The geopolitical environment remains unsettled, with multiple major wars and rising tensions politically, said President and CEO John Q. Doyle in a conference call. As more than half the world goes to the polls in elections this year, he said the economic outlook is uncertain.
Marsh McLennan's growth prospects are strong with economic growth in most of its major markets as inflation and interest rates remain elevated, the cost of risk and health care costs continue to rise and labor markets remain tight, he said.
Property rates overall increased 3%, compared with a 6% rise in the fourth quarter, and casualty rates also rose 3%, in line with the fourth quarter, Doyle said. Financial and professional liability rates fell 7% and cyber liability rates decreased 6% and workers' compensation rates fell in the mid-single digit range.
Conditions were stable in the reinsurance market as client demand increased and capacity remained adequate, Doyle said.
U.S. property catastrophe reinsurance rates in April renewals were flat with some decreases for loss-free accounts, he said. Rates rose in the 10% to 20% range for accounts hit by losses.
For Florida catastrophe risk renewals at June 1, early signs show improved conditions for cedants. Increased reinsurance appetite for growth should be adequate to meet higher demand, Doyle said.
First-quarter net income attributable to the company rose to $1.40 billion from $1.24 billion a year ago. Revenue rose to $6.47 billion from $5.92 billion.
All of the group's segments reported revenue growth in the quarter, with Marsh, Mercer and Oliver Wyman's growth accelerating, Doyle said. He noted revenue rose 9% each in both risk and insurance services and consulting.
Marsh McLennan continued to add to its assets through acquisitions in the first quarter, Doyle said.
The group used about $1 billion in cash in the first quarter, including $347 million for acquisitions, said Chief Financial Officer Mark McGivney in the call. The group expects to deploy about $4.5 billion in 2024 for dividends, M&A and share repurchases.
The amount to be used for share repurchases depends on how the M&A pipeline develops, McGivney said.
Oliver Wyman closed on the acquisition of SeaTec Consulting, expanding it capabilities in the aviation, transportation and defense industries, he said.
Marsh McLennan Agency acquired two agencies in Louisiana and Mercer completed its acquisition of Vanguard's OCIO business, which expanded its reach in endowments and foundations.
The group's Marsh, Oliver Wyman and reinsurance broker Guy Carpenter affiliates developed the Unity facility, a public-private insurance solution enabling grain shipments from ports in Ukraine, Doyle noted.
Marsh McLennan earlier said it is expanding the Unity war risk insurance facility in conjunction with the Ukrainian government and Lloyd’s to provide affordable war risk insurance for ships carrying all non-military cargo.
Doyle said Unity expanded in the first quarter to allow all ships to carry non-military cargo with the help of Lloyd's and Ukrainian banks, supporting Ukraine's wartime economic resilience.
Led by Ascot and underwritten by insurers based at Lloyd’s and other London-based insurers, Unity provides up to $50 million in hull and protection and indemnity war risk insurance. It is available to clients of all Lloyd’s registered brokers, the broker said earlier.
Marsh McLennan's outlook for 2024 includes an expectation of mid-single digit revenue growth, margin expansion and strong earnings per share growth, Doyle said.
Lloyd's and underwriting entities of Ascot parent Canada Pension Plan Investment Board have current Best's Financial Strength Ratings of A (Excellent).