Guy Carpenter, the reinsurance broker and wholly owned subsidiary of Marsh & McLennan Companies, recorded $215 million of revenue in the third quarter, an 11% increase on an underlying basis, according to MMC’s Q3 2018 results.
For the nine months ended 30 September, Guy Carpenter’s underlying revenue growth was 7%.
Meanwhile, MMC’s risk and insurance services’ Q3 revenue was $1.9 billion, an increase of 6%, or 5% on an underlying basis.
Operating income was $293 million, an increase of 9%, and adjusted operating income declined 3% to $283 million.
In Q118, MMC adopted ASC 606, new accounting rules from the Financial Accounting Standards Board that affect when certain revenues are recognised in financial results. Excluding these changes, adjusted operating income increased 13%.
For 9M18, revenue was $6.3 billion, an increase of 11%, or 4% on an underlying basis.
Operating income rose 12% to $1.5 billion and adjusted operating income rose 15% to $1.5 billion. Excluding ASC 606, adjusted operating income increased 10%.
MMC’s Q3 revenue was $1.6 billion, an increase of 10%, or 3% on an underlying basis. In U.S/Canada, underlying revenue rose 5%.
International operations produced underlying revenue growth of 2%, reflecting flat underlying growth in Europe Middle East and Africa (EMEA), 3% in Asia Pacific, and 7% in Latin America. Marsh’s underlying 9M18 revenue growth was 3%.
“We are pleased with our performance for the third quarter and first nine months of the year,” said Dan Glaser, President and Chief Executive Officer of MMC.
“In the quarter, we produced excellent underlying revenue growth of 5% in both Risk & Insurance Services and Consulting, and adjusted EPS growth of 8% excluding the impact of the new revenue standard.”
In addition, MMC’s consolidated Q3 revenue was $3.5 billion, an increase of 5% compared with Q317. On an underlying basis, revenue increased 5%.
Net income attributable to the company was $276 million. Operating income was $541 million while adjusted operating income decreased 5% to $535 million.
Excluding the impact of ASC 606, adjusted operating income rose 3%.
Meanwhile, consulting revenue in Q3 was $1.7 billion, an increase of 4%, or 5% on an underlying basis, while operating income decreased 6% to $291 million and adjusted operating income decreased 6% to $293 million.
“For the first nine months of 2018, we achieved strong underlying revenue growth of 4% on a consolidated basis and 10% adjusted EPS growth excluding the impact of the new revenue standard,” continued Glaser.
“Given our solid performance in the first nine months of 2018, the Company is well positioned to deliver full year underlying revenue growth in the 3 to 5% range, as well as margin expansion and strong growth in earnings per share.”
“The highlight of the quarter was our agreement to acquire Jardine Lloyd Thompson Group. JLT is a premier organization in our industry that we have admired for a long time,” added Glaser.
“The combination of Marsh & McLennan and JLT will create innovative solutions for our clients, career opportunities for our colleagues, and value for our shareholders.”