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"As we approach year-end, we are likely to announce several acquisitions, which will allow Marsh & McLennan Agency to operate in select geographic areas across the United States," said Brian Duperreault, president and chief executive officer of Marsh & McLennan Cos., during a third-quarter earnings conference call. "This approach will adopt a hub-and-spoke system to provide commercial property/casualty, directors and officers liability, surety, employees benefits and personal line products to customers at the local level through a dedicated sales and service force."
Duperreault said MMC announced its initiative for the agency a year ago to serve "the insurance needs of middle-market clients below national brokerage accounts," and in January, David L. Eslick was named chief executive officer of Marsh & McLennan Agency. This year, Eslick has "built a pipeline of potential acquisition candidates," said Duperreault.
A "measured approach" was taken before the agency announced any deals to ensure capital was being used appropriately, Duperreault said. "We have moved deliberately to be sure we are prudent in our approach to acquisitions and that each firm we identify meets our requirements with respect to quality, cultural compatibility, consistent business approach and pricing," he added.
When Marsh Inc., Marsh & McLennan's brokerage arm, first discussed its plans for the agency, the strategy was to use business already in-house from prior efforts to target the smaller market (BestWire, Nov. 24, 2008). In a July interview, Eslick told BestWire that the agency would be built around a model using eight or nine regional "platform" companies around which it will build up the agency's business infrastructure (BestWire, July 27, 2009).
MMC posted a $221 million third-quarter profit compared to a net loss of $8 million in the third quarter last year.
In afternoon trading on Nov. 5, shares of Marsh & McLennan Cos. Inc. (NYSE: MMC | Quote | Chart | News | PowerRating) were selling at $23.32, up about 1.8% from the previous close.
(By Chad Hemenway, associate editor, BestWeek: Chad.Hemenway@ambest.com)
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