MMC – Market expectations are for Uniform ROA to remain stable near recent highs, but management has concerns about their Wealth business, tax reform, and Oliver Wyman

• Marsh & McLennan Companies, Inc. (MMC:USA)currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 19.7x Uniform P/E. At these levels, the market is pricing in expectations for profitability to remain near current peaks, but management has concerns about growth of their Wealth business, tax reform, and the performance of Oliver Wyman
• Specifically, management may be exaggerating the opportunity they have to increase insurance penetration globally, and may lack confidence in the potential for tailwinds related to ongoing pension reform in India. Moreover, they may have concerns about the provisional report from the U.K. Competition and Markets Authority, and about their DB business. Furthermore, they may lack confidence in their ability to drive revenue growth in Oliver Wyman, and to sustain operating income growth. They may also be concerned about their ability to maintain strong growth in their Wealth business, and about the new guidance from the U.S. Treasury on tax reform. Finally, they may lack confidence in the sustainability of current tax rates, and in their ability to maintain high dividend payment levels