Marsh & McLennan Cos. (MMC)

Risks

• Item 1A. Risk Factors.
• RISKS RELATING TO THE COMPANY GENERALLY
• We 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.
• The costs to comply with, or our failure to comply with, U.S. and foreign laws related to privacy, data security and data protection, such as the E.U. General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), could adversely affect our financial condition, operating results and our reputation.
• Our 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.
• We are subject to significant uninsured exposures arising from errors and omissions, breach of fiduciary duty and other claims.
• We cannot guarantee that we are or will be in compliance with all current and potentially applicable U.S. federal and state or foreign laws and regulations, and actions by regulatory authorities or changes in legislation and regulation in the jurisdictions in which we operate could have a material adverse effect on our business.
• Our business or reputation could be harmed by our reliance on third-party providers or introducers.
• The loss of members of our senior management team or other key colleagues, or our efforts to attract and retain talent, could have a material adverse effect on our business.
• Failure to maintain our corporate culture, particularly in a hybrid work environment, could damage our reputation.
• We face significant competitive pressures in each of our businesses, including from disintermediation, as our competitive landscape continues to evolve.
• We 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 in ways that could harm our business.
• The COVID-19 pandemic has impacted how we work, and the extent to which it will continue to do so and its impact on our future financial results are uncertain.
• Our results of operations and investments could be adversely affected by macroeconomic conditions, political events and market conditions.
• Our 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.
• We face risks when we acquire businesses.
• If we are unable to collect our receivables, our results of operations and cash flows could be adversely affected.
• We may not be able to obtain sufficient financing on favorable terms.
• Our defined benefit pension plan obligations could cause the Company's financial position, earnings and cash flows to fluctuate.
• Our significant non-U.S. operations expose us to exchange rate fluctuations and various risks that could impact our business.
• Our quarterly revenues and profitability may fluctuate significantly.
• Credit rating downgrades would increase our financing costs and could subject us to operational risk.
• The current U.S. tax regime makes our results more difficult to predict.
• We are exposed to multiple risks associated with the global nature of our operations.
• RISKS RELATING TO OUR RISK AND INSURANCE SERVICES SEGMENT
• Volatility or declines in premiums and other market trends may significantly impede our ability to grow revenues and profitability.
• Adverse 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 more broadly, could have a material adverse effect on our business, results of operations and financial condition.
• RISKS RELATING TO OUR CONSULTING SEGMENT
• Mercer’s Investments business is subject to a number of risks, including risks related to market fluctuations, third-party asset managers, operational and technology risks, conflicts of interest, asset performance and regulatory compliance, that, if realized, could result in significant damage to our business.
• Revenues for the services provided by our Consulting segment may decline for various reasons, including as a result of changes in economic conditions, the value of equity, debt and other asset classes, our clients’ or an industry's financial condition or government regulation or an accelerated trend away from actively managed investments to passively managed investments.
• Factors affecting defined benefit pension plans and the services we provide relating to those plans could adversely affect Mercer.
• The profitability of our Consulting segment may decline if we are unable to achieve or maintain adequate utilization and pricing rates for our consultants.