Jay Cohen from BofA Merrill Lynch. We're very pleased to have with us, I think first time presenting at this conference, Dan Glaser, who's Group President and COO of Marsh & McLennan. I've actually been covering Marsh & McLennan for about 17 years. It's an understatement to say that during that time, there's been some changes at the company. Thank you. Can you hear me now? Always wanted to say that. Refreshingly, since Dan arrived, it's been relatively calm, and that makes my job a little bit easier, so thank you. It is our pleasure to have Dan presenting here today, and I'll turn it over to him to take you through the MMC story. Dan?
Good morning. I'd like to just start by saying I'm thrilled to be here, and I'd like to thank Jay and Bank of America Merrill Lynch for giving Marsh & McLennan Companies this opportunity. Many of you know Marsh & McLennan pretty well, I think I'll just get right into it. Marsh & McLennan Companies is a firm that is really devoted to serving clients and creating value for clients, for colleagues, and for our shareholders. In 2011, we had revenue of $11.5 billion, an adjusted operating income of $1.7 billion. Our aim is to be the world's leading global advice and solutions firm in the areas of risk, strategy, and human capital. We are structured in two segments and four operating companies.
In risk and insurance services, we have Marsh, a global leader in insurance broking and risk management, and Guy Carpenter, a global leader in reinsurance broking and high-level analytics. In consulting, we have Mercer, a global leader in human resource consulting, and Oliver Wyman, a global leader in management and strategy consulting. Each operating company represents the best skills and capabilities available in their respective market. All are global leaders, and taken together, it is an impressive and formidable combination. Marsh & McLennan Companies are strategically important to clients since risk, strategy, and human capital are critical components to each company's success. We make a difference by protecting our clients' vital assets. We play an important role in helping our clients build better businesses, and we help them protect those businesses. In short, we help our clients thrive.
In 2001, almost 90% of our revenue was from the U.S., U.K., and Canada. The past decade has seen a significant shift in our global positioning and in our sources of revenue. Our U.S.-based revenue as a percentage of the total has declined significantly as we have shifted our portfolio and expanded our revenue in continental Europe, Latin America, Asia-Pacific, and Canada. Over the past four years, our leadership team has significantly increased adjusted operating income. We have steadily improved our adjusted operating margins from 8.8% in 2007 to 10.7%, 13.2%, 14% in 2010, and 14.4% in 2011. We have a strong, cohesive, and driven leadership team. John Drzik has been at Oliver Wyman for 27 years and has been their CEO for the past six years.
The remaining five of us all have extensive experience running businesses, both on the brokerage side and also on the insurance company side. Julio adds an additional dimension to the team in that he has a significant health benefits and consumer background. Jay alluded to the Marsh & McLennan story. Marsh & McLennan has a long and justifiably proud history. The recent storybook in Marsh & McLennan Companies is really about crisis, aftermath, revival, and optimization. Today, I'm going to focus my comments on the present and on the future. Carl Sandburg once wrote, "Nothing happens unless first a dream." It starts with aspirations. We aspire to be one of the world's elite businesses, to rank among the best in value creation, to be recognized by clients, colleagues, and investors for the value that we create.
Starting with Investor Day in September 2010, we laid out and articulated our growth strategies to help us realize these aspirations. Our approach is underpinned by four pillars designed to create exceptional value and provide superior returns. Growth. Our first strategic pillar is to deliver consistent long-term growth in revenue and EPS. Our second pillar is low capital requirements. We will not acquire or develop businesses that require significant capital-intensive investments. Cash, we will generate high levels of cash. Risk, we will be vigilant and mindful about risk through operational improvements, process changes, attention, and our ERM framework, we will actively manage operational risks. In 2010, we articulated our preferred uses of cash, investing in the business, having a strong dividend payout, accretive acquisitions, share repurchases, and de-leveraging. We have done all of the above during the past two years.
We believe that our substantial operational characteristics and strengths, strong management, leading brands, deep talent base, the increasing need for our capabilities that our clients have around the world, and our global footprint can produce long-term growth in revenues that exceeds global GDP growth. Combined with thoughtful expense management, we should produce annual growth in operating income of at least 10% over the long term. Effective deployment of excess capital should give us EPS growth approaching 13%. With our dividend, we should deliver a total return to shareholders over the long term of about 16% a year. I'd like to talk a little bit more about each of our segments, starting first with risk and insurance services. This gives you a good backdrop of the segment and our sources of revenue and global positioning. Let's talk about Marsh first.
Marsh in its own right is a big company. We have over $5.3 billion of revenue, 25,000 colleagues in more than 100 countries around the world. Marsh is really, and I had the pleasure of being Marsh's CEO for three and a half to four years. It's a tremendous organization. It's well-diversified geographically, by industry, by risk and specialty practices. It's got the deepest talent base in the entire insurance industry. It has a collaborative and cohesive culture of client service, excellence, innovation, and winning in the marketplace. We have had seven consecutive quarters of underlying growth, which totaled 2% organic growth in 2010 and 4% organic growth in 2011. In 2011, we had 25 countries in which underlying growth was greater than 10%. Marsh is well-positioned for continued revenue and earnings growth, as well as margin expansion. Then Guy Carpenter.
We hit a milestone this year, the first year ever that Guy Carpenter had $1 billion of revenue. Over 2,000 employees in more than 30 countries. A limited number of clients, all their clients are insurance companies. Guy Carpenter, having said that, Guy Carpenter is absolutely devoted to client service, and they take it to a different level. The amount of relationship management is very high. Carpenter's leading analytics, strategic advisory services, and transactional capabilities bind them to their clients, and most of their client relationships are over the long term. Guy Carpenter is certainly winning in the marketplace, as demonstrated by 12 consecutive quarters of organic growth, totaling 8% in 2009, 2% in 2010, and 5% in 2011. We are very proud of our financial performance in the RIS segment over the past several years, but I can assure you we are not complacent.
Our journey continues, and we expect further growth in our adjusted operating income and margins. Incidentally, our adjusted margins increased from 8.6% in 2007 to 19.2% for 2011, and our GAAP margins improved from 6.3% in 2007 to 19.5% in 2011. I'd like to spend a little bit of time speaking about our other segment as well, our consulting segment, Mercer and Oliver Wyman. This gives you a snapshot of how we break down. You can see that the segment itself is $5.3 billion. Mercer represents 72% of our consulting business and Oliver Wyman 28%. Mercer is pretty well diversified by business line or global line of business. You have retirement and health and benefits as the two really big organizations within Mercer. Talent rewards and communications, which you've seen has had high growth over the last couple of years, outsourcing, and investments.
I was really blessed because I got to run Mercer for the last three and a half or four months, and I was able to really get involved in the details and learn the business in a way that as the COO, I probably would not have been able to do as many deep dives into their business. I feel I really know Mercer now from a granular level. It's another very big organization, almost $4 billion of revenue, 20,000 colleagues, 40 different countries. Really, a global leader in HR consulting, which is definitely a growth business, particularly in health benefits, talent rewards, and employee communications. That's an issue for C-suites all over the world. Mercer's clients include 80% of the 500 largest U.S. public companies, 70% of the FTSE 100, 65% of the Nikkei 225.
Interestingly, 80% of Mercer's clientele actually are clients with less than 5,000 employees. They're much more of an upper middle market firm than what they're given credit for. Mercer had good underlying revenue growth of 4% in 2011 after achieving 2% growth in 2010. Now Oliver Wyman. Oliver Wyman operates in a very large fragmented market in terms of management consulting and strategic consulting. Over a number of years, they've achieved a top four position in that business. They actually are leading market positions in areas like financial services, aviation, and retail, and they've experienced quite a lot of growth over the last couple of years, and we've been investing both in health and life sciences and energy sectors. We feel that Oliver Wyman is positioned very well for growth over the long term.
Oliver Wyman is in the top tier of strategy and management consulting firms. They have over 3,400 colleagues and $1.5 billion of revenue. They had another solid underlying revenue growth year of 7% in 2011, which followed a growth year of 7% underlying for 2010 as well. Two years in a row of 7% growth. This is our adjusted operating income on the consulting side. Clearly, a significant focus for the management team of Marsh & McLennan Companies over the next two to three years will be to generate higher operating income and margins from our consulting businesses. The business generated adjusted operating margins of 12.6% in 2007. In 2009, we managed well through the Great Recession, however, margins dropped to 10.3%.
We delivered 11.4% in 2010 and 11.8% in 2011, we intend to continue to stay on this path and increase our adjusted operating income and margins within the consulting segment. At our Investor Day in September of 2010, it was really our coming out party. We felt that we had solved the legacy issues that the management team was confronted with when we came in in late 2007 and early 2008. Really at that Investor Day, we made a case as to what we could do with this business. I think it's important at this point in time, to look at the financial targets that we established and review our performance against those targets. Adjusted operating income growth, we established a long-term target of 10%, in 2010, we achieved 9.4%, and in 2011, 11.8%.
We talked about EPS growth of nearing 13%, we actually delivered that and more over both 2010 and 2011. Our dividend yield, which has been pretty constant, averaging out at 3% or slightly above. Taken together, we felt we would deliver a total shareholder return in most years of around 16%, and we have handily beaten that record for 2010 and 2011. We have performed against our established targets, but more importantly, we expect this performance to continue. Really chapter three. Chapter three is not only about delivering in the present, but it's also what we intend to do in the future. As we look forward, we look to sustain superior performance building on our core strengths. First, our operational strengths. As I mentioned earlier, I think we've got the best talent in the business. We're well positioned globally.
We're known in the industry as being tremendously innovative and providing thought leadership. We have long-term client relationships, we've built on those relationships. As we mentioned recently on our call, Marsh had $1 billion of new business in 2011. We think we're very well positioned on an operational basis. We look at our financial strengths, long-term profitable growth, low capital requirements, good cash flow, improving cash flow, disciplined expense control to where in our view, expenses should never exceed revenue growth, and a high dividend payout. When we look at the world and where we go forward, obviously there's a lot of internal issues, and there's also external issues and macro factors. When we look both internally and externally, we're very excited about the opportunities for growth that we have.
I literally could spend probably an hour or more just on this slide talking about each of these issues in depth. Jay's looking at me with a curious face, so I will not do that. I do want to call out a couple of these and just address them in a little bit more detail. First off, new risks and new products. The reality is that risk is now a C-suite issue. Risk awareness is on the rise. I wouldn't necessarily say that the risks that are facing this generation or these management teams are necessarily greater than the risks faced by previous generations. I do believe that the responsibility clearly rests with CEOs of firms, and that's why it's a C-suite issue. The CEO is the CRO, is the chief risk officer.
From our perspective, we help companies grapple with operational risks, deal with issues around talent management, strategy, and anticipate emerging risks such as cyber liability and supply chain. I'll just take one issue, talking about something like talent management. It's very interesting over the last 10 years what has occurred in the world. 10 years ago, if you looked at the developed world versus the developing world, you had different characteristics in terms of voluntary turnover levels within companies. You'd have higher levels of turnover in the developed world and working for a multinational, and in some respects, in particular, a U.S. multinational, was about the best you could do in the developing world. Turnover levels in the developing world were actually quite low.
Most companies are grappling with the situation that through fear, anxiety, low growth in the developed world, there's actually very low levels of voluntary turnover in comparison to previous years. In the emerging world, the developing world, turnover rates are quite high. In fact, many companies see 20%+ turnover in their operations in many parts of the emerging world. Grappling with those kinds of issues is one of Mercer's strong suits, we get engaged on that kind of activity. Another issue is interest rates. The impact that low interest rates have had on pension liabilities and returns on our fiduciary as well as our own cash have been a significant headwind over the last several years, a dramatic headwind for us. I'm not going to call when interest rates are going to go up, but I am going to call that someday they will.
Someday those headwinds will be tailwinds to our organization, and they will help us both in terms of pension liability, but also on fiduciary income as well as our own corporate cash. Growth economies and acquisitions. Over the last couple of years, we've done a number of acquisitions with Marsh & McLennan Agency in the U.S., but we've also acquired HSBC's insurance brokerage operations, which really improved our positioning quite a bit in the middle market in the U.K., in the Middle East, and in Asia. Earlier this year, really right at the start of the year, we closed on Alexander Forbes insurance brokerage business, which makes us number one in Africa. We closed on South Africa, Botswana, and Namibia, and we're on track to close on Alexander Forbes' five other African countries. That positions us very well for future growth.
Let me end by just reaffirming our long-term financial goals. Operating income growth exceeding 10% per year. Earnings per share growth approaching 13%, combining with our dividend, giving a total shareholder return, which should be around 16% year after year. These are our forward-looking statements. I would be happy to take any questions that you might have.
Let me start off with a couple, Dan. First, contingent commissions. There still seems to be some controversy surrounding this. One broker decided they might change their stance on it recently. My question really is, do your clients care about this issue? Do you guys think about this issue internally anymore as an issue at all?
Yeah. It's a great question. A couple of things. One, it's hard to generalize about Marsh, and it's principally in relation to Marsh, but it's hard to generalize in Marsh because we're in over 100 countries. We're in tremendously different segments around the world. I would say that certainly in certain countries, in certain segments, clients very much do care. In other countries and in other segments, it never comes up and it's not an issue. I will say a couple of different things. I think for a long time, contingent commission has been a bit of a red herring that has created a lot more noise than it really deserves. The reason why I say it's a red herring is I'd start by the premise of saying that it's really about carrier revenue.
Any time that an insurance broker earns income from clients and earns additional income from carriers, they have a potential conflict of interest. It's any income from carriers, whether that income's contingent, whether it's basic commission, whether it's fee for service, whether it's outsourcing contracts. The issue really is, okay, well, how does that broker deal with that potential conflict of interest? From our perspective, the way we address it is with very fulsome levels of disclosure, and that has been our approach. The reality for Marsh & McLennan is that contingent income for us is very de minimis. Now we have carrier revenue streams. We have done a good job of enhancing yield, which is a nice way of saying getting more commission from carriers on business that we place with them.
We've done a good job of creating a system which helps carriers be more efficient and increases their bind to quote, and basically their quote to submission and bind to quote ratios. It makes them more efficient, and they'll share some of that benefit with us. Those are largely on fee for services. That battle between carriers and brokers around commission levels and income has been going on for 50 years and will go on for another 50 years. It's part of how the market works. I wouldn't really pull out one area like contingents and make that bigger or more important. We've always found that a little curious.
Second question I had, many investors do view the brokers as a group, as a great way to play a potential pricing cycle in insurance. What I'd like you to do is kind of, I'm going to give you a scenario. Let's say the insurance companies really begin to have real pressure on margins, reserves are bad, and we get a classic cycle turn. What does the world look like for Marsh, as far as potential revenue impacts, added costs, that also go along with it? How does it look in that scenario?
I'd start by saying, we pay our brokers to get the best deals for clients. No matter what's happening in the cycle, they're working hard to get the most comprehensive levels of coverage at the lowest possible prices. That's what we pay them to do, and they do that well. It is a cyclical industry. I think that we have built Marsh, in particular, on the brokerage side, to be successful through a cycle, to not depend on rate increases as a way to run a business. Having been in the business for 30 years, I can tell you that soft cycles last a lot longer than hard ones do. I don't think that it's really something that plays over the long term.
Taking Jay's question front on, if there is a cycle turn and rates go up, well, generally our income will go up. We have a lot of fee business, and we also have cap commission business, so it's not a straight pass-through of the percentage that rates go up to revenue. Certainly, rates do go up. If rates go up, our income would go up. We're split in the United States, 60/40 in favor of fee business, and internationally about 60/40 in favor of commission business. We're pretty well-balanced to play really through the cycles. In terms of cost, it doesn't add much cost. It makes brokers have to work a lot longer to get deals done. It's not like you can go out and hire the expertise that you have to have during a hard market. I wouldn't see our costs going up.
I'd see an impact on our business that's favorable largely because of some of the flow-through. Also in hard markets, there tends to be a flight to quality, and Marsh will benefit from that flight to quality.
I'm going to throw another one at you. Europe obviously is a big issue in the press, and we see what's happening there. As you look out to 2012, what kind of pressures do you see? Let's talk about, I guess, the two main segments, big picture, from Europe.
Sure. Well, one, taking the brokerage segment first, I guess the good news and the bad news is the brokerage segment usually lags macro factors like GDP. Brokers like ourselves tend to grow a little bit better than GDP country by country, but tend to be a lagging indicator because renewals tend to happen. For example, a lot of European renewals are January 1st, if there are problems in Europe that go through the year, it probably would impact into the following January 1st, an awful lot of companies and ourselves as a broker. I'd say on our brokerage side, not much of an impact. It's mainly on exposure units, and if exposure units drop and in recessionary environments, there's less expanded business because companies delay project work, et cetera.
Obviously, there'd be more of an impact on our consulting side because some aspects of our consulting business are recurring, you do them every year, and we get hired every year to do that work. Some aspects of our consulting business are more discretionary. Those aspects of our consulting business would get impacted if Europe fell off a cliff. Now, the way we're looking at the year, some of the softness that we saw in the fourth quarter was really emanated from the kind of noise that happened over the summer, right? The world was doing pretty well. The summer looked a little rockier, I think some of the discretionary spending thought process came off then, and our pipelines weakened a bit.
We don't see quite that level of weakening right now. I won't say that what we're seeing is buoyant, but we're seeing consistent levels of activity as opposed to reductions in those levels. That can change, obviously, pretty quickly, but that's how we perceive it, Jay.
There's a question over there.
If I'm not mistaken, on the risk side, you guys had a very decent year, quite good results in comparison to your competitors. My question to you is, how do you ensure you maintain the momentum? Are you guys taking initiatives to really kind of keep on pushing that direction?
Sure. No, it's a good question. I'd start with quality. I think in a large way, the world in some ways has underestimated the differentiation that happens as a result of quality. When I came to Marsh in December of 2007, I knew Marsh was a fantastic organization. I knew that it could be led better and managed better. I had worked at Marsh for 10 years, I had competed with Marsh for eight. Marsh was my biggest producer for eight years. I knew that it had a significant inherent qualitative difference between Marsh and its competitors. Now that we have the RIS side on the right track, the place runs itself. We don't have to actually do much tinkering with it for it to continue to perform well.
It really starts with quality, not only quality of colleague base, but also quality of our client base. Our clients are some of the fastest growing, most entrepreneurial, and also largest companies in the world. When they're doing well, we tend to do well with them.
That's great. Dan, great presentation.