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���������ֳ�’ sector outlook for U.S. insurance brokers remains stable. U.S. commercial insurance premium rate improvement supports near-term organic revenue growth. Profitability levels remain favorable, but may be at or nearing a peak as efforts to drive substantial efficiencies and margin improvement over the last decade approach conclusion. Diverse product and geographic platforms, strong customer retention and technology investments to leverage the industry’s value proposition all support earnings stability going forward.

The rating outlook remains stable. ���������ֳ� expects operating performance and balance sheet strength to remain supportive of current ratings, with limited potential for rating changes over the next 12–18 months. Potential actions on individual companies will reflect performance against rating sensitivities, specifically around financial leverage, as measured by debt/EBITDA. Gauging long-term financial leverage targets has proved challenging as companies’ periodic execution of sizable acquisitions can lead to variability in outstanding debt levels. EBITDA can be affected by integration efforts, restructuring projects and other nonrecurring items.

Marsh & McLennan Companies, Inc. (MMC) serves as a case in point. ���������ֳ� downgraded MMC’s ratings to ‘A–’ with a Negative Outlook in January 2019, following the initial transaction-related debt financing of the Jardine Lloyd Thompson plc (JLT) acquisition. The Negative Outlook reflects anticipation of a higher run-rate leverage target as well as inherent execution and integration risks and uncertainty tied to realizing anticipated expense savings and retaining key employee and clients going forward.