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Revenues
 9 Months Ended
Sep. 30, 2025
Revenues [Abstract]  
Revenues

NOTE 3 Revenues

The following tables present the revenues disaggregated by revenue source:

 

 

 

Three months ended September 30, 2025

 

(in millions)

 

Retail

 

 

Specialty Distribution

 

 

Other (8)

 

 

Total

 

Base commissions (1)

 

$

623

 

 

$

450

 

 

$

—

 

 

$

1,073

 

Fees (2)

 

 

204

 

 

 

142

 

 

 

—

 

 

 

346

 

Other supplemental commissions (3)

 

 

32

 

 

 

4

 

 

 

—

 

 

 

36

 

Profit-sharing contingent commissions (4)

 

 

18

 

 

 

55

 

 

 

—

 

 

 

73

 

Earned premium (5)

 

 

—

 

 

 

22

 

 

 

—

 

 

 

22

 

Investment income (6)

 

 

5

 

 

 

8

 

 

 

42

 

 

 

55

 

Other income, net (7)

 

 

1

 

 

 

—

 

 

 

—

 

 

 

1

 

Total revenues

 

$

883

 

 

$

681

 

 

$

42

 

 

$

1,606

 

 

 

 

Three months ended September 30, 2024

 

(in millions)

 

Retail

 

 

Specialty Distribution

 

 

Other (8)

 

 

Total

 

Base commissions (1)

 

$

444

 

 

$

378

 

 

$

—

 

 

$

822

 

Fees (2)

 

 

158

 

 

 

93

 

 

 

—

 

 

 

251

 

Other supplemental commissions (3)

 

 

29

 

 

 

3

 

 

 

—

 

 

 

32

 

Profit-sharing contingent commissions (4)

 

 

8

 

 

 

19

 

 

 

—

 

 

 

27

 

Earned premium (5)

 

 

—

 

 

 

23

 

 

 

—

 

 

 

23

 

Investment income (6)

 

 

2

 

 

 

8

 

 

 

21

 

 

 

31

 

Other income, net (7)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total revenues

 

$

641

 

 

$

524

 

 

$

21

 

 

$

1,186

 

 

 

 

 

Nine months ended September 30, 2025

 

(in millions)

 

Retail

 

 

Specialty Distribution

 

 

Other (8)

 

 

Total

 

Base commissions (1)

 

$

1,722

 

 

$

1,188

 

 

$

—

 

 

$

2,910

 

Fees (2)

 

 

554

 

 

 

326

 

 

 

(2

)

 

 

878

 

Other supplemental commissions (3)

 

 

160

 

 

 

17

 

 

 

—

 

 

 

177

 

Profit-sharing contingent commissions (4)

 

 

40

 

 

 

121

 

 

 

—

 

 

 

161

 

Earned premium (5)

 

 

—

 

 

 

57

 

 

 

—

 

 

 

57

 

Investment income (6)

 

 

9

 

 

 

20

 

 

 

79

 

 

 

108

 

Other income, net (7)

 

 

2

 

 

 

2

 

 

 

—

 

 

 

4

 

Total revenues

 

$

2,487

 

 

$

1,731

 

 

$

77

 

 

$

4,295

 

 

 

 

Nine months ended September 30, 2024

 

(in millions)

 

Retail

 

 

Specialty Distribution

 

 

Other (8)

 

 

Total

 

Base commissions (1)

 

$

1,440

 

 

$

1,065

 

 

$

—

 

 

$

2,505

 

Fees (2)

 

 

469

 

 

 

248

 

 

 

(1

)

 

 

716

 

Other supplemental commissions (3)

 

 

148

 

 

 

14

 

 

 

—

 

 

 

162

 

Profit-sharing contingent commissions (4)

 

 

30

 

 

 

80

 

 

 

—

 

 

 

110

 

Earned premium (5)

 

 

—

 

 

 

52

 

 

 

—

 

 

 

52

 

Investment income (6)

 

 

3

 

 

 

21

 

 

 

47

 

 

 

71

 

Other income, net (7)

 

 

3

 

 

 

2

 

 

 

1

 

 

 

6

 

Total revenues

 

$

2,093

 

 

$

1,482

 

 

$

47

 

 

$

3,622

 

 

(1)
Base commissions generally represent a percentage of the premium paid by an insured and are affected by fluctuations in both premium rate levels charged by insurance companies and the insureds’ underlying “insurable exposure units,” which are units that insurance companies use to measure or express insurance exposed to risk (such as property values, or sales and payroll levels) to determine what premium to charge the insured. Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which we control.
(2)
Fee revenues relate to fees for services other than securing coverage for our customers, including fees negotiated in lieu of commissions, and F&I products and services.
(3)
Other supplemental commissions include additional commissions over base commissions received from insurance carriers based on predetermined growth or production measures. This includes incentive commissions and guaranteed supplemental commissions.
(4)
Profit-sharing contingent commissions are based primarily on underwriting results, but may also reflect considerations for volume, growth and/or retention.
(5)
Earned premium relates to the premiums earned in the Captives.
(6)
Investment income consists primarily of interest on cash and investments.
(7)
Other income consists primarily of other miscellaneous income.
(8)
Fees within Other reflect the elimination of intercompany revenues.

The following table presents the revenues disaggregated by geographic area where our services are being performed:

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

(in millions)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

U.S.

 

$

1,410

 

 

$

1,031

 

 

$

3,657

 

 

$

3,136

 

U.K.

 

 

148

 

 

 

133

 

 

 

452

 

 

 

408

 

Other

 

 

48

 

 

 

22

 

 

 

186

 

 

 

78

 

Total revenues

 

$

1,606

 

 

$

1,186

 

 

$

4,295

 

 

$

3,622

 

 

Contract Assets and Liabilities

The balances of contract assets and contract liabilities arising from contracts with customers as of September 30, 2025 and December 31, 2024 were as follows:

 

(in millions)

 

September 30, 2025

 

 

December 31, 2024

 

Contract assets

 

$

881

 

 

$

575

 

Contract liabilities

 

$

167

 

 

$

119

 

Unbilled receivables (contract assets) arise when the Company recognizes revenue for amounts which have not yet been billed in the Company's systems and are reflected in commissions, fees and other receivables in the Company's Condensed Consolidated Balance Sheets. Businesses acquired in the current year accounted for $219 million of the increase in contract assets over the balance as of December 31, 2024, with the remaining increase due to normal seasonality and growth in the business.

Deferred revenue (contract liabilities) relates to payments received in advance of performance under the contract before the transfer of a good or service to the customer. Deferred revenue is reflected within accrued expenses and other liabilities for those to be recognized in less than twelve months and in other liabilities for those to be recognized more than twelve months from the date presented in the Company's Condensed Consolidated Balance Sheets. Businesses acquired in the current year accounted for $50 million of the increase in contract liabilities over the balance as of December 31, 2024.

As of September 30, 2025, deferred revenue totaled $167 million and consisted of $124 million and $42 million classified as short term and long term, respectively. As of December 31, 2024, deferred revenue totaled $119 million and consisted of $80 million and $39 million classified as short term and long term, respectively.

During the nine months ended September 30, 2025 and 2024, the net amount of revenue recognized related to performance obligations satisfied in a previous period was $24 million and $17 million, consisting of additional variable consideration received on our incentive and profit-sharing contingent commissions.

Other Assets and Deferred Cost

Incremental cost to obtain - The Company defers certain costs to obtain customer contracts primarily as they relate to commission-based compensation plans in the Retail segment, in which the Company pays an incremental amount of compensation on new business. These incremental costs are deferred and amortized over a 15-year period. The cost to obtain balance within the other assets caption in the Company's Condensed Consolidated Balance Sheets was $137 million and $119 million as of September 30, 2025 and December 31, 2024, respectively. For the nine months ended September 30, 2025, the Company deferred $26 million of incremental cost to obtain customer contracts. The Company recorded expense of $8 million associated with the incremental cost to obtain customer contracts for the nine months ended September 30, 2025.

Cost to fulfill - The Company defers certain costs to fulfill contracts and recognizes these costs as the associated performance obligations are fulfilled. The cost to fulfill balance within the other current assets caption in the Company's Condensed Consolidated Balance Sheets was $193 million as of September 30, 2025, which is inclusive of deferrals from businesses acquired in the current year of $57 million. The cost to fulfill balance was $145 million as of December 31, 2024. For the nine months ended September 30, 2025, the Company had net expense of $13 million related to the release of previously deferred contract fulfillment costs associated with performance obligations that were satisfied in the period, net of current year deferrals for costs incurred that related to performance obligations yet to be fulfilled.