We are good to get started with the final session. Very excited to introduce and to host Carl Hess, CEO of Willis Towers Watson, or WTW for long. This is the last session of the night. I don't have a barbecue to go to, so we're going to go for six or seven hours. I have a barbecue. Well. Sorry. I want to start with a very all-encompassing question. You've been CEO for about a year and a half. Yes. Where are things? What's working? What's not? Where are you looking forward? Where are you pulling back? That covers a lot, but really, the floor is yours. It's been quite a ride, and we have come a long way over the last few years. In fact, if you had told me 2 years ago we'd be where we are now, I would've taken it, just to be clear. We have stabilized the business. No mean feat. We have rebuilt our talent base. We have gotten our organic revenue growth back to where the industry is, which really happy about, and we've accelerated our transformation program. Momentum is building for our offerings, and we think we have a unique place in the industries in we operate, helping our clients evaluate their risks and opportunities in what's a really complex macro environment. Complexity is often good for our business because it makes our clients have to think, and that all creates strong demand. From a market-facing perspective, I think we're doing what we said we would do back in our 2021 Investor Day. Right? Focus on growth, and the organic growth we've demonstrated over the last 3 quarters, I think, is a good indicator that there is good growth potential in this company. We have simplified how we go to market, both our client-facing structure and our corporate structure, and we continue to do what it takes to transform this company to be as efficient as it can be. We are not pulling back by any means. We continue to find good people to invest in, and we think they can add value to us over both the medium and the long term. On the flip side, we are trying to instill a bit more discipline and efficiency on the cost side. In terms of opportunities, in addition to driving more operating leverage from our long-term growth and driving increased free cash flow margin, as we discussed on our last earnings call, we do see a great opportunity to deepen and broaden our specialization strategy and Risk & Broking. That's an area where we've been showing strong success and strong organic growth. In our specializations, we continue to grow faster than the industry and faster than the rest of our business, so we think that pays off. Okay. Let me follow up that with maybe the obvious question. There are a couple of prospects in growing insurance brokerage. You could focus on small accounts, don't require that much specialization. This is no disrespect when I say that those are salespeople. Yeah. That's important. Specialization is a different approach. I was hoping you could share the thought process underlying that strategic direction. Yeah. If you're focusing on relationships or sales, and we focus on relationships. Everyone has to focus on relationships. If you focus on basically commoditized sales in the market, you can have success, but at scale, you're just not going to be differentiated at all. I look at it this way. If we tried to do that, I'd be walking, or my people would be walking into a room with being one of what, 30 players in the U.S., or 10 players in France or 10 players in Germany. Flip a coin. The odds are one in 10 or one in 30. Where you specialize, though, you're different. You may not be a fit for everybody. Where you are a fit, you're going to be different in a good way, and your odds of winning will go up significantly. They may not go to 100%. I wish they did. Right. They're going to go up significantly. I think you're getting better return for the resources you use in a specialized area, and that's one of the reasons we've continued to invest in our specialties. The trick for us is to continue to grow that out, continue to find areas where we can grow that out. Because the criticism you could make is, well, most of the market is general. You're a specialist. Is there enough room for you to play? I think our sandbox potential is plenty big here, so that doesn't worry me at all. That's a long time from now before we get demand constraint from the marketplace. There are other things we can do. We don't have to just do retail broking. We can continue our build out on MGAs and MGUs and use that same expertise in the specialist area to be able to drive added value to the client by being able to help price their risk and place it, not just place it. Okay. Let's focus on that. When you talk about specialization, I've made this comment a couple of times over the conference, specialty and insurance can mean a lot of things. Yeah. What does it mean to you right now? Yeah. There are probably two basic dimensions. One is a particular area of risks where they have unique characteristics. Having better knowledge and insight into those characteristics can help you drive a better bargain for the client. Let's take aviation risk as an example. Doesn't exactly look like something that's here on the ground in many ways, although some of them are trapped on the ground in many ways. Right? There are industry specialization, understanding the dynamics of a particular industry and the unique set of risks that they have into a client's individual portfolio can add value, too. We do both. Our global lines based in London are all about the former, aviation, aerospace. These are areas where the world comes to London because it's a particular hub of intellectual capital that can help manage those risks. There's things like real estate and hospitality, which is one of our industry verticals in the U.S., where this is boots on the ground. I know this type of hotel chain/assisted living facility/et cetera, where the lead line might be, in this example, property. You're helping with the suite of risks that a hotel owner might have to deal with, which obviously go well beyond property. Sure. Okay. That's helpful. I want to make one observation leading to a question, that is disclosure has gotten better, I'm going to give Claudia props for that, which should not be interpreted as me stopping to test you on things like that. The ability to compare Willis Towers Watson's organic growth with competitors is much easier. Some of the stuff that was less recurring has been broken out explicitly. Yeah. We can track that. It's actually tremendously helpful. We've seen that stabilization. The point I want to make is we can look at organic growth without book of business settlement gains. Yeah without investment income. We can see that it's followed the trajectory you laid out, going from really low immediately following the Aon deal collapse. Yep To impressive upper single-digit numbers right now. When you, I don't want to say pivot, but when you emphasize the specialization strategy, what are the associated investments with that and the costs and maybe the timeline for them bearing fruit? The general rule of thumb is we bring someone on in broking, where it's going to take somewhere between 12-18 months for them to get fully productive. I look at our experience, the people we've been bringing on since Independence Day in July 26, 2021. We didn't start till maybe early 2022, because of things like gardening leave or just the time cycle process. We track all this. They're actually ahead of schedule in terms of what they're bringing on. Okay Compared to compensation cost or fully loaded cost than we thought. They're not fully productive yet on average, because the average person we brought in, if you do the math, is sort of toward the fourth quarter of last year. Nine months plus in. There's some momentum we think we'll still get out of the people we've brought in. In terms of sort of where we are in the talent rebuild, I think largely where we want to be is the answer. Two years ago, we were significantly depleted. I mean, we'd spent a year and a half in regulatory limbo where everybody else could offer our people certainty, and we could offer them, "Yeah, at some point the deal's going to happen." Not a great place. Maybe. Right. We've reloaded our teams. We reloaded them in a way, though, that was different than what we had before. You look at our U.S. business. In 2018, we had largely a producer-led generalist business. We have hired back into largely a team-based specialist business. With last year's reorganization, the industry lines, which is now where most of the business is, it's just a very different looking business than what we had. We'll never stop looking for good people. I don't want to stop looking for good people. We're no longer in reload mode the way we were. Okay. One message or one inference that I'm going to take from your comments is that this wasn't something that emerged in the second quarter of 2023, if this is the rebuild since 2021. Oh, that's correct. In fact, the industry, the global line/industry strategy dates back to 2018. Okay. Actually, it just, like many other things around WTW, got put on hold while the we're going someplace else was the course of action. Right. Okay. I'm going to ask this in a numerical fashion, answer it however you think is appropriate. How should we think of the impact of this hiring in what's left of 2023, specifically on margins? Yeah. We still expect full year margin expansion for R&B. Okay. Just full stop. We had some expense headwinds in Q2 that I talked about on the call. We have been taking actions to mitigate them. Our major expense categories are comp and ben, and then things like travel, entertainment, et cetera. We are looking at all of them. The actions we've started will largely feel more like a Q4 activity than Q3. For the full year, we think that's going to be I'd also note margin for us is a little lumpy because Q4 is a heavy revenue quarter. The impact in terms of margin expansion we think will be heavier in Q4 than Q3 as a result. Right. To reconcile that statement, that margin expansion in Q4 should more than make up for any margin contraction in the earlier quarters. Okay. By the end of this year- By the end of this year we'll be feeling better. Okay. Let's take that one step further. How do you view the trajectory of margins? I know we have guidance for 2024. Yep. I'm hoping the world doesn't end then. How do things You and me both. That's good. Yeah, we don't plan on being satisfied by the end of 2024, full stop. For instance, we sized the transformation program at something we thought we could accomplish during the three-year period, not everything we thought we can do- to make this a more efficient business. We ain't done yet is the headline there. This is also, especially in R&B, it's a business where scale does matter. Right. You can get improved margin as you improve scale. Growing the business will help as well. Yep. We don't plan on stopping growing. Understanding that, is there a checklist that we can look at? Again, I don't expect you to pull it out and have one of those scrolls that drops to the floor and bounces on for several feet. I was hoping you could share some details of the specifics of the game plan for margins, because that really seems to be the prime. You've fixed organic growth, and I'm not sure you've gotten full recognition for that. Yeah. Over the short term. Right. It is a combination of the Transformation Program elements. Which are a combination of real estate, technology, and process improvement/workforce relocation. All of which is in progress and happening in at least the pace as well as we thought it would. Okay. We feel very good about landing the Transformation Program home by the end of next year, and we've sized that at $360 million of run rate, so we're a $10 billion plus or minus company. That math even I can do. We are looking for operational improvement in the business, ex Transformation as well. That won't be every quarter, but we are going to look for steady progress. We do look at our peers and say that gap is something we think we can narrow over time. They've been able to generate steady operational improvement. I don't think there's any reason we shouldn't have that, once we're done with Transformation, as part of our mindset as well. Okay, fantastic. One last R&B related question, then I want to open up. I want to make sure that people in the room have the opportunity to ask their questions. One other element has been sort of the year-over-year margin headwind from bookings. Yeah. The number has come down, frankly, even though there's a negative margin impact, that's a good news. It means that less talent is leaving the building. From your perspective, when do we say, "Okay, now bookings are at a normal run rate?" Because I don't think they're zero for anybody. No. We don't expect them to be. We've always said normal might be around $25 million. Okay. We know prior year book of business activity was around $11 million. We think what we're looking at a similar number for this year, although, whether it's Q3 or Q4, I'm not so sure, right? Right. There is a possibility that that could drop into Q4, so make our result a little lumpy again for our quarter, but not for the year- Right on that. I guess what's also helping us on a forward-looking base is the way we've chosen to rebuild. Book sales are largely a part of having a producer-driven business. As we've chosen to rebuild in what's largely not a producer-driven business, that makes You're servicing more accounts more with teams and less with individual people and should make the business stickier. Okay. We should think of it as being, the word we used to use is institutionalized. That's Yes. Okay. Many people have said I should be institutionalized. Well, I was never going to even think that. Okay, that's helpful. Other questions? I know we've been focusing on R&B, and I think that's an element of broad interest, and I want to make sure that I'm not overlooking anyone that had anything to ask. Otherwise, I'm going to move to HWC, with the acknowledgement that those of us that are P&C-focused- Yeah have a little bit of tunnel vision, and we sort of take that as given, even though it's 65%- Only 65, yeah. of what you do. Can you give us an update in terms of really the broad picture there? Yeah. What's going on with recruitment, if necessary, growth, margins? Yeah. Unlike R&B, right, HWC was actually largely stable- throughout the whole period of the Aon deal. Part of that is because we actually have an excellent market position in each of the businesses with HWC. When you're the market leader already, there was less worry about what's going to happen to you under a combination. We actually did quite a good job of continuing to retain people, which leads to retention of clients, and continued to see for quite a while new business opportunities in there. In areas like our pension retirement business, there aren't that many choices out there, so not getting the opportunity was probably not going to be a thing. We were able to sort of push that for a while. The biggest place where we did suffer any human capital losses was in our health broking business. Which did sort of have the same dynamics as the corporate Risk & Broking business regard to talent. We have rebuilt that business quite nicely again. I think we are very well positioned for this and many other type of economic environments we find ourselves in going forward there. The complexity of the situation we all find ourselves in has led to strong demand for HWC services. The growth rate the last few quarters has been significantly in excess of historical levels. Part of that is demand based, and part of that is I've asked Julie Gebauer, who runs that segment, to actually make people focus a bit more on growth than they had historically. That can be growth within their business or can be growth through what we call smart connections, looking for an opportunity for a colleague to help. Most of HWC shares a common buyer hub. Which is good because that you actually have great brand portability between one service we offer another. We typically sell more than one thing to the same client. It's an easier and cheaper sale than going to a new logo. For sure. Is there anything analogous to the specialization that we're seeing in R&B within HWC? To some degree, yes. Let's take that pension actuarial business, right? You have to be a pension actuary to sign off on the financial health of a pension plan. That by definition means you are a specialist. We are typically our client's outsource pension department, is the way to look at that. Okay. It's not necessarily a specialty in the way of within an industry, the way aerospace is. We don't specialize by industry. We specialize by subject matter expertise. Whether it's that executive compensation, we have the world's biggest database of executive compensation. There's a bit of a moat effect around what we do, not meant in any kind of antitrust fashion whatsoever. No, understood. Then maybe a follow-up to a point that you made about the common clients that you have across the HW and the C. Obviously, the holy grail would be to continue that to the R&B. Yeah, although you can't push that too hard. Okay. We tried back when we became WTW. We tried to push that quite hard. The risk buyer and the HR buyer in an organization in the large market are different. They don't talk to each other. They don't like each other often, right? Trying pushing that too hard, it's just not worth it, right? Okay. There's more productive areas for sales activity. In the mid-market, however. Right especially outside the U.S., where healthcare is just not the big ticket it is for us, right? Socialized medicine. You actually quite often have a common buyer. Right For insurance, whether it's health insurance or property insurance, that is one place where we do emphasize going to market more together, and we do have more crossover. Okay. How does that interplay with the specialization? Because healthcare is a bit agnostic with respect to that. Right The answer is it's just another line that we're sell. Think of it as another insurance line we're bringing to that relationship. You're not any worse off anywhere? Oh, no. Okay. Perfect. We talked a little bit about this, and again, I'm happy to share the charts. With organic growth improving the a touch of gray associated with that silver lining, if you will, is that the comps get a little bit tougher in a what have you done for me lately industry? Yeah. How should we think of that? How should we think of organic growth going forward? Yes, the comps are getting a little tougher, but other hand, we've got better resources and more permission to go beat them than we did. A year or two ago, people were looking at WTW and kind of going, "Well, should I give them a try? Because they've suffered a lot of damage. Are they really back?" We get our fair share of at-bats now, and we're getting more than our fair share of hits. No, we're not. There is no such thing as more than our fair share of hits. We deserve it all. Right. We're doing quite well with respect to that, and so I think that actually gives us some positive momentum. I talked about the hiring and the fact that they're not fully productive yet. That's also some positive momentum. Even though we say mid-single digit organic growth for the year, I think there's some upside potential- Okay to that in terms of how we might end up this year. All right. Can I push you for 2024 yet? It's early days. Fair enough. I look at momentum across the businesses, and it's hard not to be pleased with the, there's a wind at the back of our sails, whether that's the fact that on the consulting side, the world still remains very complex. People haven't sorted out new ways of working still, and you still argue about how many days a week to be back in the office. There's all sorts of opportunities for us to help clients with workforce management. Asset volatility is still quite a thing, so our investment business continues to experience demand. People realize it's too hard to do for themselves. They want us to do it. There's just good demand across all the portfolio. The 193-year-old brand, no, it's getting 195 at this point, year-old brand we represent- now that it's firmly established as a brand that's there to stay, helps a lot. Okay. No, that's good to hear. I don't know if you mean the Corroon & Black, I think. Well, the Willis. Henry Willis. Oh, okay. Fair enough. I'm going to pretend that I'm at my computer now, looking at my model and stuff like that. Is there any useful guidance you can give us for some of the shakier issues, book gains, the tax rates? Yeah recognizing that none of this is final until its final. Yeah investment income. Those are issues that have been bouncing around, and we're hoping that at least we model it accurately, and that. Yeah the buy side anticipates things accurately. Let me try a couple. I talked about book gains earlier, right? $10 million year, the first two quarters, maybe $10 million more for the last half, and we think that's Q4. We had $11 million in book gains last year, Q3. Right. That's probably a headwind for Q3. For the year, kind of neutral. Interest income. We've historically sort of split how we record interest income in the business. The reason for that was our Willis Limited operation in London, right? Covered both our retail insurance and our retail and our reinsurance operations, and you just couldn't split the interest income between them, so we record that in corporate. With now Gallagher, the co-brokering with Gallagher ended. That's now all retail. We are now recording with Q3. We're going to be recording that in just the R&B segment. Right as opposed to be corporate. That is a neutral thing from a total. Bottom line. Right. WTW perspective, you'll see that in the R&B margins. I guess the other thing to look at is taxes. Right? I'm going to quote this because otherwise Claudia is going to be mad at me, right? Our year-to-date tax rate for the first half of the year was 22%, which was a modest uptick from the prior year rate of 20.8%. We expect a modest uptick for the full-year tax rate from the 20.9% we reported for last year as well. Okay. She's smiling. I passed. Okay. All right. Can I infer that that uptick is a consequence of the first half of the year, or are there other factors? There is change of legislation with U.K. With U.K. Oh, okay. Sorry. All right. U.K., right. They're not part of the U.K. anymore. I knew that. You got the new bit. Okay. Let's talk about transformation. Yeah. I always get nervous when I'm talking about technology because I'm not an expert by any stretch of the imagination. Yeah. I took all of my actuarial exams using an abacus. I was hoping that you could give us a little bit more color into what exactly the plan entails, so those of us from the outside. Yeah that have limited skill, but we can see what's going on. Yeah. We can monitor the progress. There are three components to the program. Back in Investor Day, we thought they were roughly equal size, right? To the $300 million we forecast. First was real estate, which was about building the office of the future, which would have less square feet and a more collaborative environment than the office of the past. That has gone great. We were already agile before COVID in most every office, and so we were ready for what this is. It's creating a better work environment, that people can come to the office when they need to come to the office, and that's to collaborate and to learn, not to read emails. Right? Probably the only headwind there is it's not the world's greatest sublet market. I've heard. That's just, we can manage our way through that. The second is technology. There's a couple themes to that. One is finish journey to the cloud, and we're there now. Right. We've sort of moved as much of the estate to the cloud as we're ever going to move- Okay which is the '90s. There are some things you're just going to keep on-prem for risk management reasons or other reasons. The part we're not necessarily all done with, which is sort of where we have multiple systems, getting down to, it may not be one in all cases, but a lot less than we've had. Part of this is about failure to integrate in the past. Right. My predecessors were often better at buying things than integrating things. Part of it is about some of our people's relentless pursuit of perfection. "Oh, no, the other 30 chatbots we built weren't good enough. I'm going to build the 31st." All right, and that we just sort of said, "Thou shalt not." Right. Look, I understand perfection, but we can't afford perfection. We can afford excellence. Right. The third part of it is operational improvement, and it sort of relates to the technology in a way, we have been doing the same sorts of things a lot of different ways throughout the organization. Part of it's because we've just never bothered to try and integrate successfully on some of these things. We are busy re-engineering processes, including where those processes will be performed. Some of that's done, and a lot of it is a work in train that will be completed by the end of next year. Okay. As I said, feel pretty good about the progress on all three of those, but not willing to declare success yet till we lock down Q4 financials. Okay. I do want to, again, look around the room to see if there are any questions, but I'm hoping to dig a little bit deeper in the processes, because I think I get it as a concept, but maybe a couple of examples would really flesh that out in terms of changes that you've made and where we have or should see that in the income statement. Yeah. Well, let's zoom in on Risk & Broking for a second, right? Specifically, let's look at the placement process. We have a client who's got a risk, right? That needs to be bound and that needs to be documented in place. That might be done purely manually by the local broker- His team. It's often his, by the way. That's not an accident. His team at the local site. Then, a couple of things happen, right? One is we don't track anything except the winning bid, so we get no price information from that. Right. Everything goes to the garbage. That's not helpful. Second, we don't have any documentation other than the local office of what the coverage is. If in fact there is a claim, we've got to go dig up what happened, what is covered, what is not. Did we have the contract written in the most favorable way for our client the first time? Have to reinterpret this, which is expensive. Where's the claims handling being done? Where is the certificate being issued? What we're trying to do is centralize where all that's done and get it done in the same way, so that if we develop contract wording, for instance, that we think is most favorable for a certain kind of coverage for certain kind of clients, we're going to see that in every contract we can with the same insurance company, at the very least, and hopefully with every insurance company we look at. We run the bid process more professionally. We trap the price information we discover as part of the bid process, so that helps inform other client situations so we can understand the price of risk better, so we can help the clients determine where they're going to spend their insurance dollar more efficiently. Right. Okay. That's very helpful. I can go on and on and on, but I don't think that's going to help progress. I'd probably welcome that, but I understand what you're saying. How should we think of the timeline? I'm particularly curious about monetizing the intelligence that you are now retaining, because some of that is expense side, right? You just haven't been able to optimize the processes. Yeah. You're absolutely right. We see some of this as revenue side. Right. Very much so, because that intelligence is packageable. Right right? Saleable to a variety of people. Right. You have to be very careful how you do that, right? Yes. Data privacy, one. Who are you working for, being another. It is doable. Right. We've seen that at least one competitor, where you have the possibility to monetize this data. That can take the form of MDI, it could take the form of service agreements with carriers, it could take the form of analytics you sell to clients, which is something we do today. Okay. Is there a way of describing the timeline until the associated revenues and expenses are a good run rate? I think we view this as a couple years' journey. It never probably finishes because I look at the analytics we have today compared to the analytics we had three years ago. We've made great progress, but by no means are we done yet. Right. This is something that, I guess, hard to flag directly. I guess I'd point out this way. Today, we have a $400 billion Insurance Consulting & Technology business- that's built all around this. Its client right now is the insurance company customer. Right. Right. That business has been growing in single-digit or better for some time. Willis Towers Watson's a very good owner of it, and we see that sort of potential in the portfolio for what we can do with this. Okay. Fantastic. I was hoping to talk a little bit about the free cash flow margin trajectory and ambitions, because one of the elements of feedback that we'd gotten was that 16% sounds a little Yeah. Let me correct you. I think we said 16% or greater. Okay is what we saw as the potential for long-term free cash flow margin. Yeah. Okay. Can we flesh out for you or greater? Yeah, sure That's a tough question. The short term of things, right? TRANZACT, right? Right. We've said we think the cash drag from that is going to continue to subside, and it'll even get to cash flow positive in the next few years. Not necessarily cash flow generated at the same rate as the rest of the organization- Stop being the 200 basis points drag it is today. Right. Which is helpful. Transformation spending is going to subside. Hopefully Andrew will pay the last bill at some point in the first or second quarter of 2025. Okay. That drag goes away. Really importantly, right, if we continue to improve adjusted operating margin and grow the way we can, that should be a double whammy in the positive for free cash flow growth. Getting our margins to where our competitors, at least within spitting distance of our competitors, I think is a critical part of this. We want to accomplish that not just through transformation efficiencies, but improving our business mix at the same time. TRANZACT's an easy one to point to, but you can look at parts of the broking. We're very light right today at MGAs and MGUs, and we have efforts on to deepen that footprint. I've had questions about reinsurance broking, which has historically been a more profitable business than retail broking, and resuming our place in it. These are all things we want to look at to make sure we can maximize the value of our portfolio. Right Generate the cash that investors would like. My sense is you've got a presence in MGAs and MGUs, not necessarily on the reinsurance side. Am I thinking about that correctly? That's correct. Although it's relatively light compared to our competitors, right? Right. MGAs, MGUs today are a relatively small part of the business. We know how to run them, but we're not doing it at scale. Affinity is another example of something we do- Not nearly at the scale we could be doing. Okay. If we can take a second and just jump into TRANZACT. There have been recently a number of companies that focused solely on competing with TRANZACT, and their record was kind of mixed. It seems like on the outside, TRANZACT didn't have a lot of those issues, just in terms of turbulent growth and retention problems. Yeah. I was hoping you could give us a TRANZACT story. Well, TRANZACT is a business that's at its heart, sells Medicare supplement, Medicare Advantage, and life insurance to Medicare-eligible people. Right. That's a growing population. With the advent of Medicare Advantage, there was a definite market opportunity there that TRANZACT and others faced. I think what's maybe been a bit different for us is because TRANZACT is part of WTW, it's managed a bit differently than some of the competitors have been, which most of them went for growth at all costs. We've always taken a growth at a reasonable cost perspective. We get our leads from a variety of sources. They range in quality, and at some point, the quality will deteriorate to the point where the value of what you're trying to do turns negative. Right. We like profits, we may have stopped at a point before others did, I think that served us well, for a variety of reasons. By keeping growth, which was healthy, but it's made the free cash flow management tamable. Not necessarily desirable. I don't think anyone here is particularly pleased with the cash drag from TRANZACT, but we've said it's 200 basis points. It's not 2,000 basis points. We do manage the growth versus profitability versus free cash flow as part of that mix, and we'll continue to. The last place I think we've been stay out of trouble, and I wish this was a wood table to knock rather than a glass table is, that receivable is an actuarial estimate. It is what you think you are going to get in future cash. In the actuarial estimates, shockingly, says one actuary to another, are subject to error. Yes. We have rather a lot more actuarial talent than our competitors do. While we don't do that valuation ourselves, we use an independent third party. We're able to have, I think, better insight into what that might be and are able to make sure we have a diversified set of risks going into that can help produce a more stable outcome. No, that makes sense. Some of it, I'd come in with the premise that the fact that the entirety of WTW is not ASC 606 accounting, so you're not as entirely subject to that sort of estimation error. Well, we're all subject to it. Subject- It's not applicable. It's not as Yeah disruptive, distortive Yeah. That's correct. That's a better way of saying it. This was a big issue for TRANZACT. It was a big issue for Willis Re with quota share. Right. That's one less problem I have. Right. That was a good time, I will say. Again, if there are questions here, please let me know. Otherwise, I want to move to capital deployment in terms of prioritizations. I know we've certainly heard a fair amount of talk about share purchases, but how do you think about your priorities for cash utilization as free cash flow improves? The first thing I'll say is pretty much motherhood and apple pie, which is we want to deploy our capital in the highest return opportunities. We do think that given our share price being where it is, that's highly likely to be share repurchase as an opportunity, but we have to think strategically as well. Remaining relevant in the businesses we're in is important too, and if everybody else is growing at organic plus X for inorganic and we just grow at organic, there's a danger we lose relevance. We do think about that. Over the short term, we think capital deployment's going to be through share repurchase, primarily. To color that, year to date, as of last quarter, we had $450 million of share repurchases, and we expect a similar amount for the second half. Going to put that in place. We'll continue to evaluate the balance, but as I said, right now, share repurchases look like where we're concentrating the activity. Okay. Does specialization within R&B give you a cleaner focus on acquisition targets if and when that's the best use of capital? It does, although there are going to be fewer of them. Right. They're likely to be smaller. Because you look at our competitors as examples, they tend to be very generalist in nature. If you were going to try and do that, and there's nothing to prevent us from going generalist, but I wouldn't want to necessarily put [National] together. Right. I could see a sleeve of generalist as part of the mix. However, I've been saying this for a couple of years now, doing it while we're still getting our operational act together on the business we do have, is not something I think that's going to be very productive for the organization. Fair enough. I think you'll be- Wait till we've got our house in order, then think about what additions you want to build onto it. Okay. That makes sense. I've got one final question, again, I want to look around to make sure I'm not looking at anything. I want to talk about the macro environment- Yeah How that impacts WTW. This is maybe segment by segment. Yeah on a more granular basis, how things are manifesting themselves in terms of client demand and capability. Finally, you as an enterprise have to deal with inflation on your own. Yeah. I was hoping it's a common question applying inside and outside. Yeah. Let's start with the revenue side, which is a little more fun to talk about, right, in some ways. The effect on inflation on insurance pricing, I think is pretty well discussed, right? Yeah. That is a bit of a tailwind. It's not great for our clients, but it is great for our commission book. Recognizing that as prices go up, our clients can buy less to offset it. Right. If your budget for insurance this year is $2 million, just because rates have gone up doesn't mean you're going to automatically bump up your budget. We're a bit insulated on the downside as well as muted on the upside from that. Right. On health insurance, though, it tends to bleed through a bit more. More directly, in other words, dollar for dollar. Exactly. Yeah. Okay. There is some help from that. Our client is the corporate, right? It's not the insurer. We push back and try and get better rates where we can and shop around where we have to. In some ways, don't oversell the effect of inflation on our insurance book. However, right, the complexity and the uncertainty is good for us, right? That's true very much for both segments, right? Complexity and uncertainty generates volatility. That makes clients revisit their risk-buying decision, which may make them rethink the efficacy of their current incumbents. We see more opportunity. We're at bats there as a result. On the consulting side, consulting does really well when there's change, right? Right. As long as change is not so severe that people stop making decisions, we tend to do pretty well. The current environment tends to benefit us pretty well. We've got a big compensation consulting business that's trying to help employers deal with their wage inflation costs, the whole new ways of working and what that means, and how do you deal with that. In general, this is not a bad economic environment for us to be in. On the flip side, right, I do have to manage our costs as well. We have structured our comp programs in a way that has a large variable compensation element to it. Even though our fixed costs are going up and we have a lot of people who rely on wages from WTW to feed themselves, and I'm very aware of that, and we want to make sure they continue to do so and stay with us. We do have some pressures in that regard. At the macro level, it's not fully felt through because I can adjust some of that in variable compensation. We have taken the opportunity to make sure we manage the costs that aren't critical for running the business as tightly as we can. We've done some of that in the third quarter. As I said before, that we think will bleed into the fourth. Things like travel. Travel costs are way up. Well, maybe you don't need to send three people to that meeting. You send one and have two come in via Zoom or Teams. Just very practical things that, frankly, our clients are very accommodating about. I guess the other thing I didn't mention was higher inflation means higher interest rates means more fiduciary income. Right. We do have seen some of the benefit of that as well. Last comment on labor, just on there, because it is the biggest cost we have. Our attrition's actually come down very nicely. Even on the low side of expectations. Right. With lower attrition, that gives you a bit of more flexibility on what you can do with overall workplace costs at the same time. Right. That's been, I would say, unexpected, because we had hoped the actions we take would work, but it's been helpful. Okay. I'm going to throw in one last question because we're running out of time. Is lower than expected attrition, are there any challenges associated with that? Well, you could end up with too high a payroll. Right If you don't manage it carefully. What it does let you do is manage your payroll, right? Right. If you have much higher than expected attrition, you've got to stick with the people you have. That's true. Right. You can't optimize anymore. Yeah. There's nothing to optimize with. There you go. Well put, Meyer. Okay. With that, we are at the end of the session and the end of the conference, thank you very much.