Marsh & McLennan Cos. Inc. reported $3.12 billion in consolidated revenue for the third quarter, a decline of about one percent compared to the same quarter last year, along with an 8.7 percent jump in net income to $323 million.
Operating income rose from $445 million to $461 million.
During an earnings call, Marsh & McLennan Chief Financial Officer J. Michael Bischoff said the results are being “impacted significantly by the strength of the U.S. dollar against major currencies, especially the euro.” He said that in the second half of the year, the dollar continued to strengthen against the Canadian and Australian dollar and the currencies of most emerging markets.
CEO Daniel Glaser said the firm is optimistic that it is on track to generate underlying revenue growth of between three and five percent for 2015, which would mark the sixth consecutive year it has done so. Year-to-date, revenue growth underlying is up three percent versus the prior year-to-date at five percent.
Chairman Peter Zaffino said the five percent growth for the third quarter last year was a “tough comparable” because it was the highest underlying growth rate the company had seen over the previous 12 quarters.
At insurance broker Marsh, revenue in the third quarter was $1.3 billion, with underlying growth of two percent. Marsh and McLennan Agency, which has made 50 acquisitions since 2009, led the U.S./Canada division with growth of two percent.
Marsh’s international division also saw revenues increase two percent.
Revenue at reinsurance broker Guy Carpenter also rose two percent to $261 million in the third quarter, which Glaser said was a “reasonable result considering the significant rate reductions in many lines.”
Glaser cited several factors he thinks gives the firm an edge going forward, including a “vast geographic footprint” that allows it to benefit from global growth. “In most years, global premiums tend to rise despite negative pricing trends,” he said. “In addition, we view risk as a growth business. Increasing exposures from new emerging risk, globalization and economic uncertainty create volatility and disruption. Our clients’ need for advice and services is only rising.”
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