The past 12 months at New York-based Marsh Inc. have seen the brokerage make significant acquisitions and position the company for future growth, executives at the brokerage say.

“All good things start with a better financial situation,” said Dan Glaser, chairman and CEO of Marsh. “We're in the right position to be able to make investments in people and technology to distinguish Marsh from its competitors.”

For 2009, Marsh's brokerage revenues fell to $10.51 billion from $11.4 billion in 2008. That makes Marsh No. 1 in Business Insurance's annual ranking of the world's largest brokers.

So far this year, Marsh is making headway despite continuing softness in the global insurance marketplace. The brokerage reported gross revenues rose 8% in the first quarter, to $1.2 billion.

“Organic growth has been hovering around zero, and that includes a variety of head winds,” including soft insurance rates and a low interest-rate environment, which shows Marsh is making progress, noted Brian Duperreault, president and CEO of parent Marsh & McLennan Cos. Inc.

In June, MMC sold Kroll Inc. for $1.13 billion to Altegrity Inc., a screening and security firm led by Michael Cherkasky, previously the head of MMC and Kroll.

Marsh's largest recent acquisition was London-based HSBC Insurance Brokers Ltd. for £135 million ($219.3 million) in cash, which was completed in March. HIBL adds operations that have leading positions in Asia and the Middle East as well as middle-market U.K. business, which had little overlap with Marsh's existing London-based operations, Mr. Glaser said.

A major part of the acquisition strategy is the Marsh & McLennan Agency L.L.C. platform, which launched in October 2008 and has grown to nearly $200 million in annualized revenue. Since mid-2009, it has acquired several agencies: Houston-based Insurance Alliance; NIA Group L.L.C. in Paramus, N.J.; Haake Cos. in Overland Park, Kan.; Thomas Rutherfoord Inc. in Alexandria, Va.; and the Bostonian Group in Boston.

In September 2009, Marsh acquired International Advisory Services Ltd., Bermuda's largest independent captive manager, which Mr. Glaser said fit well with Marsh's history of “creating capital to meet clients' needs.”

Marsh sees opportunity to expand at home and abroad, said Mr. Duperreault. “Growing the U.S. component gives us capabilities in a segment of the market where we have not played or played well, and it gives balance to Marsh's income stream,” he said.

“There is no budget around the agency, and we're not compelled to do acquisitions,” Mr. Glaser said. Rather, Marsh will continue to build its already “rich pipeline of opportunities” and do deals that complement the value Marsh delivers, he said. “Over the next few years, you'll see many acquisitions within our MMC Agency space.”

Among Marsh's continuing strengths are its expertise, attention to service and innovation, said Messrs. Duperreault and Glaser.

Several technology initiatives popular with Marsh clients, Mr. Glaser said, include the Marsh Market Information portal to assist clients in monitoring the financial strength of insurers; Marsh 3D, a risk-planning tool that helps clients analyze their returns on risk capital; and the 2009 merging of Marsh's existing analytical capabilities into the Marsh Business Analytics department. This month, Marsh unveiled a Global Benchmarking Portal with purchasing and pricing data across 20 industry groups and cross-industry reports on key coverages.

“For risk managers, we're seeing a more holistic take on risk management; that's absolutely needed,” Mr. Glaser said. “When you start thinking about how you can affect the outcome, you have to have analytics to inform your decisionmaking. Those are all Marsh's strong suit.”

“A constant from clients has been the support they continue to give us, even when we were in our darkest moments,” Mr. Duperreault said. “Why was that? Frankly, it's because the underlying service continued to be world-class. We weren't doing it necessarily in the most efficient way, but our people have continued to do whatever they can to make sure the client gets the best possible service.”

In March, Marsh announced it would not accept contingent commissions on its core U.S. brokerage business. Officials in New York and other states had revised agreements with Marsh and its competitors, allowing brokers to resume taking contingent pay on placements. Marsh said that its MMC Agency, personal lines, affinity and program businesses will accept contingents, and Marsh's brokerage operations will continue to accept enhanced commissions and fees from insurers for services rendered to the market. The enhanced compensation is fixed in advance, not related to the placement of coverage and fully disclosed to clients, Marsh noted.

Mr. Glaser said “certain types of carrier revenue streams represent a potential risk of conflicts of interest,” but added that Marsh has implemented a system of transparency and internal controls. “Clients want transparency from us—a trusting, transparent relationship, and that's exactly what we want in return,” he said.

Mr. Glaser said more than 90% of Marsh's U.S. clients have approved the brokerage accepting enhanced commissions from insurers.

MMC's global workforce at year-end 2009 was about 52,000, down slightly from 2008, and Mr. Glaser said Marsh has hired several highly experienced brokers this year. “Marsh has reasserted itself as an employer of choice in the brokerage space and has attracted a tremendous amount of talent,” he said.

Marsh “has done a phenomenal job of getting rid of businesses that didn't make sense,” said equity analyst Meyer Shields, a principal at Stifel, Nicolaus & Co. Inc. in Baltimore. The brokerage improved profit margins despite a sharp drop in fiduciary investment income, he said. “They'll be in a much more favorable environment in the years ahead,” he said. “We're getting closer to a hard market, and Marsh is increasing business that's more sensitive to rate changes”—namely, smaller and middle-market business, he said.

MMC's stock closed July 9 at $23.11 a share. Its 52-week high was $25.47 and its low was $18.61.