Marsh McLennan delivers Q3 results
Marsh McLennan delivers Q3 results | Insurance Business New Zealand
Insurance News
Marsh McLennan delivers Q3 results
It also has plans for a major deal before the year wraps up…
Insurance News
By
Kenneth Araullo
Marsh McLennan has reported its financial results for the third quarter ending September 30, 2024.
The company reported consolidated revenue of US$5.7 billion for the period, a 6% increase from the same time threshold in 2023. On an underlying basis, revenue grew 5%. Operating income rose 11% to US$1.1 billion, while adjusted operating income, which excludes certain items, increased 12% to US$1.2 billion.
The company’s net income attributable to shareholders was US$747 million, and earnings per share (EPS) increased 3% to US$1.51. Adjusted EPS grew 4% to US$1.63, with last year’s results including a 10-cent per share benefit from a favorable tax item.
For the first nine months of 2024, Marsh McLennan’s consolidated revenue totaled US$18.4 billion, up 7% on both a GAAP and underlying basis compared to the same period in 2023.
Operating income increased 12% to US$4.7 billion, while adjusted operating income rose 12% to US$4.9 billion. Net income for the nine months was US$3.3 billion, or US$6.59 per diluted share, compared to US$6.01 in the prior year. Adjusted EPS increased 10% to US$6.93.
Risk and insurance services
The Risk & Insurance Services segment generated US$3.5 billion in revenue for the third quarter, up 8%, or 6% on an underlying basis. Operating income grew 15% to US$733 million, with adjusted operating income increasing 16% to US$775 million.
For the nine months ending September 30, 2024, revenue in this segment was US$11.7 billion, up 9%, or 8% on an underlying basis. Operating income increased 13% to US$3.6 billion, and adjusted operating income rose 12% to US$3.7 billion.
Marsh, a major part of this segment, saw revenue of US$2.9 billion in the third quarter, a 9% increase, or 7% on an underlying basis. Growth in US/Canada was 6%, while international operations saw a 7% increase, with 8% growth in Latin America, 7% in EMEA, and 5% in Asia Pacific. For the first nine months of 2024, Marsh’s underlying revenue growth was 7%.
Guy Carpenter, the group’s reinsurance specialist, reported third-quarter revenue of US$381 million, a 6% increase, or 7% on an underlying basis. For the first nine months, Guy Carpenter’s underlying revenue growth was 8%.
Consulting business
Consulting revenue reached US$2.3 billion in the third quarter, a 3% increase, or 4% on an underlying basis. Operating income rose 9% to US$462 million, with adjusted operating income up 7% to US$478 million.
For the nine months ending September 30, 2024, consulting revenue was US$6.7 billion, up 4%, or 5% on an underlying basis. Operating income increased 7% to US$1.3 billion, with adjusted operating income rising 7% to US$1.3 billion.
Mercer, a key business in the consulting segment, reported third-quarter revenue of US$1.5 billion, with underlying revenue growth of 5%. Health revenue increased 8%, wealth revenue grew 4%, and career revenue rose 5%. For the first nine months of 2024, Mercer’s revenue increased 6% on an underlying basis, totaling US$4.3 billion.
Oliver Wyman, another unit in consulting, saw third-quarter revenue of US$810 million, a 4% increase, or 1% on an underlying basis. For the first nine months, Oliver Wyman’s revenue grew 5% on an underlying basis, reaching US$2.4 billion.
Acquisitions and other developments
During the third quarter, Marsh McLennan repurchased 1.4 million shares of stock for US$300 million. For the nine months ending September 30, 2024, the company repurchased 4.3 million shares for US$900 million.
On September 29, Marsh McLennan entered into an agreement to acquire McGriff Insurance Services, a US-based insurance brokerage firm with US$1.3 billion in revenue over the last 12 months ending June 30, 2024.
The acquisition, valued at US$7.75 billion in cash, is expected to close by year-end, pending regulatory approvals.
John Doyle (pictured above), president and CEO of Marsh McLennan, highlighted the company’s performance and acquisition in a statement.
“This was a milestone quarter for Marsh McLennan as we delivered strong results and announced the acquisition of McGriff Insurance Services,” he said. “Our performance demonstrated continued momentum, with 5% underlying revenue growth, 110 basis points of margin expansion, and adjusted EPS growth of 4%, or 11% excluding a one-time tax benefit a year ago. We remain on track for another great year in 2024.”
Doyle noted McGriff’s strong leadership and growth, stating that it complements Marsh McLennan Agency’s capabilities. He added that combining the firms will further strengthen their ability to serve clients.
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