Marsh & McLennan Companies, Inc. reports developments across risk, reinsurance and capital advisory, people and investment consulting, and management consulting. Company updates often center on Marsh Risk and its digital risk analytics tools, Mercer workforce, compensation, health and retirement advisory alliances, Oliver Wyman consulting operations, and Marsh McLennan Agency insurance, benefits, retirement and wealth solutions in the U.S. and Canada.
Recurring news also covers quarterly operating results, enterprise partnerships, AI-enabled service delivery, leadership and governance changes, material agreements, and capital-structure matters tied to the company's common stock and debt financing.
Credit Benchmark and Oliver Wyman have launched IRB Nexus, a credit analytics solution designed to help banks improve their internal ratings-based (IRB) models for low- and no-default portfolios. The solution aggregates over 10 million risk estimates annually from more than 40 major banks worldwide, helping financial institutions validate their IRB models and meet regulatory requirements. IRB Nexus addresses the challenge of assessing risk for portfolios lacking historical data, potentially helping banks avoid increased capital reserve requirements that could limit lending capacity.
Mercer's 2024 National Survey reveals employers are enhancing health benefits while managing rising costs. The average per-employee health insurance cost reached $16,501 in 2024, up 5% from 2023, with a projected 6% increase in 2025. Prescription drug costs rose 7.7% in 2024, driven by GLP-1 medications for diabetes and weight loss.
Notable trends include increased coverage for obesity medications (44% of large employers), IVF treatments (47% of large employers), and expanded medical plan choices. 65% of large employers now offer three or more healthcare options. Additionally, employers are focusing on cancer support, virtual primary care, and specialized health navigation services to improve care quality and accessibility.
ProSight Financial Association has released its fourth annual RMA Chief Risk Officer (CRO) Outlook Survey, revealing key banking risks for 2025. The survey, conducted with Oliver Wyman, gathered insights from 177 CROs and senior risk leaders across U.S. and Canadian banks.
Cybersecurity emerged as the top risk (63%), followed by fraud (44%), technology risk (38%), wholesale credit risk (32%), and third-party risk (32%). A significant 93% of respondents emphasized the need for banks to adapt to increased risk speed, while 84% reported facing higher regulatory standards.
The survey reflects ongoing impacts from the 2023 regional banking crisis, with institutions implementing new early warning indicators, enhanced scenario analysis, and revised crisis management plans.
Marsh McLennan (NYSE: MMC) has completed the acquisition of McGriff Insurance Services, integrating McGriff's 3,500 colleagues into Marsh McLennan Agency (MMA). The acquisition strengthens MMA's middle market presence and enhances its specialty and industry capabilities. McGriff, founded in 1886, is a leading U.S. provider of insurance broking and risk management services. The merger aims to deliver enhanced value to clients while maintaining McGriff's existing client relationships and service teams.
Mercer, a Marsh McLennan (NYSE: MMC) business, has completed the acquisition of Cardano, strengthening its position as a leading pension services provider in the UK and Netherlands. The deal includes Cardano's UK Defined Contribution Master Trust, now:pensions, expanding Mercer's DC Master Trust solutions. Over 550 Cardano employees from London, Nottingham, and Rotterdam will join Mercer. The acquisition enhances Mercer's investment solutions and advisory capabilities for institutional investors globally, though financial terms were not disclosed.
Marsh McLennan (NYSE: MMC) has announced the pricing of a $7.25 billion Senior Notes offering across multiple tranches with varying maturities and interest rates. The company plans to use the proceeds to partially fund the pending acquisition of McGriff Insurance Services' parent company and for general corporate purposes. The Notes offering is expected to close on November 8, 2024. Most series of Notes include a special mandatory redemption provision at 101% of principal plus accrued interest if the McGriff transaction doesn't close by an agreed date.
Marsh McLennan (NYSE: MMC) reported strong financial results for Q3 2024, with GAAP revenue increasing 6% to $5.7 billion and underlying revenue rising 5%. The company saw GAAP operating income growth of 11% and adjusted operating income growth of 12%. GAAP EPS rose 3% to $1.51, while adjusted EPS increased 4% to $1.63. For the nine months ended September 30, 2024, GAAP EPS rose 10% to $6.59 and adjusted EPS increased 10% to $6.93.
The company also announced the acquisition of McGriff Insurance Services for $7.75 billion in cash. The Risk & Insurance Services segment saw an 8% revenue increase, while Consulting revenue grew by 3%. Marsh McLennan repurchased 1.4 million shares for $300 million in Q3 2024.
The 16th annual Mercer CFA Institute Global Pension Index (MCGPI) has been released, highlighting the need for retirement system improvements globally. The Netherlands retained its top spot as the world's leading retirement income system, followed by Iceland and Denmark. The report emphasizes the challenges posed by falling birth rates and increasing longevity.
Key findings include:
- The shift from defined benefit (DB) to defined contribution (DC) plans introduces new financial planning challenges for future retirees
- DC plans offer increased flexibility and personalization, which is important as people live longer and retirement concepts evolve
- Significant reforms are needed to meet retirees' financial needs and changing work expectations
- The Netherlands scored highest overall (84.8), as well as in adequacy (86.3)
- Iceland led in sustainability (84.3), while Finland topped the integrity sub-index (90.8)
The report calls for collaboration between governments, policymakers, the pension industry, and employers to ensure dignified and financially stable retirements for aging populations.
Mercer's 2024 Absence and Disability Management Survey reveals significant changes in paid leave benefits. Compliance with state and local mandates has become the top concern for employers, with 70% ranking it as a priority, up from 50% in 2021. To address this, 72% of employers have increased resources for compliance.
Paid parental leave has surged from 25% in 2015 to 73% in 2024, with an average of 8 weeks offered. Employers are also making these programs more inclusive, covering adoption (67%) and surrogacy (33%). Flexible PTO has increased, with 32% of employers offering it to some employees, up from 20% in 2021.
Companies are recognizing more diverse reasons for leave, including pregnancy loss (62%) and miscarriage (58%). The observance of Juneteenth as a company holiday has risen from 9% in 2021 to 41% in 2024, while Martin Luther King Jr. Day observance increased from 55% to 63%.
Marsh McLennan (NYSE: MMC) has announced an agreement to acquire McGriff Insurance Services, through its Marsh McLennan Agency business. McGriff, a leading U.S. provider of insurance broking and risk management services, generated $1.3 billion in revenue for the trailing twelve months ended June 30, 2024. The acquisition, valued at $7.75 billion in cash, will be funded by cash and debt financing. Marsh McLennan will also assume a deferred tax asset valued at approximately $500 million.
The transaction is expected to close by year-end, subject to regulatory approval. McGriff's team of over 3,500 employees, including CEO Read Davis, will join Marsh McLennan Agency while continuing to operate from their existing locations. This acquisition will enhance Marsh McLennan Agency's capabilities across commercial property and casualty, employee benefits, management liability, and personal lines.