Former AIG UK boss returns to revive growth at broking giant by reducing complexity
The new global chief executive of Marsh, Daniel Glaser, has indicated the company could follow the recent example of Willis and develop a managing general agent (MGA) model in an attempt to fight back in the UK insurance market.
Glaser, who has left his post as managing director at AIG UK, said his primary objective would be to “reduce the complexity” of the company’s operation, and he also hinted that the firm may begin buying brokers.
The move will be part of a strategic operational assessment that will attempt to restore the broker giant to “sustained profitable growth”.
Glaser said over the coming weeks he would be working closely with the senior team in New York, including the president of Marsh & McLennan, Marsh’s parent company, Michael Cherkasky, to determine what the company’s UK strategy would be.
He said that it was too early to confirm whether Marsh would develop an MGA proposition, following recent moves by Willis and to a lesser extent, Aon. He admitted that it was a possibility. He said: “I believe in segmentation. You can’t have a guy working on one account one day and another the next.”
He added that Marsh acquiring brokers was also possibile. “We are always looking at acquisitions. If you are not growing organically you are going to have a problem.”
Significantly, last month analysts in the US said that Marsh was experiencing difficulty growing organically, while Marsh UK’s latest financial reports from December last year showed its brokerage had declined by 0.5% to £495m.
Glaser expressed concerns over the amounts being paid for brokers by consolidators and insurers. He said: “The UK market seems a bit frothy to me. The valuations are not consistent.”
Glaser, described as Cherkasky’s first choice among 18 external candidates, said he would not rule out redundancies across the group.
He would not comment on the fate of former global chief Brian Storms, and insisted he was prepared for the job and was looking forward to rejoining the broker where he had worked for 10 years.
He dismissed suggestions that he had his work cut out in his new position. “I don’t see it that way. Marsh is a world class brokerage firm with a strong nucleus of talented people. If you are the right executive, you don’t feel pressure.”
He will move from his position at AIG to take up his new post at Marsh on Monday.
Marsh has also poached Willis’ former chief operating officer, international, Artur Niemczewski. He will become chief executive, multinational, within Marsh UK. Multinational comprises Marsh’s large account practices and specialty businesses.
Meanwhile, AIG has appointed former European president, Alexander Baugh as managing director of its UK business. The move is one of three senior appointments.
Last month, following the release of its third quarter results which revealed that operating profits from continuing operations had fallen 40% to $80m (£38.9m), Cherkasky admitted that Marsh’s programme of initiatives had been “too many, too soon, for what was still a fragile organisation”.
This followed regulatory problems in the wake of the Spitzer reforms, which culminated in the departure of Brian Storms in September.
But Cherkasky said that the problems of the business were rooted in the US risk-management and middle-market business.
Nonetheless, he said: “I didn’t help in the critical areas in Marsh in the US and the UK to get it right.”
Commenting on Glaser's appointment, he added: “His perspectives as both a broker and an underwriter, coupled with his extensive international experience, make him the ideal candidate to take Marsh forward.”
Marsh has global revenues in the region of $12bn, and employs 55,000 staff.
As Insurance Times went to press, MMC shares were trading at $25.47, down almost 23% since May, but up 2.5% on the previous day.