Marsh & McLennan reports increased revenue for fourth quarter, 2016

Company enjoys revenue gains late; hopes to see more of the same this year

Marsh & McLennan reports increased revenue for fourth quarter, 2016

Insurance News

By Lyle Adriano

In a fourth-quarter earnings report, Marsh & McLennan Cos. Inc. detailed that in the fourth quarter of 2016, the brokerage had posted higher consolidated revenue despite global risks that would likely persist well into 2017.

Marsh & McLennan’s consolidated revenue in the fourth quarter of 2016 was US$3.36 billion, which marks a 0.8% year-over-year increase, the report noted.

The same report found that consolidated revenue for the full year rose to US$13.2 billion, a 2.5% year-over-year increase from 2015. Marsh & McLennan Companies’ president and CEO Dan Glaser said that this is due to balanced revenue growth in the company’s risk and consulting divisions, as well as the brokerage’s efforts to build its business via acquisitions.

The brokerage’s net income for the fourth quarter of last year surged by 16.3% to US$436 million compared to the US$375 million it generated in 2015 in the same period.

Marsh and McLennan’s risk and insurance services revenue was $1.79 billion in Q4 2016; a 3.5% increase from the same period last year. The company’s revenue from its Guy Carpenter & Co. L.L.C. reinsurance brokerage unit climbed 3% to US$222 million in the fourth quarter. Revenue for Marsh L.L.C. rose 3.6% to US$1.57 billion.

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On the other hand, consulting revenue dropped 2.1% to $1.58 billion compared to the same period in 2015. Mercer L.L.C.’s revenue also took a 3.9% hit to $1.1 billion, but Oliver Wyman rose by 2.1% to US$486 million.

Marsh & McLennan’s net income for the full year jumped to almost US$1.77 billion; a 10.6% increase from 2015.

During Marsh & McLennan’s earnings conference call, Glaser enumerated key social and political risks that played a part in 2016—the Brexit vote, continued terrorism activity, and even the income and wealth disparity suggested by the World Economic Forum’s Global Risks Report 2017.

“Looking at 2017, we see the operating environment as broadly similar to last year, including modest global economic growth, political instability and foreign currency fluctuations,” Glaser said in the call. “We see geopolitical risk, specifically its impact on foreign exchange rates, being a potential downside, but difficult to predict. That said, I have more hope than I had six months ago with regard to the US around GDP growth, inflation, interest rates and possible US corporate tax reform.”

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