MMC: Quality at a fair/good price

MMC is in the business of insurance brokerage. This means they don't take on the risk of insurance, it just connects buyers which are large organisations with sellers (insurance companies). Their cut is a percentage of the insurance premiums and as such they this makes them asset light. Switching costs are moderate but the benefit of switching is minimal which makes it the relationships sticky. The remaining 25% of the money comes from the consulting arm, which doesnt really have as great a moat as the insurance brokerage business does. The current panic is because insurance premiums are moderating after years of skyrocketing. The thinking is that if premiums stop rising, MMC's commissions stop growing. Insurance pricing is cyclical—it goes up and down like the tide. Over the long term, insurance premiums are only going to increase because the world the cost of risk will only increase with time. In terms of valuation, at current valuation we are getting FCF yield of over 5%. My estimates suggest that it can grow earnings at 7% CAGR (pricing/volume + reinvestment alpha). The current valuation multiple EV/EBIT is at 16 which lower than its 10 year average of \~18. Long term, i expect this can deliver above average returns (12% to 15%) CAGR