NU Online News Service, May 4, 2:55 p.m. EDT
Marsh & McLennan Cos. says its 2011 first-quarter net income jumped 31 percent as its flagship brokerage firms showed solid revenue increases and positive organic growth.
The New York-based services firm, and parent company of insurance broker Marsh and reinsurance broker Guy Carpenter, reports today that its net income increased $77 million to $325 million. Earnings per share increased 13 cents to 58 cents a share. Revenues rose 9 percent, or $249 million, to $2.9 billion.
"Our first-quarter results show that we are off to a very good start this year," says Brian Duperreault, president and CEO of Marsh & McLennan, during a conference call with financial analysts today. "This is the third consecutive quarter that each of our operating companies produced revenue growth on both a reported and underlying basis. And importantly, we continued to achieve revenue growth while maintaining effective control over operating expenses."
He says the growth was fueled by a combination of high retention rate and new business at Marsh, while Guy Carpenter, led by its international operation, performed well.
Revenues at Marsh grew 10 percent, or $116 million, to $1.3 billion. Guy Carpenter revenues grew by 8 percent, or $25 million, to $340 million.
Organic growth was positive at 4 percent for Marsh and 7 percent for Guy Carpenter.
For the company's consulting segment, consisting of Mercer and Oliver Wyman Group, revenues rose 9 percent overall, or $106 million, to $1.3 billion.
All operating segments at Marsh displayed positive growth, including its U.S./Canada business, with revenues rising 12 percent, or $57 million, to $545 million.
Speaking during the conference call, Dan Glaser, formerly the CEO of Marsh and now group president and chief operating officer of Marsh & McLennan, and Peter Zaffino, formerly the CEO of Guy Carpenter and now CEO of Marsh, say the strength of the performance of their respective firms came from a combination of new business and giving value to customers.
Glaser observes that Marsh's account-retention rate was strong, running at 90-94 percent depending on geography.
"Those are levels Marsh has not seen since 2000-2001," Glaser remarks.
Revenue retention has increased as well. Glaser notes the firm had 32 countries where business grew 5 percent or more. He adds that there was $240 million in new business.
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