Marsh & McLennan Cos. Inc. posted a 6% increase in first-quarter revenue, buoyed by the strongest risk and insurance revenue growth it's seen in a decade.
Consolidated revenue in the first quarter rose 6% to $3.1 billion. Operating income rose 12% to $527 million. Risk and insurance services revenue from the company's Marsh and Guy Carpenter brokerages rose 7% to $1.7 billion, and was the highest revenue growth rate the company has seen in a decade, said Daniel S. Glaser, chief operating officer and group president, during the company's conference call.
Marsh's revenue increased 3% to $1.4 billion, boosted by all geographies. Marsh's international division saw 18% growth in Latin America, 10% in Asia-Pacific and 5% in the Middle East-Africa region, Glaser said.
Guy Carpenter, the company's reinsurance broker, saw revenue grow by 5% to $357 million. Carpenter saw the highest level of first-quarter new business development since 2003, Glaser said.
He said pricing in the market varies by line and geography. Property rates are hardening more than casualty rates, in general. In the United States, property, workers' compensation and excess casualty are all up moderately, while general liability and directors & officers are still slightly down.
"From a pricing standpoint, it's not a headwind, but I wouldn't call it a tailwind either," Glaser said. "It's a pretty targeted correction of rates in certain areas, but not a broad-based 'blood in the eye' hard market where underwriters are ... walking away from clients."
Glaser's comments echoed what other industry executives have said recently about market conditions during their first-quarter conference calls.
Chris O'Kane, chief executive officer of Aspen Insurance Holdings Ltd., described higher rates as "a slow-burning fuse, but one that is certainly lit ... we are certainly moving well in the right direction."
William R. Berkley, chairman and chief executive officer of W. R. Berkley Corp., said while rates are improving, "the turn in the cycle is not a nice, predictable straight line. You are still seeing people compete aggressively here and there, in individual lines of business. Stupidity isn't limited to any one company or any one underwriter, it pops up in all markets."
Also, the company said it's seen an uptick in exposures. From a total insurable value and from a payroll standpoint, both were "mildly higher," Glaser said.
An increasing number of new captive insurers are being incorporated in the United States and the European Union, marking a shift away from the trend of offshore domiciles being more attractive to companies looking to establish a captive, according to a new Marsh Inc. report.