Colorado Springs

Marsh & McLennan Agency remains on track to be a “significant player” in the middle commercial market and is primed for additional growth, its chief executive says.

Indeed, MMC's foray into the independent agency space is on track, primed to make additional moves to augment the capabilities of its foundation partners, and one day may be among the top-five independent agency firms in the country, David L. Eslick, chair and chief executive officer of Marsh & McLennan Agency, told National Underwriter.

“We are absolutely where we wanted to be, and we are very confident in hitting our milestones,” Mr. Eslick said in an interview here during the 97th annual meeting of the Council of Insurance Agents and Brokers.

Between November 2009 and May 2010, Marsh & McLennan Agency made five acquisitions throughout the United States, with total revenues around $200 million.

With the foundation in place, the next move is to fold in acquisitions targeting agencies with $1-to-$10 million in revenue. The idea will be to build out the capabilities of the agencies that make up Marsh & McLennan Agency today, Mr. Eslick said.

For instance, Mr. Eslick noted that Bostonian Group, acquired in May, is primarily an employee benefits operation. The plan now is to make acquisitions to complement the firm and grow its property and casualty offerings.

He said 10 percent of the firm's business today is personal lines and 20-to-25 percent is in employee benefits. The primary aim of the agency is to deal with commercial accounts that do not have risk managers and to build a relationship of trust with “C-suite” clients.

Marsh & McLennan Agency's philosophy is not to become the client's risk manager. Instead, Mr. Eslick described their approach as having a conversation with the client to understand the impact of risk, while coming up with ways to reduce exposures.

Where risk cannot be eliminated, then the next step of “insuring with a third party” comes into play.

He said the value that the agency brings to the table is a local feel for clients partnered with the world-class resources that Marsh and Marsh & McLennan Corp., as the parent company, can offer clients.

As the firm builds, Marsh & McLennan Agency is not ignoring organic growth, but that is not the primary focus right now–over the next three-to-four years a significant part of the growth strategy will be on acquisition, he said.

One thing Mr. Eslick stressed is that Marsh & McLennan Agency is not destined to become a spin-off opportunity.

“We are looking to build for significant value for decades to come and to remain an ongoing contributor to Marsh & McLennan Corp. for years to come,” said Mr. Eslick. “We want a major market position and to be a great growth engine for Marsh for decades to come.”

Turning to the current state of the insurance market, he said there is no reason to believe that any turn in the soft market will be happening soon. It is difficult to judge at what point insurers will reach a point where they can no longer take reserves down and need to push prices up, he noted.

A lot of competition remains in the marketplace, he observed, and there is no sign of it slowing down. “There are a lot of smart people with differing views,” he said, noting it will be up to insurers to determine what makes the most sense going forward.

One factor that has changed dramatically is the access to capital, Mr. Eslick noted. Twenty years ago, financing was primarily generated by the United States. Today, Bermuda and other markets are willing and able to make capital available and continue to fuel the soft market, he said.

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Marsh & McLennan Agency Looks To Be &#039;Significant Player&#039;

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Marsh & McLennan Agency Looks To Be 'Significant Player'