MARSH & MCLENNAN COMPANIES, INC. (MRSH)

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

Marsh McLennan Companies Inc., and its consolidated subsidiaries (Marsh McLennan or the "Company") 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 our four market-leading businesses. With annual revenue of over $24 billion, the Company has more than 90,000 colleagues advising clients in over 130 countries.

Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients. 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. Oliver Wyman Group serves as a critical strategic, economic and brand advisor to private sector and governmental clients. 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 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.

The results of operations in the Management Discussion & Analysis ("MD&A") include an overview of the Company’s consolidated results for fiscal year 2024, compared to the results for fiscal year 2023, and should be read in conjunction with the consolidated financial statements and notes. This section also includes a discussion of the key drivers impacting the Company’s financial results of operations both on a consolidated basis and by reportable segments.

We describe the primary sources of revenue and categories of expense for each reportable segment in the discussion of segment financial results. 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 2022, refer to "Item 7. 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, 2023.

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.

Non-GAAP Measures

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (U.S.), referred to as in accordance with "GAAP" or "reported" results. The Company also refers to and presents a non-GAAP financial measure in non-GAAP revenue, within the meaning of Regulation G and Item 10(e) of Regulation S-K in accordance with the Securities Exchange Act of 1934. The Company has included a reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with GAAP as part of the consolidated revenue and expense discussion. Percentage changes, referred to as non-GAAP underlying revenue, are calculated by dividing the period over period change in non-GAAP revenue by the prior period non-GAAP revenue.

The Company believes this non-GAAP financial measure provides useful supplemental information that enables investors to better compare the Company’s performance across periods. Management also uses this measure internally to assess the operating performance of its businesses and to decide how to allocate resources. However, investors should not consider this non-GAAP measure in isolation from, or as a substitute for, the financial information that the Company reports in accordance with GAAP. The Company's non-GAAP measure includes adjustments that reflect how management views its businesses and may differ from similarly titled non-GAAP measures presented by other companies.

37

Financial Highlights

•Consolidated revenue in 2024 was $24.5 billion, an increase of 8%, or 7% on an underlying basis.

•Consolidated operating income increased $535 million, or 10% to $5.8 billion in 2024, compared to 2023. Net income attributable to the Company was $4.1 billion. Earnings per share on a diluted basis increased to $8.18 from $7.53, or 9%, compared with 2023.

•Risk and Insurance Services revenue in 2024 was $15.4 billion, an increase of 9%, or 8% on an underlying basis. Operating income was $4.4 billion and $3.9 billion in 2024 and 2023, respectively.

•Marsh's revenue in 2024 was $12.5 billion, an increase of 10%, or 7% on an underlying basis. Guy Carpenter's revenue in 2024 was $2.4 billion, an increase of 5%, or 8% on an underlying basis.

•Consulting revenue in 2024 was $9.1 billion, an increase of 5%, or 6% on an underlying basis. Operating income was $1.8 billion and $1.7 billion in 2024 and 2023, respectively.

•Mercer's revenue in 2024 was $5.7 billion, an increase of 3%, or 5% on an underlying basis. Oliver Wyman Group's revenue in 2024 was $3.4 billion, an increase of 9%, or 6% on an underlying basis.

•The Company's results of operations in 2024 included restructuring activities of $276 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 17 acquisitions in 2024. On November 15, 2024, the Company completed the acquisition of McGriff Insurance Services, LLC ("McGriff") for $7.75 billion in cash consideration.

•On January 1, 2024, the Company completed the sale of its Mercer U.K. pension administration and U.S. health and benefits administration businesses for approximately $120 million, and recorded a net gain of $35 million in the current year.

•In November 2024, the Company issued $7.25 billion of senior notes to fund the acquisition of McGriff and for general corporate purposes. In February 2024, the Company issued $500 million of 5.150% senior notes due 2034 and $500 million of 5.450% senior notes due 2054.

•In 2024, the Company repaid $1.6 billion of senior notes at maturity.

•In 2024, the Company repurchased 4.3 million shares for $900 million.

38

Acquisition of McGriff

On November 15, 2024, the Company completed the acquisition of McGriff, an affiliate of TIH Insurance Holdings (the "McGriff Transaction") for $7.75 billion in cash consideration, subject to certain customary adjustments. McGriff is an insurance broking and risk management services provider in the United States (U.S.), with approximately $1.3 billion in annual revenue.

In connection with the McGriff Transaction, on September 29, 2024, the Company entered into a Bridge Loan Commitment Letter (the “Commitment Letter”) to provide the Company under a 364-day unsecured bridge term loan facility in an amount not to exceed $7.75 billion (the "Bridge Loan Facility"). The Company paid approximately $23 million for customary upfront fees related to the Commitment Letter, amortized as interest expense.

On November 8, 2024, the Company issued $7.25 billion of senior notes and terminated the Commitment Letter.

In connection with the acquisition of McGriff, the Company incurred approximately $63 million of acquisition and retention related costs in 2024. The Company expects to recognize costs of approximately $450 million to $500 million, primarily retention incentives over the next 3 years related to the McGriff acquisition. These costs include retention plans put in place by the seller and were funded through a purchase price adjustment for McGriff. The Company continues to refine its integration plans as it relates to the acquisition of McGriff, which may change the timing and estimates of expected costs and payments.

McGriff's results of operations for the period November 15, 2024 through December 31, 2024 were included in the Company’s results of operations for 2024, in Marsh, in the Risk and Insurance Services segment.

As of November 15, 2024, the Company assumed the assets and legal liabilities of McGriff. Please see the "Risk Factors" section of this Annual Report on Form 10-K for risks associated with acquisitions and dispositions.

* * * * *

The macroeconomic and geopolitical environment including multiple major wars and global conflicts, slower GDP growth or recession, lower interest rates, capital markets volatility, inflation and changes in insurance premium rates could impact our business, financial condition, results of operations and cash flows. For more information about these risks, please see “Risk Factors – Macroeconomic Risks” in this annual report on Form 10-K.

For additional details, refer to the Consolidated Results of Operations and Liquidity and Capital Resources sections in this MD&A.

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.

39

Consolidated Results of Operations

Consolidated operating income increased $535 million, or 10% to $5.8 billion in 2024, compared to $5.3 billion in the prior year, reflecting an 8% increase in revenue and a 7% increase in expenses. Revenue growth was driven by increases in the Risk and Insurance Services and Consulting segments of 9% and 5%, respectively.

Diluted earnings per share increased to $8.18 from $7.53, or 9% from the prior year. The increase is primarily the result of higher operating income in 2024, compared to the prior year.

40

Consolidated Revenue and Expense

Revenue – Non-GAAP Revenue and Components of Change

The Company advises clients in 130 countries. As a result, foreign exchange rate movements may impact period over period comparisons of revenue. 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. Percentage changes, referred to as non-GAAP underlying revenue, are calculated by dividing the period over period change in non-GAAP revenue by the prior period non-GAAP revenue.

The non-GAAP revenue measure is presented on a constant currency basis excluding the impact of foreign currency fluctuations. The Company isolates the impact of foreign exchange rate movements period over period, by translating the current period foreign currency GAAP revenue into U.S. Dollars based on the difference in the current and corresponding prior period exchange rates.

The percentage change for acquisitions, dispositions, and other includes the impact of current and prior year items excluded from the calculation of non-GAAP underlying revenue for comparability purposes. Details on these items are provided in the reconciliation of non-GAAP revenue to GAAP revenue tables.

The following tables present the Company's non-GAAP revenue for the years ended December 31, 2024 and 2023 and the related non-GAAP underlying revenue change:

The following table provides more detailed revenue information for certain of the components presented in the previous table:

(*) Rounded to whole percentages.

41

Revenue – Reconciliation of Non-GAAP Measures

The following table provides the reconciliation of GAAP revenue to Non-GAAP revenue for the years ended December 31, 2024 and 2023:

The following table provides more detailed revenue information for certain of the components presented in the previous table:

Note: Amounts in the tables above are rounded to whole numbers.

42

Consolidated Revenue

Consolidated revenue increased $1.7 billion, or 8%, to $24.5 billion in 2024, compared to $22.7 billion in 2023. Consolidated revenue increased 7% on an underlying basis and 1% from acquisitions. On an underlying basis, revenue increased 8% and 6% in 2024, in the Risk and Insurance Services and Consulting segments, respectively.

Consolidated revenue growth in 2024 reflects the continued demand for our advice and solutions.

Consolidated Operating Expenses

Consolidated operating expenses increased $1.2 billion, or 7%, to $18.6 billion in 2024, compared to $17.5 billion in 2023. Expenses reflect a 2% increase from acquisitions.

Consolidated operating expenses in 2024 increased primarily due to compensation and benefits, driven by higher base salaries and incentive compensation.

Restructuring activities

The Company incurred a total of $276 million for restructuring activities in 2024, compared to $301 million in 2023.

In the fourth quarter of 2022, the Company initiated activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate. These activities were completed at the end of 2024. The Company incurred approximately $660 million of these restructuring costs through December 31, 2024, primarily severance and lease exit charges, of which $221 million were incurred in 2024. Related estimated savings are expected to be over $500 million, with over $450 million realized through December 31, 2024. The remaining savings are expected to be realized in 2025.

Additional details are included in Note 14, Restructuring Costs, in the notes to the consolidated financial statements.

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.

Marsh and Guy Carpenter are compensated for brokerage and consulting services through commissions and fees. Commission rates and fees vary in amount and can depend on a number of factors, including the type of insurance or reinsurance coverage provided, the particular insurer or reinsurer selected, and the capacity in which the broker acts and negotiates with clients. Revenues can be affected by premium rate levels in the insurance and reinsurance markets, the amount of risk retained by insurance and reinsurance clients, and by the value of the risks that have been insured since commission-based compensation is frequently related to the premiums paid by insureds and reinsureds. In many cases, fee compensation may be negotiated in advance, based on the type of risk, coverage required, and service provided by the Company and ultimately, the extent of the risk placed into the insurance market or retained by the client. 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.

In addition to compensation from its clients, Marsh also receives other compensation, separate from retail fees and commissions, from insurance companies. This other compensation includes, among other things, payments for consulting and analytics services provided to insurers; compensation for administrative and other services (including fees for underwriting services and services provided to or on behalf of insurers relating to the administration and management of quota shares, panels and other facilities in which insurers participate); and contingent commissions, which are paid by insurers based on factors such as volume or profitability of Marsh's placements, primarily driven by Marsh McLennan Agency ("MMA") and parts of Marsh's international operations.

Marsh and Guy Carpenter receive interest income on certain funds (such as premiums and claims proceeds) held in a fiduciary capacity for others. The investment of fiduciary funds is regulated by state and other insurance authorities. These regulations typically require segregation of fiduciary funds and limit the types of investments that may be made. Interest income from these investments varies depending on the amount of funds invested and

43

applicable interest rates, both of which vary from time to time. For presentation purposes, fiduciary interest income is segregated from the other revenues of Marsh and Guy Carpenter and separately presented within the segment, as shown in the previous revenue by segments tables.

The results of operations for the Risk and Insurance Services segment are as follows:

Revenue

Revenue in the Risk and Insurance Services segment increased $1.3 billion, or 9%, to $15.4 billion in 2024, compared to $14.1 billion in 2023. Revenue increased 8% on an underlying basis and 2% from acquisitions, partially offset by a decrease of 1% from the impact of foreign currency translation. Interest earned on fiduciary funds increased $44 million to $497 million in 2024, compared to $453 million in 2023, due to higher average interest rates compared to the prior year.

In Risk and Insurance Services, underlying revenue growth in 2024 was driven by strong retention and new business growth at Marsh and Guy Carpenter. Results also benefited from continued economic growth in most major markets and inflation.

Marsh's revenue increased $1.2 billion, or 10%, to $12.5 billion in 2024, compared to $11.4 billion in 2023. This reflects an increase of 7% on an underlying basis and 3% 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. Total International produced underlying revenue growth of 8%, reflecting growth of 10% in Latin America, 8% in EMEA and 6% in Asia Pacific.

Guy Carpenter's revenue increased $104 million, or 5%, to $2.4 billion in 2024, compared to $2.3 billion in 2023. This reflects an increase of 8% on an underlying basis, partially offset by a decrease of 3% from acquisitions.

At Guy Carpenter, underlying revenue growth in 2024 was driven by growth across all regions and global specialties. Revenue in 2023 includes a gain from a legal settlement with a competitor for $58 million, excluding legal fees of approximately $10 million.

Risk and Insurance Services segment completed 10 acquisitions in 2024. 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 Risk and Insurance Services segment increased $886 million, or 9%, to $11.0 billion in 2024, compared to $10.1 billion in 2023. Expenses reflect a 3% increase from acquisitions, partially offset by a decrease of 1% from the impact of foreign currency translation.

Expenses in 2024 increased primarily due to compensation and benefits driven by higher base salaries and incentive compensation.

In 2024, the Company incurred a total of $148 million of restructuring costs in Risk and Insurance Services, compared to $177 million in 2023, 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.

44

Consulting

The Company conducts business in its Consulting segment through Mercer and Oliver Wyman Group. 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 critical strategic, economic and brand advisor to private sector and governmental clients.

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. Revenue for Mercer’s investment management business and certain of Mercer’s defined benefit and contribution administration services consists principally of fees based on assets under management or administration. For a majority of the Mercer-managed investment funds, revenue is recorded on a gross basis with sub-advisor fees included in other operating expenses.

Revenue in the Consulting segment is affected by, among other things, global economic conditions, including changes in clients’ particular industries and markets. Revenue is also affected by competition due to the introduction of new products and services, broad trends in employee demographics, including levels of employment and the effect of government policies and regulations. Revenues from investment management services and retirement trust and administrative services are significantly affected by the level of assets under management or administration, which is impacted by securities market performance.

The results of operations for the Consulting segment are as follows:

Revenue

Consulting revenue increased $424 million, or 5%, to $9.1 billion in 2024, compared to $8.7 billion in 2023. This reflects an increase of 6% on an underlying basis.

In Consulting, underlying revenue growth in 2024 was driven by both Mercer and Oliver Wyman Group.

Mercer's revenue increased $156 million, or 3%, to $5.7 billion in 2024, compared to $5.6 billion in 2023. This reflects an increase of 5% on an underlying basis, partially offset by a decrease of 2% from dispositions and 1% from the impact of foreign currency translation. On an underlying basis, revenue increased 8% for Health, and 4% for each of Career and Wealth, as compared to the prior year.

Underlying revenue growth at Mercer was driven by continued strong growth in Health and solid growth in Career and Wealth. Health reflected growth across all regions. Wealth growth was driven by both investment management and defined benefits consulting. The increase in investment management was driven by positive net flows and the impact of capital markets. Career revenue benefited from continued strong growth in talent and rewards surveys and products.

Revenue in 2024 includes a net gain of $35 million from the sale of the Mercer U.K. pension administration and U.S. health and benefits administration businesses.

Oliver Wyman Group's revenue increased $268 million, or 9%, to $3.4 billion in 2024, compared to $3.1 billion in 2023. This reflects an increase of 6% on an underlying basis and 3% from acquisitions.

The increase in underlying revenue growth at Oliver Wyman Group in 2024 was primarily driven by the Middle East and Asia. Revenue in 2024 includes a gain of $20 million from the sale of the Celent advisory business.

The Consulting segment completed 7 acquisitions in 2024. Information regarding these acquisitions is included in Note 5, Acquisitions and Dispositions, in the notes to the consolidated financial statements.

45

Operating Expenses

In the Consulting segment, expenses increased $320 million, or 5%, to $7.4 billion in 2024, compared to $7.0 billion in 2023. Expenses reflect a decrease of 1% primarily from dispositions.

Expenses in 2024 increased primarily due to compensation and benefits driven by higher base salaries and incentive compensation, offset by a decrease from dispositions primarily related to the sale of the Mercer U.K. pension administration and U.S. health and benefits administration businesses. Expenses in 2023 included a benefit of $51 million of insurance and indemnity recoveries for a legacy JLT E&O matter relating to suitability of advice provided to individuals for defined benefit pension transfers in the U.K.

In 2024, the Company incurred $79 million of total restructuring costs in the Consulting segment, compared to $62 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.

Corporate and Other

Corporate expenses decreased $11 million, or 3%, to $318 million in 2024, compared to $329 million in 2023, reflecting primarily lower restructuring costs in the current year.

Interest Income

Interest income was $83 million in 2024, compared to $78 million in 2023. Interest income increased $5 million in 2024, due to higher average corporate funds compared to the prior year.

Interest Expense

Interest expense was $700 million in 2024, compared to $578 million in 2023. Interest expense increased $122 million in 2024, reflecting higher levels of debt from new debt issuances and higher interest rates compared to the prior year. Interest expense in 2024 includes $26 million of financing costs, primarily related to customary upfront fees for the Commitment Letter.

Investment Income

The caption "Investment income" in the consolidated statements of income comprises realized and unrealized gains and losses from investments. It includes, when applicable, other than temporary declines in the value of securities, mark-to-market increases or decreases in equity investments with readily determinable fair values and equity method gains or losses on its investments in private equity funds. The Company's investments may include direct investments in insurance, consulting or other strategically linked companies and investments in private equity funds. The Company recorded net investment income of $12 million in 2024, compared to $5 million in 2023. The increase in 2024 is primarily driven by higher mark-to-market gains from the Company's investments compared to the prior year.

Income and Other Taxes

The Company's consolidated effective tax rate for 2024 and 2023 was 24.9% and 24.3%, respectively.

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, return to provision adjustments, and valuation allowances for certain tax credits. The 2024 effective tax rate reflects the full impact of the previously enacted change in the U.K. corporate income tax rate from 19% to 25%, which was effective April 1, 2023. The blended U.K. statutory tax rate for 2023 was 23.5%.

In 2023, the Company released valuation allowances related to its non-U.S. operations. Management determined that there was sufficient positive evidence to conclude that it was more likely than not that deferred tax assets were realizable, primarily due to the sustained profitability of its operations. The release of valuation allowances resulted in a decrease to tax expense of $94 million in 2023.

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. Therefore, a shift in the mix of profits among jurisdictions, or changes in the Company's repatriation strategy to access offshore cash, can affect the effective tax rate. In 2024, pre-tax income in the U.K., Canada, Ireland, India, Bermuda, Germany, Australia, United Arab Emirates, Japan, and Singapore accounted for

46

approximately 65% of the Company's total non-U.S. pre-tax income, with effective rates in those countries of 25.0%, 28.0%, 16.3%, 27.9%, 0.0%, 30.9%, 36.7%, 17.6%, 38.2%, and 18.0%, respectively.

In addition, losses in certain jurisdictions cannot be offset by earnings from other operations and may require valuation allowances that affect the rate in a particular period, depending on estimates of the value of associated deferred tax assets which can be realized. A valuation allowance was recorded to reduce deferred tax assets to the amount that the Company believes is more likely than not to be realized. Details are provided in Note 7, Income Taxes, in the notes to the consolidated financial statements. The effective tax rate is also sensitive to changes in unrecognized tax benefits, including the impact of settled tax audits and expired statutes of limitations.

The Company has established liabilities for uncertain tax positions in relation to potential assessments in the jurisdictions in which it operates. In the third quarter of 2024, the Company received closure notices and assessments from the U.K. tax authority in relation to its 2016-2020 examinations which disallowed certain interest expense deductions. The Company has appealed the assessments and resolving this matter through litigation or alternative dispute resolution may take several years. The Company believes the resolution of tax matters will not have a material effect on the consolidated financial position of the Company. However, an adverse resolution of tax matters from current or future audits or tax litigation could have a material impact on the Company's net income or cash flows and on its effective tax rate in a particular future period.

Changes in tax laws, rulings, policies, or related legal and regulatory interpretations occur frequently and may have significant favorable or adverse impacts on our effective tax rate. In 2021, the Organization for Economic Cooperation and Development's ("OECD") released model rules for a 15% global minimum tax, known as Pillar Two. Pillar Two has now been enacted by most key non-U.S. jurisdictions where the Company operates, including the U.K. and Ireland. This minimum tax is treated as a period cost beginning in 2024 and does not have a material impact on the Company's financial results of operations for the current period. The Company continues to monitor legislative developments, as well as additional guidance from countries that have enacted Pillar Two legislation and will ensure it complies with any changes.

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. 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.

Changes to the U.S. tax law in recent years have allowed the Company to repatriate foreign earnings without incurring additional U.S. federal income tax costs as foreign income is generally already taxed in the U.S. However, permanent reinvestment continues to be a component of the Company's global capital strategy. The Company continues to evaluate its global investment and repatriation strategy considering its capital requirements and potential costs of repatriation, which are generally limited to local country withholding taxes.

47

Liquidity and Capital Resources

The Company is organized as a legal entity separate and distinct from its operating subsidiaries. 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 Company can also provide financial support to its operating subsidiaries for acquisitions, investments and certain parts of their business that require liquidity, such as the capital markets business of Guy Carpenter. Other sources of liquidity include borrowing facilities discussed below in the Financing Cash Flows section.

The Company derives a significant portion of its revenue and operating profit from operating subsidiaries located outside of the U.S. Funds from those operating subsidiaries are regularly repatriated to the U.S. out of annual earnings. At December 31, 2024, the Company had approximately $1.4 billion of cash and cash equivalents in its foreign operations, which includes $428 million of operating funds required to be maintained for regulatory requirements or as collateral under certain captive insurance arrangements. 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 2024, the Company recorded foreign currency translation adjustments which decreased net equity by $569 million. 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. subsidiaries, 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. 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 Cash Flows

The Company provided $4.3 billion of cash from operations both in 2024 and in 2023. These amounts reflect the net income of the Company during those periods, excluding gains or losses from investments, adjusted for non-cash charges, and changes in working capital which relate primarily to the timing of payments of accrued liabilities, including incentive compensation, or receipts of receivables and pension contributions. The Company used cash of $270 million and $271 million related to its restructuring activities in 2024 and 2023, respectively.

Pension Related Items

Contributions

The Company's policy for funding its tax-qualified defined benefit plans is to contribute amounts at least sufficient to meet the funding requirements set forth in accordance with applicable law. In 2024, the Company contributed $34 million to its U.S. defined benefit pension plans and $59 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 the U.S., contributions to the tax-qualified defined benefit plans are based on Employee Retirement Income Security Act ("ERISA") guidelines and the Company generally expects to maintain a funded status of 80% or more of the liability determined in accordance with the ERISA guidelines. In 2024, the Company made contributions of $32 million to its non-qualified plans and expects to contribute approximately $35 million in 2025. The Company also made required contributions of $2 million to its U.S. qualified plans in 2024. In 2025, the Company is expected to be required to make contributions totaling $2 million to its U.S. qualified plans.

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 78% of non-U.S. plan assets at December 31, 2024. Contribution rates for non-U.S. plans are generally based on local funding practices and statutory requirements, which may differ significantly from measurements in accordance with U.S. GAAP.

In the U.K., the assumptions used to determine pension contributions are the result of legally prescribed negotiations between the Company and the plans' trustee that typically occur every three years in conjunction with the actuarial valuation of the plans. Currently, this results in a lower funded status compared to U.S. GAAP and may result in contributions irrespective of the U.S. GAAP funded status.

48

In 2021, the JLT Pension Scheme was merged into the MMC U.K. Pension Fund with a new segregated JLT section created (referred to as the "JLT section").

The Company contributed $21 million to its U.K. plans, including the JLT section, in 2024. The Company's contributions to its U.K. plans, including the JLT section, for 2025 are expected to be approximately $1 million. The Company made deficit contributions of $20 million to the JLT section in 2024 and is not required to make any deficit contributions to the JLT section in 2025.

For the MMC U.K. 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 at the earliest required until 2026. The funding level will be re-assessed during 2025 as part of the December 31, 2024 actuarial valuation to determine if contributions are required in 2026. 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 $566 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 expects to contribute approximately $43 million to its non-U.S. defined benefit plans in 2025, comprising approximately of $1 million to the U.K. plans and $42 million to plans outside of the U.K.

Changes in Funded Status and Expense

The year-over-year change in the funded status of the Company's pension plans is impacted by the difference between actual and assumed results, particularly with regard to return on assets, and changes in the discount rate, as well as the amount of Company contributions, if any. Unrecognized actuarial losses as of December 31, 2024, were approximately $1.4 billion and $3.5 billion for the U.S. plans and non-U.S. plans, respectively, compared with losses of $1.3 billion and $3.2 billion at December 31, 2023. The increase in the U.S. is primarily due to lower than expected returns on plan assets. The increase in the non-U.S. plans is primarily due to lower than expected returns on plan assets partly offset by increases in the discount rates used to measure plan liabilities and the impact of foreign exchange. In the past several years, the amount of unamortized losses has been significantly impacted, both positively and negatively, by actual asset performance and changes in discount rates. The discount rate used to measure plan liabilities for the Company's U.S. and U.K. plans increased in 2024, decreased in 2023 and increased in 2022. An increase in the discount rate decreases the measured plan benefit obligation, resulting in actuarial gains, while a decrease in the discount rate increases the measured plan obligation, resulting in actuarial losses. In 2024, the Company's defined benefit pension plan assets had gains of 2.2% and losses of 5.0% in the U.S. and U.K., respectively, as compared to gains of 9.3% and 4.1% in the U.S. and U.K., respectively, in 2023.

Overall, based on the measurement at December 31, 2024, net benefit credits related to the Company’s defined benefit pension plans are expected to be lower by $69 million in 2025, compared to 2024. The decrease is primarily due to lower expected return on assets and higher recognized actuarial loss.

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.

Financing Cash Flows

Net cash provided by financing activities was $4.5 billion in 2024, compared with $1.1 billion used by financing activities in 2023.

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. The interest rate on the Credit Facility was initially based on LIBOR plus a fixed margin which varied with the Company's credit rating. In the second quarter of 2023, the Credit Facility was amended that borrowings under the Credit Facility bear interest at a rate per annum equal, at the Company's option, either at (a) Securities Overnight Financing Rate ("SOFR") benchmark rate for U.S. dollar borrowings, or (b) a currency specific benchmark rate, plus an applicable margin which varies with the Company's credit ratings. The Company is required to maintain certain coverage and leverage ratios for the Credit Facility, which are evaluated quarterly.

49

The Credit Facility includes provisions for determining a benchmark replacement rate in the event existing benchmark rates are no longer available or in certain other circumstances, in which an alternative rate may be required. At December 31, 2024 and 2023, the Company had no borrowings under this facility.

In October 2023, the Company terminated its one-year uncommitted revolving credit facility (the "Uncommitted Credit Facility"). There were no borrowings outstanding under the Uncommitted Credit Facility at December 31, 2023.

The Company also maintains other credit and overdraft facilities with various financial institutions aggregating $123 million at December 31, 2024, and $113 million at December 31, 2023. There were no outstanding borrowings under these facilities at December 31, 2024 and 2023.

The Company has outstanding guarantees and letters of credit with various banks aggregating $163 million and $139 million at December 31, 2024 and 2023, respectively.

Debt

The Company has a short-term debt financing program through the issuance of commercial paper. The proceeds from the issuance of commercial paper are used for general corporate purposes. In November 2023, the Company increased its short-term commercial paper financing program (the "Program") to $3.5 billion from $2.8 billion. The Company did not have any commercial paper outstanding at December 31, 2024 and 2023.

In November 2024, the Company issued $7.25 billion in senior notes as follows:

•$950 million 4.550% senior notes due 2027;

•$1 billion 4.650% senior notes due 2030;

•$1 billion 4.850% senior notes due 2031;

•$2 billion 5.000% senior notes due 2035;

•$500 million 5.350% senior notes due 2044;

•$1.5 billion 5.400% senior notes due 2055; and

•$300 million floating rate senior notes due 2027 (the "Floating Notes")

collectively referred to as the "November 2024 Notes".

For the Floating Notes, interest is calculated based on a compounded SOFR benchmark rate plus 0.700%.

The Company used the net proceeds from the November 2024 Notes offering to fund, in part, the McGriff Transaction, including the payment of related fees and expenses, as well as for general corporate purposes.

In June 2024, the Company repaid $600 million of 3.50% senior notes at maturity.

In March 2024, the Company repaid $1 billion of 3.875% senior notes at maturity.

In February 2024, the Company issued $500 million of 5.150% senior notes due 2034 and $500 million of 5.450% senior notes due 2054. The Company used the net proceeds from these issuances for general corporate purposes.

In October 2023, the Company repaid $250 million of 4.05% senior notes at maturity.

In September 2023, the Company issued $600 million of 5.400% senior notes due 2033 and $1 billion of 5.700% senior notes due 2053. In March 2023, the Company issued $600 million of 5.450% senior notes due 2053. The Company used the net proceeds from these issuances for general corporate purposes.

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.

Bridge Loan Commitment Letter

In connection with the McGriff Transaction, on September 29, 2024, the Company entered into a Commitment Letter to provide the Company with a Bridge Loan Facility. The Company paid approximately $23 million of customary upfront fees related to the Commitment Letter, amortized as interest expense. On November 8, 2024, the Company terminated the Commitment Letter. The Bridge Loan Facility agreement is discussed in more detail in Note 13, Debt, in the notes to the consolidated financial statements.

50

Share Repurchases

In 2024, the Company repurchased 4.3 million shares of its common stock for $900 million. At December 31, 2024, the Company remained authorized by the Board of Directors to repurchase up to approximately $2.3 billion in shares of its common stock. There is no time limit on this authorization. In 2023, the Company repurchased 6.4 million shares of its common stock for $1.15 billion.

Dividends

The Company paid dividends on its common stock shares of $1.5 billion ($3.05 per share) in 2024, as compared with $1.3 billion ($2.60 per share) in 2023.

In January 2025, the Board of Directors of the Company declared a quarterly dividend of $0.815 per share on outstanding common stock, payable in February 2025.

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).

The following amounts are included in the consolidated statements of cash flows as operating and financing activities:

For acquisitions completed in 2024, and in prior years, remaining estimated future contingent payments of $161 million, and deferred consideration payments of $179 million, are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheets at December 31, 2024.

Derivatives - Net Investment Hedge

The Company has investments in various subsidiaries with Euro functional currencies. As a result, the Company is exposed to the risk of fluctuations between the Euro and U.S. dollar exchange rates. As part of its risk management program, the Company designated its €1.1 billion senior note debt instruments ("Euro notes") as a net investment hedge (the "hedge") of its Euro denominated subsidiaries. The hedge effectiveness is re-assessed each quarter to confirm that the designated equity balance at the beginning of each period continues to equal or exceed 80% of the outstanding balance of the Euro debt instrument and that all the critical terms of the hedging instrument and the hedged net investment continue to match. 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 the Euro notes decreased by $75 million in 2024 due to change in foreign exchange rates. The Company concluded that the hedge was highly effective and recorded a decrease to accumulated other comprehensive loss for the year ended December 31, 2024.

Purchase of remaining non-controlling interest

In the second quarter of 2023, the Company purchased the remaining interest in a subsidiary for $139 million.

51

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 $411 million in 2024 and a decrease of $255 million in 2023 related to fiduciary liabilities.

Investing Cash Flows

Net cash used for investing activities amounted to $8.8 billion in 2024, compared with $1.4 billion used for investing activities in 2023.

The Company paid $8.5 billion and $976 million, net of cash, cash equivalents and cash and cash equivalents held in a fiduciary capacity acquired, for acquisitions in 2024 and 2023, respectively. The outflow of funds in 2024 related primarily to the acquisition of McGriff, where the Company paid $7.0 billion in cash consideration. The remaining outflow of funds in 2024 related primarily to the acquisitions of Cardano, the Horton Group, and Fisher Brown Bottrell Insurance Inc., for $466 million, $384 million and $321 million, respectively. The outflow of funds in 2023 related primarily to the acquisitions of Honan Insurance Group, Graham Company and Westpac for $358 million, $307 million, and $232 million, respectively.

In 2024, the Company received cash proceeds from dispositions of $135 million, partially offset by $46 million primarily related to cash and cash equivalents held in fiduciary capacity in the disposed businesses. The Company sold its Mercer U.K. pension administration and U.S. health and benefits administration businesses on January 1, 2024, for approximately $120 million, comprised of cash proceeds of $30 million and deferred consideration of $90 million. The Company received $78 million of deferred consideration in 2024.

In connection with the disposition of Mercer's U.S. affinity business in 2022, the Company transferred to the buyer an additional $24 million of cash and cash equivalents held in a fiduciary capacity in 2023.

The Company’s additions to fixed assets and capitalized software, which amounted to $316 million in 2024 and $416 million in 2023, related primarily to software development costs, the refurbishing and modernizing of office facilities, and technology equipment purchases.

Cash used for long-term investments in 2024 is primarily due to an investment in a unit trust fund. At December 31, 2024, the Company has commitments for potential future investments of approximately $117 million in private equity funds that invest primarily in financial services companies.

Commitments and Obligations

The following sets forth the Company’s future contractual obligations by type at December 31, 2024:

(a)Primarily reflects future payments of deferred and contingent purchase consideration.

The table does not include the liability for unrecognized tax benefits of $112 million as the Company is unable to reasonably predict the timing of settlement of these liabilities, other than approximately $54 million that may become payable within one year. The table also does not include the remaining transitional tax payments related to the Tax Cuts and Jobs Act ("TCJA") of $48 million, which will be paid in installments from 2025 through 2026.

52

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. Management considers the following policies to be critical to understanding the Company’s financial statements because their application places the most significant demands on management’s judgment and requires management to make estimates about the effect of matters that are inherently uncertain. Actual results may differ from those 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. 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. These deferred costs are amortized over the expected life of the underlying customer relationships. The Company also capitalizes certain pre-placement costs that are considered fulfillment costs that are amortized at a point in time when the associated revenue is recognized.

Refer to Note 2, Revenue, in the notes to the consolidated financial statements for additional information.

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. 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. In many cases, the Company has not recorded a liability, other than for legal fees to defend the claim, because the Company is unable, at present time, to make a determination that a loss is both probable and reasonably estimable. Given the unpredictability of E&O claims and of litigation that could arise from such claims, it is possible that an adverse outcome in a particular matter could have a material adverse effect on the Company’s businesses, results of operations, financial condition or cash flows in a given quarterly or annual period.

In addition, to the extent that insurance coverage is available, significant management judgment is required to determine the amount of recoveries that are probable of collection under the Company’s various insurance programs.

Retirement Benefits

The Company maintains qualified and non-qualified defined benefit pension and defined contribution plans for its eligible U.S. employees and a variety of defined benefit and defined contribution plans for its eligible non-U.S. employees. 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 Company recognizes the funded status of its over-funded defined benefit pension and retiree medical plans as a net benefit plan asset and its unfunded and underfunded plans as a net benefit plan liability. 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. 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. 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. The assumptions used in the calculation of net periodic benefit (credit) cost and pension liabilities are disclosed in Note 8, Retirement Benefits, in the notes to the consolidated financial statements.

53

The long-term rate of return on plan assets assumption is determined for each plan based on the facts and circumstances that exist as of the measurement date, and the specific portfolio mix of each plan’s assets. 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: actual and 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 target asset allocation for the U.S. plans is 50% equities and equity alternatives and 50% fixed income. At the end of 2024, the actual allocation for the U.S. plans was 51% equities and equity alternatives and 49% fixed income. The target asset allocation for the U.K. plans, which comprise approximately 78% of non-U.S. plan assets, is 12% equities and equity alternatives and 88% fixed income. At the end of 2024, the actual allocation for the U.K. plans was 12% equities and equity alternatives and 88% fixed income.

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.

The following table shows the weighted average assumed rate of return and the discount rate at the December 31, 2024 measurement date used to measure pension expense in 2025 for the total Company, the U.S. and the Rest of World ("ROW").

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:

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. It does not contemplate nor include potential future impacts a change in the interest rate environment and discount rates might cause, such as the impact on the market value of the plans’ assets. In addition, the assumed return on plan assets would likely be impacted by changes in the interest rate environment and other factors, including equity valuations, since these factors reflect the starting point used in the Company’s projection models. For example, a reduction in interest rates may result in a reduction in the assumed return on plan assets. 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.

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 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.

54

Income Taxes

Significant judgment is required in determining the annual effective tax rate and in evaluating uncertain tax positions. The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The evaluation of a tax position is a two-step process:

•First, the Company determines whether it is more-likely-than-not a tax position will be sustained upon tax examination, including resolution of any related appeals or litigation, based on only the technical merits of the position. If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of that position is not recognized in the financial statements.

•The second step is measurement. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate resolution with a taxing authority. Uncertain tax positions are evaluated based upon the facts and circumstances that exist at each reporting period and involve significant management judgment. Subsequent changes in judgment based upon new information may lead to changes in recognition, de-recognition, and measurement. Adjustments may result, for example, upon resolution of an issue with the taxing authorities, or expiration of a statute of limitations barring an assessment for an issue.

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. The Company’s accounting policy follows the portfolio approach that leaves stranded income tax effects in accumulated other comprehensive income.

Certain items are included in the Company's tax returns at different times than the items are reflected in the financial statements. As a result, the annual tax expense reflected in the consolidated statements of income is different than that reported in the tax returns. Some of these differences are permanent, such as non-deductible expenses, and some differences are temporary and reverse over time, such as depreciation expense.

Temporary differences create deferred tax assets and liabilities, which are measured using the enacted tax rates expected to apply to taxable income in the periods in which the deferred tax asset or liability is expected to be settled or realized. 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. Deferred tax assets generally represent items that can be used as a tax deduction or credit in tax returns in future years for which a benefit has already been recorded in the financial statements.

The Company evaluates all significant available positive and negative evidence, including the existence of losses in recent years and its forecast of future taxable income by jurisdiction, in assessing the need for a valuation allowance against deferred tax assets. The Company also considers tax planning strategies that would result in realization of deferred tax assets, and the presence of taxable income in prior period tax filings in jurisdictions that allow for the carry back of tax attributes pursuant to the applicable tax law. The underlying assumptions the Company uses in forecasting future taxable income require significant judgment and take into account the Company's recent performance. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which temporary differences or carry-forwards are deductible or creditable. 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.

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. The Company performs the annual impairment assessment for each of its reporting units during the third quarter of each year. The reporting unit level is defined as the same level as the Company's operating segments. In accordance with applicable accounting guidance, a company can assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test.

55

In 2024, the Company performed a qualitative impairment assessment. As part of its assessment, the Company considered numerous factors, including:

•that the fair value of each reporting unit exceeds its carrying value by a substantial margin based on its most recent quantitative assessment in 2023;

•whether significant acquisitions or dispositions occurred which might alter the fair value of its reporting units;

•macroeconomic conditions and their potential impact on reporting unit fair values;

•actual performance compared with budget and prior projections used in its estimation of reporting unit fair values;

•industry and market conditions; and

•the year-over-year change in the Company’s share price.

The Company completed its qualitative assessment in the third quarter of 2024, updated for significant considerations at year-end, and concluded that goodwill was not impaired.

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. Determining fair value of identifiable assets, particularly intangibles, and liabilities acquired also requires management to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. These estimates directly impact the amount of identified intangible assets recognized and the related amortization expense in future periods.

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."

56

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. With annual revenue of $23 billion, the Company has 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. 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. Oliver Wyman Group serves as a critical strategic, economic and brand advisor to private sector and governmental clients. 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 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.

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. This section also includes a discussion of the key drivers impacting the Company’s financial results of operations both on a consolidated basis and by reportable segments.

We describe the primary sources of revenue and categories of expense for each segment in the discussion of segment financial results. 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. 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.

Non-GAAP Measures

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (U.S.), referred to as in accordance with "GAAP" or "reported" results. The Company also refers to and presents a non-GAAP financial measure in non-GAAP revenue, within the meaning of Regulation G and Item 10(e) of Regulation S-K in accordance with the Securities Exchange Act of 1934. The Company has included a reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with GAAP as part of the consolidated revenue and expense discussion. Percentage changes, referred to as non-GAAP underlying revenue, are calculated by dividing the period over period change in non-GAAP revenue by the prior period non-GAAP revenue.

The Company believes this non-GAAP financial measure provides useful supplemental information that enables investors to better compare the Company’s performance across periods. Management also uses this measure internally to assess the operating performance of its businesses and to decide how to allocate resources. However, investors should not consider this non-GAAP measure in isolation from, or as a substitute for, the financial information that the Company reports in accordance with GAAP. The Company's non-GAAP measure includes adjustments that reflect how management views its businesses and may differ from similarly titled non-GAAP measures presented by other companies.

36

Financial Highlights

•Consolidated revenue in 2023 was $22.7 billion, an increase of 10%, or 9% on an underlying basis.

•Consolidated operating income increased $1.0 billion, or 23% to $5.3 billion in 2023, compared to 2022. Net income attributable to the Company was $3.8 billion. Earnings per share on a diluted basis increased to $7.53 from $6.04, or 25%, compared with 2022.

•Risk and Insurance Services revenue in 2023 was $14.1 billion, an increase of 11%, on a reported and 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. Operating 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. In March 2023, the Company issued $600 million of 5.450% senior notes due 2053.

•On October 16, 2023, the Company repaid $250 million of senior notes that matured.

•In 2023, the Company repurchased 6.4 million shares for $1.15 billion.

The macroeconomic and geopolitical environment including multiple major wars, escalating conflict throughout the Middle East and rising tension in the South China Sea, slower GDP growth or recession, lower interest rates, capital markets volatility and inflation has and could continue to potentially impact our business, financial condition, results of operations and cash flows. For more information about these risks, please see “Risk Factors – Macroeconomic Risks” in this annual report on Form 10-K.

For additional details, refer to the Consolidated Results of Operations and Liquidity and Capital Resources sections in this MD&A.

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

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. Revenue growth was driven by increases in the Risk and Insurance Services and Consulting segments of 11% and 7%, respectively.

The increase in revenue in 2023 reflects the continued demand for our advice and solutions, growth in new business and renewals, and investments in talent and capabilities. Results also benefited from growth in the global economy, inflation, higher insurance and reinsurance pricing, and an increase in fiduciary income due to higher interest rates.

Expenses increased in 2023 primarily due to compensation and benefits, driven by increased headcount, and higher base salary and incentive compensation. Other operating expenses decreased due to lower restructuring and facility costs, partially offset by higher travel and entertainment costs compared to 2022. Expenses in 2023 also include $51 million of insurance and indemnity recoveries for a legacy Jardine Lloyd Thompson Group plc ("JLT") Errors and Omissions ("E&O") matter relating to suitability of advice provided to individuals for defined benefit pension transfers in the United Kingdom (U.K).

Diluted earnings per share increased to $7.53 from $6.04, or 25% from the prior year. The increase is primarily the result of higher operating income in 2023, compared to the prior year.

Consolidated Revenue and Expense

Revenue – Non-GAAP Revenue and Components of Change

The Company advises clients in over 130 countries. As a result, foreign exchange rate movements may impact period over period comparisons of revenue. 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. Percentage changes, referred to as non-GAAP underlying revenue, are calculated by dividing the period over period change in non-GAAP revenue by the prior period non-GAAP revenue.

The non-GAAP revenue measure is presented on a constant currency basis excluding the impact of foreign currency fluctuations. The Company isolates the impact of foreign exchange rate movements period over period, by translating the current period foreign currency GAAP revenue into U.S. Dollars based on the difference in the current and corresponding prior period exchange rates.

38

The percentage change for acquisitions, dispositions, and other includes the impact of current and prior year items excluded from the calculation of non-GAAP underlying revenue for comparability purposes. Details on these items are provided in the reconciliation of non-GAAP revenue to GAAP revenue tables.

The following tables present the Company's non-GAAP revenue for the years ended December 31, 2023 and 2022 and the related non-GAAP underlying revenue change:

The following table provides more detailed revenue information for certain of the components presented in the previous table:

(a)In the first quarter of 2023, the Company began reporting the Marsh India operations in EMEA. Prior year results for India have been reclassified from Asia Pacific to EMEA for comparative purposes.

(*) Rounded to whole percentages.

39

Revenue – Reconciliation of Non-GAAP Measures

The following table provides the reconciliation of GAAP revenue to Non-GAAP revenue for the years ended December 31, 2023 and 2022:

The following table provides more detailed revenue information for certain of the components presented in the previous table:

40

Consolidated Revenue

Consolidated revenue increased $2.0 billion, or 10%, to $22.7 billion in 2023, compared to $20.7 billion in 2022. Consolidated revenue increased 9% on an underlying basis and 1% from acquisitions. On an underlying basis, revenue increased 11% and 7% in 2023, in the Risk and Insurance Services and Consulting segments, respectively.

Underlying revenue growth in the Risk and Insurance Services and Consulting segments in 2023 reflect the continued demand for our advice and solutions. In Risk and Insurance Services, the increase in underlying revenue was primarily due to growth in new business and renewals. Results also benefited from growth in the global economy, inflation, higher insurance and reinsurance pricing, and an increase in fiduciary income due to higher interest rates. In Consulting, revenue growth reflects continued demand for our health, wealth, and career solutions and products, and consulting services.

Consolidated Operating Expenses

Consolidated operating expenses increased $1.0 billion, or 6%, to $17.5 billion in 2023, compared to $16.4 billion in 2022. Expenses reflect a 2% increase from acquisitions. Expenses excluding the impact from acquisitions, increased 5% in 2023, with increases of 5% in both the Risk and Insurance Services and Consulting segments.

Expenses increased in 2023 primarily due to compensation and benefits driven by increased headcount, and higher base salary and incentive compensation. Other operating expenses decreased due to lower restructuring and facility costs, partially offset by higher travel and entertainment costs compared to 2022. The Company incurred a total of $301 million for restructuring activities in 2023, compared to $427 million in 2022. Expenses in 2023 also include $51 million of insurance and indemnity recoveries for a legacy JLT E&O matter relating to suitability of advice provided to individuals for defined benefit pension transfers in the U.K.

Restructuring activities

In the fourth quarter of 2022, the Company initiated activities focused on workforce actions, rationalization of technology and functional services, and reductions in real estate. The Company anticipates total charges related to these activities to be approximately $475 million. Through December 31, 2023, the Company has incurred $441 million of these restructuring costs, primarily related to severance and lease exit charges, of which $222 million were incurred in 2023. Any remaining costs are expected to be incurred by the end of 2024. Related estimated savings are expected to be approximately $400 million, with $230 million realized in 2023. The majority of the remaining savings are expected to be realized in 2024. The Company continues to refine its detailed plans for each business and location, which may change the expected timing, estimates of expected costs and related savings.

Restructuring activities also reflect JLT integration and restructuring costs in 2023 of $31 million, compared to $115 million in 2022, primarily related to lease exit charges for a legacy JLT U.K. location. For additional details, refer to Note 14, Restructuring Costs, in the notes to the consolidated financial statements.

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.

Marsh and Guy Carpenter are compensated for brokerage and consulting services through commissions and fees. Commission rates and fees vary in amount and can depend on a number of factors, including the type of insurance or reinsurance coverage provided, the particular insurer or reinsurer selected, and the capacity in which the broker acts and negotiates with clients. Revenues can be affected by premium rate levels in the insurance/reinsurance markets, the amount of risk retained by insurance and reinsurance clients, and by the value of the risks that have been insured since commission-based compensation is frequently related to the premiums paid by insureds and reinsureds. In many cases, fee compensation may be negotiated in advance, based on the type of risk, coverage required and service provided by the Company and ultimately, the extent of the risk placed into the insurance market or retained by the client. 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.

In addition to compensation from its clients, Marsh also receives other compensation, separate from retail fees and commissions, from insurance companies. This other compensation includes, among other things, payment for consulting and analytics services provided to insurers; compensation for administrative and other services (including fees for underwriting services and services provided to or on behalf of insurers relating to the administration and management of quota shares, panels and other facilities in which insurers participate); and contingent commissions, which are paid by insurers based on factors such as volume or profitability of Marsh's placements, primarily driven by Marsh McLennan Agency ("MMA") and parts of Marsh's international operations.

Marsh and Guy Carpenter receive interest income on certain funds (such as premiums and claims proceeds) held in a fiduciary capacity for others. The investment of fiduciary funds is regulated by state and other insurance authorities. These regulations typically require segregation of fiduciary funds and limit the types of investments that may be made. Interest income from these investments varies depending on the amount of funds invested and applicable interest rates, both of which vary from time to time. For presentation purposes, fiduciary interest income is segregated from the other revenues of Marsh and Guy Carpenter and separately presented within the segment, as shown in the previous revenue by segments tables.

The results of operations for the Risk and Insurance Services segment are as follows:

(a)In 2023, the Company reclassified certain amounts between Compensation and benefits and Other operating expenses for each reporting segment. The reclassification had no impact on consolidated or reporting segment total expenses. Prior period amounts were reclassified for comparability purposes.

Revenue

Revenue in the Risk and Insurance Services segment increased $1.4 billion, or 11%, to $14.1 billion in 2023, compared to $12.6 billion in 2022. 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.

The increase in revenue on an underlying basis in the Risk and Insurance Services segment in 2023 was primarily due to growth in new business and renewals. Results also benefited from growth in the global economy, inflation, higher insurance and reinsurance pricing, and an increase in fiduciary income due to higher interest rates.

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. 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.

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. Revenue in 2023 also includes a gain from a legal settlement with a competitor for $58 million, excluding legal fees.

Risk and Insurance Services segment completed 9 acquisitions in 2023. 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.

Expenses in 2023 increased primarily due to compensation and benefits driven by increased headcount, and higher base salary and incentive compensation. Other operating expenses decreased due to lower restructuring and facility costs, partially offset by higher travel and entertainment costs compared to 2022. 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. Expenses in 2022, also included settlement charges and legal costs related to strategic recruiting of $30 million.

Consulting

The Company conducts business in its Consulting segment through Mercer and Oliver Wyman Group. 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 critical strategic, economic and brand advisor to private sector and governmental clients.

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. Revenue for Mercer’s investment management business and certain of Mercer’s defined benefit and contribution administration services consists principally of fees based on assets under management or administration. For a majority of the Mercer managed investment funds, revenue is recorded on a gross basis with sub-advisor fees included in other operating expenses.

Revenue in the Consulting segment is affected by, among other things, global economic conditions, including changes in clients’ particular industries and markets. Revenue is also affected by competition due to the introduction of new products and services, broad trends in employee demographics, including levels of employment and the effect of government policies and regulations. Revenues from investment management services and retirement trust and administrative services are significantly affected by the level of assets under management or administration, which is impacted by securities market performance.

The results of operations for the Consulting segment are as follows:

(a)In 2023 the Company reclassified certain amounts between Compensation and benefits and Other operating expenses for each reporting segment. The reclassification had no impact on consolidated or reporting segment total expenses. Prior period amounts were reclassified for comparability purposes.

On January 1, 2024, the Company sold its Mercer U.S. health and benefits and U.K. pension administration businesses for approximately $110 million. The Company expects the gain on sale and the impact on Consulting segment revenues and operating income not to be material.

Revenue

Consulting revenue increased $570 million, or 7%, to $8.7 billion in 2023, compared to $8.1 billion in 2022. This reflects an increase of 7% on an underlying basis.

Mercer's revenue increased $242 million, or 5%, to $5.6 billion in 2023, compared to $5.3 billion in 2022. This reflects an increase of 7% on an underlying basis, partially offset by a decrease of 1% primarily from the

43

disposition of businesses. On an underlying basis, revenue for Health, Career and Wealth increased 10%, 6%, and 4%, respectively, as compared to the prior year.

The increase in revenue on an underlying basis at Mercer in 2023 was primarily due to the continued demand for our health, wealth, and career solutions and products. Health continued to benefit from growth in new business, higher retention, increased enrolled lives, and medical inflation. The increase in Career products and services was due to continued demand in rewards and talent strategy. Revenue in Wealth on an underlying basis grew in defined benefit consulting and investment management fees due to the Westpac Transaction, a rebound in capital markets, and positive net flows.

Revenue in 2023 included a loss of $17 million related to the sale of an individual financial advisory business in Canada. Results in 2022 also included a gain of $112 million from the sale of the Mercer U.S. affinity business.

Oliver Wyman Group's revenue increased $328 million, or 12%, to $3.1 billion in 2023, compared to $2.8 billion in 2022. This reflects increases of 8% on an underlying basis, 3% from acquisitions, and 1% from the impact of foreign currency translation.

The increase in underlying revenue at Oliver Wyman Group in 2023 reflects broad-based growth across capabilities led by growth in the Middle East and Europe. Revenue in 2022 also included a loss of $12 million related to the deconsolidation of the Company's Russian businesses.

The Consulting segment completed 5 acquisitions in 2023. 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.

Expenses in 2023 increased primarily due to compensation and benefits driven by increased headcount and higher base salary. The increase in expenses is partially offset by $51 million of insurance recoveries for a legacy JLT E&O matter relating to suitability of advice provided to individuals for defined pension transfers in the U.K.

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.

Expenses also reflect acquisition and integration related costs for the Westpac Transaction of $39 million, compared to $21 million in 2022.

Corporate and Other

Corporate expenses decreased $33 million, or 9%, to $329 million in 2023, compared to $362 million in 2022. The decrease in expenses reflects a 1% impact from foreign currency translation and lower facility and equipment costs in the current year.

Interest Income

Interest income was $78 million in 2023, compared to $15 million in 2022. Interest income increased $63 million in 2023, due to an increase in corporate funds and higher interest rates.

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. It includes, when applicable, other than temporary declines in the value of securities, mark-to-market increases or decreases in equity investments with readily determinable fair values and equity method gains or losses on its investments in private equity funds. The Company's investments may include direct investments in insurance, consulting or other strategically linked companies and investments in private equity funds. 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.

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 2023 effective tax rate reflects the previously-enacted change in the U.K. corporate income tax rate from 19% to 25%, which was effective April 1, 2023. The blended U.K. statutory tax rate for 2023 is 23.5%. The 2022 effective tax rate also reflects tax benefits from planning that postponed the utilization of U.K. tax losses to future years when the U.K. statutory tax rate will be 25%.

In 2023, the Company released valuation allowances related to its non-U.S. operations. Management determined that there is sufficient positive evidence to conclude that it is more likely than not that deferred tax assets are realizable, primarily due to the sustained profitability of its operations. The valuation allowance release resulted in a decrease to tax expense of $94 million in the current year.

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. Therefore, a shift in the mix of profits among jurisdictions, or changes in the Company's repatriation strategy to access offshore cash, can affect the effective tax rate. 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.

In addition, losses in certain jurisdictions cannot be offset by earnings from other operations and may require valuation allowances that affect the rate in a particular period, depending on estimates of the value of associated deferred tax assets which can be realized. A valuation allowance was recorded to reduce deferred tax assets to the amount that the Company believes is more likely than not to be realized. Details are provided in Note 7, Income Taxes, in the notes to the consolidated financial statements. The effective tax rate is also sensitive to changes in unrecognized tax benefits, including the impact of settled tax audits and expired statutes of limitations.

Changes in tax laws, rulings, policies or related legal and regulatory interpretations occur frequently and may also have significant favorable or adverse impacts on our effective tax rate. In July 2023, the U.K. enacted legislation to implement Pillar 2 of the Organization for Economic Cooperation and Development's ("OECD") framework, effective from January 1, 2024. This minimum tax will be treated as a period cost in future years and does not impact operating results for 2023. Other countries in the European Union (E.U.) and elsewhere have similarly adopted legislation. The Company is continuing to monitor legislative developments, especially in the E.U. countries, and is in the process of evaluating the potential impact of the U.K. and other enacted legislation on its results of future operations. Currently, the Company does not expect the impact of Pillar 2 related legislation to be material in 2024.

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 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. 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.

Changes to the U.S. tax law in recent years have allowed the Company to repatriate foreign earnings without incurring additional U.S. federal income tax costs as foreign income is generally already taxed in the U.S. However, permanent reinvestment continues to be a component of the Company's global capital strategy. The Company continues to evaluate its global investment and repatriation strategy in light of our capital requirements and potential costs of repatriation, which are generally limited to local country withholding taxes.

45

Liquidity and Capital Resources

The Company is organized as a legal entity separate and distinct from its operating subsidiaries. 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 Company can also provide financial support to its operating subsidiaries for acquisitions, investments and certain parts of their business that require liquidity, such as the capital markets business of Guy Carpenter. Other sources of liquidity include borrowing facilities in financing cash flows.

The Company derives a significant portion of its revenue and operating profit from operating subsidiaries located outside of the U.S. Funds from those operating subsidiaries are regularly repatriated to the U.S. out of annual earnings. 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. 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. 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. subsidiaries, 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. 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 Cash Flows

The Company provided $4.3 billion of cash from operations in 2023, compared to $3.5 billion provided by operations in 2022. These amounts reflect the net income of the Company during those periods, excluding gains or losses from investments, adjusted for non-cash charges and changes in working capital which relate primarily to the timing of payments of accrued liabilities, including incentive compensation, or receipts of receivables and pension contributions. The Company used cash of $271 million and $193 million related to its restructuring activities in 2023 and 2022, respectively.

Pension Related Items

Contributions

The Company's policy for funding its tax-qualified defined benefit plans is to contribute amounts at least sufficient to meet the funding requirements set forth in accordance with applicable law. 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.

In the U.S., contributions to the tax-qualified defined benefit plans are based on Employee Retirement Income Security Act ("ERISA") guidelines and the Company generally expects to maintain a funded status of 80% or more of the liability determined in accordance with the ERISA guidelines. 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.

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 based on local funding practices and statutory requirements, which may differ significantly from measurements in accordance with U.S. GAAP.

In the U.K., the assumptions used to determine pension contributions are the result of legally-prescribed negotiations between the Company and the plans' trustee that typically occur every three years in conjunction with the actuarial valuation of the plans. Currently, this results in a lower funded status compared to U.S. GAAP and may result in contributions irrespective of the U.S. GAAP funded status.

46

In 2021, the JLT Pension Scheme was merged into the MMC U.K. Pension Fund with a new segregated JLT section created (referred to as the "JLT section").

The Company contributed $42 million to its U.K. plans, including the JLT section, in 2023. 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. 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 funding level will be re-assessed during 2025 as part of the December 31, 2024 actuarial valuation to determine if contributions are required in 2026. 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 expects to contribute approximately $78 million to its 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.

Changes in Funded Status and Expense

The year-over-year change in the funded status of the Company's pension plans is impacted by the difference between actual and assumed results, particularly with regard to return on assets, and changes in the discount rate, as well as the amount of Company contributions, if any. 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 increase in the non-U.S. plans is primarily due to decreases in the discount rates used to measure plan liabilities, lower than expected returns on plan assets and the impact of foreign exchange. In the past several years, the amount of unamortized losses has been significantly impacted, both positively and negatively, by actual asset performance and changes in discount rates. The discount rate used to measure plan liabilities for the Company's U.S. and U.K. plans decreased in 2023 and increased in 2022 and 2021. An increase in the discount rate decreases the measured plan benefit obligation, resulting in actuarial gains, while a decrease in the discount rate increases the measured plan obligation, resulting in actuarial losses. 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.

Overall, based on the measurement at December 31, 2023, net benefit credits related to the Company’s defined benefit plans are not expected to be materially different in 2024, compared to 2023, for both the U.S. and non-U.S. plans.

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.

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. The interest rate on the Credit Facility was initially based on LIBOR plus a fixed margin which varied with the Company's credit rating. In the second quarter of 2023, the Credit Facility was amended that borrowings under the Credit Facility bear interest at a rate per annum equal, at the Company's option, either at (a) SOFR benchmark rate for U.S. dollar borrowings, or (b) a currency specific benchmark rate, plus an applicable margin which varies with the Company's credit ratings. The Company is required to maintain certain coverage and leverage ratios for the Credit Facility, which are evaluated quarterly.

47

The Credit Facility includes provisions for determining a benchmark replacement rate in the event existing benchmark rates are no longer available or in certain other circumstances, in which an alternative rate may be required. At December 31, 2023 and 2022, the Company had no borrowings under this facility.

In October 2023, the Company terminated its one-year uncommitted revolving credit facility ("Uncommitted Credit Facility"). There were no borrowings outstanding under the Uncommitted Credit Facility at December 31, 2022.

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 outstanding borrowings under these facilities at December 31, 2023 and 2022.

The Company has outstanding guarantees and letters of credit with various banks aggregating $139 million and $152 million at December 31, 2023 and 2022, respectively.

Debt

In November 2023, the Company increased its short-term commercial paper financing program (the "Program") to $3.5 billion from $2.8 billion. The Company had previously increased the Program's capacity in October 2022 to $2.8 billion from $2.0 billion. The Company did not have any commercial paper outstanding at December 31, 2023 and 2022.

In October 2023, the Company repaid $250 million of 4.05% senior notes that matured.

In September 2023, the Company issued $600 million of 5.400% senior notes due 2033 and $1 billion of 5.700% senior notes due 2053. In March 2023, the Company issued $600 million of 5.450% senior notes due 2053. The Company used the net proceeds from these issuances for general corporate purposes.

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.

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.

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 authorization. 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.

Dividends

The Company paid dividends on its common stock shares of $1.3 billion ($2.60 per share) in 2023, as compared with $1.1 billion ($2.25 per share) in 2022.

In January 2024, the Board of Directors of the Company declared a quarterly dividend of $0.710 per share on outstanding common stock, payable in February 2024.

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 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.

Derivatives - Net Investment Hedge

The Company has investments in various subsidiaries with Euro functional currencies. As a result, the Company is exposed to the risk of fluctuations between the Euro and U.S. dollar exchange rates. As part of its risk management program, the Company issued €1.1 billion senior notes, and designated the debt instruments as a net investment hedge of its Euro denominated subsidiaries. The hedge is re-assessed each quarter to confirm that the designated equity balance at the beginning of each period continues to equal or exceed 80% of the outstanding balance of the Euro debt instrument and that all the critical terms of the hedging instrument and the hedged net investment continue to match. 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 the Euro notes increased by $54 million in 2023 due to change in foreign exchange rates. The Company concluded that the hedge was highly effective and recorded an increase to accumulated other comprehensive loss for the year ended December 31, 2023.

Purchase of remaining non-controlling interest

In the second quarter of 2023, the Company purchased the remaining interest in a subsidiary for $139 million.

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.

Investing Cash Flows

Net cash used for investing activities amounted to $1.4 billion in 2023, compared with $850 million used for investing activities in 2022.

The Company paid $976 million and $572 million, net of cash, cash equivalents and cash and cash equivalents held in a fiduciary capacity acquired, for acquisitions in 2023 and 2022, respectively. The outflow of funds in 2023 related primarily to the acquisitions of Honan Insurance Group, Graham Company and the Westpac Transaction for $358 million, $307 million, and $232 million, respectively.

In connection with the disposition of Mercer's U.S. affinity business in 2022, the Company transferred to the buyer an additional $24 million of cash and cash equivalents held in a fiduciary capacity in 2023.

49

In 2022, the Company sold certain businesses, primarily Mercer's U.S. affinity business, for cash proceeds of approximately $155 million, partially offset by $36 million primarily related to cash and cash equivalents held in a fiduciary capacity in the disposed businesses.

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.

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. At December 31, 2023, the Company has commitments for potential future investments of approximately $121 million in private equity funds that invest primarily in financial services companies.

Commitments and Obligations

The following sets forth the Company’s future contractual obligations by type at December 31, 2023: