Marsh raises cost-cut goal as revenue climbs
Marsh announced it will raise the annual savings goal under its Thrive restructuring plan by 50%, targeting $600 million in cost reductions after reporting higher third-quarter revenue.
Revenue Growth Supports Bigger Savings Target
The broker posted third-quarter revenue of $6.86 billion, an 8% rise from the same period last year. Underlying revenue, which strips out currency effects and acquisition impacts, grew 5%.
Net income for the quarter increased 8% to $808 million, up from $747 million a year earlier.
For the first nine months, total revenue reached $21.86 billion, a 7% increase, while underlying revenue rose 5%. Net income over the same span fell 4% to $3.22 billion.
Segment Performance and Reinsurance Outlook
Revenue in the risk and insurance division climbed 7% to $4.2 billion, or 3% on an underlying basis, in Q3. The segment posted a 6% increase for the first nine months, reaching $14.07 billion.
Marsh Risk, the core brokerage unit, reported $3.73 billion in quarterly revenue, a 10% jump and a 5% rise on an underlying basis. International revenue grew 6%, led by 7% growth in EMEA and 4% in Asia Pacific.
Reinsurance revenue fell 6% to $374 million in the quarter, reflecting lower property rates and a tough year-over-year comparison, according to chief operating officer Mark McGivney. Year-to-date reinsurance revenue remains flat at $2.28 billion.
John Doyle, Marsh’s president and CEO, stated that soft reinsurance market conditions, driven by abundant capital, are likely to continue through the 1 January renewal cycle.
The company now expects its three-year cost-saving programme to cost about $750 million, up from the original $500 million estimate, with most actions slated for completion by the end of 2028.
Increased savings are intended to fund further investment in sales, technology and new capabilities, Doyle added.
Demand for AI-related services is rising across the firm’s businesses, including risk management and consulting.
Management consulting revenue grew 14% on an underlying basis to $1.01 billion in Q3, driven by AI work, McGivney noted.
Growth is also evident in the Quotient practice, which assists private-equity firms and portfolio companies with AI and technology transformation.
Digital infrastructure projects, such as data-centre developments, continue to generate demand for risk, capital advisory and consulting services, Doyle said.
Marsh recently launched Stratus, a property insurance exchange offering up to $10 billion of capacity for digital facilities, following the earlier Nimbus platform that provides $2.7 billion for construction risks.
