Marsh & Mclennan Companies (MRSH) risk factors, FY2024 10-K

Macroeconomic Risks

1. 01Our results of operations and investments could be adversely affected by geopolitical or macroeconomic conditions
2. 02Changes in macroeconomic and geopolitical conditions could also shift demand to services for which we do not have a competitive advantage, and this could negatively affect the amount of business that we are able to obtain

Legal and Regulatory Risks

1. 03We are subject to significant uninsured exposures arising from errors and omissions, breach of fiduciary duty and other claims
2. 04In addition, we may be responsible for the legal and regulatory liabilities of companies that we acquire
3. 05We currently utilize the services of hundreds of third-party providers to meet the needs of our clients around the world
4. 06We may not be able to effectively identify and manage actual and apparent conflicts of interest

Cybersecurity, Data Protection and Technology Risks

1. 07We could incur significant liability or our reputation could be damaged if our information systems are breached or we otherwise fail to protect client or Company data or information systems
2. 08law enforcement agencies or regulators following any such event, whether due to delayed discovery or a failure to follow existing protocols
3. 09Our business performance and growth plans could be negatively affected if we are not able to develop and implement improvements in technology or respond effectively to the threat of digital disruption and other technological change such as AI
4. 10partnerships with technology companies as part of our growth strategy, as well as investments in technology, including generative AI, and infrastructure to support our own systems
5. 11The loss of members of our senior management team or other key colleagues, or if we are unsuccessful in our efforts to attract, retain and develop talent, could have a material adverse effect on our business
6. 12Failure to maintain our corporate culture could adversely affect our business and reputation
7. 13Increasing scrutiny and changing laws and expectations from regulators, investors, clients and our colleagues with respect to our environmental, social and governance (ESG) practices and disclosure may impose additional costs on us or expose us to new or additional risks
8. 14Moreover, public opinion and potential legal actions regarding ESG-related initiatives remain highly dynamic and can vary across stakeholders and geographies. Balancing these competing expectations globally is complex
9. 15We face significant competitive pressures in each of our businesses, including from disintermediation, as our competitive landscape continues to evolve
10. 16We rely on a large number of vendors and other third parties to perform key functions of our business operations and to provide services to our clients. These vendors and third parties may act or fail to act in ways that could harm our business
11. 17As we do not control many of the actions of these third parties, we are subject to the risk that their decisions or operations may adversely impact us and replacing these service providers could create significant delay in services or operations and additional expense

Business Resiliency Risks

1. 18Our inability to successfully recover should we experience a disaster or other business continuity or data recovery problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability
2. 19We face risks when we acquire or dispose of businesses
3. 20We expect that acquisitions will continue to be a key part of our business strategy. Our success in this regard will depend on our ability to identify and compete for appropriate acquisition candidates and to finance and complete the transactions we decide to pursue on favorable terms with positive results

Financial Risks

1. 21If we are unable to collect our receivables, our results of operations and cash flows could be adversely affected
2. 22We may not be able to obtain sufficient financing on favorable terms
3. 23Our defined benefit pension obligations and the assets set aside to fund those obligations are sensitive to certain changes in the financial markets. Any such changes may result in increased pension expense or additional cash payments to fund these plans
4. 24Our significant non-U.S. operations expose us to exchange rate fluctuations and various risks that could impact our business
5. 25Our quarterly revenues and profitability may fluctuate significantly
6. 26certain other business lines are derived from the value of assets under management, advisement or administration; and
7. 27Currently, the Company's senior debt is rated A- by 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
8. 28At December 31, 2024, we had total consolidated debt outstanding of approximately $19.9 billion
9. 29The current U.S. tax regime has provisions which have unintended consequences and may also impact our tax rate in varying degrees based on where our global income is earned
10. 30We are exposed to multiple risks associated with the global nature of our operations

RISKS RELATING TO OUR RISK AND INSURANCE SERVICES SEGMENT

1. 31Results in our Risk and Insurance Services segment may be adversely affected by a general decline in economic activity
2. 32Volatility or declines in premiums and other market trends may significantly impede our ability to grow revenues and profitability
3. 33Adverse legal developments and future regulations concerning how intermediaries are compensated by insurers or clients, as well as allegations of anti-competitive behavior or conflicts of interest, could have a material adverse effect on our business, results of operations and financial condition

RISKS RELATING TO OUR CONSULTING SEGMENT

1. 34Our Consulting segment, conducted through Mercer and Oliver Wyman Group, represented 37% of our total revenue in 2024. Our businesses in this segment are subject to particular risks
2. 35Our businesses are subject to a number of risks related to the U.S. healthcare industry, including risks related to healthcare regulation and reputational damage from negative publicity
3. 36as a result of the revenue our businesses receive from healthcare-related services including our consulting advice to clients from different areas of the healthcare industry
4. 37Factors affecting defined benefit pension plans and the services we provide relating to those plans could adversely affect Mercer
5. 38The profitability of our Consulting businesses depends in part on ensuring that our consultants maintain adequate utilization rates (i.e., the percentage of our consultants' working hours devoted to billable activities)
6. 39If the utilization rate for our consulting professionals declines, our revenues, profit margin and profitability could decline