Contracts with Customers

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Contracts with Customers

4. Contracts with Customers

Contract Assets and Liabilities/Contract Balances

Information about unbilled receivables, contract assets and contract liabilities from contracts with customers is as follows (in millions):

	December 31, 2023		December 31, 2022
Unbilled receivables	$	1,093.7	$	910.9
Deferred contract costs		169.1		144.5
Deferred revenue		706.2		609.3

The unbilled receivables, which are included in premium and fees receivable in our consolidated balance sheet, primarily relate to our rights to consideration for work completed but not billed at the reporting date. These are transferred to the receivables when the client is billed. The deferred contract costs represent the costs we incur to fulfill a new or renewal contract with our clients prior to the effective date of the contract. These costs are expensed on the contract effective date. The deferred revenue in the consolidated balance sheet included amounts that represent the remaining performance obligations under our contracts and amounts collected related to advanced billings and deposits received from customers that may or may not ultimately be recognized as revenues in the future. Deposits received from customers could be returned to the customers based on lesser actual transactional volume than originally billed volume.

Significant changes in the deferred revenue balances, which include foreign currency translation adjustments, during the period are as follows (in millions):

	Brokerage			Risk Management			Total
Deferred revenue at December 31, 2021	$	395.9		$	183.7		$	579.6
Incremental deferred revenue		342.3			103.2			445.5
Revenue recognized during the year ended December 31,    2022 included in deferred revenue at December 31, 2021		(326.3	)		(104.6	)		(430.9	)
Net change in collected billings/deposits received from customers		21.4			(7.0	)		14.4
Impact of changes in foreign exchange rates		(17.9	)		—			(17.9	)
Deferred revenue recognized from business acquisitions		18.6			—			18.6
Deferred revenue at December 31, 2022		434.0			175.3			609.3
Incremental deferred revenue		386.3			106.7			493.0
Revenue recognized during the year ended December 31,    2023 included in deferred revenue at December 31, 2022		(358.4	)		(103.6	)		(462.0	)
Net change in collected billings/deposits received from customers		18.8			(5.8	)		13.0
Impact of changes in foreign exchange rates		15.2			—			15.2
Deferred revenue recognized from business acquisitions		37.7			—			37.7
Deferred revenue at December 31, 2023	$	533.6		$	172.6		$	706.2

Revenue recognized during 2023 in the table above included revenue from 2022 acquisitions that would not be reflected in prior years.

Remaining Performance Obligations

Remaining performance obligations represent the portion of the contract price for which work has not been performed. As of December 31, 2023, the aggregate amount of the contract price allocated to remaining performance obligations was $706.2 million.

The estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period is as follows (in millions):

	Brokerage		Risk Management		Total
2024	$	498.4	$	42.7	$	541.1
2025		31.3		68.5		99.8
2026		1.9		28.1		30.0
2027		1.0		14.6		15.6
2028		0.5		7.9		8.4
Thereafter		0.5		10.8		11.3
Total	$	533.6	$	172.6	$	706.2

Deferred Contract Costs

We capitalize costs incurred to fulfill contracts as “deferred contract costs” which are included in other current assets in our consolidated balance sheet. Deferred contract costs were $169.1 million and $144.5 million as of December 31, 2023 and 2022, respectively. Capitalized fulfillment costs are amortized to expense on the contract effective date. The amount of amortization of the deferred contract costs was $570.8 million and $504.4 million for the years ended December 31, 2023 and 2022, respectively.

We have applied the practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is one year or less for our brokerage segment. These costs are included in compensation and operating expenses in our consolidated statement of earnings.