Marsh McLennan beats profit estimates on risk and insurance business strength
Adds analyst comments in paragraph 13, expenses in paragraph 9
By Ateev Bhandari
Jan 30 (Reuters) - Insurance brokerage and consulting firm Marsh McLennan's MMC.N fourth-quarter profit beat Wall Street estimates on Thursday, powered by record growth in its risk and insurance business.
WHY IT'S IMPORTANT
Insurers have consistently raised policy prices in recent years in response to losses from wars and natural catastrophes, as well as inflationary pressures.
The sector usually sees steady or even heightened demand during economic uncertainty. The trends in the broader industry have also boosted income for brokerages such as Marsh McLennan, which earn commissions based on insurance premiums.
BY THE NUMBERS
Marsh McLennan's risk and insurance services business posted revenue growth of 11.5%, while its consulting arm's revenue climbed 6.1%.
On an adjusted basis, the New York-based firm earned $927 million, or $1.87 per share, for the quarter ended Dec. 31.
Analysts on average had expected $1.76 per share, according to data compiled by LSEG.
It reported total revenue of $6.07 billion in the quarter, up 9.2% from the same period a year earlier.
The Oliver Wyman-parent's operating expenses rose 10.6% to $4.93 billion.
Its fiduciary interest income - earnings on funds held on behalf of clients - fell 9% to $112 million.
KEY QUOTE
"The key remains the focus between organic growth and how much the company is willing to pay for such growth," said Bob Huang of Morgan Stanley, noting that higher expenses were a headwind.
CONTEXT
Marsh McLennan, through its four subsidiaries - Marsh, Mercer, Oliver Wyman, and Guy Carpenter - provides risk, insurance, and consulting services in more than 130 countries.
The company went on a $9.4 billion acquisition spree in 2024, including the $7.75 billion purchase of McGriff, completed in November.
Earlier this week, insurance brokerage Brown & Brown BRO.N also beat fourth-quarter profit estimates, driven by robust growth in investment returns and increased commissions and fees.
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