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MMC underlying revenue +1% in Q4, RIS margins contract 220bps


Marsh & McLennan Companies (MMC) bounced back from a third-quarter underlying revenue decline, delivering 1% growth in the fourth quarter, helped by a 4% underlying increase at Marsh and a 5% rise at Guy Carpenter.

Operating income was higher within MMC’s risk and insurance segment in Q4 than a year ago, growing by 27% to $463mn, though it declined on an adjusted basis by 5% to $525mn. Unadjusted operating income across the entire company was down from the year before, totaling $571mn, versus $592mn in Q4:19.

Adjusted operating margins company-wide contracted by about 60bps in the last three months of the year, weighed down by 220bps of compression in RIS. Margins were better within consulting, where they expanded by 170bps, helping mitigate the headline result.

For the full year, underlying revenue within RIS grew by 3%, to $10.3bn overall.

Underlying revenue across MMC grew by 1% for the full year in 2020.

The company reported adjusted EPS of $1.19 in the quarter just ended, better than the $1.13 analysts had estimated.



Underlying revenue at Marsh in the US and Canada increased by 7% in Q4, better than when it was flat in the year-ago quarter, before the economic impacts of Covid-19 had taken hold. International underlying revenues at Marsh were flat, with a 2% decline in EMEA offsetting 3% and 1% growth in Latin America and Asia Pacific, respectively. Marsh grew by 3% for the full year on an underlying basis. Underlying growth was 3% in the third quarter of 2020.

Guy Carpenter

Guy Carpenter (GC) generated $162mn in fourth-quarter revenue, though its 5% growth figure was down from the year before, when the reinsurance broker grew by 10%. GC grew its full-year underlying revenue by 6%, above the 5% growth registered for the full year 2019. The subsidiary had reported flat underlying revenues in Q3.

Commentary: Dan Glaser, president and CEO, said: “2020 was a year like no other. I am proud of how our colleagues rose to the challenge, helping clients and one another, and achieving impressive financial performance. We ended the year with a strong fourth quarter with positive underlying revenue growth. In 2020, we achieved revenue growth of 3% with underlying revenue growth of 1% and grew adjusted EPS 7%.

“We demonstrated our resilience as a company in 2020 and are well positioned for growth in 2021.”

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