Marsh McLennan's Glaser trumpets growth despite darkening economic clouds
President and chief executive says the firm sees increased demand 'when the world is unsettled', highlighting geopolitical risk, pandemic risk and cyber threats
Broking giant’s chief executive says the firm is ‘resilient’ as it books 9% underlying growth in its Marsh and Guy Carpenter businesses
Marsh McLennan president and chief executive, Dan Glaser, said the broking and consulting giant would post growth at the upper end of its full-year guidance despite concerns about recession and the war in Ukraine.
Glaser said the firm was “resilient” and despite the gloomy outlook “there are some nuances to the macro-story that remain supportive of our growth”.
The softening GDP growth outlook and rising inflation had “offsetting impacts” on insurance premiums, Glaser said.
“Even if GDP growth softens, as predicted, higher inflation will increase insured values and likely cause higher loss costs,” he said, “In addition, property/casualty insurance pricing conditions remain firm.”
Glaser said the firm benefitted from increased demand for services “when the world is unsettled”.
“We are helping our clients adapt to this changing landscape,” he said, highlighting geopolitical risk, pandemic risk and cyber threats.
Glaser was speaking to analysts after the firm reported 9% organic revenue growth in its Marsh and Guy Carpenter business units in the second quarter of the year.
Corporate broking business Marsh saw revenues climb to $2.8bn in the quarter, representing 9% underlying growth.
Marsh reported growth in all geographic segments.
In the US and Canada, underlying revenue rose 10%, while international operations produced underlying revenue growth of 9%, with 11% growth in Asia-Pacific and 14% growth in Latin America.
For the first six months of the year, Marsh’s underlying revenue growth was 10%.
Reinsurance broking business Guy Carpenter reported first-quarter revenue of $522m, an increase of 9% on an underlying basis.
The unit booked organic growth of 10% in the first half of the year.
Marsh McLennan’s risk and insurance services arm, which comprises Marsh and Guy Carpenter, reported operating income up 2% to $967m in the second quarter.
Overall, Marsh McLennan reported consolidated revenue in the second quarter of $5.4bn, an increase of 10% on an underlying basis.
Operating income rose 11% to $1.4bn.
Glaser said the company would see margin expansion in 2022 and this would be its 15th year of such expansion.
Marsh McLennan shares were up more than 3% in morning trading on the New York Stock Exchange.