Marsh & McLennan Companies Inc. reported Thursday $413 million net income attributable to the company for its 2013 first quarter, up 19 percent from $347 million in the prior year period.
The consolidated revenue in the first quarter was $3.1 billion, a 2 percent increase compared with the first quarter of 2012. Operating income rose 15 percent to $607 million, compared with $527 million in the prior year period.
Risk and Insurance Services revenue rose 5 percent to $1.8 billion in the first quarter. Operating income increased 13 percent to $468 million, compared with $412 million in the prior year.
Looking at individual divisions, insurance brokerage unit Marsh’s revenue in the first quarter was $1.4 billion, an increase of 5 percent. International operations had underlying revenue growth of 5 percent, reflecting growth of 13 percent in Latin America; 6 percent in Asia Pacific; and 3 percent in Europe, the Middle East and Africa. In the U.S./Canada division, underlying revenue grew 2 percent.
In the U.S., brokerage Marsh continues to see a pricing improvement. “When we look across the different segments within the U.S. business, more of our clients are receiving rate increases than are receiving rate decreases,” Marsh CEO Peter Zaffino said. “The lines of business that are seeing the biggest increases are D&O, more on the financial lines, excess and umbrella, workers’ compensation.”
Reinsurance brokerage unit Guy Carpenter’s first quarter revenue was $375 million, up 5 percent from the prior year.
Consulting segment revenue was $1.4 billion in the first quarter, down 1 percent from the first quarter of 2012. Operating income was $187 million, up from $164 million in the prior year.
Human resources consulting unit Mercer’s revenue was $1 billion, up 3 percent from the prior year first quarter. Management consulting unit Oliver Wyman’s revenue was $321 million, a decrease of 9 percent on an underlying basis.
“We had an excellent first quarter, which represents another step forward in our journey to be among the elite companies of the world,” Marsh & McLennan CEO Dan Glaser said during an earnings conference call.
Glaser said brokerage Marsh delivered underlying revenue growth across all major geographies, led by strong performance in the international division as well as sequential improvement in the U.S./Canada division. Guy Carpenter’s underlying revenue growth in the quarter was driven by strong growth in its international and global specialty operations.
The consulting segment produced significant growth in profitability and margin expansion, led by Mercer, Glaser said.
Marsh & McLennan’s adjusted operating income grew 16 percent in the first quarter, reflecting “mid-teens growth and exceptional margin expansion in both the Risk & Insurance Services and Consulting segments,” Glaser said.
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