Marsh & McLennan revenue up despite Brexit uncertainty

Marsh & McLennan Cos. Inc. on Tuesday reported consolidated revenue of $3.14 billion in the third quarter of 2016, an increase of about 1% from the $3.12 billion reported in the third quarter of last year, although its consulting division’s revenue was negatively affected, in part, by uncertainty over the U.K. vote to leave the European Union. 

Net income for the brokerage rose 17.3% to $379 million in the quarter compared with the same period last year, according to its third-quarter earnings report. 

“We are pleased with our year-to-date performance and are on track for a strong 2016,” Marsh and McLennan President and CEO Dan Glaser said during the company’s earnings call on Tuesday. “Over the last couple of years, we have seen volatility around commodity prices and foreign exchange, declining interest rates, weak global GDP growth, political instability and lower (property and casualty) insurance pricing. Despite this backdrop, we’ve produced significantly higher earnings growth than the S&P 500.” 

Revenue for the company’s risk and insurance services division, rose 3.0% in the third quarter of 2016 to $1.63 billion. Revenue for the Guy Carpenter & Co. L.L.C. reinsurance brokerage unit was flat in the third quarter at $260 million while revenue for Marsh L.L.C. increased 3.6% to $1.36 billion. 

Consulting revenues, meanwhile, declined 1.8% to $1.51 billion the third quarter, as a 1.7% increase in Mercer’s revenue to $1.11 billion was offset by a 10.2% revenue decline in the Oliver Wyman consulting division to $404 million. 

“This was driven by comparisons to very strong growth in the financial services practice last year as well as global growth concern exacerbated by Brexit uncertainty,” Chief Financial Officer Mark McGivney said during the conference call. “In the fourth quarter, we expect Oliver Wyman’s revenue growth to be relatively flat to last year.”

For the first nine months of 2016, revenue was $9.85 billion, an increase of 3.1% over the same period in 2015. Marsh L.L.C.’s revenue rose 4.6% over the first nine months of 2016 to $4.41 billion, while Guy Carpenter reported revenue increased 1.7% to $919 million for the period, according to the report. Consulting revenues were up 1.8% to $4.53 billion over the first nine months of the year, according to the report.