Marsh & McLennan Companies, Inc. (NYSE:MMC) Q1 2024 Earnings Call Transcript

And even if there’s healthcare inflation in the other areas where it’s brokerage, it’s not a linear type activity from a commission perspective because we’re — once that cost is flowing through to the client P&L, we’re always out there doing plan redesign for a client to help make sure that that full cost of healthcare inflation is not flowing through their P&L, right, because they really don’t control — that’s one of the larger costs that they don’t control themselves based upon the activity that they’ve had. So that’s really where a lot of the inflation helps us. Part of it is increased activity and project work. Occasionally it does create higher rates that flows through in brokerage, but many times those higher rates, we’re still doing plan design with the client to try and mitigate the impact that is going to have on the client P&L even in a spot where it’s straight commission based brokerage, we’re trying to mitigate those costs.

John Doyle: So, rising health and benefit costs in a tight labor market, again, is a pressure point. And another example of where, again, we can bring scale and a broader set of capabilities to the market that our clients appreciate. Do you have a follow-up, Robert?

Robert Cox: Yeah, very helpful. Thank you. Maybe just last question. On the wealth segment, correct me if I’m wrong, but I think last year, probably, the pension business was growing stronger than your investment business. Did that occur as well in the first quarter here or were both of them kind of similar to the 5% organic growth that was achieved in well?

John Doyle: Yeah, we had good solid growth across investment management and defined benefits. As Pat mentioned, our DB business and this period of elevated interest rates have seen a bit more growth than we expected over the course of the last couple of years, but good growth in our OCIO business and our broader set of consulting capabilities inside of our investment business. So, yes, we felt good about that. Thank you, Robert. Andrew?

Operator: Thank you. I would now like to turn the call back over to John Doyle, President and CEO of Marsh & McLennan, for any closing remarks.

John Doyle: All right. Thank you, Andrew. And I want to thank everyone for joining us on the call this morning. In closing, I want to thank our colleagues for their hard work and dedication. I also want to thank our clients for their continued support. Thank you all very much, and I look forward to speaking with you again next quarter.

Operator: This concludes today’s conference. Thank you for participating, and you may now disconnect.