In This Article:
(Reuters) - Insurance broker giant Marsh McLennan's first-quarter profit exceeded analysts' expectation on Thursday, thanks to strong performance in its risk and insurance services business.
WHY IT IS IMPORTANT
Brokers tend to be resilient even in a softer economic environment given the non-discretionary nature of insurance purchases.
Analysts expect industry growth to remain healthy as the business is closely linked to insurance pricing trends and less on economic growth.
But a potential recession could impact the consulting arms of insurance brokers considering the economy-sensitive nature of the business.
KEY QUOTE
"Marsh McLennan is a resilient business built to deliver across market cycles. Clients value our advice and solutions, particularly in uncertain times," CEO John Doyle said.
CONTEXT
Marsh McLennan kicks off the earnings season for the insurance brokerage industry, with rivals Willis Towers Watson and Aon set to report their results next week.
The New York-based company caters to clients in 130 countries across four businesses — Marsh, Guy Carpenter, Mercer and Oliver Wyman .
Marsh McLennan invested $9.4 billion on deals in 2024, the largest year of acquisitions in its history. That included the $7.75 billion purchase of rival McGriff Insurance Services.
BY THE NUMBERS
Marsh McLennan's risk and insurance services business posted revenue growth of 11%, while the consulting arm reported 5% increase.
On an adjusted basis, the company earned $3.06 per share during the quarter ended March 31. Analysts on average estimated $3.02 per share, according to data compiled by LSEG.
Its total revenue rose 9% to $7.1 billion, compared with the estimate of $7.08 billion.
(Reporting by Arasu Kannagi Basil and Jaiveer Shekhawat in Bengaluru; Editing by Shilpi Majumdar)