Marsh & McLennan Companies (MMC), the parent of broker Marsh and reinsurance broker Guy Carpenter, posted strong growth and improved profits in the second quarter of 2014 with its reinsurance unit also enjoying 3 percent growth despite tough market conditions.
MMC’s consolidated revenue in the second quarter of 2014 was $3.3 billion, an increase of 7 percent, or 5 percent on an underlying basis, compared with the second quarter of 2013. Its operating income rose by 12 percent to $647 million, compared with $577 million in the prior year.
Net income attributable to the company in the second quarter was $431 million compared with $388 million in the prior year. For the six months ended June 30, 2014, net income attributable to the company was $874 million compared with $801 million in 2013.
Its risk and insurance services unit posted revenue of $1.8 billion in the second quarter of 2014, an increase of 6 percent, or 4 percent on an underlying basis. Its operating income rose 6 percent to $448 million.
Marsh's revenue in the second quarter of 2014 was $1.5 billion, an increase of 7 percent or 4 percent on an underlying basis. Its international operations produced underlying revenue growth of 5 percent, reflecting growth of 16 percent in Latin America; 9 percent in Asia Pacific; and 1 percent in EMEA. In the US/Canada division, underlying revenue was up 3 percent. Guy Carpenter's second quarter revenue was $295 million, an increase of 3 percent from the prior year, or 2 percent on an underlying basis.
Dan Glaser, president and chief executive officer, said: "The company delivered another quarter of excellent financial results. We produced revenue growth of 7 percent with underlying revenue growth of 5 percent. This was our strongest quarterly revenue performance in two years, with all operating companies contributing.
“Adjusted operating income grew 11 percent, with margin expansion of 60 basis points to 19.8 percent. For the six months of 2014, we achieved outstanding results, with 4 percent underlying revenue growth, an 11 percent increase in adjusted operating income and margin improvement of 100 basis points to 20.4 percent."
Guy Carpenter, Marsh & McLennan, Marsh, North America, Second Quarter 2014 Results, Dan Glaser