Marsh & McLennan revenue risesReprints
Marsh & McLennan Cos. Inc. on Thursday reported third-quarter revenue of $3.34 billion, a 6.6% increase over the same period last year, as executives at the brokerage and consulting firm said it’s too early to tell what effect the recent string of catastrophes will have on insurance rates.
Underlying revenue at Marsh & McLennan, which excludes the effect of currency fluctuations and mergers, acquisitions and dispositions, increased 3% during the third quarter, while profit increased 3.6% to $393 million.
Risk and insurance revenue, which includes its insurance brokerage unit Marsh L.L.C. and reinsurance brokerage unit Guy Carpenter & Co. L.L.C., increased 8% in the third quarter to $1.76 billion. Marsh reported an 8.7% revenue increase, much of it driven by acquisitions, and underlying revenue growth of 3%. Guy Carpenter reported a 4% increase in actual and underlying revenue.
For the first nine months of 2017, Marsh & McLennan reported $10.34 billion in revenue, a 5% increase over the same period last year and a 3% increase on an underlying basis. Profit increased 9.8% to $1.46 billion.
In a conference call with analysts, Marsh & McLennan President and CEO Dan Glaser said the firm expects underlying revenue growth to be in the 3% to 5% range for the full year.
The recent string of catastrophe losses, including hurricanes Harvey, Irma and Maria, have caused significant losses for some insurers, but it’s too early to tell what effect they will have on pricing, Mr. Glaser said.
“The insurance market itself is large, global and well-capitalized, and there are many insurers and other capital providers, so the market is competitive. Certain markets, it’s true, have been hit pretty hard by this series of events, and they are going to want rate increases. But that doesn’t mean they are going to get the rate increases that they want,” he said.
John Doyle, CEO of Marsh, said insurance rates on average fell 1.6% in the third quarter. Since the string of catastrophes, property renewal quotes have varied from 5% decreases to 20% increases, and there has been no measurable increase so far in other lines, he said.
“In my experience, it would be unusual for these events to drive pricing in long-tail lines,” Mr. Doyle said.