Change in Presentation of Fiduciary Assets and Liabilities

12 Months Ended

Dec. 31, 2023

Change in Presentation of Fiduciary Assets and Liabilities

5. Change in Presentation of Fiduciary Assets and Liabilities

In first quarter 2023, we revised the presentation of certain amounts in our consolidated balance sheet and statement of cash flows primarily to separately identify and present fiduciary assets and liabilities. Specifically, we have reclassified prior period balances of fiduciary assets historically included in restricted cash and premiums and fees receivable into a new line on the balance sheet, fiduciary assets. Additionally, we have made certain immaterial revisions to fiduciary related balances including premiums receivable and premiums payable to underwriting enterprises related to the former Willis Re operations from gross to a net presentation to align to our accounting policy and presentation. We also added a new accounts receivable, net line in the balance sheet that includes accrued agency billed commissions, fees, supplemental commissions, direct bill commissions and contingent commission receivables due to the company. Fiduciary assets represent cash held and insurance and reinsurance receivables that relate to our clients and are held on their behalf. Fiduciary liabilities represent the corresponding amounts that are owed to underwriting enterprises on behalf of our clients. We made the applicable revisions and reclassifications to the prior-period amounts to conform to the current period presentation. These changes had no impact on the consolidated statement of earnings, comprehensive earnings or stockholders’ equity for all periods presented. Additionally, these revisions did not impact our previously reported net increase in total cash (i.e., net cash, cash equivalents and restricted cash in the aggregate on our statement of cash flows).

The revisions and reclassifications to the presentation of the consolidated balance sheet include the following:

Assets

•

Restricted cash line was removed. Amounts were reclassified to cash and cash equivalents and fiduciary assets. See Note 20 - Supplemental Disclosures of Cash Flow Information for a reconciliation of our end of period cash, cash equivalents, restricted cash and fiduciary cash balances.

•

A new fiduciary assets line was added. Amounts were reclassified from restricted cash and premiums and fees receivable.

•

A new accounts receivable, net line was added. Amounts were reclassified from premiums and fees receivable and other current assets.

•

The premiums and fees receivable line was removed.

Liabilities

•

A new fiduciary liabilities line item was added. Amounts were reclassified from premiums payable to underwriting enterprises.

•

The premiums payable to underwriting enterprises was removed.

The revisions and reclassifications to the presentation of the consolidated statement of cash flows include the following:

Net cash provided by operating activities

•

The net change in premiums and fees receivable was removed.

•

A new net change in accounts receivable, net was added.

•

The net change in premiums payable to underwriting enterprises was removed.

Net cash provided by financing activities

•

A new net change in fiduciary assets and liabilities was added.

In addition to these changes, we moved the net change in fiduciary assets and liabilities from the operating section to the financing section of the statement of cash flows.

The effect of the changes to the presentation of our consolidated balance sheet as of December 31, 2022 is summarized below:


	December 31,
(In millions)	Reported 2022		Change			Revised 2022
Cash and cash equivalents	$	342.3	$	396.1		$	738.4
Restricted cash		4,621.9		(4,621.9	)		—
Premiums and fees receivable		16,408.9		(16,408.9	)		—
Fiduciary assets		—		18,236.7			18,236.7
Accounts receivable, net		—		2,911.1			2,911.1
Other current assets		1,461.5		(1,062.5	)		399.0
Total current assets		22,834.6		(549.4	)		22,285.2
Total assets		38,907.8		(549.4	)		38,358.4
Premium payable to underwriting enterprises		18,698.2		(18,698.2	)		—
Fiduciary liabilities		—		18,236.7			18,236.7
Accrued compensation and other accrued liabilities		2,091.2		(87.9	)		2,003.3
Total current liabilities		21,888.0		(549.4	)		21,338.6
Total liabilities		29,717.6		(549.4	)		29,168.2
Total liabilities and stockholders' equity		38,907.8		(549.4	)		38,358.4

The effect of the changes to the presentation of our statement of cash flows for the year ended December 31, 2022 and 2021 is summarized below:


	Year ended December 31,
(In millions)	Reported 2022			Change			Revised 2022
Cash flows from operating activities:
Net change in accounts receivable, net	$	—		$	(319.6	)	$	(319.6	)
Net change in premium and fees receivable		(4,789.3	)		4,789.3			—
Net change in premiums payable to underwriting enterprises		5,084.2			(5,084.2	)		—
Net change in other current assets		(47.1	)		(24.6	)		(71.7	)
Net change in accrued compensation and other accrued liabilities		215.3			(96.3	)		119.0
Net cash provided by operating activities		2,125.4			(735.4	)		1,390.0
Cash flows from financing activities:
Net change in fiduciary assets and liabilities		—			735.4			735.4
Net cash provided by (used) by financing activities		(522.8	)		735.4			212.6


	Year ended December 31,
(In millions)	Reported 2021			Change			Revised 2021
Cash flows from operating activities:
Net change in accounts receivable, net	$	—		$	(172.3	)	$	(172.3	)
Net change in premium and fees receivable		132.9			(132.9	)		—
Net change in premiums payable to underwriting enterprises		35.5			(35.5	)		—
Net change in other current assets		(136.8	)		34.0			(102.8	)
Net change in accrued compensation and other accrued liabilities		222.3			(5.0	)		217.3
Net cash provided by operating activities		1,704.1			(311.7	)		1,392.4
Cash flows from financing activities:
Net change in fiduciary assets and liabilities		—			311.7			311.7
Net cash provided by financing activities		2,684.1			311.7			2,995.8