DAILY NEWS Feb 15, 2013 12:36 PM - 0 comments

Revenues up for three major global brokerages

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2013-02-15

Three major global firms providing insurance brokerage and risk management services in Canada recently reported revenues increased year-to-year from 2011 to 2012.

Financial

For 2012, Marsh & McLennan Companies Inc. recorded revenues of $11.9 billion, up from $11.5 billion in 2011. All figures are in U.S. currency.

The sales figures are similar to those reported Feb. 1 by London-based Aon PLC, which recorded revenues of $11.514 billion in 2012, up from $11.287 billion in 2011. Aon's net earnings for the full year edged up slightly, from $1.01 billion in 2011 to $1.02 billion last year, while fourth-quarter net earnings jumped 10% year-over-year, from $280 million in 2011 to $307 million last year.

Meanwhile, London-based Willis Group Holdings plc reported Tuesday that, while the "organic" growth of its revenues in North America was 3.1%, its net loss from continuing operations during the fourth quarter of 2012 was $804 million.

"Total commissions and fees for Willis Group were $867 million in the fourth quarter of 2012, up 7.0% from $810 million in the prior year quarter," Willis stated in a press release.

The company’s fourth-quarter results were affected by a $492-million writeoff of goodwill in North America, the company said, as well as $200 million "related to the write-off of unamortized cash retention awards" and $252 million "related to the accrual of 2012 cash bonuses and a $113 million tax charge to establish a deferred tax asset valuation allowance.”

The valuation allowance, Willis said, “is related to the North America segment and is directly associated with the recording of the goodwill impairment and cash retention charges."

In Canada, Willis has offices in Toronto, Calgary and Vancouver, and owns Willis Corroon Aerospace of Canada Ltd., an aviation risk services broker in Montreal. The firm announced last November the acquisition of Avalon Actuarial Inc., whose services include employee benefits consulting, group insurance, retirement and pension plans.

Willis Group's services include property and casualty, environmental, cyber, professional indemnity, executive risks, corporate governance and risk management.

Net income up slightly for Marsh

Marsh & McLennan owns Marsh Canada, whose services include insurance brokerage and risk management. The parent firm did not break out its results for Canada specifically, but did report 2012 revenues of $2.594 billion for the U.S. and Canada, up from $2.471 billion in 2011.

For the fourth quarter, Marsh & McLennan recorded worldwide revenues of $3.002 billion, up from $2.908 billion in 2011. Net income for the fourth quarter edged up slightly year-over-year, from $256 million in 2011 to $259 million last year.

For the full year, net income increased from $994 million in 2011 to $1.176 billion in 2012.

Revenue for Guy Carpenter, Marsh & McLennan's risk and reinsurance services subsidiary, was $1.079 billion in 2012, up from $1.041 billion in 2011. Measured by generally accepted accounting principles (GAAP), Guy Carpenter's revenue growth year-over-year was 4%, but in a press release, the firm suggested the "underlying" growth, which excludes changes attributable to currency fluctuations, acquisitions and disposals, was 6%.

"Guy Carpenter's underlying revenue growth of 6% marked its highest increase in several years," Marsh & McLennan CEO Dan Glaser stated in a press release.

Of the $11.9 billion in revenue for 2012, $6.581 billion was from insurance, including the Marsh and Guy Carpenter operations. Marsh & McLennan recorded revenues of $5.382 billion from consulting, which includes its Oliver Wyman subsidiary.

For the quarter ending Dec. 31, 2012, revenue from insurance alone was $1.626 billion, up from $1.572 billion in 2011. Fourth-quarter revenue from insurance in the U.S. and Canada increased year-over-year from $669 million in 2011 to $689 million in 2012.

In Canada, Marsh has more than 60 risk consultants, offering services in areas such as natural hazards, product liability, professional liability, employment, environmental, supply chain and directors' and officers' liability.

Organic retail revenue up 4% in North America at Aon

For its part, Aon provides insurance brokerage and risk management in Canada through Aon Reed Stenhouse, while Aon Benfield provides reinsurance brokerage and intermediary services in Canada.

Worldwide, Aon plc reported revenues of $2.05 billion in the fourth quarter of 2012, up from $2.002 billion for the same period in 2011. In 2012, $1.694 billion of Aon's revenue was from retail, $349 million was from reinsurance and $7 million was from investments.

"Americas organic revenue increased 4% in the fourth quarter with solid growth across all regions, including a record quarter of new business for U.S. Retail," Aon said of its retail segment.

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