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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Welcome to Marsh & McLennan's Conference Call. Today's call is being recorded. Second quarter 2021 financial results and supplemental information were issued earlier this morning. They are available on the company's website at mmc.com.
Please note that remarks made today may include forward-looking statements, including certain expectations related to COVID-19 and other matters. 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 for this quarter and to our most recent SEC filings, including our most recent Form 10-K, all of which are available on the Marsh & McLennan 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.
I'll now turn this over to Dan Glaser, President and CEO of Marsh & McLennan.
Good morning, and thank you for joining us to discuss our second quarter results reported earlier today. I'm Dan Glaser, President and CEO of Marsh & McLennan. Joining me on the call today is Mark McGivney, our CFO; and the CEOs of our businesses, John Doyle of Marsh; Peter Hearn of Guy Carpenter; Martine Ferland of Mercer; and Nick Studer, of Oliver Wyman. Also with us this morning is Sarah Dewitt, Head of Investor Relations.
I'd like to welcome Nick who became CEO of Oliver Wyman, July 1. Nick has led many of Oliver Wyman’s major practices in his 23 years with the business and look forward to seeing Oliver Wyman continue to grow and thrive under his leadership. On behalf of the Executive Committee, I also want to thank Scott McDonald for his many contributions during his distinguished [Technical Difficulty] career at the firm. Marsh & McLennan had an outstanding second quarter.
We have a well-positioned and benefiting from an abundance of opportunities. We are stronger and have broader capabilities [indiscernible]. [They are] benefiting from what may be the strongest economic rebound, nearly four decades led by our largest region, the U.S. There is high demand for our advice and solutions in this time of uncertainty and in the face of challenging market conditions.
We are seeing a [flight] to quality and stability, which is contributing to high levels of business growth and client retention. And it's helping us attract talent. And there's a long runway for growth as we think about major protection gaps around the world, new emerging risks, digitization, workforce of the future and under penetrated market such as small commercial.
We are focused on capitalizing on these opportunities and I am proud of our execution in the quarter. We generated record second quarter revenue and earnings, the best underlying growth of any quarter in two decades [earlier poised] for an excellent year. The strength of our results was brought based with each of our businesses and virtually all of our major geographies, seeing an acceleration in growth. Our adjusted EPS increased by an impressive 33% and we generated margin expansion despite challenging expense comparisons.
As we look ahead, the economic outlook for the U.S. and most of the major countries we operate in is encouraging. However, the pandemic is not over yet. Vaccine hesitancy creates risk. And there are many parts of the world where vaccine availability is limited. As a result, much of the world is experiencing another wave of the pandemic with rising case counts due to the spread a variance.
In addition, the shape of this economic recovery is very different from any we've seen before. Some industries are thriving, while others are being impacted by supply chain disruption, inventory issues, and labor shortages. Navigating this dynamic landscape is challenging, even confounding for some businesses. The growth opportunity for Marsh & McLennan is significant during this time of uncertainty and recovery.
We are aiding and guiding our clients through the complexities of the new normal, as well as helping them tackle issues like climate risk, cyber, diversity and inclusion, employees safety and well being, and workforce disruption. Our ability to provide differentiated high quality solutions to our clients rest on our talent and expertise.
Our colleagues are our number one competitive advantage. And with the potential for industry consolidation, we see a meaningful opportunity to invest in hiring and deepen our world-class talent pool. We have strong momentum and as we mentioned last quarter, our efforts are focused on resurgence and expansion.
Let me provide some examples of how we are helping our clients address complex issues of the day. Specifically two major challenges, cybersecurity and climate change. Cybersecurity is one of the greatest risks [facing society]. Supply chain and ransomware attacks continue to rise with a number of recent high profile attacks, affecting organizations across all sectors and segments from technology to critical infrastructure and healthcare.
Marsh & McLennan is helping clients manage cyber risk. Increasingly, we are bringing our businesses together to leverage all of our expertise, data and relationships with public and private partners to help clients become more resilient. Our growth in participation in cyber extends well beyond the placement of insurance. Under the leadership of John Doyle, we are leveraging the collective capabilities of Marsh, Guy Carpenter, and Oliver Wyman to bring cyber solutions from across our enterprise to clients.
Not only are we helping clients with risk transfer through our insurance businesses, but through our cyber risk assessment tools, we help clients measure and quantify their cyber risk exposure to better inform decisions about cybersecurity, risk mitigation and transfer strategies. We also help clients with incident response before, during, and after events, as well as part of our broader efforts to how clients build resilience in the face of a constantly evolving threat landscape.
A second defining challenge in [our time] is climate change. Climate and the broader topic of ESG are complex, multi-dimensional challenges virtually all companies face. The threat of a changing climate present obvious questions for companies touching everything from strategy, to resilience to their workforce, and how they communicate. Even though climate change is a long-term threat, the issue is proximate that has immediate consequences as firms deal with call for action, strategies to respond, and more input for various stakeholders.
Led by Nick Studer, we are bringing together our businesses to help our clients anticipate climate risk, and opportunities. For example, Oliver Wyman is working with our insurance businesses to support clients in the transition to a low carbon economy and manage climate risk. We are assisting clients with the development of carbon light business models, and to de-risk investment in sustainable technologies. And Marsh and Guy Carpenter, we are helping to develop innovative climate solutions to bridge protection gaps.
We assist clients with stress testing models, quantifying the impact of climate change, and providing risk management and Insurance Services to protect against climate impacts. And Mercer’s responsible investment business help [indiscernible] fiduciaries of investment pools understand how a changing climate could impact investment returns in the future and anticipate them today. Overall, we're uniquely positioned to help our clients with their most pressing challenges.
Let me spend a moment on current PNC insurance market conditions. The second quarter marks the 15th consecutive quarter of rate increases in the commercial PNC insurance marketplace. The Marsh Global Insurance Market Index showed price increases of 15% year-over-year versus 18% in the first quarter. The pace of the price increases continue to moderate, but still remains high reflecting elevated loss activity and concerns about inflation and low interest rates.
Global property insurance was up 12% and global financial and professional lines were up 34% driven in part by steep cyber increases, while global casualty rates were up 6% on average, and U.S. workers compensation rates declined modestly in the quarter. Keep in mind, our index skews to large account business. However, U.S. small and middle market insurance pricing continues to rise as well, although the magnitude of price increases is less than for large complex accounts.
Turning to reinsurance, Guy Carpenter's global property catastrophe rate online index increased just 6% at [indiscernible]. In the second quarter, the market was more orderly and balanced than a year ago, reflecting adequate capital and an increased willingness to deploy capacity. Measured and moderate single-digit rate increases were typical after two years of double-digit rate increases.
However, programs that have significant losses saw higher increases and capacity remains constrained on certain lines of business, most notably cyber. Concerns remain around inflation, losses in certain lines, extreme weather events, and the beginning of a new hurricane season. It is in times like these where our expertise and capabilities shine. We are working hard to help our clients navigate the current environment.
Now, let me turn to our fantastic second quarter financial performance. We generated adjusted EPS of $1.75, which is up 33% versus a year ago, driven by strong top line growth and continued low levels of T&E. Total revenue increased 20% versus a year ago and rose 13% on an underlying basis, the highest quarterly growth in two decades. Underlying revenue grew 13% in RIS and 12% in the Consulting. Marsh grew 14% in the quarter on an underlying basis, the highest quarterly underlying growth in nearly two decades and benefited from stronger business and renewal growth.
Guy Carpenter grew 12% on an underlying basis in the quarter, continuing its stream of excellent results. Mercer underlying revenue was 6% in the quarter, the highest in almost a decade. Oliver Wyman posted record reported underlying revenue growth of 28%. Overall, the second quarter saw adjusted operating income growth of 24%. And our adjusted operating margin expanded 90 basis points year-over-year.
As we look out for the rest of 2021, we are well positioned. With 9% underlying revenue growth year to date, our full-year growth will be strong. We expect favorable market dynamics to persist for at least the remainder of the year. Although the pace of growth could moderate versus the second quarter as year-over-year comparisons become more challenging. We also expect to generate margin expansion for the full-year and strong growth in adjusted EPS.
With that, let me turn it over to Mark for a more detailed review of our results.
Thank you, Dan and good morning. Our results were excellent with record second quarter revenue earnings, the best quarterly underlying growth in two decades, meaningful margin expansion and significant growth in adjusted earnings. Highlights from our second quarter performance included the strongest underlying [growth in the market] since the first quarter of 2003, the strongest in Guy Carpenter in 15 years, solid rebound of 6% at Mercer, and record reported underlying growth in Oliver Wyman.
Second quarter growth and adjusted earnings per share was also impressive, rising at the fastest pace of any quarter more than a decade. Consolidated revenue increased 20% in the second quarter to 5 billion, reflecting underlying growth of 13%. Operating income in the quarter was 1.2 billion, an increase of 39% over the prior year. Adjusted operating income increased 24% to 1.2 billion, and our adjusted operating margin increased [19 basis points] to 26.4%.
GAAP EPS was $1.60 in the quarter and adjusted EPS increased 33% to $1.75. For the first six months to 2021, underlying revenue growth was 9%, our adjusted operating income grew 22% to 2.6 billion, our adjusted operating margin increased 170 basis points, and our adjusted EPS increased 26% to $3.74.
Looking at Risk & Insurance Services, second quarter revenue was 3.1 billion, up 21% compared with a year ago or 13% on an underlying basis. Operating income increased 37% to 950 million. Adjusted operating income increased 22% to 927 million, and our adjusted operating margin expanded 30 basis points to 32.4%. For the first six months of the year, revenue was 6.4 billion with underlying growth of 10%. Adjusted operating income for the first half of the year increased 19% to 2 billion with a margin of 34.5%, up 110 basis points from the same period a year ago.
At March, revenue in the quarter was 2.7 billion, up 23% compared with a year ago, 14% on an underlying basis. Even excluding the impact of the revenue adjustment we recorded a year ago, underlying revenue at Marsh was up 12%. Growth in the quarter was broad-based and was driven by robust new business growth and solid retention. The U.S. and Canada region delivered another exceptional quarter with underlying revenue growth of 15%, the highest result since we began reporting this segment.
In international, underlying growth was 13%. EMEA was up 16%, Asia Pacific was up 10%, and Latin America grew 2%. For the first six months of the year, Marsh's revenue was 5 billion with underlying growth of 11%. U.S. and Canada underlying growth was 12%, and international was up 9%. Guy Carpenter’s second quarter revenue was 488 million, up 13% compared with a year ago or 12% on an underlying basis. Growth was broad-based across all geographies and specialties.
Guy Carpenter has now achieved 7% or higher underlying growth in 6 of the last 8 quarters. For the first six months of the year, Guy Carpenter generated 1.4 billion of revenue [and] 8% underlying growth. In the consulting segment, revenue in the quarter was 1.9 billion, up 17% from a year ago or 12% on an underlying basis. Operating income increased 35% to 344 million. Adjusted operating income increased 34% to 356 million and the adjusted operating margin expanded by 220 basis points to 19.5%.
Consulting generated revenue of 3.8 billion for the first six months of 2021, representing underlying growth of 8%. Adjusted operating income for the first half of the year increased 31% to 726 million. Mercer’s revenue was 1.3 billion in the quarter, up 6% on an underlying basis, representing a meaningful acceleration from the first quarter. Career grew 15% on an underlying basis, reflecting the rebound in the economy and business confidence.
Wealth increased 4% on an underlying basis, reflecting strong growth and investment management offset by a modest decline in defined benefit. Our assets under delegated management grew to 393 billion at the end of the second quarter, up 28% year-over-year, and 3% sequentially, benefiting from net new influence and market gain. Health underlying revenue growth was 4% in the quarter driven by strength internationally.
Oliver Wyman’s revenue in the quarter was 618 million, an increase of 28% on an underlying basis. Second quarter results represent a sharp rebound from the contraction we saw in the second quarter last year. For the first six months of the year, revenue at Oliver Wyman was 1.2 billion, an increase of 19% on an underlying basis. Adjusted corporate expense was 62 million in the second quarter.
Foreign Exchange was a modest benefit to earnings in the quarter. Assuming exchange rates remain at current level, we expect FX to have a minimal impact on EPS for the remainder of the year. However, net asset credit was 71 million in the quarter. For the remaining two quarters of the year, we expect our other net benefit credit will be mostly consistent with the level in the second quarter. Investment income was 19 million in the second quarter on a GAAP basis, and 18 million on an adjusted basis, and mainly reflect gains on our private equity portfolio.
Interest expense in the second quarter was 110 million, compared to 132 million in the second quarter of 2020, reflecting lower debt levels in the period. Based on our current forecasts, we expect approximately 110 million of interest expense in the third quarter. Our adjusted effective tax rate in the second quarter was 24.4%, compared to 25% in the second quarter last year. Our tax rate benefited from favorable discrete items, the largest of which was the accounting for share based compensation.
Excluding discrete items, our effective adjusted tax rate was approximately 25.5%. Our GAAP tax rate was 31.6% in the second quarter, up from 26.2% in the second quarter of 2020. The increase reflects a $100 million impact from the revaluation of deferred tax liabilities, due to an increase in the UK statutory tax rate that goes into effect in 2023. Through the first half of the year, our adjusted effective tax rate was 24.4%, compared with 24% last year.
Based on the current environment, we continue to expect an adjusted effective tax rate between 25% and 26% for 2021, excluding discrete items. As we currently look out for the balance of the year, we expect our top line growth to remain strong, reflecting the economic rebound and favorable environment. Keep in mind the second quarter faced the most favorable year-over-year comparison for revenue growth.
As we progress through the rest of the year, this combined with continued normalization of expenses will result in more challenging comparison. However, our businesses have momentum and we expect positive trends to continue, resulting in strong performance in the second half in a terrific full-year.
Turning to capital management and our balance sheet, we ended the quarter with 10.8 billion of total debt. This reflects a repayment of 500 million of senior notes in April, which completed our JLT related deleveraging. Our next scheduled debt maturity is in January of 2022 [when] 500 million of senior notes mature. We continue to expect to deploy approximately 3.5 billion and possibly more capital in 2021, of which at least 3 billion will be deployed across dividends, acquisitions, and share repurchases.
The ultimate level of share repurchases will depend on how the M&A pipeline develop. Last week, we raised our dividends 15%, which is the largest increase since the third quarter of 1998. We also repurchased 2.4 million shares of our stock for 322 million in the second quarter. Our cash position at the end of the second quarter was 888 million. Uses of cash in the quarter total 993 million and included 241 million for dividends, 322 million for share repurchases, and 430 million for acquisitions.
For the first six months, uses of cash total 1.4 billion and included 478 million for dividends, 434 million for share repurchases, and 473 million for acquisitions. Overall, we had an exceptional second quarter positioning us well to deliver strong growth in both revenue and adjusted earnings in 2021.
And with that, I'm happy to turn it back to Dan.
Thanks Mark, and operator we are ready to begin Q&A.
[Operator Instructions] Our first question comes from Elyse Greenspan with Wells Fargo. Your line is open.
Hi, thanks. Good morning. My first question is on the organic growth outlook, recognizing the comps do get a little bit harder in the second half of the year, but, you know, the Q3 was still negative last year. So, I guess my question is, given what you know now, sounds like you guys are positive, but a little bit cautious about the economy. You know, is it possible, it sounds like it's still possible, we could see double-digit organic growth over the remaining two quarters of the year?
So, we obviously, as Mark was saying, we've got momentum, and we feel very good about how we're positioned, and we're not that fearful about the economy. We are fearful about continuing waves of COVID, but, you know, the economies have adjusted somewhat in many parts of the world and are more resilient certainly than they were in the spring of 2020. And so the impact, economic impact won't be as severe as what we've seen, even with continuing waves of COVID.
I mean, last quarter Elyse, we said that 2021 growth would be at the high-end of our 3% to 5% range and possibly higher. I think at 9% underlying growth through six months, it's safe to say that we're in the higher category. You know, we feel very good about our position. We're going to have a very good year. And 2021 is just going to set a new base for us. We intend to grow revenues and earnings in 2022 as well. So, this is not going to be a one-year wonder.
Okay, that's helpful. And then my second question was on the margin side. So, you guys, you know, Dan, I think you both said that, you know, some T&E has not fully come back, but also, you know, the pretty impressive revenue growth helped drive that margin improvement as well. So, we think about the back half of the year and T&E coming back, can you just help us think through, you know, the resulting impact on the margins, especially if revenue remains strong, maybe the second half could also see some margin improvement?
Well, I'll start by saying that we absolutely expect margin expansion in the year, and this will be our 14th consecutive year of margin expansion. Margins are an outcome of how we run the business. I mean, we grow our revenue every year at a pace that's faster than how we grow our expenses. I think you may be overly optimistic about T&E really roaring back in the back half of this year. I think it's going to be very gradual, and slow, actually. And I think that companies, not just Marsh & McLennan will travel with more purpose and will be more thoughtful about traveling. And I think clients will expect the same of providers like ours.
And so, you know, we do expect and hope that over time, you know, T&E gets back to, kind of 2019 levels, but we may be quite a way away from that point-in-time. You know, we were very pleased with our margin expansion in the quarter. And as you said, that was driven by our top line like that's where it largely came from. And it helped us – that strong top line helped us overcome a comparable, which was a minus 5% expense [for us]. I mean, look at look at our – [yes margins] are up 30 bips, but that's on top of 430 bips margin expansion in the second quarter of last year. So, we like where we are. We will grow margins for the year. It may not be every quarter, don't know that right now, but ultimately we feel good for the year.
Next question please.
Our next question comes from Jimmy Bhullar with JPMorgan. Your line is open.
Hi, good morning. So, just on organic growth, again, obviously you mentioned easy comps, were there any other tailwinds, such as maybe pent-up demand in certain industries or just the benefit of higher price hikes in PNC that might not repeat to the same extent in future periods?
Yeah. The high levels of growth were not just because of easy comps at all. I mean, Guy Carpenter’s comp was a 9 last year, you know, March was a 1. So, it was not exactly layoffs in terms of comps. I think that the real momentum right now, and the U.S. economy is getting stronger, [family integration] is well behind us and the combined organization is emerging from the pandemic stronger than what we went in and focus on our front foot. New business generation was terrific across the businesses. And our growth was broad based. Retention is strong, pricing is a tailwind, and we're benefiting from disruption and flight to quality and stability. So, there are a lot of factors that are that are underpinning our revenue growth, and we feel very good about revenue growth into the future.
Okay. And then on share buybacks, I think you spent over 300 million in 2Q over 400 for the first half. And that's a higher pace than you typically did prior to the pandemic. So, is it more of a catch up from not buying back stock last year or is – should we assume this is going to be more of a run rate going forward?
We're not catching up with [every year], every year is its own adventure. And ultimately, as we've said before, we start every period believing in a balanced approach to capital management, not that we'll spend the same money in each of our three principal buckets of dividend, and acquisition and share repurchase, but we don't have an approach that waited to one versus the other. And so share purchase in large part is a function of what our acquisition activity looks like, you know, every year might not be perfectly balanced, but the first half was pretty balanced.
I mean, our uses of 478 million of dividends, 434 of share repurchases, and 473 of acquisition. So, it is a balanced approach and I think you’ll see that from us. I mean, at the end, as Mark was saying, we have 3.5 billion or more to deploy. We are a cash generation type of company. So, this is again, not a one-year wonder. This is an every year, we're going to put money toward our dividend. We're going to grow our dividend. We're going to acquire high quality firms and we're going to buy back our own shares. I mean that's going to be year-after-year.
Okay, thank you.
Next question please.
Our next question comes from David Motemaden with Evercore ISI. Your line is open.
Hi, thanks. Good morning. I wanted to talk a little bit more about the expenses. Just the other operating expenses were up, you know, not as much as I would have thought. I mean, it sounds like T&E continues to be a benefit. That's not going to roar back, but still up only 6% year-over-year, despite a pretty favorable or pretty tough comp on the expense side. I'm wondering if there was anything else one off in there? And relatedly, I guess, you know, are you guys realizing more sustainable expense saves as a result of some of the operational changes due to COVID-19? Like, you know, real estate expense saves, and that sort of thing?
It's a good question, David. And we certainly are going to realize a number of efficiency gains over the next several years. And that's just, as you mentioned real estate more purposeful, T&E or traveling in general and hopefully [indiscernible] as well. Also, you know, we've been undergoing some significant modernization projects on technology and on operations, and so that – that will benefit us more in the future than it's doing right now. The biggest growth in our expenses frankly is compensation. And I think that's a good thing is, our variable cost is going up along with our growth.
We're in the market, we're hiring. I mean, the first six months of this year, our headcount has grown nearly 2000. Most of that is coming within Marsh, as they're capitalizing on the opportunity they see with their two biggest competitors having some element of distraction and uncertainty. So, you know, at the end, it's more expense related to headcount and expense related to compensation that's where the growth of expense is coming from. And we feel pretty good about that, you know, we can manage that over time. But we’re in the market right now. You know, building our business and building on already the industry leading pool of talent we already have.
Great. Yeah, that's good to hear. I guess maybe just a follow up on that headcount. I mean, I think, you know, that's the 2,000 headcount growth this year is definitely more than I was thinking where I had thought, how much of a – how much of a tail does that have? Like, you know, is that something that you think can continue through the end of the year or is, you know, is that something that, you know, you have like this, you know, period of time where the consolidation is, sort of in, there's some uncertainty there, and you guys are capitalizing on that? And then once that's over, it's, you know, sort of back to normal course, where you guys are still getting talent, it's just not as significant.
I think talent begets talent. You know, people are attracted to work in environments with smart, creative, dedicated people. And the more people like that you have the more talent you attract. It's clear that the issues of Willis in particular, in Aon, are creating a short-term opportunity that will run its course one way or the other. I mean, I was just looking at the stats recently are hiring from Aon and Willis post, the announcement is three times higher on a net basis than it was in the 16 months prior to the announcement. So that's not going to run forever, but ultimately, we're doing our best to continue to build [powers] and capabilities within our already formidable firm.
Next question please.
Our next question comes from Meyer Shields with KBW. Your line is open.
Thanks. So, two questions I think related to what you were talking about. First, when you talk about the flight to stability, was that a headwind or a tailwind to margins in the quarter?
I think the flight to stability indicates that our account protection levels in our new business are higher than they otherwise would be. So, that would be a benefit in not only revenue, but a benefit to margins because the revenue is higher than it would otherwise be. It's not having an impact on expense.
Okay, perfect. And then obviously, the reinsurance, organic growth has been fantastic for a long-time. There are, you know, it seems like there are a lot of new companies out there. I was hoping you could give us a little bit more color on what's happening in the competitive environment?
You know, we're very pleased with Guy Carpenter’s performance over a number of years, but I'll hand off to Peter so we can dig in a little bit deeper. So, Peter, you want to take that?
Yeah. Thanks, Dan. Thanks, Meyer. We have, we've enjoyed a terrific run over the past several years. Our model is, you know, based on consistent growth over a long period of time, and we're able to capitalize on that model, as a result of a very compelling proposition. Disciplined around both sales and pipeline that have resulted in new business wins, and as we look at our new business wins, over the past several quarters Meyer, the amount of new business coming from new clients, has grown significantly, to the extent that in Q2 2021, that number was 56% of our revenue growth from new business came from new clients.
So, you know, we're seeing continued growth based on the model that we built. Yes, there are a number of new challenger brokers out there, and we have to be mindful, you know, all of our competitors are worthy adversaries. But we believe we have a very compelling proposition that over a long period of time has produced sustained growth and opportunity for us on a continuing basis.
Okay, fantastic. Thank you.
Alright, thanks Meyer. Next question please.
Our next question comes from Brian Meredith with UBS. Your line is open.
Yeah, thanks. Two quick ones here. First one, Dan, I'm wondering if you could break down at Marsh? Just generally speaking, what the impact in organic revenue growth was from rate versus call exposure growth versus market share gains, just generally speaking?
If you can speak up just a little bit more? I got the question, but it was a little faint. I'll hand over to John, but, you know, I’ll just start by saying how thrilled we all are with – in our 150th year anniversary at the company. We could grow the GAAP top line by 20%. In Marsh in particular, [have its] best growth in a couple of decades. This is a phenomenal overall performance. But John, you want to break down the growth a bit?
Sure. Brian, thanks for the question. As Dan and Mark both mentioned, we certainly benefited from the economic rebound, relatively soft prior year [indiscernible], proud of that growth in the second quarter last year during the [speck of a pandemic]. The pricing environment, Dan talked about it a little bit in his remarks earlier, about 50% of our revenue is sensitive to PNC pricing. While rate increases have come down modestly, compared to the fourth quarter of last year and the first quarter of this year, they held really where we're sensitive to pricings, where we get commission, but it's from a number of different areas. But I also want to emphasize that we executed really well in the quarter.
Our team is even as strong as it's ever been. They're highly engaged, focused on delivering for our clients. And the market remains challenging. It's, you know, again, while rates aren't nearly as much as they were before, they are quite difficult. I do think, you know, there's been a bit of catch up. You know, in some markets, there's a fair amount of new business. In our results, so whether it's in transaction risk in cyber or in construction, there are examples of where that is the case. But again, we're very pleased with the results in the quarter.
Anything else, Brian?
Great. That's great. Thanks. And then the second question is, Dan can you talk a little bit about, kind of the M&A environment here, kind of what it looks like right now and also have the issues that Aon and Willis have kind of run into with some regulatory approvals, has that at all changed your kind of strategic view of M&A right now?
No. It had no impact. Our philosophy in M&A is basically we like buying firms that are high quality with a leadership team generally remains in place, and recurring revenue streams, high cash generation, low capital requirements, and a history of success that sets it up for us, and then it’s really getting to know each other over a long stretch of time and figuring out, it's not us buying, and it's not them selling, we're deciding to come together. We believe the outcome for our clients and our people will be better together than separate. And that's the approach. Pipeline remains strong for us, throughout our businesses.
In fact, you know, last year was the highest acquired revenue within Marsh & McLennan agency, which as you know, has been more than a decade long, in terms of strategy building. So, we feel very good about that. I mean, obviously, there's a lot of capital in the world. So, you know, multiples are higher than what we would like. And we need to be very selective and very careful in our evaluation of pro forma results, because most of the companies we've looked at are private. But our strategy for a long period of time has been more of a string of pearls, not something where it is one mega type of acquisition, but it's building the company's capabilities.
Geographic have, you know, [indiscernible] JLT was an anomaly in some ways and it was perhaps our biggest acquisition in history. And [indiscernible] that acquisition, because we have been cultivating a broad relationship, for a long period of time. We were coming together, because we thought the combination was going to be better for clients, and you're seeing a manifestation of that. Growth is better, because of our combination with JLT, particularly in our specialty operation. And so, you know, that's, kind of where we are. Our thoughts on M&A have not changed.
Great. Thank you.
Next question please.
Our next question comes from Ryan Tunis with Autonomous Research. Your line is open.
Hey, thanks. Good morning. I guess, just thinking about consulting, a couple of things. First of all, with Oliver Wyman, the 28 organic, just any color on I guess how you're thinking about that, any visibility on, sort of the back half of the year? And I guess, just within Mercer, it sounds it has been some focus on the call about comps becoming more difficult, is that obvious that the comps get that much more challenging there. So, I'm – maybe curious if you Martine could give us some perspective on, you know, sort of how business developed in the three months of the quarter and where we're at now, looking at the back half?
I’m glad Ryan that you have, sort of consulted. It is a big part of our business and a big part of our performance, you know, and I'll hand it off to Nick first and then over to Martine, but let me just say a couple of comments first. One, we've mentioned before, that Oliver Wyman will tend to be our fastest grower over long stretches of time, but with more volatility. And so yeah, look back to the second quarter of last year minus 13. So, we love [this 28], but ultimately you put them together, and it's 6% over one of the more difficult periods in recent human history.
And so yeah, we tick the box on that. And that's a terrific result. Mercer on the other hand, Mercer is in terrific growth businesses, health, wealth, career, and you know, Martine does some great underpinning work. And if you go back to the end of 2019, you know 2% growth, 3% growth, and 4% growth in sequential quarters, and then 5% growth in the first quarter of 2020. And then got [indiscernible] the pandemic as expected in some ways, and held up very well with a minus 3 throughout last year. So, Martine and Mercer are going back to, you know, a terrific result in the second quarter. It is sort of getting back to the same pace or getting back to the same processes that existed pre-pandemic.
Let's start with Nick, and then we'll go to Martine. Nick?
Thank you very much. Yes, as Dan said, we're thrilled with the performance. And as to where it's coming from, it's in an incredibly broad base. The growth in the quarter was highest in the regions and the sectors, which have been most adversely affected by the pandemic and then referred to the comp. The Americas, particularly the U.S. have seen a very sharp rebound in client demand, both through the economic conditions and business confidence rising materially, and if you take, for example, the transportation sector, which was the sector that suffered the greatest impact from the pandemic last year, springing back very strongly.
While a lot of outsides of the Americas growth in Europe and in the Asia Pacific region were also quite robust. And across all major industry groups financial services, consumer industrial healthcare, all actually going remarkably at similar rates. And you know what we do think the outsized growth in Q2 was an outlier, we see business confidence remaining high, as global economic conditions improve, and we see even some semblance of return to normality in some of the places we operate. And it is also applied this in the labor market for the skill set that our consoles possess. So, we have a decent outlook for the business for the rest of the year.
Thanks Nick. Martine?
Thanks for asking the question. Similar to Oliver Wyman the growth in the quarter really came all along the business and of the regions. But I think it's worth spending a moment [on the career,] we have said through the pandemic, that this is where we have the most discretionary projects a little bit more connected to our Oliver Wyman would be operating. And it's absolutely come back. Times have restarted projects. There's a lot of demand out there. We’ve been helping clients with their post pandemic workforce. There was a war for talent out there.
So, demand for rewards, demands for skills, and skill sets, assessment, engagement, transformation, as companies accelerate their [indiscernible] to digital and newer technology. So that is sustaining our [through] business. We see strong sales, good momentum for the rest of the year. And I want to spend another moment on our wealth business, I think 4% growth in the quarter is, we have not seen that since Q4 2017. Again, all [sub-divisions] in our wealth business did well.
In particular, our OCIO business, which is the part of the business where we implement asset management for our clients. And you see the flight to strong governance there, deep manager research, and combined with questions and helping clients with ESG and [DDI], the type of investment in modeling and the life balance [indiscernible] comments a little bit. And lastly on wealth, this is the year where the DB cards of our portfolio which you all know is in structural decline, and for some years, actually because same size becomes smaller than investment management solution. And we have in a portfolio than we can see that this should be providing some tailwinds as we go beyond 2021.
Thanks Nick, thanks Martine.
Thanks. Got it. And then just a follow-up for Dan and maybe John Doyle as well, can you just, I guess give us an update on the strategic importance of using wholesale brokers on the PNC side and maybe how that's evolved over time?
Yeah. I'll take it and hand it over to John. It’s an interesting question. I think wholesale brokers in a lot of ways like the [indiscernible] in that, you know, they become quite specialists in a lot of different areas with some really good skills. Those are exactly what I think back in my career, what wholesale really meant 10 or 20 years ago. I think specialty placement might be more appropriate. But John, you want to talk about use of wholesalers?
Sure. You know, [Technical Difficulty] it's largely focused on specialty capabilities. And the most part we use wholesalers when we need to access certain markets, certain specialty insurance, [ENS insurance] in particular, respect their distribution access to certain [Technical Difficulty] brokers. For the most part that happens in the United States, almost no utilization for us. Like I say in the United States, risk kind of originated from the United States. To some extent it happens in the London marketplace as well, but we have a preferred a relationship with a couple of other specialty wholesalers and focus our efforts making sure we're delivering the same quality outcome for our clients that we came back from utilizing our own teams.
Next question please.
Thank you. [Operator Instructions] Our next question comes from Paul Newsome with Piper Sandler. Your line is open.
Good morning, and congrats on the quarter. My question is about the potential persistency of some of these market share gains. I'm thinking about back to the JLT acquisition and it seemed to me there was a little bit of drag on organic growth for about a year as things sort of moved through the system and the integration happened. Do you think there's a read through to, kind of what's happening for you on a positive sense today that as you hire these new people, it really takes, kind of a year for the full revenue impact and so that's kind of how we should think about the benefit of the flight to quality? It’s kind of a year-by-year kind of effect?
Yeah, I would start Paul by saying, you know, we're an awfully big company. So, we make decisions to add to our talent, capability, and our broad capabilities, more generally, to build skill, content, etcetera. As opposed to necessarily saying, oh, that person is going to cost us this amount and we expect them to produce this amount over the course of the next couple of years. Your basic premise that will be to hire senior people that generally you expense first and then some revenue might come later.
Yeah, if the premise is true, as they get involved with the firm more broadly, but unlike some of the [PT] firms, it's not just focused on, you know, this is a producer, this is what they think their book of businesses and you know, and we are buying, you know, that produce, that's just not how we operate. We're much more of a content culture building capabilities.
But John what are your thoughts on that?
The market shares is a hard thing to measure. I've read some estimates of personal insurance premiums will grow about 10% this year. So, if you use that as a proxy for the market then, you know then, yes, we cannot share. You know, I mentioned earlier, we're picking up some new business, you know [indiscernible] construction, primarily. Our win rates are up [indiscernible] when I look at the success in RFPs, it's up compared to historical levels, and the number of offensive RFPs, defensive RFPs is considerably better, which it's been passed. All I think speaks to the quality of the time. And at the same time, we're investing in talent that's going to drive the future growth. So, we’re [on pace], we have good momentum, and we're excited about what that means for us [indiscernible].
Anything else, Paul?
Yeah, just a little bit more on the market share, it looks like it came everywhere in terms of gains, in your businesses, is that really a fair sense? Or were there some benefits 0 business that you [indiscernible]?
This is the [lowest level] of business growth that we've seen, certainly, since I've been at the company. And so it is occurring in many different spots. And I would put it down to that one of our fundamental growth market, risk strategy and people, you know, companies whether you're in a large account segment, the middle market segment, as a small segment, if you work for an organization or government, you have to focus on those three things. They're completely relevant to how you approach the business. We've got competitive advantages that starts with the quality of our people, our culture. Large capabilities that got even further gone in through the acquisitions we've done over the last number of years, most notably JLT. And our global footprint, those are competitive advantages.
We don't have a lot of competitors in any way that can match up to those advantages. And we continue to acquire best-in-class businesses. Our number one focus is on quality, and history of success. And so that's particularly in middle market brokerage. And we've got all kinds of opportunities. We spoke about cyber, and climate in our scripts, for digital, small commercial, you know, risk awareness in general is much higher. And so, you know, we're – as I've mentioned before, the pandemic maybe brought us closer than we ever were before. We're more connected. We're more collaborative than ever before. And we're leveraging our combined strengths like never before. So, all of those factors come together and we are a more formidable force in the market. And we're going to win business. And you know, that's going to continue.
Thank you. That's great.
Next question.
Thank you. I would now like to turn the call back over to Dan Glaser, President and CEO of Marsh & McLennan for any closing remarks.
Okay. Well, that's a first. Okay, but I appreciate everyone joining us on the call this morning. I want to thank our 70,000 colleagues for their commitment, hard work, and dedication to Marsh & McLennan, and I look forward to speaking with you next quarter. Thank you very much.
This concludes today's conference call. Thank you for participating. You may now disconnect.