as allegations of anti-competitive behavior or conflicts of interest, could have a material adverse effect on Marsh’s business, results of operations and financial condition; • Mercer’s Wealth business is subject to a number of risks, including risks related to public and private capital market fluctuations, third-party asset managers and custodians, operations and technology risks, conflicts of interest, ESG and greenwashing, asset performance and regulatory compliance, that, if realized, could result in significant damage to our business; • Revenues for the services provided by our Consulting segment may decline for various reasons, including as a result of changes in economic conditions, the value of equity, debt and other asset classes, our clients’ or an industry's financial condition or government regulation or an accelerated trend away from actively managed investments to passively managed investments; • Factors affecting defined benefit pension plans and the services we provide relating to those plans could adversely affect Mercer; and • The profitability of our Consulting segment may decline if we are unable to achieve or maintain adequate utilization and pricing rates for our consultants.
It is therefore important for us to attract, incentivize and retain significant revenue-producing employees and the key managerial and other professionals who support them. We face numerous challenges in this regard, including the intense competition for talent, which has accelerated through the pandemic.
It is therefore important for us to attract, incentivize and retain significant revenue-producing employees and the key managerial and other professionals who support them. We face numerous challenges in this regard, including the intense competition for talent, which has accelerated in recent years.
RISKS RELATING TO OUR RISK AND INSURANCE SERVICES SEGMENT Our Risk and Insurance Services segment, conducted through Marsh and Guy Carpenter, represented 61% of the Company's total revenue in 2022. Our business in this segment is subject to particular risks. Results in our Risk and Insurance Services segment may be a dversely affected by a general decline in economic activity.
RISKS RELATING TO OUR RISK AND INSURANCE SERVICES SEGMENT Our Risk and Insurance Services segment, conducted through Marsh and Guy Carpenter, represented 62% of the Company's total revenue in 2023. Our business in this segment is subject to particular risks. Results in our Risk and Insurance Services segment may be a dversely affected by a general decline in economic activity.
For example, these claims could include allegations related to losses incurred by policyholders arising from the COVID-19 pandemic, or losses from cyberattacks associated with policies where cyber risk was not specifically included or excluded in policies, commonly referred to as “silent cyber.” In our Consulting 21 segment, where we increasingly act in a fiduciary capacity through our investments business, such claims could include allegations of damages arising from the provision of consulting, investment management (including, for example, from trading or other operational errors), actuarial, pension administration and other services.
For example, these claims could include allegations related to losses from cyberattacks associated with policies where cyber risk was not specifically included or excluded in policies, commonly referred to as “silent cyber.” In our Consulting segment, where we increasingly act in a fiduciary capacity through our investments business, such claims could include allegations of damages arising from the provision of consulting, investment management (including, for example, from trading or other operational errors), actuarial, pension administration and other services.
We are at risk of attack by a variety of adversaries, including state-sponsored organizations, organized crime and hackers, through use of 17 increasingly sophisticated methods of attack, including the deployment of artificial intelligence to find and exploit vulnerabilities, "deep fakes", long-term, persistent attacks (referred to as advanced persistent threats) and the use of the IT supply chain to introduce malware through software updates or compromised suppliers accounts or hardware.
We are at risk of attack by a variety of adversaries, including nation states, state-sponsored organizations, organized crime and hackers, through use of increasingly sophisticated methods of attack, including the deployment of AI to find and exploit vulnerabilities, "deep fakes", long-term, persistent attacks (referred to as advanced persistent threats) and the use of the IT supply chain to introduce malware through software updates or compromised suppliers accounts or hardware.
Credit rating downgrades would increase our financing costs and could subject us to operational risk. Currently, the Company's senior debt is rated A- by S&P and Fitch and Baa1 by Moody's. The Company carries a Stable outlook with both S&P and Fitch and Positive outlook with Moody's.
Credit rating downgrades would increase our financing costs and could subject us to operational risk. Currently, the Company's senior debt is rated A- by S&P, A3 by Moody's and A- by Fitch. The Company carries a Stable outlook with S&P, Moody's and Fitch.
The Company's policy for funding its defined benefit pension plans is to contribute amounts at least sufficient to meet the funding requirements set forth by law. In the United States, contributions to these plans are based on ERISA guidelines.
The Company's policy for funding its defined benefit pension plans is to contribute amounts at least sufficient to meet the funding requirements set forth by law. In the U.S., contributions to these plans are based on ERISA guidelines.
Macroeconomic or geopolitical conditions, such as a slower economic growth or recession, the war in Ukraine, inflationary pressures or supply chain challenges, could result in financial difficulties for our clients, which could cause clients to delay payments to us, request modifications to their payment arrangements that could increase our receivables balance or default on their payment obligations to us.
Macroeconomic or geopolitical conditions, such as a slower economic growth or recession, the war in Ukraine and the escalating conflict throughout the Middle East, inflationary pressures or supply chain challenges, could result in financial difficulties for our clients, which could cause clients to delay payments to us, request modifications to their payment arrangements that could increase our receivables balance or default on their payment obligations to us.
In addition, we have migrated certain data, and may increasingly migrate data, to the cloud hosted by third-party providers. Some of these vendors and third parties also have direct access to our systems.
In addition, we have migrated certain data, and may increasingly migrate data, to the cloud where it is hosted by third-party providers. Some of these vendors and third parties also have direct access to our systems or data.
In addition, geopolitical conflict, such as the war in Ukraine, has resulted in, and may continue to result in, new and rapidly evolving trade sanctions, which 22 may increase our costs, negatively impact our revenues or impose additional operational limitations on our businesses.
In addition, geopolitical conflict, such as the war in Ukraine and the escalating conflict throughout the Middle East, has resulted in, and may continue to result in, new and rapidly evolving trade sanctions, which may increase our costs, negatively impact our revenues or impose additional operational limitations on our businesses.
We could experience significant financial and reputational harm if our information systems are breached, sensitive client or Company data are compromised, surreptitiously modified, rendered inaccessible for any period of time or maliciously made public, or if we fail to make adequate or timely disclosures to the public or law enforcement agencies following any such event, whether due to delayed discovery or a failure to follow existing protocols.
We could experience significant financial and reputational harm if our information systems are breached, sensitive client or Company data are compromised, surreptitiously modified, rendered inaccessible for any period of time or maliciously made public, or if we fail to make adequate or timely disclosures to the public, law enforcement agencies or regulators following any such event, whether due to delayed discovery or a failure to follow existing protocols. 17 Cyberattacks are increasing in frequency and evolving in nature.
These players are focused on using technology and innovation, including artificial intelligence (AI), digital platforms, data analytics, robotics and blockchain, to simplify and improve the client experience, increase efficiencies, alter business models and effect other potentially disruptive changes in the industries in which we operate.
These players are focused on using technology and innovation, including AI, digital platforms, data analytics, robotics and blockchain, to simplify and improve the client experience, increase efficiencies, alter business models and effect other potentially disruptive changes in the industries in which we operate. We are actively investing in generative AI tools.
The risk of business disruption is more pronounced in certain geographic areas, including major metropolitan centers, like New York or London, where we have significant operations and approximately 3,500 and 5,600 colleagues in those respective locations, and in certain countries and regions in which we operate that are subject to higher potential threat of terrorist attacks or military conflicts.
The risk of business disruption is more pronounced in certain geographic areas, including major metropolitan centers, like New York or London, where we have significant operations and approximate ly 3,700 and 5,700 colleagues i n those respective locations, and in certain countries and regions in which we operate that are subject to higher potential threat of terrorist attacks or military conflicts.
In particular, we are at increased risk of a cyberattack during periods of heightened geopolitical conflict, such as the war in Ukraine, as diplomatic events and economic policies may trigger espionage or retaliatory cyber incidents.
Further, we are at increased risk of a cyberattack during periods of heightened geopolitical conflict, such as the war in Ukraine and the escalating conflict throughout the Middle East, as diplomatic events and economic policies may trigger espionage or retaliatory cyber incidents.
A disruption of physical infrastructure could impact our ability to conduct business and service clients. This may include deliberate or unintentional disruption of service to electrical systems, satellite communications, undersea or terrestrial cable systems, Internet services, or other systems our colleagues or third parties rely on us to conduct business in a multitude of jurisdictions across the globe.
This may include deliberate or unintentional disruption of service to electrical systems, satellite communications, undersea or terrestrial cable systems, Internet services, or other systems our colleagues or third parties rely on us to conduct business in a multitude of jurisdictions across the globe.
Given the breadth and depth of changes in data protection obligations, including classifying data and committing to a range of administrative, technical and physical controls to protect data and enable data transfers outside of the E.U., our compliance with laws such as the GDPR and the CPRA will continue to require time, resources and review of the technology and systems we use.
Given the breadth and depth of changes in data protection obligations, including classifying data and committing to a range of administrative, technical and physical controls to protect data and enable data transfers across borders, our compliance with such laws will continue to require time, resources and review of the technology and systems we use.
The costs to comply with, or our failure to comply with, U.S. and foreign laws related to privacy, data security and data protection, such as the E.U. General Data Protection Regulation (GDPR) and the California Privacy Rights Act (CPRA), could adversely affect our financial condition, operating results and our reputation.
The costs to comply with, or our failure to comply with, U.S. and foreign laws related to privacy, data security and data protection, such as the EU's General Data Protection Regulation (GDPR) and the California Consumer Privacy Act, as amended by the California Privacy Rights Act, (CCPA), could adversely affect our financial condition, operating results and our reputation.
Our significant non-U.S. operations expose us to exchange rate fluctuations and various risks that could impact our business. Approximately 51% of our total revenue reported in 2022 was from business outside of the United States.
Our significant non-U.S. operations expose us to exchange rate fluctuations and various risks that could impact our business. Approximately 53% of our total revenue reported in 2023 was from business outside of the U.S.
In 2022, approximately 51% of the Company's total revenue was generated from operations outside the United States, and over one-half of our employees were located outside the United States. In addition, we conduct our operations through four separate businesses. Potential conflicts of interest may arise across our businesses given the significant volume of our engagements.
In 2023, approximately 53% of the Company's total revenue was generated from operations outside the U.S., and over one-half of our employees were located outside the U.S. In addition, we conduct our operations through four separate businesses. Potential conflicts of interest may arise across our businesses given the significant volume of our engagements.
Because these techniques change frequently and new techniques may not be identified until they are launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures, resulting in potential data loss, data unavailability, data corruption or other damage to information technology systems.
The techniques used to achieve such unauthorized access, damage or interruption change frequently and new techniques may not be identified until they are launched against a target, and we may be unable to anticipate these techniques or implement adequate preventative or remedial measures, resulting in potential data loss, data unavailability, data corruption or other damage to information technology systems.
Some of our competitors may have greater financial resources, or may be better positioned to respond to technological and other changes in the industries we serve, and they may be able to compete more effectively.
Additionally, some of our competitors may have greater financial resources, or may be better positioned to respond to technological and other changes in the industries we serve, and they may be able to compete more effectively. Furthermore, the competition for talent continues to accelerate.
Given the complexity of operationalizing the various privacy laws such as the GDPR and the CPRA, the maturity level of proposed compliance frameworks and the continued lack of certainty on how to implement their requirements, we and our clients are at risk of enforcement actions taken by E.U. and other data protection authorities or litigation from consumer advocacy groups acting on behalf of data subjects.
Given the complexity of operationalizing the various privacy laws mentioned above, the maturity level of proposed compliance frameworks and the continued lack of certainty on how to implement their requirements, we and our clients are at risk of enforcement actions taken by data protection authorities around the world or litigation from consumer advocacy groups acting on behalf of data subjects.
The Company has significant defined benefit pension obligations to its current and former employees, totaling approximately $11.8 billion, and related plan assets of approximately $13.0 billion, at December 31, 2022 on a U.S. GAAP basi s.
The Company has significant defined benefit pension obligations to its current and former employees, totaling approximately $12.2 billion, and related plan assets of approximately $13.5 billion, at December 31, 2023 on a U.S. GAAP basi s.
Remote and hybrid work arrangements may also negatively impact our ability to maintain and promote our culture, as we believe being together is integral to promoting our culture.
Remote and hybrid work arrangements, particularly following the COVID-19 pandemic, may also negatively impact our ability to maintain and promote our culture, as we believe being together is integral to promoting our culture.
In many cases, the Company has not recorded a liability, other than for legal fees to defend the claim, because we are unable, at the present time, to make a determination that a loss is both probable and reasonably estimable. Given the judgment involved in estimating and establishing liabilities in accordance with U.S.
In many cases, the Company has not recorded a liability, other than for legal fees to defend a claim, because we are unable, at the present time, to make a determination that a loss is both probable and reasonably estimable.
We may also be exposed to claims related to assets or solutions offered by the Consulting segment in complement to its traditional consulting services.
We may also be exposed to claims related to services or solutions offered by the Consulting segment in addition to consulting services.
Mercer’s Investments business is subject to a number of risks, including risks related to litigation (both by clients and by plan participants, particularly as we increasingly act in a fiduciary capacity), liquidity and market volatility, third-parties, our operations and technology, trading errors, conflicts of interest, asset performance and regulatory compliance and scrutiny, which could arise in connection with these offerings.
Mercer’s Investments business is subject to a number of risks, including risks related to litigation (both by clients and by plan participants, particularly as we increasingly act in a fiduciary capacity), liquidity and market volatility, an inability to obtain contractual limitations of liability for errors & omissions in certain jurisdictions or parts of our business, third-parties, our operations and technology (including the use of AI), trading errors, conflicts of interest, asset performance and regulatory compliance and scrutiny, which could arise in connection with these offerings.
Our operations depend in particular upon our ability to protect our technology infrastructure against damage. If a business continuity event occurs, we could lose client or Company data or experience interruptions to our operations or delivery of services to our clients, which could have a material adverse 26 effect.
Our operations depend in particular upon our ability to protect our technology infrastructure against damage. If a business continuity event occurs, we could lose client or Company data or experience interruptions to our operations or delivery of services to our clients, which could have a material adverse effect. Such risks have increased significantly due to hybrid and remote work environments.
Our information technology systems and safety control systems, and those of our numerous third-party providers, as well as the control systems of critical infrastructure they rely on, such as power grids, and undersea cables, are potentially vulnerable to unauthorized access, damage or interruption from a variety of external threats, including physical attack, cyberattacks, computer viruses and other malware, ransomware and other types of data and systems-related modes of attack.
Our information technology systems and information security control systems, and those of our numerous third-party providers, as well as the control systems of critical infrastructure they rely on, such as power grids, and undersea cables, are potentially vulnerable to unauthorized access, damage or interruption from a variety of external threats, including software bugs, physical attack, cyberattacks, computer viruses and other malware, malicious or destructive code, ransomware, social engineering attacks (including phising and digital or telephonic impersonation), hacking, denial-of-service attacks and other types of data and systems-related modes of attack.
In addition, we are subject to risks that, at the time any of our outstanding debt matures, we will not be able to retire or refinance the debt on terms that are acceptable to us. The current U.S. tax regime makes our results more difficult to predict.
In addition, we are subject to risks that, at the time any of our outstanding debt matures, we will not be able to retire or refinance the debt on terms that are acceptable to us.
For example, the war in Ukraine has continued to result in worldwide geopolitical and macroeconomic uncertainty and may negatively impact other regional and global economic markets (including Europe and the United States), companies in other countries (particularly those that have done business with Russia) and various sectors, industries and markets for securities and commodities globally, such as oil and natural gas, and may increase financial market volatility and adversely impact regional and global economic markets, industries and companies.
For example, the war in Ukraine and the escalating conflict throughout the Middle East have resulted in worldwide geopolitical and macroeconomic uncertainty and may negatively impact other regional and global economic markets (including Europe, the Middle East and the U.S.), companies in other countries (particularly those that have done business with Russia or have substantial exposure to, or operations in, impacted countries) and various sectors, industries and markets for securities and commodities globally, such as oil and natural gas, and may increase financial market volatility and adversely impact regional and global economic markets, industries and companies.
Additional information regarding certain ongoing investigations and certain other legal and regulatory proceedings is set forth in Note 16, Claims, Lawsuits and Other Contingencies, in the notes to the consolidated financial statements included under Part II, Item 8 of this report.
Additional information regarding certain ongoing investigations and certain other legal and regulatory proceedings is set forth in Note 16, Claims, Lawsuits and Other Contingencies, in the notes to the consolidated financial statements included under Part II, Item 8 of this report. 16 Our business or reputation could be harmed by our reliance on third-party providers or introducers.
Disruptions may be the result of weather, natural disaster, war, terrorism, pandemic, or other natural or geopolitical event. Our systems are also subject to compromise from internal threats such as improper action by employees, vendors and other third parties with otherwise legitimate access to our systems. Moreover, we face the ongoing challenge of managing access controls in a complex environment.
Disruptions may be the result of weather, natural disaster, war, terrorism, pandemic, or other natural or geopolitical events. Our systems are also subject to compromise from internal threats such as fraud, mistake, misconduct or other improper action by employees, vendors and other third parties with otherwise legitimate access to our systems.
These inquiries consume significant management attention, and the cost of compliance and the consequences of failing to be in compliance could therefore have a material adverse effect on our business. In addition, we may be responsible for the legal and regulatory liabilities of companies that we acquire.
These inquiries consume significant management attention, and the cost of compliance and the consequences of failing to be in compliance could therefore have a material adverse effect on our business.
Our business disruption insurance may also not fully cover, in type or amount, the cost of a successful recovery in the event of such a disruption. Acquisitions and Dispositions Risks We face risks when we acquire businesses. We have a history of making acquisitions and investments, including a total of 93 in the period from 2017 to 2022.
Our business disruption insurance may also not fully cover, in type or amount, the cost of a successful recovery in the event of such a disruption. Acquisitions and Dispositions Risks We face risks when we acquire or dispose of businesses.
For example, the GDPR, which became effective in May 2018, greatly increased the 19 European Commission’s jurisdictional reach of its laws and added a broad array of requirements for handling personal data, such as the public disclosure of data breaches, privacy impact assessments, data portability and the appointment of data protection officers in some cases.
Many of these laws, which are modeled after the GDPR, have greatly increased the jurisdictional reach of privacy laws and added a broad array of requirements for handling personal data, such as the public disclosure of data breaches, data protection impact assessments, data portability and the appointment of data protection officers in some cases.
There is a risk that we may not effectively identify and manage potential conflicts of interest, including but not limited to where our services to a client conflict, or are perceived to conflict, with the interests of another client or our own interests, where we receive revenue or benefits from third-parties with whom we conduct business (including but not limited to insurers, investment managers and vendors) and where our colleagues have personal interests. 23 Competitive Risks The loss of members of our senior management team or other key colleagues, or if we are unsuccessful in our efforts to attract, retain and develop talent, could have a material adverse effect on our business.
There is a risk that we may not effectively identify and manage potential conflicts of interest, including but not limited to where our services to a client conflict, or are perceived to conflict, with the interests of another client or our own interests, where we receive revenue or benefits from third-parties with whom we conduct business (including but not limited to insurers, investment managers and vendors) and where our colleagues have personal interests.
Adverse legal developments and future regulations concerning how intermediaries are compensated by insurers or clients, as well as allegations of anti-competitive behavior or conflicts of interest more broadly, could have a material adverse effect on our business, results of operations and financial condition.
If we are unable to achieve and maintain adequate billing rates for all of our services, our margins and profitability could decline. 29 Adverse legal developments and future regulations concerning how intermediaries are compensated by insurers or clients, as well as allegations of anti-competitive behavior or conflicts of interest, could have a material adverse effect on our business, results of operations and financial condition.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAdditional information regarding certain legal proceedings and related matters is set forth in Note 16, Claims, Lawsuits and Other Contingencies, in the notes to the consolidated financial statements appearing under Part II, Item 8 ("Financial Statements and Supplementary Data") of this report. 35 PART II
Biggest changeAdditional information regarding certain legal proceedings and related matters is set forth in Note 16, Claims, Lawsuits and Other Contingencies, in the notes to the consolidated financial statements appearing under Part II, Item 8 ("Financial Statements and Supplementary Data") of this report.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis is in addition to the Company's existing share repurchase program, which had approximately $1.3 billion of remaining authorization as of December 31, 2021. The Company repurchased approximately 12.2 million shares of its common stock for $1.9 billion in 2022.
Biggest changeThe Company repurchased approximately 12.2 million shares of its common stock for $1.9 billion in 2022. In March 2022, the Board of Directors of the Company authorized an additional $5 billion in share repurchases. This was in addition to the Company's existing share repurchase program, which had approximately $1.3 billion of remaining authorization at December 31, 2021.
As of December 31, 2022, the Company remained authorized to repurchase up to approximately $4.3 billion in shares of its common stock. There is no time limit on the authorization. The Company repurchased approximately 7.9 million shares of its common stock for $1.2 billion in 2021.
The Company repurchased approximately 6.4 million shares of its common stock for $1.15 billion in 2023. At December 31, 2023, the Company remained authorized to repurchase up to approximately $3.2 billion in shares of its common stock. There is no time limit on the authorization.
Item 5. Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company’s common stock is listed on the New York, Chicago and London Stock Exchanges.
Item 5. Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company’s common stock is listed on the New York and Chicago Stock Exchanges. Effective as of November 27, 2023, the Company’s common stock was delisted from the London Stock Exchange.
The following table indicates the high and low prices (NYSE composite quotations) of the Company’s common stock in 2022 and 2021 and each quarterly period thereof: 2022 Stock Price Range 2021 Stock Price Range High Low High Low First Quarter $173.34 $142.80 $122.09 $106.95 Second Quarter $183.14 $143.33 $141.41 $121.31 Third Quarter $174.23 $146.82 $162.26 $137.85 Fourth Quarter $176.75 $148.14 $175.12 $151.37 Full Year $183.14 $142.80 $175.12 $106.95 On March 23, 2022, the Board of Directors of the Company authorized an additional $5 billion in share repurchases.
The following table indicates the high and low prices (NYSE composite quotations) of the Company’s common stock in 2023 and 2022, and each quarterly period thereof: 2023 Stock Price Range 2022 Stock Price Range High Low High Low First Quarter $176.85 $151.86 $173.34 $142.80 Second Quarter $189.02 $165.86 $183.14 $143.33 Third Quarter $199.20 $183.81 $174.23 $146.82 Fourth Quarter $202.81 $184.02 $176.75 $148.14 Full Year $202.81 $151.86 $183.14 $142.80 The Company has a share repurchases program authorized by the Board of Directors.
The following information relates to the Company's repurchases of equity securities during any month within the fourth quarter of the fiscal year covered by this report: Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs Oct 1-31, 2022 977,063 $ 155.2316 977,063 $ 4,512,323,223 Nov 1-30, 2022 382,066 $ 164.9085 382,066 $ 4,449,317,300 Dec 1-31, 2022 800,566 $ 169.0335 800,566 $ 4,313,994,859 Total 2,159,695 $ 162.0597 2,159,695 $ 4,313,994,859 As February 9, 2023, there were 4,210 stockholders of record. 36
The following information relates to the Company's repurchases of equity securities during each month within the fourth quarter of the fiscal year covered by this report: Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs Oct 1-31, 2023 239,503 $ 187.95 239,503 $ 3,369,049,645 Nov 1-30, 2023 635,940 $ 197.13 635,940 $ 3,243,683,847 Dec 1-31, 2023 410,498 $ 193.91 410,498 $ 3,164,084,989 Total 1,285,941 $ 194.39 1,285,941 $ 3,164,084,989 At February 8, 2024, there were 4,044 stockholders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOperating income was $1.6 billion and $1.5 billion in 2022 and 2021, respectively. • The Company's results of operations in 2022 were impacted by restructuring activities of $427 million, primarily related to severance and lease exit charges for activities focused on workforce actions, technology rationalization and reductions in real estate. • The Company completed 20 acquisitions in 2022, the largest being the acquisition of HMS Insurance Inc., a full service broker in the Risk and Insurance services segment, and the 38 Avascent Group Ltd, an aerospace and defense management consulting firm in the Consulting segment. • In 2022, Mercer sold its U.S. affinity business that provided insurance marketing, brokerage and administration to association and affinity groups for cash proceeds of approximately $140 million and a net gain of $112 million. • The Company issued senior notes of $500 million due 2032 and $500 million due 2052, and repaid senior notes of $350 million due in March 2023. • In 2022, the Company repurchased 12.2 million shares for $1.9 billion.
Biggest changeOperating income was $1.7 billion and $1.6 billion in 2023 and 2022, respectively. • The Company's results of operations in 2023 were impacted by restructuring activities of $301 million, primarily related to severance and lease exit charges for activities focused on workforce actions, technology rationalization and reductions in real estate. • The Company completed 14 acquisitions in 2023, the largest being the acquisitions of Honan Insurance Group and Graham Company in the Risk and Insurance Services segment. • In the Consulting segment, the Company completed the acquisition of Westpac Banking Corporation’s ("Westpac") financial advisory business, Advance Asset Management, and the transfer from Westpac of BT Financial Group's personal and corporate pension funds to the Mercer Super Trust managed by Mercer Australia (referred to collectively, as the "Westpac Transaction"). • In September 2023, the Company issued $600 million of 5.400% senior notes due 2033 and $1.0 billion of 5.700%% senior notes due 2053.
The Company’s policy for funding its tax-qualified defined benefit retirement plans is to contribute amounts at least sufficient to meet the funding requirements set forth in U.S. and applicable foreign laws.
The Company’s policy for funding its tax-qualified defined benefit retirement plans is to contribute amounts at least sufficient to meet the funding requirements set forth in the U.S. and applicable foreign laws.
The vast majority of 54 unrecognized losses relate to inactive plans and are amortized over the remaining life expectancy of the participants. The determination of net periodic benefit (credit) cost is based on a number of assumptions, including an expected long-term rate of return on plan assets, the discount rate, mortality and assumed rate of salary increase.
The vast majority of unrecognized losses relate to inactive plans and are amortized over the remaining life expectancy of the participants. The determination of net periodic benefit (credit) cost is based on a number of assumptions, including an expected long-term rate of return on plan assets, the discount rate, mortality and assumed rate of salary increase.
Debt In October 2022, the Company issued $500 million of 5.75% senior notes due 2032 and $500 million of 6.25% senior notes due 2052. The Company used the net proceeds from these issuances for general corporate purposes, and repaid $350 million of 3.30% senior notes in November 2022, with an original maturity date of March 2023.
In October 2022, the Company issued $500 million of 5.75% senior notes due 2032 and $500 million of 6.25% senior notes due 2052. The Company used the net proceeds from these issuances for general corporate purposes, and repaid $350 million of 3.30% senior notes in November 2022, with an original maturity date of March 2023.
Management also makes significant judgments and estimates to measure the progress toward completing performance obligations and realization rates for consideration related to contracts as well as potential performance-based fees in the Consulting segment. The Company capitalizes the incremental costs to obtain contracts primarily related to commissions or sales bonus payments.
Management also makes judgments and estimates to measure the progress toward completing performance obligations and realization rates for consideration related to contracts as well as potential performance-based fees in the Consulting segment. The Company capitalizes the incremental costs to obtain contracts primarily related to commissions or sales bonus payments.
The Company’s accounting policies for its defined benefit pension plans, including the selection of and sensitivity to assumptions, are discussed in Management’s Discussion of Critical Accounting Policies. For additional information regarding the Company’s retirement plans, refer to Note 1, Summary of Significant Accounting Policies, and Note 8, Retirement Benefits, in the notes to the consolidated financial statements.
The Company’s accounting policies for its defined benefit pension plans, including the selection of and sensitivity to assumptions, are discussed in Management’s Discussion of Critical Accounting Estimates. For additional information regarding the Company’s retirement plans, refer to Note 1, Summary of Significant Accounting Policies, and Note 8, Retirement Benefits, in the notes to the consolidated financial statements.
The key assumptions and sensitivity to changes in the assumed health care cost trend rate are discussed in Note 8, Retirement Benefits, in the notes to the consolidated financial statements. Income Taxes Significant judgment is required in determining the annual effective tax rate and in evaluating uncertain tax positions.
The key assumptions and sensitivity to changes in the assumed health care cost trend rate are discussed in Note 8, Retirement Benefits, in the notes to the consolidated financial statements. 52 Income Taxes Significant judgment is required in determining the annual effective tax rate and in evaluating uncertain tax positions.
The Company utilizes case level reviews by inside and outside counsel, an internal actuarial analysis by Oliver Wyman, a subsidiary of the Company, and other methods to estimate potential losses. The liability is reviewed quarterly and adjusted based on claims developments.
The Company utilizes case level reviews by inside and outside counsel, an internal actuarial analysis by Oliver Wyman Group, a subsidiary of the Company, and other methods to estimate potential losses. The liability is reviewed quarterly and adjusted based on claims developments.
The gains or losses and prior service costs or credits that have not been recognized as components of net benefit (credit) costs are recorded as a component of Accumulated Other Comprehensive Income ("AOCI"), net of tax, in the Company’s consolidated balance sheets.
The gains or losses and prior service costs or credits that have not been recognized as components of net benefit (credit) cost are recorded as a component of Accumulated Other Comprehensive Income ("AOCI"), net of tax, in the Company’s consolidated balance sheets.
Pension Fund, excluding the JLT section, an agreement was reached with the trustee in the fourth quarter of 2022 , based on the surplus funding position at December 31, 2021. In accordance with the agreement, no deficit funding is required until 2026.
Pension Fund, excluding the JLT section, an agreement was reached with the trustee in the fourth quarter of 2022, based on the surplus funding position at December 31, 2021. In accordance with the agreement, no deficit funding is required at the earliest until 2026.
The Company conducts business in this segment through Marsh and Guy Carpenter. • Consulting includes health, wealth and career solutions and products, and specialized management, strategic, economic and brand consulting services. The Company conducts business in this segment through Mercer and Oliver Wyman Group.
The Company conducts business in this segment through Marsh and Guy Carpenter. • Consulting includes health, wealth and career advice, solutions and products, and specialized management, strategic, economic and brand consulting services. The Company conducts business in this segment through Mercer and Oliver Wyman Group.
A reconciliation of segment operating income to total operating income is included in Note 17, Segment Information, in the notes to the consolidated financial statements included in Part II, Item 8, of this report. For information and comparability of the Company's results of operations and liquidity and capital resources for fiscal year 2020, refer to "Item 7.
A reconciliation of segment operating income to total operating income is included in Note 17, Segment Information, in the notes to the consolidated financial statements included in Part II, Item 8, of this report. For information and comparability of the Company's results of operations and liquidity and capital resources for fiscal year 2021, refer to "Item 7.
New Accounting Pronouncements Note 1, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements contains a summary of the Company’s significant accounting policies, including a discussion of recently issued accounting pronouncements and their impact or potential future impact on the Company’s financial results, if determinable, under the sub-heading "New Accounting Pronouncements." 57
New Accounting Pronouncements Note 1, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements contains a summary of the Company’s significant accounting policies, including a discussion of recently issued accounting pronouncements and their impact or potential future impact on the Company’s financial results, if determinable, under the sub-heading "New Accounting Pronouncements." 54
Legal and Other Loss Contingencies The Company and its subsidiaries are subject to numerous claims, lawsuits and proceedings including claims for E&O. The Company records a liability when a loss is both probable and reasonably estimable which requires significant management judgment.
Legal and Other Loss Contingencies The Company and its subsidiaries are subject to numerous claims, lawsuits and proceedings including claims for errors and omissions ("E&O"). The Company records a liability when a loss is both probable and reasonably estimable which requires significant management judgment.
As the Company does not have significant operations of its own, the Company is dependent upon dividends and other payments from its operating subsidiaries to pay principal and interest on its outstanding debt obligations, pay dividends to stockholders, repurchase its shares and pay corporate expenses.
As the Company does not have significant operations of its own, the Company is dependent upon dividends and other payments from its operating subsidiaries to pay principal and interest on its outstanding debt obligations, pay dividends to shareholders, repurchase its shares and pay corporate expenses.
The following table shows the weighted average assumed rate of return and the discount rate at the December 31, 2022 measurement date used to measure pension expense in 2023 for the total Company, the U.S. and the Rest of World ("ROW"). Total Company U.S.
The following table shows the weighted average assumed rate of return and the discount rate at the December 31, 2023 measurement date used to measure pension expense in 2024 for the total Company, the U.S. and the Rest of World ("ROW"). Total Company U.S.
Risk and Insurance Services In the Risk and Insurance Services segment, the Company’s subsidiaries and other affiliated entities act as brokers, agents or consultants for insureds, insurance underwriters and other brokers in the areas of risk management, insurance broking, insurance program management, risk consulting, analytical modeling and alternative risk financing services, primarily under the name of Marsh, and engage in specialized reinsurance broking, strategic advisory services and analytics solutions, primarily under the name of Guy Carpenter.
Risk and Insurance Services In the Risk and Insurance Services segment, the Company’s subsidiaries and other affiliated entities act as brokers, agents or consultants for insureds, insurance underwriters and other brokers in the areas of risk management, insurance broking, insurance program management, risk consulting, analytical modeling and alternative risk financing services, primarily under the brand of Marsh, and engage in specialized reinsurance broking expertise, strategic advisory services and analytics solutions, primarily under the brand of Guy Carpenter.
On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted into law. The Company evaluated the provisions of the new legislation, the most significant of which are the corporate alternative minimum tax and the share repurchase tax.
On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted into law. The Company evaluated the provisions of the IRA, the most significant of which are the corporate alternative minimum tax and the share repurchase tax.
The gains and losses that exceed specified corridors, 10% of the greater of the projected benefit obligation or the market-related value of plan assets, are amortized prospectively out of AOCI over a period that approximates the remaining life expectancy of participants in plans where substantially all participants are inactive or the average remaining service period of active participants for plans with active participants.
The gains and losses that exceed specified corridors in accordance with accounting guidance, of the greater of the projected benefit obligation or the market-related value of plan assets, are amortized prospectively out of AOCI over a period that approximates the remaining life expectancy of participants in plans where substantially all participants are inactive or the average remaining service period of active participants for plans with active participants.
Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Form 10-K for the fiscal year ended December 31, 2021. This MD&A contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Refer to "Information Concerning Forward-Looking Statements" at the outset of this report.
Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company's Form 10-K for the fiscal year ended December 31, 2022. This MD&A contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Refer to "Information Concerning Forward-Looking Statements" at the outset of this report.
Continued strengthening of the U.S. dollar against foreign currencies would further decrease the translated U.S. dollar value of the Company’s net investments in its non-U.S. subsidiarie s, as well as the translated U.S. dollar value of cash repatriations from those subsidiaries. Cash and cash equivalents on our consolidated balance sheets includes funds available for general corporate purposes.
Continued weakening of the U.S. dollar against foreign currencies would further increase the translated U.S. dollar value of the Company’s net investments in its non-U.S. subsidiarie s, as well as the translated U.S. dollar value of cash repatriations from those subsidiaries. Cash and cash equivalents on our consolidated balance sheets includes funds available for general corporate purposes.
The table does not include the liability for unrecognized tax benefits of $97 million as the Company is unable to reasonably predict the timing of settlement of these liabilities, other than approximately $32 million that may become payable within one year.
The table does not include the liability for unrecognized tax benefits of $124 million as the Company is unable to reasonably predict the timing of settlement of these liabilities, other than approximately $49 million that may become payable within one year.
Share Repurchases On March 23, 2022, the Board of Directors of the Company authorized an additional $5 billion in share repurchases. This is in addition to the Company's existing share repurchase program, which had approximately $1.3 billion of remaining authorization as of December 31, 2021. In 2022, the Company repurchased 12.2 million shares of its common stock for $1.9 billion.
In 2022, the Company repurchased 12.2 million shares of its common stock for $1.9 billion. In March 2022, the Board of Directors of the Company authorized an additional $5 billion in share repurchases. This was in addition to the Company's existing share repurchase program, which had approximately $1.3 billion of remaining authorization at December 31, 2021.
In 2022, the Company's defined benefit pension plan assets had losses of 18.3% and 29.2% in the U.S. and U.K., respectively, as compared to gains of 13.2% and 1.9% in the U.S. and U.K., respectively, in 2021.
In 2023, the Company's defined benefit pension plan assets had gains of 9.3% and 4.1% in the U.S. and U.K., respectively, as compared to losses of 18.3% and 29.2% in the U.S. and U.K., respectively, in 2022.
Mercer delivers advice and technology-driven solutions that help organizations redefine the future of work, shape retirement and investment outcomes, and advance health and well-being for a changing workforce. Oliver Wyman Group serves as a critical strategic, economic and brand advisor to private sector and governmental clients.
Mercer delivers advice and technology-driven solutions that help organizations redefine the world of work, reshape retirement and investment outcomes, and unlock health and well-being for a changing workforce. Oliver Wyman Group serves as a critical strategic, economic and brand advisor to private sector and governmental clients.
The consolidated results of operations in the Management Discussion & Analysis ("MD&A") includes an overview of the Company’s consolidated 2022 results compared to the 2021 results, and should be read in conjunction with the consolidated financial statements and notes.
The results of operations in the Management Discussion & Analysis ("MD&A") include an overview of the Company’s consolidated 2023 results compared to the 2022 results, and should be read in conjunction with the consolidated financial statements and notes.
Further, most senior executive and oversight functions are conducted in the U.S. and the associated costs are incurred primarily in the U.S. Some of these expenses may not be deductible in the U.S., which may impact the effective tax rate.
The Company’s interest expense deductions are not currently limited. Further, most senior executive and oversight functions are conducted in the U.S. and the associated costs are incurred primarily in the U.S. Some of these expenses may not be deductible in the U.S., which may impact the effective tax rate.
The Company expects to continue its practice of repatriating available funds from its non-U.S. operating subsidiaries out of current annual earnings. Where appropriate, a portion of the current year earnings will continue to be permanently reinvested. In 2022, the Company recorded foreign currency translation adjustments which decreased net equity by $1 billion.
The Company expects to continue its practice of repatriating available funds from its non-U.S. operating subsidiaries out of current annual earnings. Where appropriate, a portion of the current year earnings will continue to be permanently reinvested. In 2023, the Company recorded foreign currency translation adjustments which increased net equity by $274 million.
If the hedge is highly effective, the change in the debt balance related to foreign exchange fluctuations is recorded in accumulated other comprehensive loss in the consolidated balance sheets. The U.S. dollar value of t he Euro n otes decreased by $82 million in 2022 related to the change in foreign exchange rates.
If the hedge is highly effective, the change in the debt balance related to foreign exchange fluctuations is recorded in accumulated other comprehensive loss in the consolidated balance sheets. The U.S. dollar value of t he Euro n otes increased by $54 million in 2023 due to change in foreign exchange rates.
The table also does not include the remaining transitional tax payments related to the Tax Cuts and Jobs Act ("TCJA") of $62 million, which will be paid in installments beginning in 2023 through 2026. 53 Management’s Discussion of Critical Accounting Policies and Estimates Management makes estimates and judgments that affect reported amounts of assets, liabilities, revenue and expenses, and disclosure of contingent assets and liabilities.
The table also does not include the remaining transitional tax payments related to the Tax Cuts and Jobs Act ("TCJA") of $58 million, which will be paid in installments from 2024 through 2026. 50 Management’s Discussion of Critical Accounting Estimates Management makes estimates and judgments that affect reported amounts of assets, liabilities, revenue and expenses, and disclosure of contingent assets and liabilities.
The target asset allocation for the U.K. plans, which comprise approximately 79% of non-U.S. plan assets, is 14% equities and equity alternatives and 86% fixed income. At the end of 2022, the actual allocation for the U.K. plans was 16% equities and equity alternatives and 84% fixed income.
At the end of 2023, the actual allocation for the U.S. plans was 49% equities and equity alternatives and 51% fixed income. The target asset allocation for the U.K. plans, which comprise approximately 79% of non-U.S. plan assets, is 14% equities and equity alternatives and 86% fixed income.
The Company's senior debt is currently rated A- by Standard & Poor's ("S&P"), Baa1 by Moody's and A- by Fitch. The Company's short-term debt is currently rated A-2 by S&P, P-2 by Moody's and F2 by Fitch. The Company carries a Positive outlook with Moody's and a Stable outlook with S&P and Fitch.
The Company's senior debt is currently rated A- by Standard & Poor's ("S&P"), A3 by Moody's, and A- by Fitch. The Company's short-term debt is currently rated A-2 by S&P, P-2 by Moody's, and F-2 by Fitch. The Company carries a Stable outlook with S&P, Moody's and Fitch.
At December 31, 2022, the Company had approximately $921 million of cash and cash equivalents in its foreign operations, which includes $325 million of operating funds required to be maintained for regulatory requirements or as collateral under certain captive insurance arrangements.
At December 31, 2023, the Company had approximately $1.2 billion of cash and cash equivalents in its foreign operations, which includes $462 million of operating funds required to be maintained for regulatory requirements or as collateral under certain captive insurance arrangements.
Assumed rate of return on plan assets $ (24) $ (45) $ 24 $ 45 Discount Rate $ (1) $ 6 $ 1 $ (8) The impact of discount rate changes relates to the increase or decrease in actuarial gains or losses being amortized through net periodic pension cost, as well as the increase or decrease in interest expense, with all other facts and assumptions held constant.
Assumed rate of return on plan assets $ (23) $ (46) $ 23 $ 46 Discount Rate $ — $ 8 $ — $ (9) The impact of discount rate changes relates to the increase or decrease in actuarial gains or losses being amortized through net periodic benefit (credit) cost, as well as the increase or decrease in interest expense, with all other facts and assumptions held constant.
Similarly, certain other items such as the revenue impact of acquisitions and dispositions, including transfers among businesses, may impact period-to-period comparisons of revenue. Underlying revenue measures the change in revenue from one period to another by isolating these impacts.
Similarly, certain other items such as acquisitions and dispositions, including transfers among businesses, may impact period over period comparisons of revenue. Non-GAAP revenue measures the change in revenue from one period to the next by isolating these impacts on an underlying revenue basis.
In 2022, the Company made contributions of $30 million to its non-qualified plans and expects to contribute approximately $31 million in 2023. The Company was not required to and made no contributions to its U.S. qualified plans in 2022, and is not required to make any contributions in 2023.
In 2023, the Company made contributions of $33 million to its non-qualified plans and expects to contribute approximately $31 million in 2024. The Company was not required to and made no contributions to its U.S. qualified plans in 2023. In 2024, the Company is required to make contributions totaling $2 million to its U.S. qualified plans.
The IRA is effective as of January 1, 2023, and will not have a significant impact on the Company's financial results of operations. As a U.S.-domiciled parent holding company, the Company is the issuer of essentially all of the Company's external indebtedness, and incurs the related interest expense in the U.S. The Company’s interest expense deductions are not currently limited.
The IRA was effective as of January 1, 2023, and does not have a significant impact on the Company's financial results of operations for the current year. As a U.S.-domiciled parent holding company, the Company is the issuer of essentially all of the Company's external indebtedness, and incurs the related interest expense in the U.S.
ROW Assumed rate of return on plan assets 5.31 % 6.49 % 4.74 % Discount rate 5.16 % 5.53 % 4.89 % Holding all other assumptions constant, a 0.5 percentage point change in the rate of return on plan assets and discount rate assumptions would affect net periodic pension cost for the U.S. and U.K. plans, which together comprise approximately 85% of total pension plan liabilities, as follows: 0.5 Percentage Point Increase 0.5 Percentage Point Decrease (In millions) U.S.
ROW Assumed rate of return on plan assets 5.44 % 6.49 % 4.96 % Discount rate 4.95 % 5.52 % 4.59 % Holding all other assumptions constant, a 0.5 percentage point change in the rate of return on plan assets and discount rate assumptions would affect net periodic benefit (credit) cost for the U.S. and U.K. plans, which together comprise approximately 83% of total pension plan liabilities, as follows: 0.5 Percentage Point Increase 0.5 Percentage Point Decrease (In millions) U.S.
The major component of revenue in the Consulting business is fees paid by clients for advice and services. Mercer, principally through its health line of business, also earns revenue in the form of commissions received from insurance companies for the placement of group (and occasionally individual) insurance contracts, primarily life, health and accident coverages.
Mercer, principally through its health line of business, also earns revenue in the form of commissions received from insurance companies for the placement of group (and occasionally individual) insurance contracts, primarily life, health and accident coverages.
As of December 31, 2022, the Company remained authorized to repurchase up to approximately $4.3 billion in shares of its common stock. There is no time limit on this author ization. In 2021, the Company repurchased 7.9 million shares of its common stock for $1.2 billion.
Share Repurchases In 2023, the Company repurchased 6.4 million shares of its common stock for $1.15 billion. At December 31, 2023, the Company remained authorized to repurchase up to approximately $3.2 billion in shares of its common stock. There is no time limit on this author ization.
The Company expects to contribute approximately $76 million to it s non-U.S. defined benefit plans in 2023, comprising approximately $41 million to the U.K. plans and $35 million to plans outside of the U.K.
The Company expects to contribute approximately $78 million to it s non-U.S. defined benefit plans in 2024, comprising approximately of $39 million to the U.K. plans and $39 million to plans outside of the U.K.
The cost of these post-retirement benefits for employees in the U.S. is accrued during the period up to the date employees are eligible to retire but is funded by the Company as incurred.
The Company contributes to certain health care and life insurance benefits provided to its retired employees. The cost of these post-retirement benefits for employees in the U.S. is accrued during the period up to the date employees are eligible to retire but is funded by the Company as incurred.
The trends and comparisons of revenue from one period to the next can be affected by changes in premium rate levels, fluctuations in client risk retention and increases or decreases in the value of risks that have been insured, as well as new and lost business, and the volume of business from new and existing clients. 44 In addition to compensation from its clients, Marsh also receives other compensation, separate from retail fees and commissions, from insurance companies.
The trends and comparisons of revenue from one period to the next can be affected by changes in premium rate levels, fluctuations in client risk retention and increases or decreases 41 in the value of risks that have been insured, as well as new and lost business, and the volume of business from new and existing clients.
Fiduciary Liabilities Since cash and cash equivalents held in a fiduciary capacity are not available for corporate use, they are shown in the consolidated balance sheets as an offset to fiduciary liabilities. Financing cash flows reflect an increase of $1.7 billion and $1.2 billion in 2022 and 2021 , respectively, related to fiduciary liabilities.
Fiduciary Liabilities Since fiduciary assets are not available for corporate use, fiduciary assets are shown separately in the consolidated balance sheets as cash and cash equivalents held in a fiduciary capacity, with a corresponding amount in current liabilities. Financing cash flows reflect an increase of $255 million and $1.7 billion in 2023 and 2022 , respectively, related to fiduciary liabilities.
This reflects increases of 8% on an underlying basis and 1% from acquisitions, partially offset by a decrease of 5% from the impact of foreign currency translation. Mercer's revenue increased $91 million, or 2%, to $5.3 billion in 2022, compared to the prior year.
Guy Carpenter's revenue increased $238 million , or 12%, to $2.3 billion in 2023, compared to $2.0 billion in 2022. This reflects increases of 10% on an underlying basis and 3% from acquisitions, partially offset by a decrease of 1% from the impact of foreign currency translation.
Income and Other Taxes The Company's consolidated effective tax rate for 2022 and 2021 was 24.4% and 24.6%, respectively. 47 The tax rates in both years reflect the impact of discrete tax matters such as excess tax benefits related to share-based compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments, non-taxable adjustments related to contingent consideration for acquisitions, and valuation allowances for certain tax credits.
The tax rates in both years reflect the impact of discrete tax matters such as excess tax benefits related to share-based compensation, enacted tax legislation, changes in uncertain tax positions, deferred tax adjustments, non-taxable adjustments related to contingent consideration for acquisitions, and valuation allowances for certain tax credits.
The Company does not intend to dispose the business and has indefinitely reinvested this gain. The effective tax rate may vary significantly from period to period. The effective tax rate is sensitive to the geographic mix of earnings and the cost to repatriate the Company's earnings, which may result in higher or lower effective tax rates.
The effective tax rate may vary significantly from period to period. The effective tax rate is sensitive to the geographic mix of earnings and the cost to repatriate the Company's earnings, which may result in higher or lower effective tax rates.
Revenue Recognition In the Risk and Insurance Services segment, judgments related to the amount of variable revenue consideration to ultimately be received on placement of quota share reinsurance treaties and contingent commission from insurers, which was previously recognized when the contingency was resolved, now requires significant judgments and estimates.
Revenue Recognition In the Risk and Insurance Services segment, management makes judgments related to the amount of variable revenue consideration to ultimately be received on placement of quota share reinsurance treaties and contingent commission from insurers.
Changing the discount rate and leaving the other assumptions constant, may also not be representative of the impact on expense, because the long-term rates of inflation and salary increases are often correlated with the discount rate.
Changing the discount rate and leaving the other assumptions constant, may also not be representative of the impact on expense, because the long-term rates of inflation and salary increases are often correlated with the discount rate. Changes in these assumptions will not necessarily have a linear impact on the net periodic benefit (credit) cost.
Information regarding these acquisitions is included in Note 5, Acquisitions and Dispositions, in the notes to the consolidated financial statements. 45 Operating Expenses Expenses in the Risk and Insurance Services segment increased $551 million, or 6%, to $9.6 billion in 2022, compared with $9.0 billion in 2021.
Information regarding these acquisitions is included in Note 5, Acquisitions and Dispositions, in the notes to the consolidated financial statements. 42 Operating Expenses Expenses in the Risk and Insurance Services segment increased $588 million, or 6%, to $10.1 billion in 2023, compared to $9.6 billion in 2022. Expenses reflect a 1% increase from acquisitions.
The following amounts are included in the consolidated statements of cash flows as operating and financing activities: For the Years Ended December 31, (In millions) 2022 2021 2020 Operating: Contingent consideration payments for prior year acquisitions $ (38) $ (49) $ (48) Receipt of contingent consideration for dispositions — 19 — Acquisition/disposition related net charges for adjustments 49 57 26 Adjustments and payments related to contingent consideration $ 11 $ 27 $ (22) Financing: Contingent consideration for prior year acquisitions $ (32) $ (28) $ (54) Deferred consideration related to prior year acquisitions (126) (89) (68) Payments of deferred and contingent consideration for acquisitions $ (158) $ (117) $ (122) Receipt of contingent consideration for dispositions $ 3 $ 71 $ — For acquisitions completed in 2022, and in prior years, remaining estimated future contingent payments of $377 million and deferred consideration payments of $142 million, are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheets at December 31, 2022.
Contingent Payments Related To Acquisitions The classification of contingent consideration in the consolidated statements of cash flows is dependent upon whether the receipt, payment or adjustment was part of the initial liability established on the acquisition date (financing) or an adjustment to the acquisition date liability (operating). 48 The following amounts are included in the consolidated statements of cash flows as operating and financing activities: For the Years Ended December 31, (In millions) 2023 2022 2021 Operating: Contingent consideration payments for prior year acquisitions $ (41) $ (38) $ (49) Receipt of contingent consideration for dispositions 1 — 19 Acquisition/disposition related net charges for adjustments 29 49 57 Adjustments and payments related to contingent consideration $ (11) $ 11 $ 27 Financing: Contingent consideration for prior year acquisitions $ (135) $ (32) $ (28) Deferred consideration related to prior year acquisitions (67) (126) (89) Payments of deferred and contingent consideration for acquisitions $ (202) $ (158) $ (117) Receipt of contingent consideration for dispositions $ 2 $ 3 $ 71 For acquisitions completed in 2023, and in prior years, remaining estimated future contingent payments of $252 million and deferred consideration payments of $92 million, are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheets at December 31, 2023.
As part of a long-term strategy which depends on having greater influence over asset allocation and overall investment decisions, in December 2022 , the Company renewed its agreement to support annual deficit contributions by the U.K. operating companies under certain circumstances, up to £450 million (or $541 million) over a 7-year period.
In December 2022, the Company renewed its agreement to support annual deficit contributions that may be required by the U.K. operating companies under certain circumstances, up to £450 million (or $576 million) over a seven-year period. This is part of an agreement which gives the Company greater influence over asset allocation and overall investment decisions.
The Company made deficit contributions of $103 million to the JLT section in 2022 , and is expected to make contributions totaling approximately $39 million in 2023. For the MMC U.K.
The Company's contributions to its U.K. plans, including the JLT section, for 2024 are expected to be approximately $39 million. The Company made deficit contributions of $41 million to the JLT section in 2023 , and is expected to make contributions totaling approximately $38 million in 2024. For the MMC U.K.
In 2022, pre-tax income in the U.K., Barbados, Canada, Ireland, Bermuda, Australia, Japan, India, and Germany accounted for approximately 65% of the Company's total non-U.S. pre-tax income, with effective rates in those countries of 17.8%, 1.2%, 26.8%, 11.9%, 3.7%, 29.3%, 32.8%, 24.9%, and 32.6%, respectively.
In 2023, pre-tax income in the U.K., Canada, Barbados, Ireland, Bermuda, India, United Arab Emirates, Japan, and Australia accounted for approximately 65% of the Company's total non-U.S. pre-tax income, with effective rates in those countries of 20.0%, 27.3%, 1.2%, 23.2%, (18.8)%, 26.0%, 17.3%, 37.6%, and 26.0%, respectively.
Funds held on behalf of clients in a fiduciary capacity are segregated and shown separately in the consolidated balance sheets as an offset to fiduciary liabilities. Fiduciary funds cannot be used for general corporate purposes, and should not be considered as a source of liquidity for the Company.
Fiduciary assets are shown separately in the consolidated balance sheets as cash and cash equivalents held in a fiduciary capacity, with a corresponding amount in current liabilities. Fiduciary assets cannot be used for general corporate purposes, and should not be considered as a source of liquidity for the Company.
Operating income was $3.1 billion in both 2022 and 2021. • Consulting revenue in 2022 was $8.1 billion, an increase of 5%, or 8% on an underlying basis.
Operating income was $3.9 billion and $3.1 billion in 2023 and 2022, respectively. • Consulting revenue in 2023 was $8.7 billion, an increase of 7%, on a reported and underlying basis.
On an underlying basis, U.S./Canada rose 7%. Total International operations produced underlying revenue growth of 10%, reflecting growth of 13% in Asia Pacific, 11% in Latin America and 8% in EMEA. Results in 2022 also include a charge of $27 million related to the loss on deconsolidation of the Company's Russian businesses.
Total International operations produced underlying revenue growth of 9%, reflecting growth of 13% in Latin America and 9% in each of EMEA and Asia Pacific. Revenue in 2022 also included a loss of $27 million related to the deconsolidation of the Company's Russian businesses.
Operating Cash Flows The Company provided $3.5 billion of cash from operations in both 2022 and 2021.
Operating Cash Flows The Company provided $4.3 billion of cash from operations in 2023, compared to $3.5 billion provided by operations in 2022.
In 2021, the Company sold certain of its businesses, primarily in the U.S. and U.K., for cash proceeds of appr oximately $84 million. In the third quarter of 2022, the Company sold the remaining investment in the common stock of Alexander Forbes ("AF"), for cash proceeds of approximately $62 million.
In the third quarter of 2022, the Company sold the remaining investment in the common stock of Alexander Forbes ("AF"), for cash proceeds of approximately $62 million.
Revenue increased by 7% excluding the Marsh India gain in 2021. This reflects increases of 9% on an underlying basis and 1% from acquisitions, offset by a decrease of 3% from the impact of foreign currency translation. Interest earned on fiduciary funds increased by $105 million to $120 million, compared to $15 million in the prior year.
Revenue increased 11% on an underlying basis and 1% from acquisitions, partially offset by a decrease of 1% from the impact of foreign currency translation. Interest earned on fiduciary funds increased by $333 million to $453 million in 2023, compared to $120 million in the prior year.
Temporary differences create deferred tax assets and liabilities, which are measured at existing tax rates. Deferred tax liabilities generally represent tax expense recognized in the financial statements for which payment has been deferred, or expense for which a deduction has been taken already in the tax return but the expense has not yet been recognized in the financial statements.
Deferred tax liabilities generally represent tax expense recognized in the financial statements for which cash tax payments have been deferred, or expense for which a deduction has been taken already in the tax return but the expense has not yet been recognized in the financial statements.
The model takes into account several factors, including: target portfolio allocation, investment, administrative and trading expenses incurred directly by the plan trust, historical portfolio performance, relevant forward-looking economic analysis, and expected returns, variances and correlations for different asset classes. These measures are used to determine probabilities using standard statistical techniques to calculate a range of expected returns on the portfolio.
The Company utilizes a model developed by Mercer, a subsidiary of the Company, to assist in the determination of this assumption. The model takes into account several factors, including: target portfolio allocation, investment, administrative and trading expenses incurred directly by the plan trust, historical portfolio performance, relevant forward-looking economic analysis, and expected returns, variances and correlations for different asset classes.
Information regarding these acquisitions is included in Note 5, Acquisitions and Dispositions, in the notes to the consolidated financial statements. Operating Expenses Consulting expense s increased $301 million, or 5%, to $6.6 billion in 2022, compared to $6.3 billion in 2021.
Information regarding these acquisitions is included in Note 5, Acquisitions and Dispositions, in the notes to the consolidated financial statements. Operating Expenses Expenses in the Consulting segment increased $457 million, or 7%, to $7.0 billion in 2023, compared to $6.6 billion in 2022. Expenses reflect an increase of 2% from acquisitions.
In 2021, the Company contributed $35 million to its U.S. defined benefit pension plans and $95 million to its non-U.S. defined benefit pension plans.
In 2023, the Company contributed $33 million to its U.S. defined benefit pension plans and $78 million to its non-U.S. defined benefit pension plans. In 2022, the Company contributed $30 million to its U.S. defined benefit pension plans and $139 million to its non-U.S. defined benefit pension plans.
Financing Cash Flows Net cash used for financing activities was $1.0 billion in 2022 , compared with $1.3 billion used by financing activities in 2021 . Credit Facilities The Company has a multi-currency unsecured $2.8 billion five-year revolving credit facility (the "Credit Facility"), entered into in April 2021.
Financing Cash Flows Net cash used for financing activities was $1.1 billion in 2023 , compared with $1.0 billion used by financing activities in 2022 . Credit Facilities In October 2023 , the Company increased its multi-currency unsecured five-year revolving credit facility (the "Credit Facility") capacity to $3.5 billion from $2.8 billion and extended the expiration to October 2028 .
In Marsh, revenue increased $302 million, or 3%, to $10.5 billion in 2022, compared to $10.2 billion in 2021. Revenue increased by 6% excluding the Marsh India gain in 2021. This reflects increases of 8% on an underlying basis and 1% from acquisitions, offset by a decrease of 3% from the impact of foreign currency translation.
Marsh's revenue increased $873 million, or 8%, to $11.4 billion in 2023, compared to $10.5 billion in 2022. This reflects increases of 8% on an underlying basis and 1% from acquisitions, partially offset by a decrease of 1% from the impact of foreign currency translation. U.S./Canada rose 7% on an underlying basis.
The Company conducts business through two segments: • Risk and Insurance Services includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services.
The four businesses also collaborate together to deliver new solutions to help clients manage complex and interconnected risks. The Company conducts business through two segments: • Risk and Insurance Services includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services.
The Company also maintains other credit facilities, guarantees and letters of credit with various banks aggregating $514 million at December 31, 2022 , and $508 million at December 31, 2021. There were no o utstanding borrowings under these facilities as of December 31, 2022 or as of December 31, 2021.
The Company also maintains other credit and overdraft facilities with various financial institutions aggregating $113 million at December 31, 2023 , and $362 million at December 31, 2022. There were no o utstanding borrowings under these facilities at December 31, 2023 and 2022.
Interest expense increased $25 million due to higher short term borrowings in 2022 at higher interest rates compared to the prior year . Investment Income (Loss) The caption "Investment income (loss)" in the consolidated statements of income comprises realized and unrealized gains and losses from investments.
Interest Expense Interest expense was $578 million in 2023, compared to $469 million in 2022. Interest expense increased $109 million in 2023, primarily due to an increase in long- term debt and higher interest rates. Investment Income The caption "Investment income" in the consolidated statements of income comprises realized and unrealized gains and losses from investments.
The Company’s additions to fixed assets and capitalized software, which amounted to $470 million in 2022 and $406 million in 2021, primarily related to computer equipment purchases, the refurbishing and modernizing of office facilities, and software development costs.
The Company’s additions to fixed assets and capitalized software, which amounted to $416 million in 2023 and $470 million in 2022, related primarily to software development costs, the refurbishing and modernizing of office facilities, and technology equipment purchases. Cash used for long-term investments in 2023 is due to investments in private equity funds.
In 2022, the Company incurred $77 million for restructuring costs in Consulting, of which $53 million related to the Company's activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate. Expenses also reflect higher travel and entertainment costs compared to the prior year.
In 2023, the Company incurred $62 million of total restructuring cost in the Consulting segment, compared to $77 million in the prior year, primarily related to the Company's activities initiated in the fourth quarter of 2022, focused on workforce actions, rationalization of technology and functional services, and reductions in real estate.
The Company recorded net investment income of $21 million in 2022, compared to $61 million in 2021. Net investment income in 2022 is driven primarily by lower mark-to-market gains from the Company's private equity investments compared to the prior year.
The Company recorded net investment income of $5 million in 2023, compared to $21 million in 2022. The decrease in 2023 is primarily driven by lower mark-to-market gains from the Company's private equity investments compared to the prior year. 44 Income and Other Taxes The Company's consolidated effective tax rate for 2023 and 2022 was 24.3% and 24.4%, respectively.
Factors that could adversely affect the Company’s financial statements related to the financial and operational impact of COVID-19 are included in "Item 1A - Risk Factors" in Part I of this report. 39 Consolidated Results of Operations For the Years Ended December 31, (In millions, except per share data) 2022 2021 2020 Revenue $ 20,720 $ 19,820 $ 17,224 Expense Compensation and benefits 12,071 11,425 10,129 Other operating expenses 4,369 4,083 4,029 Operating expenses 16,440 15,508 14,158 Operating income $ 4,280 $ 4,312 $ 3,066 Income before income taxes $ 4,082 $ 4,208 $ 2,793 Net income before non-controlling interests $ 3,087 $ 3,174 $ 2,046 Net income attributable to the Company $ 3,050 $ 3,143 $ 2,016 Net income per share attributable to the Company – Basic $ 6.11 $ 6.20 $ 3.98 – Diluted $ 6.04 $ 6.13 $ 3.94 Average number of shares outstanding – Basic 499 507 506 – Diluted 505 513 512 Shares outstanding at December 31, 495 504 508 Consolidated operating income decreased $32 million, or 1% to $4.3 billion in 2022, compared to the prior year, reflecting a 5% increase in revenue and a 6% increase in expenses.
Acquisitions and dispositions impacting the Risk and Insurance Services and Consulting segments are discussed in Note 5, Acquisitions and Dispositions, in the notes to the consolidated financial statements. 37 Consolidated Results of Operations For the Years Ended December 31, (In millions, except per share data) 2023 2022 2021 Revenue $ 22,736 $ 20,720 $ 19,820 Expense: Compensation and benefits 13,099 12,071 11,425 Other operating expenses 4,355 4,369 4,083 Operating expenses 17,454 16,440 15,508 Operating income $ 5,282 $ 4,280 $ 4,312 Income before income taxes $ 5,026 $ 4,082 $ 4,208 Net income before non-controlling interests $ 3,802 $ 3,087 $ 3,174 Net income attributable to the Company $ 3,756 $ 3,050 $ 3,143 Net income per share attributable to the Company – Basic $ 7.60 $ 6.11 $ 6.20 – Diluted $ 7.53 $ 6.04 $ 6.13 Average number of shares outstanding: – Basic 494 499 507 – Diluted 499 505 513 Shares outstanding at December 31, 492 495 504 Consolidated operating income increased $1.0 billion, or 23% to $5.3 billion in 2023, compared to $4.3 billion in the prior year, reflecting a 10% increase in revenue and a 6% increase in expenses.
In 2022, the Company incurred $254 million for restructuring costs in Risk and Insurance Services, of which $104 million related to the Company's activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate.
In 2023, the Company incurred a total of $177 million restructuring costs in Risk and Insurance Services, compared to $254 million in 2022, primarily related to activities initiated in the fourth quarter of 2022, focused on workforce actions, rationalization of technology and functional services, and reductions in real estate and lease exit charges for a legacy JLT U.K. location.
Unrecognized actuarial losses as of December 31, 2022 were approximately $1.4 billion and $2.6 billion for the U.S. plans and non-U.S. plans, respectively, compared with losses of $1.8 billion and $2.9 billion as of December 31, 2021.
Unrecognized actuarial losses as of December 31, 2023, were approximately $1.3 billion and $3.2 billion for the U.S. plans and non-U.S. plans, respectively, compared with losses of $1.4 billion and $2.6 billion as of December 31, 2022. The decrease in the U.S. is primarily due to greater than expected returns on plan assets.
The discount rate selected for each U.S. plan is based on a model bond portfolio with coupons and redemptions that closely match the expected liability cash flows from the plan. Discount rates for non-U.S. plans are based on appropriate bond indices adjusted for duration. In the U.K., the plan duration is reflected using the Mercer yield curve.
Discount rates for non-U.S. plans are based on appropriate bond indices adjusted for duration. In the U.K., the plan duration is reflected using the Mercer yield curve.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. General Marsh & McLennan Companies Inc., and its consolidated subsidiaries (the "Company") is a global professional services firm offering clients advice in the areas of risk, strategy and people. The Company’s more than 85,000 colleagues advise clients in over 130 countries.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. General Marsh & McLennan Companies Inc., and its consolidated subsidiaries (the "Company") is a global professional services firm in the areas of risk, strategy and people. The Company helps clients build the confidence to thrive through the power of perspective of its four market-leading businesses.
Valuation allowances are established for deferred tax assets when it is estimated that it is more-likely-than-not that future taxable income will be insufficient to fully use a deduction or credit in that jurisdiction. 56 Fair Value Determinations Goodwill Impairment Testing – The Company is required to assess goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred.
Valuation allowances are established for deferred tax assets when it is estimated that it is more-likely-than-not that future taxable income will be insufficient to fully use a deduction or credit in that jurisdiction.
The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill.
Purchase Price Allocation Assets acquired and liabilities assumed, including contingent consideration, as part of a business acquisition are generally recorded at their fair value at the date of acquisition. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill.
Outside the U.S., the Company has a large number of non-U.S. defined benefit pension plans, the largest of which are in the U.K., which comprise approximately 79% of non-U.S. plan assets at December 31, 2022.
Outside the U.S., the Company has a large number of defined benefit pension plans, the largest of which are in the U.K., which comprise approximately 79% of non-U.S. plan assets at December 31, 2023. Contribution rates for non-U.S. plans are generally base d on local funding practices and statutory requirements, which may differ significantly from measurements in accordance with U.S.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company had the following investments subject to variable interest rates: For the Years Ended December 31, (In millions) 2022 2021 Cash and cash equivalents $ 1,442 $ 1,752 Cash and cash equivalents held in a fiduciary capacity $ 10,660 $ 9,622 Based on the above balances at December 31, 2022, if short-term interest rates increased or decreased by 10%, or 25 basis points for the year 2023, annual interest income, including interest earned on cash and cash equivalents held in a fiduciary capacity, would increase or decrease by approximately $30 million.
Biggest changeThe Company had the following investments subject to variable interest rates: For the Years Ended December 31, (In millions) 2023 2022 Cash and cash equivalents $ 3,358 $ 1,442 Cash and cash equivalents held in a fiduciary capacity $ 10,794 $ 10,660 Based on the above balances at December 31, 2023, if short-term interest rates increased or decreased by 10% , or 47 basis points for the year 2024, annual interest income, including interest earned on cash and cash equivalents held in a fiduciary capacity, would increase or decrease by approximately $66 million.
The non-U.S. based revenue that is exposed to foreign exchange fluctuations is approximately 51% of total revenue. We periodically use forward contracts and options to limit foreign currency exchange rate exposure on net income and cash flows for specific, clearly defined transactions arising in the ordinary course of business.
The non-U.S. based revenue that is exposed to foreign exchange fluctuations is approximately 53% of total revenue. We periodically use forward contracts and options to limit foreign currency exchange rate exposure on net income and cash flows for specific, clearly defined transactions arising in the ordinary course of business.
The Company periodically reviews the carrying value of such investments to determine if any valuation adjustments are appropriate under the applicable accounting pronouncements. Other A number of lawsuits and regulatory proceedings are pending. Refer to Note 16, Claims, Lawsuits and Other Contingencies, in the notes to the consolidated financial statements included in this report. 59
The Company periodically reviews the carrying value of such investments to determine if any valuation adjustments are appropriate under the applicable accounting pronouncements. Other A number of lawsuits and regulatory proceedings are pending. Refer to Note 16, Claims, Lawsuits and Other Contingencies, in the notes to the consolidated financial statements included in this report. 56
The Company also has investments of approximately $215 million that are accounted for using the equity method. The Company's investments are subject to risk of decline in market value, which, if determined to be other than temporary, could result in realized impairment losses.
The Company also has investments of approximately $266 million that are accounted for using the equity method. The Company's investments are subject to risk of decline in market value, which, if determined to be other than temporary, could result in realized impairment losses.
Although the Company has significant revenue generated in foreign locations which is subject to foreign exchange rate fluctuations, in most cases both the foreign currency revenue and expenses are in the functional currency of the foreign location.
Although the Company has significant revenue generated in foreign locations which is subject to foreign exchange rate fluctuations, in most cases both the foreign currency revenue and expense are in the functional currency of the foreign location.
In Continental Europe, the largest amount of revenue from renewals for the Risk and Insurance Services segment o ccurs in the first quarter. 58 Equity Price Risk The Company holds investments in bo th public and private companies as well as private equity funds, including investments of approximately $17 million that are valued using readily determinable fair values and approximately $42 million of investments without readily determinable fair values.
In Continental Europe, the largest amount of revenue from renewals for the Risk and Insurance Services segment o ccurs in the first quarter. 55 Equity Price Risk The Company holds investments in bo th public and private companies as well as private equity funds, including investments of approximately $16 million that are valued using readily determinable fair values and approximately $20 million of investments without readily determinable fair values.
If foreign exchange rates of major currencies (Euro, Sterling, Australian dollar and Canadian dollar) moved 10% in the same direction against the U.S. dollar compared with the foreign exchange rates in 2022, the Company estimates net operating income would increase or decrease by approximately $74 million.
If foreign exchange rates of major currencies (Euro, British Pound, Australian dollar and Canadian dollar) moved 10% in the same direction against the U.S. dollar compared with the foreign exchange rates in 2023, the Company estimates net operating income would increase or decrease by approximately $80 million .
At December 31, 2021, a change in short-term interest rates of 10%, or 1 basis point, would have increased or decreased interest income by approximately $1 million. The change in interest rate risk at December 31, 2022 is due to higher short-term interest rates compared to the prior year.
At December 31, 2022, a change in short-term interest rates of 10%, or 25 basis points, would have increased or decreased interest income by approximately $30 million. The change in interest rate risk at December 31, 2023 is due to higher short-term interest rates compared to the prior year.
The corresponding increase or decrease in net operating income in 2021 was estimated at $57 million. The Company has exposure to approximately 80 foreign currencies overall.
The corresponding increase or decrease in net operating income in 2022 was estimated at $74 million. The Company has exposure to approximately 80 f oreign currencies overall.

Other MRSH 10-K year-over-year comparisons