Marsh McLennan reported consolidated revenue of $6.5 billion in the first quarter of 2024, up 9% from $5.9 billion in the prior-year quarter. On an underlying basis, its revenue also increased 9%. The firm’s operating income also rose 12% from $1.7 billion to $1.9 billion, while its net income reached $1.4 billion. “We had a terrific start to the year, reflecting continued momentum across our business. For the quarter, we generated 9% underlying revenue growth, 14% adjusted EPS growth, and 80 basis points of margin expansion. With this strong start, we are well positioned for another good year in 2024,” said John Doyle, president and CEO. The firm’s risk and insurance services segment, which includes broking arms Marsh and Guy Carpenter, saw revenue grow 9% to $4.3 billion in Q1 2024, while its operating income was up 12%, reaching $1.6 billion. Marsh McLennan’s consulting services, Mercer and Oliver Wyman, reported $2.2 billion in revenue, reflecting a 9% increase in the first three months of the year. The company also highlighted Oliver Wyman’s acquisition of SeaTec Consulting, which was completed in February. In March, Marsh McLennan Agency closed on the previously announced agreement to acquire two leading middle-market agencies in Louisiana – Querbes & Nelson and Louisiana Companies. Within this month, Mercer also completed the acquisition of Vanguard's U.S. Outsourced Chief Investment Officer (OCIO) business. The firm’s operating income also rose 12% from $1.7 billion to $1.9 billion, while its net income reached $1.4 billion. “We had a terrific start to the year, reflecting continued momentum across our business. For the quarter, we generated 9% underlying revenue growth, 14% adjusted EPS growth, and 80 basis points of margin expansion. With this strong start, we are well positioned for another good year in 2024,” said John Doyle, president and CEO. The firm’s risk and insurance services segment, which includes broking arms Marsh and Guy Carpenter, saw revenue grow 9% to $4.3 billion in Q1 2024, while its operating income was up 12%, reaching $1.6 billion. Marsh McLennan’s consulting services, Mercer and Oliver Wyman, reported $2.2 billion in revenue, reflecting a 9% increase in the first three months of the year. The company also highlighted Oliver Wyman’s acquisition of SeaTec Consulting, which was completed in February. In March, Marsh McLennan Agency closed on the previously announced agreement to acquire two leading middle-market agencies in Louisiana – Querbes & Nelson and Louisiana Companies. Within this month, Mercer also completed the acquisition of Vanguard's U.S. Outsourced Chief Investment Officer (OCIO) business.  

 

Developers, suppliers, and users of artificial intelligence must comply with existing state consumer protection, anti-discrimination, and data privacy laws, the Massachusetts attorney general cautioned Tuesday. In an advisory, Attorney General Andrea Campbell pointed to what she described as the widespread increase in the use of AI and algorithmic decision-making systems by businesses, including technology focused on consumers. The advisory is meant in part to emphasize that existing state consumer protection, anti-discrimination, and data security laws still apply to emerging technologies, including AI systems — despite the complexity of those systems — just as they would in any other context. “There is no doubt that AI holds tremendous and exciting potential to benefit society and our commonwealth in many ways, including fostering innovation and boosting efficiencies and cost-savings in the marketplace,” Cambell said in a statement. “Yet, those benefits do not outweigh the real risk of harm that, for example, any bias and lack of transparency within AI systems, can cause our residents,” she added. Falsely advertising the usability of AI systems, supplying an AI system that is defective, and misrepresenting the reliability or safety of an AI system are just some of the actions that could be considered unfair and deceptive under the state’s consumer protection laws, Campbell said. Misrepresenting audio or video content of a person for the purpose of deceiving another to engage in a business transaction or supply personal information as if to a trusted business partner — as in the case of deepfakes, voice cloning, or chatbots used to engage in fraud — could also violate state law, she added. The goal, in part, is to help encourage companies to ensure that their AI products and services are free from bias before they enter the commerce stream — rather than face consequences afterward. Regulators also say that companies should be disclosing to consumers when they are interacting with algorithms. A lack of transparency could run afoul of consumer protection laws. Elizabeth Mahoney of the Massachusetts High Technology Council, which advocates for the state’s technology economy, said that because there might be some confusion about how state and federal rules apply to the use of AI, it’s critical to spell out state law clearly. “We think having ground rules is important and protecting consumers and protecting data is a key component of that,” she said. Campbell acknowledges in her advisory that AI holds the potential to help accomplish great benefits for society even as it has also been shown to pose serious risks to consumers, including bias and the lack of transparency. Developers and suppliers promise that their AI systems and technology are accurate, fair, and effective even as they also claim that AI is a “black box”, meaning that they do not know exactly how AI performs or generates results, she said in her advisory. The advisory also notes that the state’s anti-discrimination laws prohibit AI developers, suppliers, and users from using technology that discriminates against individuals based on a legally protected characteristic — such as technology that relies on discriminatory inputs or produces discriminatory results that would violate the state’s civil rights laws, Campbell said. AI developers, suppliers, and users also must take steps to safeguard personal data used by AI systems and comply with the state’s data breach notification requirements, she added.

The American Property Casualty Insurance Association is urging California lawmakers to slow down on legislation that would require insurers to factor state and private fire mitigation efforts into decisions on coverage and rates. The bill, S.B. 1060, would require insurers to account for fire mitigation efforts including hazardous fuel reduction, home hardening, defensible space and fire prevention activities, according to the measure's text. It would also authorize the Department of Insurance to examine models used for underwriting purposes to ensure compliance with a risk model requirement and issue orders to ensure compliance. Lawmakers in the state's Senate Insurance Committee are scheduled to take up the bill on April 24, according to the Legislature's website. It's sponsored by Sen. Josh Becker, a Democrat of Menlo Park. "The California Department of Insurance already requires insurers that use risk models to take into consideration specific mitigations and provide consumers discounts," said Mark Sektnan, APCIA's vice president for state government relations. "The department is also in the process of developing regulations to authorize new types of catastrophe models that factor in the risk of wildfires and mitigation efforts taken by individuals and communities.  We believe the department should be allowed time to adopt these regulations." Carriers support wildfire mitigation efforts like home and community hardening projects to protect both public safety and property, Sektnan said in an emailed statement. Insurers will be allowed to base projected wildfire, terrorism and flood losses on catastrophe models under proposed regulatory changes in California, a move Insurance Commissioner Ricardo Lara is calling another step in efforts to safeguard the integrity of the state’s insurance market. The market is “essentially at a crossroad” with residents finding fewer options on climate-related threats from wildfires to atmospheric rivers and floods, he said. Seven of the state’s 12 largest property/casualty insurance groups have instituted some kind of limit on underwriting, his department said, sharply increasing enrollment at the state’s insurer of last resort. The five largest homeowners multiperil writers in California in 2022, based on direct premiums written, were: State Farm Group, with a 20.58% market share; Farmers Insurance Group, 14.46%; CSAA Insurance Group, 6.66%; Liberty Mutual Insurance Cos., 6.43%; and Allstate Insurance Group, 6.36%; according to BestLink.