Management: Having returned to Marsh UK in 2007 to drag the company back into profit, chief executive Martin South has set himself the bold target of transforming the British division into a $1bn (£622m) business with a 20-point margin in three to five years. Yet despite last year’s aggressive acquisition strategy, Marsh has been pushed down from second-biggest broker to third in our rankings. Expect it to strike back soon.
Strategy: Marsh appears to be in prime position for a game-changing UK acquisition, with pundits touting Giles and Oval as likely targets.
A deal on this scale would shake up the sector, putting Marsh ahead of even Aon. It would complete the turnaround story that involved the firm acquiring HSBC Insurance Brokers for £135m in April 2010. The broker went on to report a global revenue rise for 2010 of 10% to $1.3bn, following Marsh UK’s return to profit after a cost-cutting and outsourcing drive under South in 2007/08.
In August 2011, the global group reported a revenue rise of 11% to $2.6bn for the first half of the year, compared with the same period in 2010. The risk and insurance services division of Marsh & McLennan Companies (MMC) – comprising Marsh and reinsurance broker Guy Carpenter – made an operating profit of $739m in the first half of this year, up 22% on that period in 2010.
Expertise: The broker provides a comprehensive line-up of insurance and risk services – from political risk cover to trade credit – to businesses and industries ranging from agriculture to hospitality to transport.
Like JLT, Marsh has entered the SME market, but the move has yet to truly pay off. However, plans to expand its ProBroker and Labyrinth networks may improve its market share. In July Marsh launched a global claims practice, which will be supported by the broker’s 1,350-strong claims team, under head of claims for the international division and EMEA David Pigot.
Big story: Marsh is rolling out a database risk analysis tool, MarshConnect, for which underwriters must pay to gain access. But with Aon and Cooper Gay Swett & Crawford having launched theirs and Willis set to follow suit, doubts have been raised over whether insurers can afford to sign up to all of them.
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