Goodwill and Other Intangibles

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

The Company is required to assess goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. The Company performs the annual impairment assessment for each of its reporting units during the third quarter of each year. In accordance with applicable accounting guidance, a Company can assess qualitative factors to determine whether it is necessary to perform a goodwill impairment test. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test. In 2019, the Company elected to perform a quantitative impairment assessment. Fair values of the reporting units were estimated using a market approach. Carrying values for the reporting units are based on balances at the prior quarter end and include directly identified assets and liabilities as well as an allocation of those assets and liabilities not recorded at the reporting unit level. The Company completed its 2019 annual review in the third quarter and concluded goodwill was not impaired, as the fair value of each reporting unit exceeded its carrying value by a substantial margin.

Other intangible assets that are not deemed to have an indefinite life are amortized over their estimated lives and reviewed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature. The Company does not have any indefinite lived intangible assets.

Changes in the carrying amount of goodwill are as follows:



September 30,
(In millions)	2019			2018
Balance as of January 1,	$	9,599		$	9,089
Goodwill acquired ^(a)	4,962			410
Other adjustments^(b)	(275		)	(64		)
Balance at September 30,	$	14,286		$	9,435

^(a)Primarily reflects $4.8 billion from the acquisition of JLT in 2019.

^(b)Primarily reflects the impact of foreign exchange.

Of total goodwill acquired of $5.0 billion in 2019, $201 million related to the Risk and Insurance Services segment is deductible for tax purposes. The goodwill arising from the acquisitions consist largely of the synergies and economies of scale expected from combining the operations of the Company and the acquired entities and the trained and assembled workforce acquired. The goodwill acquired was primarily assigned to the Risk and Insurance Services segment.

Goodwill allocable to the Company’s reportable segments at September 30, 2019 is as follows: Risk and Insurance Services, $11.3 billion and Consulting, $3.0 billion.

The gross cost and accumulated amortization of identified intangible assets at September 30, 2019 and December 31, 2018 are as follows:



	September 30, 2019						December 31, 2018
(In millions)	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Client Relationships	$	3,526	$	824	$	2,702	$	1,970	$	639	$	1,331
Other ^(a)	364		197		167		259		153		106
Amortized intangibles	$	3,890	$	1,021	$	2,869	$	2,229	$	792	$	1,437

^(a) Primarily non-compete agreements, trade names and developed technology.

Aggregate amortization expense for the nine months ended September 30, 2019 and 2018 was $235 million and $135 million, respectively. The estimated future aggregate amortization expense is as follows:



For the Years Ending December 31,
(In millions)	Estimated Expense
2019 (excludes amortization through September 30, 2019)	$	95
2020	354
2021	343
2022	327
2023	320
Subsequent years	1,430
	$	2,869