Marsh & McLennan Companies 2008 Annual Report MMC is a global professional services firm providing advice and solutions in the areas of risk, strategy and human capital. It is the parent company of a number of the world’s leading risk experts and specialty consultants, including Marsh, the insurance broker and risk advisor; Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of HR and related financial advice and services; Oliver Wyman, the management consultancy; and Kroll, the risk consulting firm. With more than 54,000 employees worldwide and annual revenue exceeding $11 billion, MMC provides analysis, advice and transactional capabilities to clients in more than 100 countries. This annual report contains “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995. Please see “Information Concerning Forward-Looking Statements” on page i in the Form 10-K included in this annual report. government services unit, may be divested when Dear Shareholder market conditions improve. Maintain the performance of Guy Carpenter. A new management team led by Peter Zaffino was installed at Guy Carpenter in the first quarter and quickly s I sit down to write this letter, it is hard to undertook measures to restructure the business. For believe that I only recently celebrated my A the year, profitability was maintained in a difficult one-year anniversary as the CEO of MMC. 2008 environment, a performance turnaround that is a proved to be a remarkable year in many ways. credit to the new senior leadership at that operating When I joined the company last February, we faced company. challenges on several fronts and moved quickly to address them. As the year progressed, our work Continue profitable growth at Mercer and Oliver continued amid the pressure of economic conditions Wyman. Our two largest consulting businesses were that worsened into what will likely be the most impacted by the financial crisis that engulfed the significant recession of our lifetimes. Looking back U.S. and other major economies in the second half on 2008 now, I am very pleased to report that – while of 2008. Under the leadership of Michele Burns and we must stay vigilant and maintain focus in the face John Drzik, Mercer and Oliver Wyman began of continued economic uncertainty – MMC made implementing cost-saving steps to offset the effects significant progress over the course of the year. of potentially reduced demand. As a result, Mercer posted an excellent year, showing growth in both In March 2008, a month after becoming CEO, I underlying revenue and profitability. At Oliver presented to our Board of Directors a set of goals Wyman, a realignment of capacity leaves the that in my view were essential to the long-term company better positioned to handle projected prospects of MMC. I would like to quickly update levels of demand in the year ahead. you on these objectives: Reshape the focus of the MMC Corporate Center. Fix Marsh. Last year, we said that the linchpin of In 2008, we undertook efforts to clarify the roles and MMC’s recovery was a turnaround of Marsh, our responsibilities of the Corporate Center and began to insurance broking subsidiary. In particular, we implement initiatives designed to provide more needed to repair Marsh’s cost structure, simplify the efficient and cost-effective support to the portfolio organization, and deliver the products and services of companies that comprise MMC. Areas providing that our clients truly wanted from us in more technology, real estate and procurement services efficient ways. Under the leadership of Dan Glaser, were consolidated into a new unit, Technology & who joined the company just before I did, Marsh Business Services (TBS). In addition, executives were delivered on all fronts in 2008. As a result, the hired for two positions crucial to our continued business was returned to profitable growth with a success: In September, Vanessa Wittman joined as significant improvement in operating results, far Chief Financial Officer and Orlando Ashford was exceeding even our own goals for the year. Even more hired as Head of MMC Human Resources. striking was that this performance was achieved during a soft insurance cycle. It is clear that Dan and n short, the 2008 objectives we set for ourselves his team are successfully executing their turnaround I were largely achieved, a feat all the more plan, and we look for continued improvements to the impressive given that it took place against the operating and service models this year. backdrop of the most severe recession in decades. I am deeply proud of the work of MMC’s management Rationalize Kroll. In the first quarter, we changed team and everything they were able to accomplish the management at Kroll, promoting Ben Allen to last year. CEO. We examined Kroll’s many businesses and determined that several – while good, solid As we began 2009, we continued to face uncertainty. businesses – were not in keeping with MMC’s long- While we all, including our clients, would like to see term objectives for growth and should therefore be dramatically improved economic conditions this divested. We sold Kroll’s U.S. and U.K. restructuring year, we cannot rely on that scenario and will businesses to their senior executives in late 2008. manage MMC accordingly. Our first priorities for Several other Kroll businesses, including the 2009 are to continue the momentum we achieved in 2008 and to manage MMC in a manner that Mercer and Oliver Wyman. Continue to produces acceptable returns in this difficult manage these companies effectively during the environment. continued turbulent business conditions. Kroll. Continue to build Kroll as a company, However, we also need to recognize the supporting short- and medium-term growth importance of striking the correct balance: We while reducing economic impact on market- must manage MMC prudently in the current sensitive lines of business. environment, but we must undertake the initiatives and make the appropriate was an excellent reminder for us investments that will better position the 2008 all that no one can predict the company for long-term growth and stability. future. However, I can say with confidence that our achievements last year make for an We will continue, for example, to seek excellent foundation on which to continue our thoughtful, accretive acquisitions that enhance success in 2009. If we continue to execute on the market-leading positions of our operating all of our strategies across the operating companies. We will also seek to improve our companies – and assuming that economic technology infrastructure to gain greater conditions do not take a dramatic turn for the efficiencies and to stay competitive. And we worse – I feel comfortable saying that although will invest in people: in attracting talent, we do not expect this year to be easy, we have whether individuals or teams, and in retaining the pieces in place to produce profitable growth. the great professionals already at the firm. During the past year, we put together a largely It is also important to remember that while the new senior leadership team for MMC. We have current economic environment is a stressful already begun to see the evidence of what this one, MMC’s value proposition is to provide top-flight group of executives can produce. In clients with the ideas, insights and solutions to 2009, I will be working with this team to ensure help them mitigate risk and manage through that we are aligned in our focus to execute on times of crisis. Our goal is be the preeminent MMC’s short-term goals while making the source of innovative and cutting-edge decisions necessary to assure long-term success. thinking – what we call “thought leadership.” In times like these, when the very ground on My major goals as CEO for 2009 include: which our clients stand is shifting, our expertise Manage MMC prudently in the face of will be in even greater demand. For MMC, great uncertainty, resulting in growth in earnings challenges present great opportunities. while protecting the key assets of the firm. I believe in our mission: MMC is a professional services firm committed to assist our clients in Invest in protecting and enhancing our human the protection and enhancement of value capital through talent development and through advice and solutions in risk, strategy increased employee engagement. and human capital. We have the right Ensure that the MMC Operating Companies, companies under the MMC umbrella to achieve the MMC Corporate Center and TBS execute our goals, a talented executive team leading the their strategies and react to macro-economic company, and more than 54,000 colleagues and market changes in a timely manner. around the world doing their best each day for Specific goals for the Operating Companies their clients. I look forward to our mutual include: success. Marsh. Continue the transformation of the Sincerely, U.S. business and effectively launch Marsh & McLennan Agency for the small and emerging growth sector. Guy Carpenter. Capitalize on opportunities Brian Duperreault, President and CEO for growth amid continued industry consolidation. February 27, 2009 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2008 Commission File No. 1-5998 Marsh & McLennan Companies, Inc. (Exact name of registrant as specified in its charter) Delaware 36-2668272 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1166 Avenue of the Americas New York, New York 10036-2774 (Address of principal executive offices; Zip Code) (212) 345-5000 Registrant’s telephone number, including area code Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, par value $1.00 per share New York Stock Exchange Chicago Stock Exchange London Stock Exchange Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.