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Marsh McLennan reports double-digit revenue growth in Q2



Marsh & McLennan Cos. Inc. reported a double-digit increase in underlying revenue growth during the second quarter and expects continued growth in 2022 despite the increasing risk of a recession.

Insurance prices remain stable and although the outlook for GDP growth has softened, the company will benefit from higher inflation as insurance values ​​and loss costs increase and demand for its services increases, senior Marsh McLennan executives said in an interview with analysts on Thursday.

Even if a recession occurs, Marsh McLennan is well positioned to perform through the economic cycle, says Dan Glaser, President and CEO.

“We have shown our ability to manage our cost base in good and tough times and run our business to increase revenue faster than spending,”

; Glaser said.

Since the listing in 1962, the company has increased earnings per share during all recession periods, even during severe recessions that accompanied the global financial crisis and pandemic in 2020, he said.

The company expects to deliver in the upper end of its medium-high single-digit or higher revenue growth guidance for the full year, he said.

Marsh McLennan reported second-quarter revenue of $ 5.4 billion, a 7% increase over the same period in 2021, and a 10% increase on an underlying basis, according to the brokerage house’s earnings report released Thursday before the markets opened.

Net income for the second quarter was $ 967 million, an increase of 18%.

Risk and insurance services, which include its insurance and reinsurance intermediaries, reported second-quarter revenue of $ 3.31 billion, an increase of 5% and an increase of 9% on an underlying basis.

Marsh LLC, its commercial insurance entity, reported revenue of $ 2.78 billion, a 5% increase over the second quarter of 2021 and a 9% increase on an underlying basis.

In the United States and Canada, Marsh’s underlying revenues increased by 10%, while revenues in Europe, the Middle East and Africa increased by 7%. Revenues from Latin America increased by 14% on an underlying basis, while Asia and the Pacific saw growth of 11%.

Guy Carpenter & Co. LLC, the company’s reinsurance broker, reported $ 522 million in revenue in the second quarter, a 9% increase on an underlying basis.

Interest rate hikes in the market remain, along with continued concerns about the impact of inflation on loss costs and a tightening reinsurance market, says John Doyle, President, CEO and Vice President of Marsh McLennan.

The Marsh Global Insurance Market Index showed price increases of 9% year-on-year, the 19th consecutive quarter of interest rate hikes, said Mr. Doyle.

Global property insurance and global accident rates rose by 6%, and global financial and professional lines excluding cyber were up with low single-digit numbers, while cyber prices rose by 80% in some geographies, Doyle said.

Marsh McLennan has returned to a more normal employment pattern after the increase last year which ensured that it increased by 6,000 employees in 2021, Glaser said.

The company is ready to act as the economic conditions warrant and is focused on delivering higher levels of customer service and reducing internal costs, said Mr. Glasses.

Efficiency improvements include technology modernization, property rationalization and different ways of working, he said.

“You do not want to be too careful too soon. Our business is doing well,” Glaser told analysts.

Revenue for the first half year increased by 8% in 2022 to USD 10.9 billion, or 10% on an underlying basis. Net income for the first half of the year was $ 2.0 billion, an increase of 13%.


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