Martine Ferland: Yes, no, thanks John and Mike as well for the question. Yes, of course and you’re right to say that our Career business is the one that has most discretionary projects. So of course we are looking at all indicators in a cautionary way. But what I want to say here is, we’ve had a tremendous two years in Career. Q4 was a 12% growth. The whole of 2022 was 14% growth. The demand here is really related to change in the world of work. We’ve added to that in 2022 wage in high inflation. We have the labor shortages issue. So we’re looking at reward strategies, workforce analytics, future of work skills, gap, talent engagement, assessment of skills. It’s all on top of our client’s agenda. So overall at this point, we’ve entered 2023 with very solid growth momentum, strong sales, strong pipeline.
And of course, we are confident in this year, we are monitoring development on sales pipeline and client sentiment given the macroeconomic conditions that are foreseen. But the question remains that as the people agenda stays such an elevated point for our clients that what we’re seeing right now is that demand stays strong.
John Doyle: Terrific. Thank you, Martine. Thanks Mike. Andrew, can we have our next question please?
Operator: Certainly. And our next question comes from the line of Robert Cox with Goldman Sachs.
Robert Cox: Hey, thanks for taking my question. I think previously, maybe not for a while, but you guys had talked about a 3% to 5% organic growth outlook longer-term. Just curious if your view on that has changed at all?
John Doyle: Well, you know, as I shared we expect mid-single-digits underlying revenue growth or better for this year, that’s the guidance we’re sharing. As I noted Robert in my prepared remarks, we’re in terrific businesses, we’re well positioned in those businesses, just have outstanding talent and a culture that makes us an employer of choice as well. So we feel good about our growth prospects for the near-term.
Robert Cox: Got it. And maybe just a follow up, yes, how big of a deal are wage pressures in the business today and into 2023, I think the consulting segment perhaps is a little bit more susceptible to that and we saw margins decline year-over-year, so just wondering how big of an impact that is?
John Doyle: Yes, you know, it’s been manageable for us for sure. As we said we worked really, really hard on our culture and becoming an employer of choice in the markets that we operate in. I think we attract outstanding talent because of that culture, because of the strength of the brands, and it really enables talented individuals who want to devote their career in the areas of risk strategy and people to be their best when they work here. And that’s how we think about it. And as I said earlier it’s a privilege to do the work that we do, trying to tackle the issues of the day. We’re a collaborative environment, so you do it with some really talented people who are very, very focused on client impact. And our client engagement, our colleague engagement, excuse me, remains very, very high.
So we saw some elevated voluntary turnover in the early part of the year, but that moderated in the second half of the year, that I think that elevated turnover was really a bounce back from very abnormally low voluntary turnover. But wage pressure has been manageable for us. We’re being thoughtful about merit pools and how we allocate those pools, but we feel very, very well positioned from a talent perspective. Thank you, Robert. Andrew, next question please?
Operator: And our next question comes from the line of Meyer Shields with KBW.
Meyer Shields: Thanks. Good morning. A couple of quick questions. First, John, strategically, when you can anticipate higher fiduciary income, does that translate into more latitude for longer-term investments?
John Doyle: You know, we’re trying to balance, obviously, the near-term and the mid-term. The growth in fiduciary income may or may not be correlated to client demand or opportunities that we see. It’s obviously connected to other macro factors. But you know, I think part of the steps that we took in the fourth quarter, the actions that we took in the fourth quarter create capacity for us to make investments and to become a stronger business going forward.
Meyer Shields: Okay, that’s helpful. Second question, when we’ve heard a lot of comments very clearly accurate about the difficult reinsurance renewal season, does that actually impact the expenses that Guy Carpenter incurs? I mean, obviously a stressful period, but I’m wondering about the financial impact.
John Doyle: It was a stressful period. Our colleagues were attested and I would say I don’t want to mitigate the impact on our insurance company clients. It was a challenging outcome. Again, we expected a difficult market as well. But no, it doesn’t impact our cost base in any meaningful way. And, as I said, the overall outlook is supportive of a good growth environment for Guy Carpenter. Okay, thank you Meyer. Andrew, next question please?
Operator: Thank you. And our next question comes from the line of Andrew Kligerman with Credit Suisse.
Andrew Kligerman: Hey, good morning. First question is around underlying revenue growth. Marsh is up 6%, Guy Carpenter up 5%. Given the strong exposure growth, the strong rate increases, if you netted that out, would the underlying growth be negative?
John Doyle: No. it would not be, it would not be negative Andrew, but, and thank you for your question. It was a very strong year of growth at both Marsh and at Guy Carpenter. I would note Guy Carpenter is a very, very small quarter. And so again, we’re quite pleased with the revenue growth. And as I’ve said a number of times this morning, Guy Carpenter is very well positioned for good strong growth in 2023. At Marsh, it was an outstanding year. You know, 8% for the year, 6% in the quarter. You know, as we noted, I mean, I’ll ask Martin to comment on this in a second. Marsh in the U.S. had some headwinds related to the capital markets, right? So, and Martin mentioned earlier the impact of pricing. We had fewer M&A with less M&A activity, less ITO activity.
So as Martin pointed out that an impact on pricing there, but it was more of a volume issue. We expected that entering into the fourth quarter. It’s also a headwind for us into the first quarter as well. But we expect a good growth year in 2023. Martin, maybe you could provide a little bit more color to share your thoughts on 2023 and our growth at the end of 2022.
Martin South: Yes, of course, delighted to, thank you. Well, as you said, we had growth of 6% in the quarter. It was on top of the 9% in the prior course of 2021. Strong balance of growth across the portfolio. International in the quarter grew 8%, APAC at 12%, EMEA at 7%, Latin America at 4%. You mentioned U.S. and Canada at 5%. I’d say that the U.S. and Canada was actually impacted by headwinds in our business. So we had tough comps in the prior year from elevated M&A and SPAC activity and capital markets activity in the back half of 2021. We think but for that, we would have been posting underlying growth in the region of 8% for the U.S. and Canada, so very strong results there and we feel bullish that as that normalizes in the first quarter of next year, we’re going to see an uptick.
The full year growth international was 10%, APAC 13%, Latin America 12%, which is a much better representation of what they’re likely to. This is the smallest part of international Latin America, so you should look at the full year as a better indicative rather than just a discreet quarter. EMEA was up 8% and the U.S. and Canada up 7%. And then when we look at what’s driven the growth and what we think are likely to grow in the future construction growth was double-digit energy and power dealing with the transition up double percent of trade credit business up double digits. Our advisory business, which helps our clients mitigate changes in risk grew double digits throughout the year. So we feel very good about how we’re positioned about the geographies that we’re in about our position in the value proposition and feeling good about growth.
