Marsh & McLennan Cos. Inc. on Wednesday reported increased revenue for the first quarter, with its main insurance and reinsurance brokerage units posting a combined underlying growth rate of 9%.
Insurance rates continued to rise during the quarter, with the Marsh Global Insurance Market Index climbing 4%, John Doyle, Marsh McLennan’s president and CEO, said on a conference call with analysts to discuss the results.
Meanwhile, the company continued with the restructuring program it announced in January.
Marsh McLennan reported revenue of $5.92 billion for the first quarter, up 6.8% from the same period last year and up 9% on an underlying or organic basis, which excludes the impact of currency fluctuations and acquisitions.
Revenue at its main insurance brokerage unit Marsh LLC rose 7.8% to $2.74 billion, up 9% on an underlying basis. Guy Carpenter & Co. LLC, its reinsurance broker, reported a 7.2% increase in revenue to $1.07 billion, up 10% on an underlying basis.
In the US and Canada, Marsh reported $1.39 billion in revenue, up 8.3% or 7% on an underlying basis. For EMEA, the company reported $932 million in revenue, up 7.2% or 10% on an underlying basis; Asia-Pacific revenue was $312 million, up 6.1% or 11% on an underlying basis. In Latin America, revenue was $115 million, up 10.6% or 10% on an underlying basis.
Marsh McLennan’s consulting businesses, Mercer LLC and Oliver Wyman LLC, reported a combined $2.03 billion in revenue, up 1% or 5% on an underlying basis.
Net income from the quarter was $1.24 billion, an increase of 15.3% compared to the same period last year.
Marsh clients globally continued to see increased insurance rates on many lines, Mr. Doyle.
Property insurance rates were up 10%, and casualty rates were in the low single digits, he said. Compensation levels for workers were unchanged, and management and professional responsibility levels fell in the mid-single digits.
“Cyber insurance saw the highest increase in our index, although the rate of increase continued to moderate,” he said.
Reinsurance rates rose significantly in the quarter, with U.S. property catastrophe rates jumping 40% to 60% during April 1 renewals for accounts unaffected by losses and rate increases were even higher for accounts with losses, Mr. Doyle. U.S. reinsurance rate hikes “were more modest,” he said.
Marsh McLenann expects increased annual savings from the restructuring plan focused on staffing, technology and real estate it announced in January.
“We now expect approximately $300 million in savings by 2024 with total costs to achieve those savings of $375 (million) to $400 million,” he said.
Marsh, which hired thousands of new employees in 2021 and 2022, is likely to see a slowdown in hiring this year but recruiting will remain active, Mr. Doyle.