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Segment Information

9 Months Ended

Sep. 30, 2020

17. Segment Information

We have three reportable segments: brokerage, risk management and corporate.

The brokerage segment is primarily comprised of our retail and wholesale insurance brokerage operations. The brokerage segment generates revenues through commissions paid by underwriting enterprises and through fees charged to our clients. Our brokers, agents and administrators act as intermediaries between underwriting enterprises and our clients and we do not assume net underwriting risks.

The risk management segment provides contract claim settlement and administration services for enterprises and public entities that choose to self-insure some or all of their property/casualty coverages and for underwriting enterprises that choose to outsource some or all of their property/casualty claims departments. These operations also provide claims management, loss control consulting and insurance property appraisal services. Revenues are principally generated on a negotiated per-claim or per-service fee basis. Our risk management segment also provides risk management consulting services that are recognized as the services are delivered.

The corporate segment manages our clean energy and other investments. In addition, the corporate segment reports the financial information related to our debt and other corporate costs, external acquisition-related expenses and the impact of foreign currency translation.

Allocations of investment income and certain expenses are based on reasonable assumptions and estimates primarily using revenue, headcount and other information. We allocate the provision for income taxes to the brokerage and risk management segments using the local country statutory rates. Reported operating results by segment would change if different methods were applied.

Financial information relating to our segments for the three and nine-month periods ended September 30, 2020 and 2019 is as follows (in millions):

	Three-month period ended September 30,						Nine-month period ended September 30,
	2020			2019			2020			2019
Brokerage
Total revenues	$	1,294.6		$	1,195.9		$	3,931.3		$	3,709.0
Earnings before income taxes	$	276.4		$	199.9		$	935.0		$	794.6
Identifiable assets at September 30, 2020 and 2019							$	18,641.2		$	16,261.6
Risk Management
Total revenues	$	244.3		$	246.3		$	717.0		$	724.8
Earnings before income taxes	$	25.3		$	21.7		$	64.1		$	64.7
Identifiable assets at September 30, 2020 and 2019							$	964.5		$	920.8
Corporate
Total revenues	$	310.2		$	383.0		$	651.7		$	1,039.8
Loss before income taxes	$	(92.2	)	$	(106.8	)	$	(261.9	)	$	(317.2	)
Identifiable assets at September 30, 2020 and 2019							$	2,209.2		$	1,991.4
Total
Total revenues	$	1,849.1		$	1,825.2		$	5,300.0		$	5,473.6
Earnings before income taxes	$	209.5		$	114.8		$	737.2		$	542.1
Identifiable assets at September 30, 2020 and 2019							$	21,814.9		$	19,173.8

Disaggregation of Revenue

We disaggregate our revenue from contracts with clients by type and geographic location for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

Revenues by type and segment for the three-month periods ended September 30, 2020 are as follows (in millions):

			Risk
	Brokerage		Management		Corporate			Total
Revenues:
Commissions	$	889.9	$	—	$	—		$	889.9
Fees		293.2		202.6		—			495.8
Supplemental revenues		54.7		—		—			54.7
Contingent revenues		34.5		—		—			34.5
Investment income		18.9		0.1		—			19.0
Net gains on divestitures		3.4		—		—			3.4
Revenues from clean coal activities		—		—		310.8			310.8
Other net losses		—		—		(0.6	)		(0.6	)
Revenues before reimbursements		1,294.6		202.7		310.2			1,807.5
Reimbursements		—		41.6		—			41.6
Total revenues	$	1,294.6	$	244.3	$	310.2		$	1,849.1

Revenues by type and segment for the nine-month period ended September 30, 2020 are as follows (in millions):

			Risk
	Brokerage		Management		Corporate			Total
Revenues:
Commissions	$	2,734.6	$	—	$	—		$	2,734.6
Fees		858.1		604.7		—			1,462.8
Supplemental revenues		164.0		—		—			164.0
Contingent revenues		117.0		—		—			117.0
Investment income		53.0		0.6		—			53.6
Net gains on divestitures		4.6		—		—			4.6
Revenues from clean coal activities		—		—		652.1			652.1
Other net losses		—		—		(0.4	)		(0.4	)
Revenues before reimbursements		3,931.3		605.3		651.7			5,188.3
Reimbursements		—		111.7		—			111.7
Total revenues	$	3,931.3	$	717.0	$	651.7		$	5,300.0

Revenues by geographical location and segment for the three-month periods ended September 30, 2020 are as follows (in millions):

			Risk
	Brokerage		Management		Corporate		Total
Revenues:
United States	$	866.6	$	203.9	$	310.2	$	1,380.7
United Kingdom		230.8		9.8		—		240.6
Australia		56.6		26.2		—		82.8
Canada		57.1		1.4		—		58.5
New Zealand		37.0		3.0		—		40.0
Other foreign		46.5		—		—		46.5
Total revenues	$	1,294.6	$	244.3	$	310.2	$	1,849.1

Revenues by geographical location and segment for the nine-month period ended September 30, 2020 are as follows (in millions):

			Risk
	Brokerage		Management		Corporate		Total
Revenues:
United States	$	2,613.3	$	602.2	$	651.7	$	3,867.2
United Kingdom		746.2		29.4		—		775.6
Australia		156.6		72.5		—		229.1
Canada		171.5		3.9		—		175.4
New Zealand		103.0		9.0		—		112.0
Other foreign		140.7		—		—		140.7
Total revenues	$	3,931.3	$	717.0	$	651.7	$	5,300.0

Revenues by type and segment for the three-month periods ended September 30, 2019 are as follows (in millions):

			Risk
	Brokerage		Management		Corporate			Total
Revenues:
Commissions	$	809.9	$	—	$	—		$	809.9
Fees		278.9		211.2		—			490.1
Supplemental revenues		49.8		—		—			49.8
Contingent revenues		30.4		—		—			30.4
Investment income		23.6		0.4		—			24.0
Net gains on divestitures		3.3		—		—			3.3
Revenues from clean coal activities		—		—		386.0			386.0
Other net losses		—		—		(3.0	)		(3.0	)
Revenues before reimbursements		1,195.9		211.6		383.0			1,790.5
Reimbursements		—		34.7		—			34.7
Total revenues	$	1,195.9	$	246.3	$	383.0		$	1,825.2

Revenues by type and segment for the nine-month period ended September 30, 2019 are as follows (in millions):

			Risk
	Brokerage		Management		Corporate			Total
Revenues:
Commissions	$	2,528.0	$	—	$	—		$	2,528.0
Fees		796.8		622.7		—			1,419.5
Supplemental revenues		153.4		—		—			153.4
Contingent revenues		107.9		—		—			107.9
Investment income		60.6		1.3		—			61.9
Net gains on divestitures		62.3		—		—			62.3
Revenues from clean coal activities		—		—		1,042.7			1,042.7
Other net losses		—		—		(2.9	)		(2.9	)
Revenues before reimbursements		3,709.0		624.0		1,039.8			5,372.8
Reimbursements		—		100.8		—			100.8
Total revenues	$	3,709.0	$	724.8	$	1,039.8		$	5,473.6

Revenues by geographical location and segment for the three-month periods ended September 30, 2019 are as follows (in millions):

			Risk
	Brokerage		Management		Corporate		Total
Revenues:
United States	$	795.9	$	208.6	$	383.0	$	1,387.5
United Kingdom		221.8		10.4		—		232.2
Australia		52.9		22.5		—		75.4
Canada		52.6		1.0		—		53.6
New Zealand		36.1		3.8		—		39.9
Other foreign		36.6		—		—		36.6
Total revenues	$	1,195.9	$	246.3	$	383.0	$	1,825.2

Revenues by geographical location and segment for the nine-month period ended September 30, 2019 are as follows (in millions):

			Risk
	Brokerage		Management		Corporate		Total
Revenues:
United States	$	2,487.6	$	614.0	$	1,039.8	$	4,141.4
United Kingdom		674.2		30.6		—		704.8
Australia		157.7		65.0		—		222.7
Canada		168.2		3.3		—		171.5
New Zealand		107.7		11.9		—		119.6
Other foreign		113.6		—		—		113.6
Total revenues	$	3,709.0	$	724.8	$	1,039.8	$	5,473.6

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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