Marsh & McLennan Cos. Inc. reported a double-digit increase in underlying revenue during the first quarter and expects continued growth throughout 2022.
Insurance rates rose by double-digit numbers in the first quarter as well, senior Marsh McLennan executives said in an interview with analysts on Thursday.
The company also reported an increase in compensation and benefit costs as it continued its recruitment.
Marsh McLennan reported underlying or organic revenue growth of 10% during the first quarter.
“Based on our current outlook, we continue to expect medium-term single-digit or better underlying revenue growth for the full year,” said Dan Glazer, President and CEO.
The Group̵7;s sales for the quarter were $ 5.55 billion, an increase of 9.2% compared to the same period last year.
Net income increased by 9% compared to the first quarter of last year to $ 1.07 billion.
Costs for benefits and benefits increased by 10.4% to $ 3.1 billion as the company continued to recruit staff. Last year, Marsh McLennan added nearly 6,000 employees.
Over the next two to three quarters, “the cost increase will be in the rearview mirror, but the capacity and growth kicker will remain,” Glazer said.
Risk and insurance services, which include Marsh McLennan’s core business in insurance and reinsurance brokerage, reported $ 3.55 billion in revenue, an increase of 10.1%. On an underlying revenue basis, which excludes the effects of currency fluctuations and acquisitions, revenue for the sector increased by 11%.
Marsh LLC, its insurance brokerage unit, reported $ 1.28 billion in revenue from the United States and Canada, a 10% increase on an underlying basis; $ 842 million from Europe, the Middle East and Africa, an increase of 9%; $ 321 million from Asia-Pacific, up 17%; and $ 104 million from Latin America, an increase of 16%.
Insurance rates continued to rise during the quarter, said John Doyle, CEO, Chief Operating Officer and Vice President of Marsh McLennan.
Marsh’s global insurance market index for the first quarter showed price increases of 11% year-on-year, he said.
“This marks the 18th consecutive quarter of interest rate hikes in the commercial (property / non-life insurance market),” said Mr. Doyle.
Global property insurance prices rose by 7% and global accident rates averaged up to mid-digit, he said.
“Global financial and professional lines excluding cyber increased high single-digit numbers, while cyber speeds more than doubled in some geographies,” said Mr. Doyle.
Marsh McLennan incurred a $ 52 million fee, mostly non-cash, related to its decision to transfer ownership of its Russian operations to local management, said Mark McGivney, CFO of Marsh McLennan.
“In terms of ongoing impact, revenues and operating revenues from Russia are not significant,” he said.