Marsh McLennan Company CEO on M&A – “Our pipeline has by no means been higher”

Whereas insurance coverage merger & acquisition (M&A) exercise has been excessive for a few years, a minimum of one CEO isn’t anxious concerning the market being picked over. 

In actual fact, Marsh McLennan Company (MMA) chairman and CEO David Eslick (pictured) advised Insurance coverage Enterprise that the agency’s M&A pipeline “has by no means been higher.”

“There’s nonetheless some very nice-sized, high-quality corporations that we proceed to keep in touch with,” stated Eslick. “Final yr, we did extra offers than we’ve ever achieved in our historical past.”

With some 10,000 workers in 170 places of work throughout North America, MMA gives enterprise insurance coverage, worker well being & advantages, retirement, and personal consumer insurance coverage to organizations and people.

Following that deal, Eslick shared his views on the challenges within the M&A market, noting that credit score markets had been “pretty tight.”

“I believe there’s some actual modifications,” he stated. “A whole lot of our rivals for acquisitions, personal equity-backed brokers, have seen their curiosity expense go up dramatically, which impacts their money movement.”

As a completely owned subsidiary of worldwide insurance coverage {and professional} providers agency Marsh McLennan, MMA isn’t held again by the credit score surroundings, Eslick stated.

“I believe we’re higher positioned, frankly, than we’ve ever been [to continue with M&A],” he stated.

“Marsh McLennan is the friendliest monetary backer I’ve ever discovered within the business. This permits us to not depend on credit score markets or anything to make choices on the precise acquisitions and to have the precise capital construction to do this.”

However Eslick additionally harassed that MMA would proceed to be a discerning a part of its M&A method.

“We predict we’re going to proceed to be lively, however we don’t do acquisitions to do acquisitions. We solely have a look at companions,” the CEO advised Insurance coverage Enterprise.

“We principally ask ourselves two questions: ‘Will they make us higher? Can we assist make them higher?’ And if the reply is ‘sure’ to each of these, then we’re going to have a look at a partnership.”

Onerous market underscores want for sturdy partnerships

Massive disaster losses which have led to carriers limiting enterprise or withdrawing from sure markets or states are making a difficult surroundings for brokers.

Eslick stated MMA’s sources place it to help shoppers via laborious market circumstances and persevering with financial volatility.

“We at all times have issues for our shoppers and the dangers and the exposures that they’ve. However I believe it speaks concerning the success of Marsh McLennan Company that we now have been the place that our shoppers look to for that help due to our sources and capabilities, together with information and analytics,” he stated.

“We have now the most important information lake within the business, and we may help our shoppers use that information to make goal choices about the kind of merchandise they want and the publicity that they might be prepared to take.”

Moreover, MMA’s “main” place with its service companions helps it faucet into obtainable capability and create options for its shoppers.

“Along with that, we now have the biggest reinsurance dealer on the planet with Man Carpenter. With our capacity to work with service companions and our backstop functionality, there’s no different dealer within the market that may do this with our measurement and with our scale, so it places us in an excellent place to unravel shoppers’ wants,” Eslick stated.

What are your ideas of Marsh McLennan Company’s M&A method and strategy to the laborious market? Inform us within the feedback.