Marsh McLennan faces $52m hit from Russia exit in Q1 2022
Marsh McLennan’s decision to pull out of Russia in response to the country's invasion of Ukraine has already cost the global re/insurance giant as much as $52 million, according to its first quarter 2022 results.
As the invasion entered its second month in March, the broker announced it would exit all of its businesses in Russia and transfer ownership of its Russian business to local management who will operate independently in the Russian market.
Marsh’s Q1 report showed $52 million loss on deconsolidation of Russian businesses and other related charges, majority of it (40%) in the Risk & Insurance Services segment. The remaining 12% was incurred in its Consulting business unit.
The loss on deconsolidation is included in revenue and excluded from underlying revenue calculations and adjusted operating margin.
In the first quarter, Marsh McLennan produced consolidated revenue of $5.5 billion, an increase of 9% compared with Q1 2021. On an underlying basis, revenue increased 10%.
Net profit attributable to the company came in at $1.1 billion, compared with $983 million in the prior year quarter.
In its Risk & Insurance Services business, revenue was $3.5 billion in Q1 2022, an increase of 10%, or 11% on an underlying basis.
Marsh's revenue was $2.5 billion, an increase of 11% on an underlying basis. Guy Carpenter's revenue was $999 million, an increase of 11% on an underlying basis.
Dan Glaser (pictured), president and chief executive of the company, said: “ Marsh McLennan started 2022 with an excellent first quarter. We generated underlying revenue growth of 10%, adjusted operating income growth of 12%, and adjusted EPS growth of 16%. We are well-positioned for another solid year.”
“The current war in Ukraine has reminded us that risk and uncertainty are constants, and I am proud of the work our colleagues are doing to help one another and our clients navigate the widespread challenges created by this horrific situation,” he added.
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