Marsh McLennan sees 'mid-single-digit or better' 2022 sales growth

Marsh McLennan has forecast underlying revenue growth of “mid-single-digit or better” this year as well as further margin expansion and solid earnings growth after a strong fourth quarter.

The outlook comes after the business generated underlying revenue growth of 10% to $US19.8 billion ($28.29 billion) in 2021.

“We produced one of the finest results in our company’s history,” Marsh McLennan President and CEO Dan Glaser said. “We enter 2022 well positioned for continued growth.

“In 2021, we broke out of the 3% to 5% underlying growth range of recent years. We believe we will sustain that momentum, driving mid-single-digit or better growth in 2022.”

The “fantastic year” closed with the third consecutive quarter of double-digit growth.

In the Property & Casualty (P&C) market, Mr Glaser said rate increases persisted, reflecting losses, low returns and concern about inflation, sending the Marsh Global Insurance Market Index up 13%.

“As we look ahead to 2022, we continue to see a good runway for growth given the outlook for above-average GDP growth, sustained firm P&C pricing conditions, the inflationary impact on exposures, further opportunities from disruption in the brokerage sector and the benefit of our recent organic investments,” Mr Glaser said.

Rising levels of complexity, volatility, and uncertainty across the economic landscape would support growth in years ahead, he said.

At the reinsurance market renewals on January 1, capacity in most areas was available, although insurers pushed for price increases and, in some cases, coverage changes and tighter terms and conditions.

Capacity was adequate, but reinsurers adjusted their risk appetite and pricing thresholds for certain sectors in response to challenges such as the frequency and severity of catastrophe losses, climate change, core inflation, social inflation, and underlying rate increases, Mr Glaser said.

Placements were “very orderly, and everything got completed” but more constrained in the catastrophe property market and the cyber market, where rates were almost double in Europe and over 100% in North America.

Mr Glaser said cyber was “going to be a tremendous growth market”.

“We’re nowhere close to saturation where clients will start not buying cyber because of the price. You have to bear in mind that this is a significant governance issue for most boards — you’d have to be a pretty brave company to decide to not buy cyber if it’s presented to you at a board level,” he said.