July 29, 2016 by Canadian Underwriter
Marsh & McLennan Companies, Inc. (MMC) has reported that revenue for the United States/Canada division of Marsh was up to US$804 million for the second quarter of 2016 ending June 30, from US$760 in the same quarter in 2015.
For the first six months of the year, revenue for the U.S./Canada division was US$1.505 billion, up from US$1.398 billion in H1 2015, MMC said in a statement on Thursday reporting its financial results for the quarter and half-year.
MMC is a global professional services firm whose companies include commercial brokerage Marsh; Guy Carpenter, a provider of risk and reinsurance intermediary services; Mercer, a provider of talent, health, retirement and investment consulting; and management consultant firm Oliver Wyman.
Overall, consolidated revenue in Q2 was US$3.4 billion, an increase of 5% compared with the second quarter of 2015 (US$3.2 billion). On an underlying basis, revenue increased 3%. Operating income rose 16% to US$726 million from US$629 million. Net income attributable to the company was up 13% to US$472 million from US$429 million. For H1 2016, net income attributable to the company increased 6% to US$953 million from US$901 million. Revenue for H1 2016 was US$6.7 billion compared with US$6.4 billion in H1 2015, the statement said.
Revenue for Risk & Insurance Services was US$1.8 billion in Q2 2016, an increase of 6% from Q2 2015. Revenue grew 2% on an underlying basis. Operating income was US$490 million, an increase of 15%. Adjusted operating income rose 11% to US$493 million compared with US$445 million in last year’s second quarter, MMC reported in the statement. For the six months ending June 30, revenue was US$3.7 billion, an increase of 5%, or 2% on an underlying basis. Operating income rose 7% to US$1 billion. Adjusted operating income rose 5% to US$1 billion, compared with US$991 million last year.
Marsh’s revenue in the second quarter of 2016 was US$1.6 billion, an increase of 2% on an underlying basis. International operations produced underlying revenue growth of 4%: Europe, Middle East and Africa grew 3%, Asia Pacific rose 2% and Latin America increased 11%, while the U.S./Canada division was flat. Guy Carpenter’s second quarter revenue was US$285 million, an increase of 3% on an underlying basis.
Consulting revenue was US$1.5 billion in the second quarter of this year, an increase of 4%. Revenue grew 5% on an underlying basis. Operating income rose 15% to US$285 million. Adjusted operating income increased 18% to US$288 million compared with US$244 million in last year’s second quarter. For the first six months of 2016, revenue was US$3 billion, up 4%, or 5% on an underlying basis. Operating income rose 7% to US$530 million, while adjusted operating income increased 7% to US$526 million compared with US$491 million in 2015, the statement said.
Mercer’s revenue was US$1.1 billion in the second quarter, an increase of 4% on an underlying basis. Investments grew 6% on an underlying basis; Talent increased 6%; Health grew 5%; and Retirement rose 2%. Oliver Wyman Group’s revenue was US$460 million in the second quarter, an increase of 5% on an underlying basis.
“Underlying revenue rose 3% on a consolidated basis, reflecting an increase of 2% in Risk & Insurance Services and 5% in Consulting,” MMC president and CEO Dan Glaser noted in the statement. “Adjusted operating income was up 14%, with both segments contributing double-digit growth. We continue to produce strong results as we help clients navigate global uncertainty. We expect to deliver underlying revenue growth, meaningful margin expansion and strong growth in earnings per share in 2016.”