Goodwill and Other Intangibles

12 Months Ended

Dec. 31, 2020

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 quantitative goodwill impairment test. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test. In 2020, the Company elected to perform a qualitative impairment assessment. As part of its assessment, the Company considered numerous factors, including:

•that the fair value of each reporting unit exceeds its carrying value by a substantial margin based on its most recent quantitative assessment in 2019;

•whether significant acquisitions or dispositions occurred which might alter the fair value of its reporting units;

•macroeconomic conditions and their potential impact on reporting unit fair values;

•actual performance compared with budget and prior projections used in its estimation of reporting unit fair values;

•industry and market conditions;

•and the year-over-year change in the Company’s share price.

The Company completed its qualitative assessment in the third quarter of 2020 and concluded that goodwill was not impaired.

Other intangible assets that are not deemed to have an indefinite life are amortized over their estimated lives and assessed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature. Based on its assessment, the Company concluded that other intangible assets were not impaired. The Company does not have any indefinite lived intangible assets.

Changes in the carrying amount of goodwill are as follows:


(In millions of dollars)	2020		2019
Balance as of January 1, as reported	$	14,671	$	9,599
Goodwill acquired (a)	593		5,124
Other adjustments (b)	253		(52)
Balance at December 31,	$	15,517	$	14,671

(a) Includes $4.9 billion from the acquisition of JLT in 2019.

(b) Primarily reflects the impact of foreign exchange and dispositions.

The goodwill acquired in 2020 and 2019 included approximately $179 million and $213 million, respectively, which is deductible for tax purposes, primarily related to the Risk and Insurance Services segment.

Goodwill allocable to the Company’s reportable segments is as follows: Risk and Insurance Services, $11.7 billion and Consulting, $3.8 billion.

The gross cost and accumulated amortization of intangible assets at December 31, 2020 and 2019 are as follows:


(In millions of dollars)	2020						2019
	Gross Cost		Accumulated Amortization		Net Carrying Amount		Gross Cost		Accumulated Amortization		Net Carrying Amount
Customer relationships	$	3,713	$	1,170	$	2,543	$	3,494	$	897	$	2,597
Other (a)	386		230		156		380		203		177
Amortized intangibles	$	4,099	$	1,400	$	2,699	$	3,874	$	1,100	$	2,774

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

Aggregate amortization expense was $351 million for the year ended December 31, 2020, $314 million for the year ended December 31, 2019 and $183 million for the year ended December 31, 2018. The estimated future aggregate amortization expense is as follows:


For the Years Ending December 31,
(In millions of dollars)
2021	$	356
2022	327
2023	300
2024	285
2025	275
Subsequent years	1,156
	$	2,699