Cuộc họp công bố kết quả kinh doanh quý 3/2026 của Marsh (MRSH): EPS tăng 10%, nâng mục tiêu Thrive

Điểm chính

• Marsh đã công bố doanh thu quý 3/2026 đạt 6,9 tỷ USD, tăng 8% so với cùng kỳ năm trước và tăng 5% trên cơ sở hữu cơ. Lợi nhuận từ hoạt động kinh doanh đã điều chỉnh tăng 6% lên 1,5 tỷ USD, trong khi EPS đã điều chỉnh tăng 10% lên 2,03 USD.
• Mảng Tư vấn dẫn đầu đà tăng trưởng với doanh thu hữu cơ tăng 8%. Tư vấn Quản trị tăng 14%, nhờ nhu cầu diện rộng, các dự án liên quan đến AI và thời điểm ghi nhận phí thành công thuận lợi.
• Mảng Rủi ro đạt mức tăng trưởng hữu cơ 5% bất chấp giá bảo hiểm thương mại giảm nhẹ. Doanh thu Tái bảo hiểm giảm 6% trong quý do phí tái bảo hiểm tài sản thấp hơn và mức nền so sánh cao của cùng kỳ năm trước gây áp lực lên kết quả.
• Marsh đã nâng mục tiêu tiết kiệm chi phí từ chương trình Thrive từ 400 triệu USD lên 600 triệu USD, với lý do có thêm các cơ hội từ Dịch vụ Doanh nghiệp & Khách hàng, tái thiết kế quy trình, chuyển dịch nhân lực tối ưu (right-shoring), tự động hóa và công nghệ.
• Công ty đã mua lại 500 triệu USD cổ phiếu trong quý 3, nâng tổng giá trị mua lại từ đầu năm đến nay lên 2 tỷ USD. Ban lãnh đạo tiếp tục dự kiến tổng mức phân bổ vốn đạt khoảng 5,5 tỷ USD trong năm 2026.
• Ban lãnh đạo duy trì triển vọng cả năm với mức tăng trưởng doanh thu hữu cơ tương tự năm 2025, mở rộng biên lợi nhuận trên toàn công ty và tăng trưởng EPS đã điều chỉnh vững chắc, tùy thuộc vào các điều kiện kinh tế, địa chính trị và thị trường.

Dữ liệu tài chính cốt lõi

Trong 9 tháng đầu năm 2026, doanh thu hữu cơ tăng 5%. Lợi nhuận từ hoạt động kinh doanh đã điều chỉnh tăng 7% lên 6,1 tỷ USD, biên lợi nhuận hoạt động đã điều chỉnh đạt 28,1% và EPS đã điều chỉnh tăng 9% lên 8,29 USD.

Kết quả Kinh doanh và Hoạt động

Doanh thu hữu cơ mảng Rủi ro tăng 5%. Khu vực Mỹ và Canada tăng 4%, trong khi tăng trưởng quốc tế đạt 6%, bao gồm 7% tại EMEA và 4% tại Châu Á - Thái Bình Dương. Mỹ Latinh đi ngang. Ban lãnh đạo ghi nhận các hợp đồng mới tăng trưởng vững chắc cùng nhu cầu về hạ tầng kỹ thuật số và rủi ro giao dịch, bất chấp giá bảo hiểm thương mại giảm.

Theo Chỉ số Thị trường Bảo hiểm Toàn cầu của Marsh, giá bảo hiểm thương mại gốc đã giảm 5% trong quý 3 sau khi giảm 6% trong quý 2. Giá bảo hiểm tài sản toàn cầu giảm 10%, giá bảo hiểm trách nhiệm tài chính và chuyên môn giảm 3%, và giá bảo hiểm an ninh mạng giảm 4%. Giá bảo hiểm rủi ro tài sản toàn cầu tăng 1%, bao gồm mức tăng 13% của bảo hiểm trách nhiệm vượt mức tại Mỹ.

Doanh thu hữu cơ mảng Tái bảo hiểm giảm 6% trong quý 3 và giảm 1% trong 9 tháng đầu năm. Ban lãnh đạo cho biết áp lực giá giảm đáng kể đã lấn ạt đà tăng của các hợp đồng mới và tỷ lệ duy trì khách hàng ở mức cao trong khoảng 95-99%. Nguồn vốn truyền thống và nguồn vốn thay thế dồi dào tiếp tục gây áp lực lên giá tái bảo hiểm ngắn hạn, và công ty dự kiến các điều kiện cạnh tranh sẽ kéo dài qua chu kỳ tái tục ngày 1 tháng 1.

Doanh thu hữu cơ mảng Tư vấn tăng 8%. Trong nhóm Con người và Đầu tư, mảng Sức khỏe và Phúc lợi tăng 5%, mảng Đầu tư và Hưu trí tăng 8%, và mảng Lực lượng Lao động và Đãi ngộ giảm 1% do mức tăng trưởng ở Mỹ và hầu hết các thị trường quốc tế bị bù trừ bởi môi trường khó khăn tại Trung Đông. Tài sản quản lý đạt 843 tỷ USD, đi ngang so với quý trước và tăng 23% so với cùng kỳ năm trước nhờ các hợp đồng mới và tác động của thị trường vốn.

Mảng Tư vấn Quản trị tăng 14%. Marsh cho biết nhu cầu diễn ra trên diện rộng, trong đó công tác chuyển đổi liên quan đến AI thông qua bộ phận Quotient của Oliver Wyman đã đóng góp vào đà tăng trưởng. Quý 3 cũng ghi nhận các khoản phí thành công vốn dự kiến thuộc quý 4, mặc dù ban lãnh đạo cho biết các khoản phí này không chiếm phần lớn mức tăng trưởng của phân khúc.

Marsh đã điểm qua một số sáng kiến về AI và hạ tầng kỹ thuật số. Marsh Risk Companion sử dụng công cụ phân tích hỗ trợ bởi AI để mô hình hóa và tối ưu hóa các kịch bản rủi ro của khách hàng. Broker Workbench đã giảm thời gian xử lý giao dịch bảo hiểm trong mảng bán buôn tại Anh từ hai đến bốn tuần xuống còn vài giờ, trong khi 93% giao dịch bán buôn tại London hiện đã được thực hiện bằng công nghệ kỹ thuật số. Công ty cũng ra mắt Stratus Exchange, cung cấp quyền tiếp cận khoản bảo hiểm tài sản lên tới 10 tỷ USD cho các cơ sở kỹ thuật số đang hoạt động, nối tiếp gói bảo hiểm rủi ro xây dựng Nimbus trị giá 2,7 tỷ USD.

Định hướng của Ban lãnh đạo

Ban lãnh đạo tiếp tục dự kiến mức tăng trưởng doanh thu hữu cơ cả năm 2026 tương tự như mức đạt được trong năm 2025, thêm một năm mở rộng biên lợi nhuận trên toàn công ty và tăng trưởng EPS đã điều chỉnh vững chắc. Triển vọng này dựa trên các điều kiện thị trường hiện tại và có thể thay đổi tùy theo môi trường kinh tế hoặc địa chính trị.

Mảng Tư vấn Quản trị đang trên đà đạt mức tăng trưởng một chữ số ở mức cao cho cả năm. Điều này ngụ ý rằng doanh thu quý 4 sẽ gần như đi ngang do một số khoản phí thành công dự kiến trong quý 4 đã được ghi nhận trong quý 3.

Trong quý 4, ban lãnh đạo dự kiến thu nhập lãi từ tiền gửi ủy thác đạt khoảng 94 triệu USD, chi phí doanh nghiệp đã điều chỉnh đạt 80 triệu USD và chi phí lãi vay đạt 255 triệu USD. Tỷ giá hối đoái dự kiến sẽ không ảnh hưởng đáng kể đến lợi nhuận. Thuế suất hiệu dụng đã điều chỉnh dự kiến ở mức khoảng 25% cho năm 2026, không bao gồm các khoản mục riêng lẻ không được dự báo.

Marsh hiện hướng tới mục tiêu tiết kiệm 600 triệu USD theo chương trình Thrive, tăng so với mức 400 triệu USD trước đó. Công ty dự kiến chi phí liên quan sẽ khoảng 750 triệu USD, với phần lớn các hành động được hoàn tất vào cuối năm 2028 và khoản tiết kiệm sẽ được ghi nhận tương đối đều đặn trong ba năm triển khai chương trình. Ban lãnh đạo cho biết khoản tiết kiệm này sẽ hỗ trợ đầu tư vào mảng bán hàng, các năng lực mới, công nghệ và thương hiệu Marsh.

Công ty tiếp tục dự kiến phân bổ khoảng 5,5 tỷ USD vốn trong năm 2026 cho cổ tức, M&A và mua lại cổ phiếu. Mức mua lại cổ phiếu cuối cùng sẽ phụ thuộc vào danh mục các cơ hội M&A.

Rủi ro và các lĩnh vực cần theo dõi

• Giá bảo hiểm thương mại và tái bảo hiểm tài sản hạ nhiệt tiếp tục là yếu tố bất lợi đối với doanh thu, đặc biệt là đối với mảng tái bảo hiểm.
• Ban lãnh đạo dự kiến công suất tái bảo hiểm dồi dào và các điều kiện thị trường cạnh tranh sẽ tiếp tục diễn ra qua chu kỳ tái tục ngày 1 tháng 1.
• Các điều kiện kinh tế và địa chính trị có thể khác biệt đáng kể so với các giả định làm nền tảng cho triển vọng của công ty.
• AI có thể làm tăng rủi ro an ninh mạng và tạo ra các rủi ro có khả năng nghiêm trọng, mang tính hệ thống hoặc không thể đảo ngược nếu được triển khai mà không có các giải pháp bảo vệ phù hợp.
• Các điều khoản loại trừ AI diện rộng trong các hợp đồng bảo hiểm có thể tạo ra sự không chắc chắn, tranh chấp và khoảng trống bảo hiểm vì AI ngày càng được tích hợp sâu vào các sản phẩm và quy trình kinh doanh.
• Mảng Tư vấn Quản trị đối mặt với mức nền so sánh khó khăn hơn trong quý 4 do thời điểm ghi nhận phí thành công thuận lợi đã mang lại lợi ích cho quý 3.

Điểm nhấn phần Hỏi & Đáp với Chuyên gia phân tích

AI, năng suất và biên lợi nhuận: Ban lãnh đạo cho biết AI đã và đang cải thiện dịch vụ khách hàng, quy trình vận hành và năng suất của nhân viên. Cùng với tự động hóa, chuyển dịch nhân lực tối ưu (right-shoring) và Dịch vụ Doanh nghiệp & Khách hàng, giải pháp này mang lại tiềm năng hiệu quả bổ sung. Tuy nhiên, Marsh nhấn mạnh rằng sự tăng trưởng và kết quả mang lại cho khách hàng vẫn quan trọng hơn là chỉ tập trung cắt giảm chi phí.

Chiến lược M&A: Marsh cho biết công ty đã hoàn tất hơn 130 giao dịch đại lý thị trường tầm trung trong khoảng 15 năm qua. Ban lãnh đạo có đủ nguồn lực cho các thương vụ thâu tóm lớn nhưng mô tả phương pháp tiếp cận "chuỗi ngọc bích" tiếp tục có khả năng xảy ra cao hơn, cùng với sự phân bổ vốn cân bằng và kỷ luật.

Nhu cầu tư vấn: Oliver Wyman cho biết Quotient là mảng tăng trưởng nhanh nhất trong danh mục đầu tư của họ, nhưng đà tăng trưởng trong quý 3 cũng bao gồm nhu cầu ở các lĩnh vực như M&A và tích hợp sau sáp nhập. Việc định giá dựa trên kết quả và phí thành công đang chiếm tỷ trọng lớn hơn trong các hợp đồng với khách hàng.

Phạm vi bảo hiểm AI: Ban lãnh đạo phân biệt giữa AI như một sự tiến hóa của các rủi ro hiện hữu, các khoảng trống do AI tạo ra đòi hỏi sản phẩm hiện có phải phát triển, và các rủi ro độc nhất tiềm ẩn chưa từng được tính đến trước đây. Marsh đang hợp tác với khách hàng, doanh nghiệp bảo hiểm và doanh nghiệp tái bảo hiểm thay vì ủng hộ các điều khoản loại trừ diện rộng.

Đầu tư vào nhân tài: Các khoản tiết kiệm và cải thiện năng suất đang giúp Marsh bổ sung thêm nhân sự tiếp xúc trực tiếp với thị trường, đồng thời hấp thụ một phần sự sụt giảm nhân sự ở các vị trí bộ phận trung gian và hỗ trợ (middle và back-office). Công ty cho biết họ tiếp tục tuyển dụng nhân viên mới bắt đầu sự nghiệp với tốc độ tương tự và đang đầu tư vào các chuyên viên kinh doanh và tư vấn ở những khu vực có mức tăng trưởng cao hơn.

Toàn văn Biên bản Cuộc họp Báo cáo Kết quả Kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Hello, and welcome to Marsh's earnings conference call. Today's call is being recorded. Third quarter 2026 financial results and supplemental information were issued earlier this morning. They are available on the company's website at marsh.com.

Please note that remarks made today may include forward-looking statements. Forward-looking statements are subject to risks and uncertainties, and a variety of factors may cause actual results to differ materially from those contemplated by such statements. For a more detailed discussion of those factors, please refer to our earnings release to this quarter and to our most recent SEC filings, including our most recent Form 10-K, all of which are available on the Marsh website.

During the call today, we may also discuss certain non-GAAP financial measures. For a reconciliation of these measures to the most closely comparable GAAP measures, please refer to the schedule in today's earnings release.

[Operator Instructions] I will now turn this over to John Doyle, President and CEO of Marsh.

John Doyle

Good morning, and thank you for joining us to discuss our third quarter results. I'm John Doyle, President and CEO of Marsh. On the call with me is Mark McGivney, our COO and CFO; and our business CEOs and Nick Studer from Risk, Dean Klisura Reinsurance; Pat Tomlinson of People and Investments; and Ted Moynihan for Management Consulting. Also with us is Jay Gelb, Head of Investor Relations.

Let me start by commenting on the conditions confronting businesses today. We're clearly in a period of change and uncertainty in the world. This change is structural, not cyclical, and it's happening at pace and all at once. Wars, geoeconomics, extreme weather and AI advances are challenging long-established norms. Businesses require a new playbook, better insights and perspectives and the flexibility to adapt as never before. At the same time, access to information and technology as well as greater focus on resilience offers businesses great opportunity.

It's why Marsh and Bloomberg announced the competitive Resilience Coalition. As knowledge partner for the Bloomberg New Economy, Marsh will co-chair the coalition and bring together business and government leaders to strengthen resilience and help organizations in an increasingly complex environment.

Marsh's vision and capabilities as a professional services firm across risk, strategy, people and investments have us well positioned to help clients be more resilient and to thrive in this moment.

When it comes to AI, we believe it will be good for our country and the global economy. However, we need to deploy the technology responsibly to avoid potentially severe, systemic or irreversible risks. We're particularly concerned about the potential for heightened cyber exposure from AI, and we are working with governments, insurance companies and businesses to create awareness and resilience to this risk.

Responsible AI implementation begins with the developers, but businesses and governments have a role to play in ensuring safeguards are in place. Marsh will be active in helping clients manage the risks and capture the opportunities from AI.

Turning to results. Marsh had a strong quarter, reflecting our market-leading positions, the value we deliver to clients and the commitment of our colleagues around the world. In our Consulting segment, growth was strong in people and investments and management consulting. In RIS, growth accelerated in our risk business, while reinsurance faced continued market headwinds, but executed well. Overall, revenue grew 8% in the quarter. Underlying revenue growth was 5%, adjusted operating income grew 6% and adjusted EPS grew 10%. And we repurchased $500 million of stock in the quarter bringing us to $2 billion year-to-date.

We also made meaningful progress executing our Thrive program and successfully completed our brand transition. When we launched Thrive a year ago, we targeted $400 million in savings. We're now seeing greater opportunities coming from Business & Client Services or BCS, and advances in technology. As a result, we are increasing our Thrive savings target to $600 million. The expanded savings will create additional capacity to invest in sales, new capabilities, our brand and technology.

Let me touch on some of the progress from our reinvestments. Thrive has enabled us to invest in sales capacity at a higher rate this quarter and year-to-date, and we're hiring producers and consultants in areas where we see the greatest opportunity for growth. Our colleague value proposition is strong, and we remain the destination for top talent in our business.

I've been pleased with the strong positive reaction from colleagues and clients to our new brand strategy, the efficiencies we've captured from it and our progress marketing Marsh to prospective clients. As a result of very favorable market research, we accelerated the transition of Guy Carpenter and Mercer to Marsh several months ahead of schedule. We believe we can be the most impactful professional services firm in the world and we're investing in our new brand to reflect that ambition.

Since its introduction last year, BCS has fundamentally changed how we work. An important part of the team's mission is to build shared services for greater efficiency, including in areas such as client onboarding, data ingestion, commercial enablement and operational excellence. BCS is also reengineering our processes and moving work to our capability centers, which is generating additional savings. Overall, our execution of Thrive has been excellent to date, and we're excited about the investments in growth it's enabling.

Turning to AI in our business. We're not thinking about it as something that will be a factor in our business, it already is a factor in our business. It's enhancing our client relationships, how we manage operations and how colleagues work every day. We are focused currently on several areas where AI is driving growth, including building AI-enabled products, consulting on AI transformation, serving the digital infrastructure ecosystem and adding to capabilities and productivity for our producers and consultants.

We've already deployed several AI-enabled products for clients that deliver valuable insights. These solutions tap into our large and expanding proprietary data sets in risk, health and talent. Marsh Risk Companion is a good example. This AI-enabled analytics suite provides actionable insights for client risk programs. We can more easily model and optimize client risk scenarios with the new platform. This is leading to faster, more informed decision-making and reduced administrative burden for the clients' risk management team.

We're also advising clients on AI transformation. For example, Oliver Wyman's fastest-growing practice, Quotient is working with private equity firms to serve their portfolio companies. They're engaging us on everything from a genetic commerce and commercial effectiveness to cost reduction and technology transformation.

Digital infrastructure continues to be a growth driver for Marsh. More and more clients across broad sectors of the economy are asking for our help in risk, capital advisory, credit and consulting in the wake of extensive growth in digital infrastructure.

We are also working to bring the insurance capacity needed to support digital infrastructure. Marsh recently launched the Stratus Exchange, which offers access up to $10 billion in property coverage for the ongoing operations of digital facilities. Stratus is a natural follow-up to Nimbus, our $2.7 billion insurance facility for construction risks.

We're also focused on growth from greater colleague productivity, notably Broker Workbench, launched in Q3 for our U.K. wholesale business. It uses our data and analytics to place the clients' risk faster, matching risk and capital more efficiently. In fact, 93% of our wholesale trading in London is now digital and the time to process placements is reduced from 2 to 4 weeks to a couple of hours with Workbench. Although it's early, and it is early, AI is making us better now in delivering new perspectives and insights more efficiently and with greater impact for our clients.

Now turning to market conditions. According to the Marsh Global Insurance Market Index, primary commercial insurance rates decreased 5% in Q3. This follows a 6% decline in the second quarter. As a reminder, our index skews to large accounts. Rates in the U.S. decreased 1%. Canada, Europe and Asia declined mid-single digits. The U.K., Latin America decreased in the high single digits and the Pacific region had double-digit decreases. Global property rates decreased 10%. Global financial and Professional liability rates were down 3%, while cyber decreased 4%. Global casualty rates increased 1%, with U.S. excess casualty up 13%, reflecting inflationary pressure and loss costs and workers' compensation decreased 5%.

In reinsurance, market conditions led by short tail lines remain soft, driven by abundant capacity from both traditional reinsurers and alternative capital. Property cat reinsurance losses have been relatively benign this year and capital is increasing, adding to a competitive market environment. We expect these conditions to persist through the January 1 renewal cycle.

In casualty reinsurance, capacity is generally adequate. Reinsurers are focused on loss development and their differentiating terms based on claims experience, exposure data and portfolio quality. Our clients continue to explore alternative options to complement traditional strategies, including greater use of third-party capital solutions such as sidecar vehicles for their liability portfolios.

Market conditions remain supportive of our insurance and reinsurance clients even as the cost of risk continues to rise. We are committed to helping clients optimize their risk financing and strengthen resilience in an uncertain environment.

Now to our third quarter financial performance, which Mark will cover in more detail. Consolidated revenue increased 8% to $6.9 billion or an increase of 5% on an underlying basis with 3% growth in RIS and 8% in consulting. Risk was up 5%. Reinsurance declined 6%. People and investments increased 5% and and Management Consulting grew 14%. Adjusted operating income grew 6% and adjusted EPS was $2.03, up 10% year-over-year.

Looking ahead, we continue to expect underlying revenue growth in 2026 similar to last year. We also anticipate another year of margin expansion and solid adjusted EPS growth. Our outlook is based on current market conditions, but the economic and geopolitical environment could change materially from our assumptions.

This is an exciting time for us. We have a new Marsh brand and a business and client services team optimizing how we work. We have long-standing trusted client relationships and the advantage of large proprietary data sets. We're upsizing the Thrive program to drive greater efficiency and investment, and we see new possibilities from AI to better serve clients who strive to manage risk and capitalize on the opportunity of this moment.

With that, I'll turn the discussion to Mark for a more detailed review of our results. Mark?

Mark McGivney

Thank you, John, and good morning. We had a strong third quarter that showed continued momentum in underlying revenue growth and double-digit EPS growth, reflecting our strong position and great execution. Consolidated revenue increased 8% to $6.9 billion with underlying growth of 5%. Operating income was $1.2 billion, and adjusted operating income was $1.5 billion, up 6%.

Our adjusted operating margin was 22.7%. GAAP EPS was $1.69 and adjusted EPS was $2.03, up 10% over last year.

For the first 9 months of 2026, underlying revenue growth was 5%. Adjusted operating income grew 7% to $6.1 billion. Our adjusted operating margin was 28.1% and adjusted EPS increased 9% to $8.29.

As part of our previously announced brand change, we've updated several business descriptors in our earnings release. Guy Carpenter results are now reported as reinsurance. And M[indiscernible] results are reported as people investments. Within people and investments, wealth is reported as investments in retirement, health as health and benefits and career as workforce and reward.

Looking at Risk and Insurance Services. Third quarter revenue was $4.2 billion, up 7% from a year ago or 3% on an underlying basis. Operating income in RIS was $745 million. Adjusted operating income was $1 billion, up 4% over last year, and the adjusted operating margin was 24.6%. The first 9 months revenue in RIS was $14.1 billion, reflecting underlying growth of 3%. Adjusted operating income increased 5% to $4.6 billion. The adjusted operating margin was 33.2%.

At Risk, revenue in the quarter was $3.7 billion, up 10% from a year ago or 5% on an underlying basis. Despite the headwind from a soft pricing environment, sales and new business growth remains solid in areas such as digital infrastructure and transactional risk are creating demand.

In U.S. and Canada, underlying growth was 4%. In international, underlying growth was 6% with EMEA up 7%, Asia Pacific up 4% and Latin America flat.

The first 9 months of the year Risks revenue was $11.5 billion with underlying growth of 4%. U.S. and Canada grew 4% and international was up 5%.

In Reinsurance, revenue in the quarter was $374 million, down 6% on both the reported and underlying basis. Q3 is a small quarter for reinsurance and revenue was impacted by continued softness in property reinsurance rates as well as a tough comparison to a strong third quarter last year that benefited from nonrecurring items.

Through 9 months, reinsurance is down 1% on an underlying basis, which better reflects our top line performance this year. Significant rate pressure has more than offset strong new business growth and excellent client retention, which remains in the high 90s.

In the Consulting segment, third quarter revenue was $2.7 billion, up 9% or 8% on an underlying basis. Operating income was $563 million, and adjusted operating income was $593 million, up 9%. Our adjusted operating margin in Consulting was 22.1%. For the first 9 months, Consulting revenue was $7.8 billion, reflecting underlying growth of 7%. Adjusted operating income increased 11% to $1.7 billion. The adjusted operating margin was 21.4%.

People and Investments revenue was $1.7 billion in the quarter, up 6% or 5% on an underlying basis.

Health and Benefits grew 5%, reflecting continued growth across our regions. Investments in retirement was up 8%, led by our investments business. Our assets under management were $843 billion at the end of the third quarter, flat sequentially and up 23% from the third quarter last year. Year-over-year growth was driven by new business and the impact of capital markets.

Workforce & Rewards was down 1% with growth in the U.S. and most of international offset by the impact of a challenging environment in the Middle East. For the first 9 months of the year, revenue at People and Investments was $4.9 billion with 5% underlying growth.

Management Consulting generated revenue of $1 billion in the third quarter, up 14% on both a reported and underlying basis. This great result reflected strong demand and delivery across the business, especially in AI-related work.

The quarter also benefited from favorable timing on success fees that we had expected in the fourth quarter. For the first 9 months of the year, revenue at Management Consulting was $2.9 billion, an increase of 11% on an underlying basis. For the full year, Management Consulting is on pace for high single-digit growth, which would imply a roughly flat top line in Q4 due in part to the timing I mentioned.

Fiduciary interest income was $100 million in the quarter, down $9 million from the third quarter last year. Looking ahead, we expect fiduciary interest income will be approximately $94 million in the fourth quarter.

Foreign exchange was a $0.01 benefit in the third quarter. Based on current exchange rates, we expect FX will have an immaterial effect on earnings in the fourth quarter.

Corporate expenses in the third quarter were $68 million on an adjusted basis compared to $71 million a year ago. Looking ahead to the fourth quarter, we expect adjusted corporate expense of approximately $80 million.

Building on John's comments on Thrive, the program is going well, and our early success has resulted in us seeing more opportunities. We now expect to generate $600 million of savings with the vast majority of our actions taken by the end of 2028 and savings realized fairly evenly over the 3 years of the program. We expect costs associated with generating savings will be approximately $750 million. So far, most of our savings have come from simplifying and streamlining our organization, right shoring actions and efficiencies in BCS, we expect further savings in these areas.

We are excited about our progress so far and the benefit we will get from the additional savings. Thrive is enabling us to accelerate investments that would help us sustain growth into the future while we continue to deliver solid results today.

Total noteworthy items in the third quarter were $170 million, including $71 million of costs associated with Thrive. Noteworthy items this quarter also included $144 million relating to the Greensill litigation. As disclosed in our 10-Q this morning, we have settled our involvement in this litigation and do not expect any additional charges relating to the case. Note that total settlement payments and costs are reflected in our statement of cash flows.

Interest expense in the third quarter was $248 million. In our current forecast, we expect $255 million of interest expense in the fourth quarter.

Our adjusted effective tax rate in the third quarter was 24.6% compared to 24.8% in the third quarter last year, with both periods benefiting modestly from discrete items.

When we give forward guidance around our tax rate, we do not project discrete items. Based on the current environment, we expect an adjusted effective tax rate of around 25% for 2026.

Turning to capital management, our balance sheet. We ended the quarter with total debt of $20.5 billion. We had $550 million of euro-denominated senior notes mature in September, and we intend to replace them with new euro-denominated notes in the fourth quarter.

Our cash position at the end of the third quarter was $1.8 billion. Uses of cash in the quarter totaled $1.3 billion and included $476 million for dividends, $288 million for acquisitions and $500 million for share repurchases.

For the first 9 months, uses of cash totaled $4 billion and included $1.4 billion for dividends, $607 million for acquisitions and $2 billion for share repurchases. We continue to expect to deploy approximately $5.5 billion of capital in 2026 across dividends, acquisitions and share repurchases. The ultimate level of share repurchase will depend on how our M&A pipeline develops.

For the full year, we continue to expect underlying revenue growth similar to the levels we generated in 2025, along with another year of margin expansion, solid adjusted EPS growth.

With that, I'm happy to turn it back to John.

John Doyle

Thank you, Mark. Andrew, we are ready to begin the Q&A session.

Operator

[Operator Instructions] Our first question comes from the line of Greg Peters with Raymond James.

Phần hỏi đáp

Charles Peters

Thanks for the comments on the AI and the update on Thrive. A couple of your peers have given some detail on how they plan to deploy AI to drive margin expansion. And I think that might be part of what's going on with your raising the Thrive targets. But maybe you could give us some more details on what you're doing with technology and AI to drive the margin expansion.

John Doyle

Thanks for the question. I spoke to it a bit in my prepared remarks. We're quite excited about what these new technologies can mean to our business. And it's not just margin expansion. I also want to reinforce the importance of it to how we serve our clients and what it can mean to our growth over time. I think that's really a critical part of what we're thinking about and how we're investing against it. So we see clear benefits for our colleagues, for our clients and earnings growth in it for our shareholders. We think we're well positioned. I spoke about -- I have spoken not just on this call but on prior calls about long-standing deeply trusted client relationships we have, the data sets, the proprietary data sets, the analytics, the modeling and risk management, all of these things are fundamental to our business model. This period of change is driving a lot of growth in our consulting businesses. So we're quite excited about how we're helping our clients as well.

But yes, it's helping drive some efficiency for us today. We're now not quite 3 years into BCS. We formed BCS almost 3 years ago. It was in the first quarter of of 2024. We're excited about the work that our team is doing there looking at leveraging the best tech not just AI, I would point out, but automating processes, challenging workflows all across the company. And we had areas where we're doing things quite well. And now we're doing the -- we're taking the best from each parts of those companies. And so -- and optimizing our operating model. So Paul Beswick leads all of that for us. He's doing an excellent job. His team is deep and strong. It also allows for more efficient CapEx for us, too.

And so yes, we're -- we feel good about what it can mean to our margins. I'm not going to speak to 2027 on this call, Greg. I'll talk about that in January. But between and not just AI, right shoring, automation and the early returns from AI are all levers for us to drive future efficiency. So we feel good about that.

Do you have a follow-up, Greg?

Charles Peters

Of course, I'm going to pivot and it's on M&A. And I know you're not going to talk about your pipeline on a public call. But Ann's done this very large transaction, and there's some concern in the marketplace that you might feel the need to respond with a similar big transaction. So maybe you could spend a minute and tell us about how you view your middle market presence? And when you're looking at M&A, what kind of capabilities are you looking to bolt on to what you already have?

John Doyle

Yes, yes. Sure. Well, look, let me be clear, our interest in the mid-market isn't recent, right? It's been there for quite a long time. We're not following anyone. We have the best middle market business in the industry. I'm incredibly proud of Marsh Agency. It's been thoughtfully constructed over 15 years by acquiring the best regional agencies all across the country. We've done over 130 deals since we began that strategy about 15 years ago. It can't be replicated, and I wouldn't change our business for any business in the market. And I remain very excited about the middle market. We've been bringing scale benefits to those customers, helping them realize other value through our services and help position them -- help position our clients for better growth. It's not, of course, just P&C, it's health and benefits. And so it's a market we like quite a bit.

We expect to continue to invest in that market, both organically and inorganically. Our capital management strategy, Greg, has not changed. It remains the same. We are going to be disciplined, let me be clear. We will be disciplined and balanced in our approach. We do favor investing in the business. Our pipeline is good. There's no question about it. They're -- at least for some strategic buyers, there's a bit of a gap between bid and ask at the moment. And so we announced a deal on the 1st of October, a Midwest Agency, top 100 agency in the Midwest that we're excited about. We closed on Astara earlier in the third quarter.

So we remain very active in the market. But again, we're going to be disciplined about how we deploy our capital. And in our prepared remarks, both Mark and I touched on what we did in the third quarter. We bought back a bit more stock. We're now a $2 billion kind of year-to-date. So hopefully, that's helpful. We have the capacity to do big deals, but we're far more likely to do a string of pearls continue that approach.

Operator

Our next question comes from the line of Mike Zaremski with BMO.

Michael Zaremski

Great. I guess I'll start with Oliver Wyman in consulting. We've -- as we kind of dug into the excellent growth, we've some consultants have talked about AI making them much more efficient and then being able to work through their backlogs faster and kind of pull forward revenues. Just curious if that is a dynamic you think is contributing to Marsh's excellent results?

John Doyle

Yes. Thanks, Mike, and it's really terrific results. And as I mentioned in my prepared remarks, it's a great opportunity in this moment of change for us to help our clients position themselves for greater success. So it's not only driving growth for our business, but it's also changing the way we're doing business with our clients as well. And so Ted, maybe you can talk more about that.

Ted Moynihan

Yes, Mike, thank you. I mean we had a great quarter. The performance was strong and pretty broad-based across industries and capabilities and regions is certainly the case that our Quotient AI platform that helps our clients transform around AI was the strongest growing part of the portfolio and has really been contributing to what's a good year for us. I would say we, ourselves, in terms of your question about how we are actually delivering for clients, we've been on that journey for probably 3 years now, transforming how we deliver for our clients. And we're using a very sophisticated range of tools. We've built a lot of agentic solutions ourselves that can create more value for our clients. We've built a lot of specialist capabilities. So across data analytics, forward deployed engineers that are blended into consulting teams.

Increasingly, we partner with technology companies to be that frontier model companies, hyperscalers, cloud providers and so on. And certainly, as our business has shifted from advice 10 years ago today to really generating outcomes for our clients on their transformation journeys, we started to increase the amount of success pricing in our business. Our clients have been encouraging and willing to allow us to participate in the value that we're creating for them. And I think Mark mentioned that, in Q3, some of our performance was pulling forward some success fees that we might have seen in Q4. And so that certainly contributed to the level of growth you see in the numbers there.

John Doyle

Thanks, Ted. Mike, do you have a follow-up?

Michael Zaremski

Yes. A quick follow-up, maybe dovetailing on Greg Peter's question on Thrive. John, you talked about still early days of AI use cases impacting every employee's daily lives. Is it reasonable if we're thinking out into '27 or '28 that whether it's called Thrive or not, that there could be a much larger, broader program that is impacting Marsh when we're thinking about productivity gains?

John Doyle

Yes. Look, I would say, Mike, we're excited about the path that we're on. As I said, it is early. So I don't want to get ahead of ourselves, right? There's a lot involved. And the tools are changing and changing fairly rapidly. We'll see whether they continue to change at the same pace. But it is -- our colleagues are actively using these tools. Our tech team, again, led by Paul Beswick has done a terrific job. We've built a proprietary model that we call LAN AI inside of our company, and we've introduced -- we introduced new tools literally every week to our colleagues. Now every one of those tools impacts different parts of our employee population, our colleague population in different ways. I'm very encouraged by the take-up rate. And so yes, we're transforming the way we operate, and we see certainly efficiency possibilities down the road. But more important than anything else is how we serve our customer and what that can mean to our growth.

Operator

Our next question comes from the line of Rob Cox with Goldman Sachs.

Robert Cox

My first question just on competition in the marketplace. So just thinking about levered private brokers right now, it seems like the softening pricing environment and higher interest rates combo could put some pressure on their business models right now, and it seems like there could be some disruption going on. So I'm just wondering if you think that could help Marsh potentially win some more business in the open market, win on talent or potentially make opportunistic M&A more attractive?

John Doyle

Yes. Thanks, Rob. I want to be careful because there's obviously a range of kind of PE owned or levered backed kind of brokers out there, some are much smaller than others. And of course, they serve kind of different markets. What I would say though is that we're certainly well capitalized. We have the ability to invest in our business, again, and I'm talking about organic investment really here. What I'm excited about is how scale is going to matter through this period of transformation. And that's why I keep reinforcing the deep, long-standing trusted client relationships, the proprietary data sets, the analytics we have, the modeling all being improved with new technology.

I don't think it's debatable that scale matters in this changing time. And so that has us incredibly well positioned. I think it will help us win business, of course, organically in the market, but it's also going to help us probably as the M&A pipeline develops over time as well where others were realized it will be difficult to invest at the same rate that we're investing.

So I'm excited about how we're positioned competitively. It starts with our people. Our people still matter. They are what deliver the insights to our clients, and we have the deepest, best talent in the marketplace.

Do you have a follow-up, Rob?

Robert Cox

Yes. And that's helpful. Just maybe on the AI exclusion discussion. I know there's been some media coverage about brokers being against broad AI exclusions and policies. And I was hoping you could unpack that view for us a little bit and any views you guys have on that?

John Doyle

Yes. And I'll ask Nick to talk about it in a second. But AI is embedded in most companies' workflows and lots of different ways and processes and products, right? So broad-based exclusion could create real confusion and uncertainty. We're not trying to poke insurers. We just are really trying to have a thoughtful discussion about how this might change exposures, very limited claim activity to date and really better understand how these risks aggregate. And by the way, kudos to Nick and to Dean for leading on this issue really for the broader marketplace. But Nick, maybe you could talk just back from a conference actually, where we had a lot of engagement on this conversation?

Nicholas Studer

Yes. I do want to emphasize that we see our role here as to advise our clients look out for the best interest of our clients while working with carriers and with the reinsurance markets to make sure that the market is reflecting the risks that are there. And if I unpack it a little bit, there are sort of 2 -- we certainly see 2, and there's probably over time a third category will emerge. The first category is just where AI is an aberration or an evolution of an existing risk apparel. And it will be impossible to unbundle it from the causal pathways to whatever outcome may be. And that's really where we were focused on not excluding things, which we think would lead to uncertainty to contention to gaps in cover.

There are places a second category where AI risks will require us to evolve established products or services because the AI exposes gaps or floors in the existing marketplace and there's an evolutionary opportunity there. We're not certain as a third category where there's something totally unique to AI that has never been previously contemplated in the insurance market, but we're open to the possibility. And in all 3 categories, we're working with our clients and looking to work with carriers to help the market evolve.

John Doyle

Terrific. Thank you, Nick.

Operator

Our next question comes from the line of Meyer Shields with KBW.

Meyer Shields

Mark, you mentioned the, I guess, pull forward acceleration of the success fees in Oliver Wyman. I was hoping you could give us a sense as to maybe the revenue and earnings impact of that?

John Doyle

Mark, do you want to take that?

Mark McGivney

Yes. We wanted to point it out is certainly not explaining the preponderance of growth in Management Consulting. Even without that management consulting at a very strong growth growth quarter. But as Ted mentioned, success fees are becoming a big part -- a bigger part of how we're structuring fees with clients. It's good for us to participate in that gain sharing. And so that was a factor. But Management Consult had strong growth, strong growth year-to-date, but we just wanted to point that out.

John Doyle

You have a follow-up?

Meyer Shields

Yes, just a quick one. So if we take the commentary from the Marsh index, so it looks like property pricing got a little bit less bad to 10% down from 12%. Are the book of business that renewed in the second quarter comparable to the third?

John Doyle

Yes. Good question. You called it less bad. I want to point out, it's very good for our clients, right? So the rate relief is -- we're trying to have efficient risk financing, right, for our clients. But of course, it does impact our growth. I wouldn't over-index on -- certainly on a quarter, but I would also say, Meher, that even in Marsh Risk, right, more of our property cat renewals exist in the first and second quarter. So yes, there's a bit of a different mix of business here in the third quarter. Hopefully, that helps.

Operator

Our next question comes from the line of David Motemaden with Evercore ISI.

David Motemaden

I know it's a smaller reinsurance quarter, but the growth there over the last 3 quarters has been -- or at least over the prior 2 has been softer than your peers. And I hear your commentary on the pricing environment likely continuing to be a headwind into next year. Could you just unpack some of the moving pieces there between net new and then the drag from pricing? And if we should expect the same type of growth as we've seen in the first 9 months into 2027 given the pricing environment, sounds like it will continue?

John Doyle

Sure, sure. David, thank you. As Mark noted, we're minus 1 through 9 months, which we think is really kind of reflective of where we are. Mark spoke, of course, about pricing and the impact of that. We're a bit overweight on property cat relative to some others. We're a bit overweight U.S. as well compared to some others. And we had a bit -- it was a noisy quarter in the third quarter, too, a small quarter, but also a bit noisy with some nonrecurring items. We've been hit a little bit by some of the consolidation that's happened in the industry as well during the course of the year. But again, no excuses. We're well positioned. We have, we think, the best reinsurance team in the market. I would also point out to you, David, that some business that we do for the insurance industry and our companies and Oliver Wyman Actuary, Oliver Wyman and some business in March Risk as well.

So it's a critical business to us. It's really important on so many levels. And so we feel like we're well positioned. Dean and the team see good growth, in fact, and M&A advisory, alternative capital, alternative structures and driving opportunities. So we're facing some market headwinds. We've seen them before, but we feel good about how we're positioned over the medium to long term. Do you have a follow-up, David?

David Motemaden

I do, yes. Just within the management consulting business, it sounds like the growth there is being driven by Quotient, the AI transformation. It sounds like some competitors are passing through some of the AI efficiencies that they're getting in their business through, I guess, lowering price to improve volume in AI transformation engagements. Is that something that you guys are doing? Is this something you're considering? Just hoping for a little bit of color there.

John Doyle

Yes. Bert, I would first note, David, that our growth is more broad-based than Quotient. So -- and maybe I'll ask Pat to talk about some of the impacts in a second in people and investments as well. But Ted, maybe you can talk about -- I mean we're excited about AI driving kind of greater value of work that we're doing as opposed to driving some pricing change. But Ted, maybe you can start and pass it off to Pat.

Ted Moynihan

Yes, I would just reiterate John's point that the growth was pretty broad-based. To give you another example, we saw pretty good demand, for example, in our M&A business in our post-merger integration business over the last quarter as well. The nature of work is changing and a lot of the AI transformation work that we are doing brings different skills in, the pricing structures change a little bit. As I mentioned, outcome-based pricing is growing a little bit. But we're seeing our clients are really happy to pay for value. One of the points that John drew out in his comments was around the private equity companies that are increasingly bringing us in to look at their portfolio companies and do everything from AI strategy to cost transformation to agentic commerce and so on. So it's really -- I think we see a multiyear transformation for a lot of our client base around AI, and that's why we're very excited about the opportunities for Quotient, for us and for our clients.

John Doyle

Pat?

Patrick Tomlinson

Yes. Thanks for the question as well. And we're pleased with our overall growth across the People & Investments business and across the various different practices. But on AI, we see that probably the most at this point inside of our workforce and rewards practice. And our overarching view on it is that the potential impact to the business, I would say, is going to be is positive. It's strengthening our opportunity with clients and the value we're delivering. We are seeing clients expecting us to use AI in our work, right? And where I would say the biggest impact we're seeing is we're expecting them to -- they're expecting faster time lines. They expect it to be used responsibly. They expect us to be able to protect their data, but they also expect increased feed to value. I think Ted was hitting on this and the increased speed to outcomes. And that's what we're really seeing the most. We've got proprietary data sets, as John has mentioned in his opening, and those differentiated data sets combined with our AI capabilities that we're building to be able to drive value for clients and with our consultants and recommendations is really allowing us to create more precision, more relevance for clients and getting them the outcomes that they're looking for faster.

I would say also that clients also understand from -- the question was about cost, the clients also understand that AI is not free. They're all seeing it on their side as well. And they expect us to continue to invest in AI tools and invest in the platform to be able to go ahead and deliver them these outcomes in a faster, more consistent basis to where they can go ahead and capture speed to value.

John Doyle

Thanks, Pat. And David, I would add that, as I mentioned, the lens suite of tools that we're introducing to our colleagues are able to handle overwhelmingly the work that we do for our clients and how it's changed our processes internally. We do use frontier models, third-party frontier models when working with our clients, and we build that -- those costs into the pricing of the work that we're doing for our clients. So thank you, David.

Operator

Our next question comes from the line of Bob Huang with Morgan Stanley.

Jian Huang

One thing I want to just maybe unpack a little bit is the -- if we look at the EMEA business within Risk and Insurance Services, right, you mean not only had a strong quarter. In fact, EMEA had a really strong year. As we think about the drivers here, can you maybe just help us give us a little bit more details in terms of how durable is this business? What's kind of driving it now? And then where are the drivers going from here, right? What is driving the growth?

John Doyle

Yes. Thanks, Bob. Yes, we have an outstanding team incredibly well positioned all throughout that region. And I'll ask Nick to unpack some of the drivers of growth there.

Nicholas Studer

Yes. I think very robust, strong business, quite diversified in the geographic range of the region. We had really strong growth, very high single-digit growth in new business, strong growth in specialties. And actually, so specialty-wise, growth in cyber, credit, marine, we saw growth in PAC, where we work very closely with Dean's teams. We saw growth in capturing some of what had previously been leakage to the wholesale markets through our London wholesaler through [indiscernible] London, growth in facilities, growth across the board.

John Doyle

And I would add, Bob, that obviously, there's a tremendous amount of disruption given the ongoing geopolitical conflict all throughout the region. We have over 2,500 colleagues in the Middle East. And we're incredibly proud of their resilience, their focus on delivering for our clients. So I just want to point out the Middle East part of that territory as we reported and growth has remained resilient for us as a company. Do you have a follow-up, Bob?

Jian Huang

Yes. I really appreciate it. My follow-up is a little bit more on on consulting. I know we talked about AI workloads, things in nature. But I want to maybe focus a little bit on the traditional work. As we go into this year so far and going into next year, do you see any visible signs of maybe the traditional non-AI-related consulting work, perhaps facing pressure or cannibalization from AI implementation? Does it make sense that as AI becomes a bigger part of the business, that AI workload will start to cannibalize or become a bigger part of consulting going forward, if that makes sense?

John Doyle

I'm not sure I really understand your question. Would it -- maybe I'll share a couple of thoughts that come to mind, right? So obviously, AI is driving a lot of change inside of companies all around the world and Ted spoke and Pat both spoke about how that's driving some opportunity for us at the moment. What I would also, though, say, in my prepared remarks, I talked about broader change, right, geopolitical conflict, geoeconomics. I didn't talk much about extreme weather. It's been obviously a relatively modest year from a cat risk perspective. But all of these themes, social issues, labor market challenges, all driving lots of change and uncertainty for clients, all of those factors, not just AI, are driving demand for our services, not just in Consulting, but in Risk as well, right?

And so -- and one of the unique attributes about our firm is that we help clients understand their risks, develop a plan to mitigate those risks, help them finance some of those tail risks when that's appropriate, and we do that in lots of different ways. But then we also help them capture the opportunity in this moment. And that's really why we're coming together on one unified brand and why we're excited about not just helping companies build greater resilience in this time of change, but using that resilience as an offensive weapon so that our clients can help grow and thrive in moments like this. Hopefully, that helps.

Operator

Our next question comes from the line of Elyse Greenspan with Wells Fargo.

Elyse Greenspan

My first question is on the margin guidance for the year. You guys pointed to margin improvement for 2 I just wanted to clarify, do you guys expect margin improvement for the year in both segments or just on an overall basis?

John Doyle

Yes. We -- thanks, Elyse. We don't guide by segment. But as Mark and I both noted in our prepared remarks, we do expect continued margin expansion for the year for the company. Again, we want to balance margin expansion with continued investment in future growth. We want to deliver growth in earnings for our company over the long term, of course. And so we delivered solid growth in adjusted EPS in the quarter and margins were flat, but we do expect to drive margin expansion for the year for the company. Do you have a follow-up, Elyse?

Elyse Greenspan

Yes. Then my second question, you guys had called out, I think, transactional-oriented businesses and data centers is benefiting the U.S. and Canada organic growth in the quarter. Can you just give us a sense of the contribution in the Q3 and how that's compared to other quarters this year and just -- and any sense of expectations going forward as well?

John Doyle

Yes. We're not going to give exact revenue contribution from those sectors. And obviously, it's a dynamic economy and we're continuing to invest in areas where we see growth, right? So digital infrastructure has been an area where we've been investing, the active M&A environment has driven some growth for us there, and we continue to invest there. Health care continues to be a strong driver of demand. Private Capital, Ted spoke about it, but it's more broad-based than in our management consulting team. We're seeing real opportunities. In energy, I think I mentioned energy I can't recall, I think I mentioned energy. So we're investing against kind of the fast-moving rivers, if you will, that are out there and both transaction risk, and we just wanted to call out how transaction risk and digital infrastructure continue to be good sources of growth for us. Do you have a follow-up, Elyse?

Operator

Our next question comes from the line of Alex Scott with Barclays.

Taylor Scott

I just wanted to see if you could dig a little more into the transactional risk, construction, digital infrastructure and how that impacted things this quarter and maybe what you're seeing in terms of a little more real time, I think things have maybe slowed down in September and into October. So is that something on any of those fronts that we should be considering into the end of the year?

John Doyle

I'm sorry, Alex, what slowed down in September and October? I didn't hear that part.

Taylor Scott

I think transactional risk, and I don't know about construction, but rates are certainly up. So I just wanted to see if there's any impact from some of those things?

John Doyle

No. I mean for our business, demand remained pretty strong through the quarter. Our pipelines remain in both of those -- both segments of our business remain strong as well in digital infrastructure, of course, I mentioned in my prepared remarks that the Stratus exchange that we put together, as these data centers transition to being operational risks and so really important transition. So while there can be a nonrecurring aspect to some aspects of construction or a heightened area of -- heightened period of risk, we do serve those clients through the operational phase of those facilities.

I mentioned also in my prepared remarks that there's kind of a broader wake. There's broader investment that happens around data center construction. And so it's driving growth for us in Marsh Agency and other parts of the company as well as other investment happens kind of around this big capital infusion that happens in communities. So we're excited about how we're positioned there. Obviously, lots of politics around data center construction. And as I mentioned also in my prepared remarks, we're all for responsible AI deployment that includes the construction of data centers. And we're working with clients on community engagement and how to show up in the right way so that it can be a win-win for communities, not just here in the United States, but in other parts of the world as well.

Do you have a follow-up, Alex?

Taylor Scott

Yes. Maybe if I could do a follow-up on just hiring and the saves that you're expecting related to some of the implementation of AI, the Thrive program, et cetera. To what degree is that allowing you to begin investing more in hiring? And how do you balance that versus the margin improvement as we think in the next year?

John Doyle

Yes. It's a good question. And it is a balance, right? We're constantly trying to balance it. It connects back to my comments to Elyse about margin expansion, right? We want to continue to drive growth in the business. And while really margin expansion is an outcome of the way we run the business, it's not really a primary KPI for us inside of the company. Again, we do expect to drive margin expansion this year. I'm very pleased with the state of our talent. We have the best talent in the market hands down. Our retention is strong. Our engagement scores are excellent. We work really hard on our colleague value proposition. We know we have to earn where we stand in the market and earn the time and commitment of our colleagues to the work that we do here.

We have been adding to market-facing talent, both laterally and from an early career point of view. We continue to hire early career at the same rate we have. So I think it might be a little bit different than some others, not in our industry, but broadly in the economy, but we continue to see really strong returns from hiring early career folks. And we've begun to harvest some attrition really in our mid and back office. So it's been part of the process improvement and cost improvement that our team in BCS and some of the automation and workflows. So quarter-to-quarter, when you look at our total colleague headcount, there's going to be ins and outs with M&A and contractors.

But -- so it's a dynamic time, obviously, for people, right? And what we tell our colleagues is that be good users of AI and you're going to become more valuable to us, more valuable to our clients, and that will be a win-win for both our colleagues and for our business.

Operator

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

John Doyle

Thanks so much, Andrew, and thank you all for joining us this morning. In an active quarter for our industry, I want to recognize our colleagues for their focus and discipline and thank our clients for their continued trust and support. We remain confident in our strategy and energized about what's ahead. I look forward to speaking with you all again next quarter.

Operator

Thank you. Ladies and gentlemen, thank you for participating. This does conclude today's program, and you may now disconnect.