Marsh McLennan's profit gets a lift from higher interest rates

Marsh & McLennan Companies

18/07/2024 13:34

July 18 (Reuters) - Insurance brokerage firm Marsh
McLennan's  MMC.N  second-quarter adjusted profit rose 8.5%,
helped by higher interest income from funds held on behalf of
clients. 
 
WHY ITS IMPORTANT 
    
The U.S. Federal Reserve maintaining a high interest-rate
environment has helped firms such as Marsh McLennan earn higher
income on funds they hold on behalf of clients, or in a
fiduciary capacity.
    
BY THE NUMBERS 
   
The New York-based company's fiduciary interest income jumped
nearly 16% to $125 million in the three months ended June 30,
compared with $108 million a year earlier. 
    On an adjusted basis, the company earned $1.19 billion, or
$2.41 per share, compared with $1.10 billion, or $2.20, a year
earlier. 
    Marsh McLennan reported a total revenue of $6.22 billion,
slightly below analyst's average estimates of $6.31 billion,
according to the LSEG data.
    The topline, however, rose nearly 6%, helped by a $4.02
billion revenue from its risk and insurance services business,
which was up from $3.72 billion in the year-ago quarter.    
    The company's consulting unit also registered a revenue of
$2.22 billion, up from $2.17 billion in the second quarter of
FY23.

 
CONTEXT 
While its revenue streams are diversified across consulting,
talent management and investment management services, Marsh
McLennan's risk and insurance services business accounts for
most of its revenue.  
    Mercer, the firm's largest consultancy unit, agreed to buy
London-based pension fund manager Cardano in June. 
    Acquiring Cardano, which oversees $66 billion of assets,
will help Mercer widen its foothold in the UK market, the
consultancy company had said during the announcement.

 (Reporting by Pritam Biswas in Bengaluru; Editing by Shreya
Biswas)
 ((Pritam.Biswas@thomsonreuters.com;))