Marsh McLennan profit rises amid volatile global backdrop
Marsh McLennan has reported increased second-quarter revenues and earnings and says the business is well placed amid a more uncertain economic and geopolitical environment.
CEO and President Dan Glaser says talk about the risk of recession and the impact of rising inflation has increased over the course of the year, while demand for the company’s services remains strong.
“We are increasingly harnessing the collective power of our firm to guide clients as they deal with issues such as geopolitical risk, the pandemic, cyber threats, global supply chain disruptions, capital markets volatility, climate change, tight labour markets, and new ways of working,” Mr Glaser told an earnings call.
“Even if a recession does emerge, Marsh McLennan is well positioned to perform through the economic cycle.”
The company’s second quarter net profit rose to $US967 million ($1.4 billion) from $US820 million ($1.2 billion) a year earlier, with revenue rising about 7% to $US5.4 billion ($7.8 billion). First-half, earnings increased to $2.04 billion ($2.95 billion) from $US1.8 billion ($2.6 billion).
Mr Glaser says property and casualty insurance pricing conditions remain firm, underwriters are cautious about how they deploy capital, and terms and conditions are tight in some product lines.
“Insurers also continue to account for the rising frequency and severity of catastrophe losses, the risk of social inflation and a firmer reinsurance market,” he said.
Risk & Insurance Services revenue rose 5% in the quarter to $US3.3 billion ($4.8 billion), while both Marsh and Guy Carpenter revenue was up 9% on an underlying basis.
In the Marsh international operations, Asia Pacific underlying revenue increased 11%, Latin America 14% and Europe, the Middle East and Africa 7%.
Operating income in the Risk & Insurance Services business rose 2% in the quarter to $US967 million ($1.4 billion), while for the half it rose 4% to $US2.1 billion ($3.03 billion).
In the consulting division, which includes Mercer and Oliver Wyman, revenue rose 10% to $US2.1 billion ($3.03 billion) in the quarter, while operating income rose 39% to $US475 million ($685.8 million).
