Marsh & McLennan Cos. Inc. reported revenue growth of nearly 20% in the second quarter as economies continued to recover after locking in before the comparable reporting period last year.
The world's largest broker also added 2,000 employees in the first half of the year, which included a significant increase in employment rates from rivals Aon PLC and Willis Towers Watson PLC since those companies announced merger plans last year, says Marsh McLennan's CEO.
Its insurance and reinsurance brokerage units continued to benefit from higher insurance rates pushing up commissions and fees, but price increases slowed, said Dan Glaser, President and CEO of Marsh McLennan, in a conference call with analysts on Thursday.
Major issues for Marsh McLennan customers include the effects of climate change and cyber risk, he said, as cyber attacks accelerate. Marsh McLennan himself was hit by a cybercrime in April.
Marsh McLennan reported $ 5.02 billion in revenue for the second quarter, a 1
"We are benefiting from what may be the strongest economic recovery in nearly four decades, led by our largest region, the United States," Glaser said.  Net income for the second quarter was $ 820 million, an increase of 43.4%.
The company's risk and insurance services division, which includes its insurance and reinsurance brokers, reported revenue of $ 3.14 billion, an increase of 20.7% and an increase of 13% compared to an underlying basis. Marsh LLC, its main insurance broker, reported revenue of $ 2.65 billion, an increase of 22.6% and an increase of 14% on an underlying basis. In the United States and Canada, Marsh reported underlying revenue growth of 15%.
Marsh reported $ 796 million in revenue for Europe, the Middle East and Africa, an increase of 33.3%. Asia-Pacific had revenue of $ 347 million, an increase of 16.4%, and Latin America's revenue was $ 103 million, an increase of 4%.
Guy Carpenter & Co. LLC, its reinsurance agent, reported $ 488 million in revenue, an increase of 12.7% and 12% on an underlying basis.
Property / accident insurance rates continue to rise, while the second quarter marks the 15th quarter in a row of commercial insurance rates, says Glaser.
According to Marsh's analysis, global insurance rates increased 15% in the second quarter, compared to 18% in the first quarter, he said.
"Price increases continued to be moderate but are still high, reflecting increased loss activity and concerns about inflation and low interest rates," said Mr. Glaser sa.
Global real estate insurance rates increased by 12%, and global rates for financial and professional lines increased by 34%, in part due to steep cyber insurance increases, he said. The global number of accidents increased by 6%, and the compensation rate for American workers "decreased modestly," he said.
In reinsurance, single-digit increases were typical in the second quarter, after two years of double-digit increases, he said.
Marsh McLennan added nearly 2,000 employees in the first half of 2021, said Glaser, which includes about 700 employees from Missoula, Montana-based PayneWest Insurance Inc., which Marsh acquired in April.
Marsh also increased his employment rate from Aon and Willis, whose merger has been delayed due to antitrust issues.
Since the announcement of the Aon-Willis deal in March 2020, Marsh's employment from its two main competitors has been “three times higher on a net basis than it was in the 15 months prior to the announcement. It will not run forever, but in the end we will do our best to continue to build talent and ability, ”he said.
Aon and Willis declined to comment on Mr Glas's comments.
While the pandemic is still a concern, Marsh McLennan is "focused on resurgence and expansion," Glaser said. Two major areas where the company is trying to help its customers are cyber risk and climate change, he said.
Cyberattacks on supply chains and ransomware incidents continue to increase and affect organizations in all sectors, he said.
Mr. Glaser did not comment during the April 5 infringement call on Marsh McLennan, and a spokeswoman said the company had no further comment on the intrusion, which was revealed earlier this month.
For the first six months of 2021, Marsh McLennan reported $ 10.1 billion in revenue, an increase of 14% over the same period last year and 9% higher on an underlying basis. Net income was $ 1.8 billion, an increase of 36%. Catalog