New Marsh Agency Targets Small Business On Main Street

Independent agents will face a major new competitor next year after Marsh, one of the world's largest insurance brokerages, launches a new firm to pursue the bread-and-butter business of Main Street producers–small-commercial accounts.

Marsh, the insurance brokerage subsidiary of New York-based Marsh & McLennan Companies, announced it is forming a new unit–Marsh & McLennan Agency LLC–devoted to serving the insurance needs of small and emerging U.S. companies.

The new unit, which will launch in the first quarter of next year, will conduct its business separately from Marsh, the broker said. It will offer customers commercial property-casualty, directors and officers liability, surety, employee benefits and personal lines products through a dedicated sales and service force in retail locations throughout the United States.

“By combining the product and service capabilities of chosen insurance companies with our industry expertise, our dedicated teams will deliver local customer service focus, valuable insurance market relationships, and access to global resources,” said Jack Butcher, president and chief executive officer of Marsh & McLennan Agency, in a statement.

“We believe that the Marsh & McLennan Agency will be a positive development for the insurance buyers, and anticipate that the agency will be able to offer customers favorable coverage at competitive rates, as well as differentiated insurance solutions,” added Joe McSweeny, president of the U.S./Canada division of Marsh.

In an interview with National Underwriter, Mr. Butcher explained that a few years ago, MMC made the decision to exit the small-commercial market, which he said was not profitable because of the way Marsh was servicing such clients.

However, the company's new management–led by Dan Glaser, chairman and CEO of Marsh–reviewed business opportunities and decided this was a segment missing from its portfolio, he said.

“It was clear to us that the customer in this segment requires a very different experience than the customer in the global 500,” said Mr. Butcher. “We decided this is a very attractive segment for us and can be profitably served, but we have to service this customer the way they want to be served, not the way we service our larger clients around the world.”

Which carriers the new agency will represent has yet to be announced.

Marsh & McLennan Agency will try to differentiate itself by offering customers deep expertise in complex risk, backed by a brand that represents global experience.

“We do have [small-business] customers still coming to us, asking if they can do business with us,” noted Mr. Butcher. “It may be the brand at work there, where people recognize the Marsh & McLennan brand.”

The broker still has a substantial book of small business currently, according to Mr. Butcher, so it will not be starting the new unit from scratch. He said the agency will focus on a customer who does not need complex risk management solutions and has a typical revenue size of $75 million or less.

“The question of how small we go will ultimately be driven by our carrier's appetite,” said Mr. Butcher. “There are a lot of neat products that can serve [Main Street businesses] very well.”

Current small-business customers will continue to be serviced through Marsh Inc., he said, although the service offerings of the agency will be reviewed with clients, and it will ultimately be up to the customer to determine if the new agency will be better suited to meet their insurance needs.