A year of meaningful moments in 2015 MARSH & McLENNAN COMPANIES ANNUAL REPORT DRAFT “ We exist to serve clients. If we do so effectively, we will achieve our revenue and profit objectives.” DAN GLASER PRESIDENT AND CHIEF EXECUTIVE OFFICER MARSH & McLENNAN COMPANIES We are Marsh & McLennan Companies: a global professional services firm offering clients advice and solutions in risk, strategy and people. OUR FOUR OPERATING COMPANIES ARE: WE ARE COMMITTED TO: MARSH ENABLING CLIENT SUCCESS A leader in insurance broking and risk management. We anticipate the needs of our clients and act as their trusted advisors. GUY CARPENTER A leader in reinsurance and intermediary FINDING THE SMARTER WAY advisory services. We never stop searching for a better solution. MERCER WORKING SIDE BY SIDE A leader in talent, health, retirement We collaborate to harness our collective intelligence. and investment consulting. LIVING THE GREATER GOOD OLIVER WYMAN We act with integrity and strive to improve our A leader in management, economic communities around the world. and brand strategy consulting. 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. To our shareholders, Throughout our 145-year history, we have helped our clients grapple with complex challenges. 2015 was a case in point. Financial markets tumbled, foreign exchange rates fluctuated dramatically and geopolitical turmoil swept through continents. These volatile and uncertain conditions contributed to a dynamic environment full of threats and opportunities for our clients. Our areas of strength — risk, strategy and people — have never been more relevant or important. Clients sought our deep expertise, our understanding of their businesses, our creativity and our unwavering commitment to client service. 145-year Our company has considerable advantages that enable us to grow in varied HISTORY OF LEADERSHIP AND market conditions. Most importantly, we have great people. We are, after all, a INNOVATION professional services firm. The intellectual capacity and creativity of our colleagues is our product. As I visit our offices around the world, I am always impressed by the intelligence, ingenuity and dedication of our colleagues and our leaders. We make a positive impact on the businesses, people and societies we serve by providing guidance and support during critical moments... that is a powerful purpose that unites us all. Our 60,000 colleagues — actuaries, brokers, consultants, subject-matter experts and other professionals — advise clients on many of the most complex issues of our time: responding to natural catastrophes, providing for retirement security, attracting and retaining the best people and enhancing cyber resilience — to name a few. We manage our company with three specific constituencies in mind: our clients, our colleagues and our shareholders. We have sought to strike the appropriate balance between rigorous execution in the short term and strategic investment for the long term. These twin objectives are reflected in our return of a record amount of capital to shareholders in 2015 coupled with our substantial investments to grow our business. Though we live in challenging times, I am confident that our inherent strengths — extraordinary people, a cohesive culture and a restless commitment to finding a better way — will fuel our firm’s long-term growth. 1 ANOTHER YEAR OF STRONG FINANCIAL PERFORMANCE 6 years Building on six consecutive years of strong performance, Marsh & McLennan delivered another year of robust financial results in 2015. OF CONSECUTIVE OPERATING MARGIN We generated 4% underlying revenue growth with healthy increases at all four GROWTH IN BOTH SEGMENTS operating companies. In each of the last six years, we have grown consolidated underlying revenue in the 3% to 5% range. Acquisitions have added an additional two percentage points on average over that same time period. Adjusted operating income1 rose 5% to $2.5 billion. We continued our track record of operational excellence by increasing adjusted operating margins. In 2015, our consolidated margin accelerated 100 basis points, to 19.1%, our highest level in more than a decade. Our earnings per share increased 12%, and adjusted EPS grew 8% to a record $3.05. We achieved these results despite $0.18 of negative impact from the effects of foreign exchange. On a constant currency basis, our adjusted EPS growth was an impressive 14.5%. Since 2009, our adjusted EPS “We are a brains business. We manufacture ideas and solutions. We collaborate to has grown at a CAGR of 13.5%, in line with the create a value proposition greater than the 13% long-term target we established in 2010. We sum of its individual parts.” delivered this outstanding record of performance while overcoming approximately $200 million of foreign exchange headwinds during this six-year period, representing a yearly average of $.04 per share. Risk and Insurance Services revenue of $6.9 billion reflected an increase of 3% on an underlying basis. Adjusted operating income rose 3% to $1.6 billion, with the adjusted margin expanding 90 basis points to 23.3%, the highest in more than a decade. Adjusted operating margins in RIS have improved every year since 2007. Marsh’s underlying revenue growth of 3% reflected increases across all major geographies. This was Marsh’s fifth straight year of underlying revenue growth of at least 3%. Guy Carpenter’s underlying revenue growth of 2% was a solid result given the dynamics in the reinsurance industry. 1 For a reconciliation of non-GAAP results to GAAP results, as related to all non-GAAP references presented in this letter, please refer to the Company’s Form 8-K, dated February 4, 2016, available on the Company’s 2 website at mmc.com. Consulting produced revenue of $6.1 billion, an increase of 5% on an underlying basis. Adjusted operating income rose 4%, exceeding $1 billion for the first time in our history. Consulting’s track record of higher adjusted operating margins continued in 2015, expanding 80 basis points to 17.3%. Since 2010, the adjusted margin has improved by 600 basis points. Mercer’s underlying revenue growth of 4% was strong and marked the fifth consecutive year of growth of 3% or higher. Oliver Wyman’s underlying revenue growth of 7% in 2015 came on top of 2014’s outstanding growth of 15%. “Since 2009, our adjusted EPS has grown at a CAGR of 13.5%, consistent with our long-term target set at Investor Day in 2010 and reaffirmed in March 2014.” OUR COMMITMENTS TO SHAREHOLDERS In 2015, we returned a record level of cash — over $2 billion — to our shareholders. At our Investor Day in March 2014, we made three commitments to shareholders: 1) Grow adjusted EPS at a long-term CAGR of 13%; 2) Increase our dividend per share by double-digits every year; and 3) Reduce our share count every year. We continue to deliver on these commitments. Since 2009, our adjusted EPS has grown at a CAGR of 13.5%, consistent with our long-term target set at Investor Day in 2010 and reaffirmed in March 2014. In 2015, we increased our annual dividend by 11.3%, exceeding even the 10.4% increase in 2014. And our share count declined for the second straight year. Bottom line, Marsh & McLennan delivered another strong year of financial performance in 2015. OUR VIEW OF THE MARKETS I am proud to have spent the past 30 years working in the insurance industry, both as a broker and as an underwriter. In my view, the insurance industry plays a crucial role in spurring economic growth, the taking of risk and promoting innovation. On the upside, insurance enables commerce to thrive. Satellites are launched. Skyscrapers are built. Medicines are invented. On the downside, insurance is a vital buffer enabling lives and livelihoods to be rebuilt following loss. 3 “ Today, we are stronger strategically, operationally and financially than at any time in the last decade.” Clients in more than 130 countries $ Highest margin in Consulting’s adjusted operating Risk and Insurance Services in income exceeds 19.1% Consolidated adjusted margin 12 years $1 billion has improved more than for first time in history 1,000 basis points since 2007 4 Investments for growth and efficiencies since 2009 of nearly $1.2 billion For 27 acquisitions $7 billion and investments in 2015 $13 billion 60,000 Annual revenue Colleagues around the world making a difference for clients in critical moments 11.3% Dividend growth Continuing our commitment to double-digit dividend growth 6 years 2010 3% Of consecutive underlying 2011 5% revenue growth in the 3% to 5% range 2012 4% 2013 3% 2014 5% 2015 4% 5 Like the broader market, these are dynamic times in the insurance industry. Insurance companies are dealing with significant structural change. We have seen large-scale M&A, senior management changes, a reduction in the underwriting appetite at several companies, an infusion of alternative capital and a willingness at some firms to reconsider reinsurance as a way to reduce volatility. Intense competition and excess capacity coupled with challenging returns have led to orderly pricing declines. This trend has played out for several years and is fundamentally good for our clients. As insurance markets evolve and consolidate, we $2 billion believe that the advice of a broker will be all the more important to clients trying to make sense of industry change. Advisors with the deepest experience and broadest RETURNED TO SHAREHOLDERS THROUGH DIVIDEND capabilities stand to benefit from a flight to quality as clients seek trusted advisors AND SHARE REPURCHASE with the right skills to help them navigate through the uncertainty. Dynamic change also creates exciting opportunities for our consulting businesses.