2023 brokerage revenue: $22.35B

Percent increase: 8.1%

Marsh & McLennan Cos. Inc. delivered solid revenue growth last year, as it spent $1.6 billion on acquisitions and expanded its middle-market business in the U.S. and Australia.

The company, which had aligned its workforce across its four businesses and streamlined technology as part of a restructuring program announced last year, saw growth in its U.S. middle-market sector and in its international business, said Martin South, president and CEO of Marsh LLC, its main brokerage arm. 

More recently, Marsh stepped up its direct involvement in the wholesale brokerage market by launching Victor Access, a wholesale brokerage unit of Victor, its managing general underwriter. The move marked Marsh’s reentry into a market sector it exited 20 years ago after then-New York Attorney General Eliot Spitzer’s investigations into the brokerage sector. 

The company completed 14 acquisitions last year including the purchase of Philadelphia-based brokerage Graham Co. — a former top 100 brokerage of U.S. business with about $74 million in annual revenue — by Marsh McLennan Agency, the small and midsized brokerage unit of Marsh.

Marsh also acquired Australian middle-market brokerage Honan Insurance Group Pty. Ltd., adding more than 400 employees across Australia, New Zealand, Singapore and Malaysia.

Despite continued high valuations for brokerages, Marsh McLennan remains an active acquirer, spending a further $347 million on six acquisitions in the first quarter of this year.

In April, Marsh McLennan Agency added Jackson, Mississippi-based Fisher Brown Bottrell — another top 100 brokerage with about $55 million in annual revenue — marking its entry into the Mississippi market.

The deals helped Marsh McLennan grow its brokerage revenue to $22.35 billion in 2023, an 8.1% increase over 2022. It retains its No. 1 position in Business Insurance’s ranking of the world’s largest brokerages.

Acquiring companies is a core part of Marsh McLennan’s growth strategy, Mr. South said.

Marsh McLennan Agency, launched in 2008, accounts for around half of Marsh’s U.S.-Canada segment and $3 billion in annual revenue, according to the brokerage’s investor presentation in the fourth quarter of 2023.

“We’re always going to have a lot of one-off consulting and risk advisory work, but in MMA a very high volume of the business is recurring. It’s a different mix of business,” Mr. South said.

Rival Aon PLC’s purchase of middle-market brokerage NFP Corp. won’t have a significant impact on Marsh, analysts say.

“What NFP gives to Aon is kind of what Marsh already has with their agency business. It’s a platform to expand within the middle market,” said J. Paul Newsome, managing director with Piper Sandler & Co. in Minneapolis.

The deal theoretically could add greater competition from Marsh’s perspective, “but the middle market is such a huge market, with so many players, I’m not sure it really makes much difference,” Mr. Newsome said.

Marsh McLennan posted 10% consolidated revenue growth and 9% organic revenue growth in 2023. Its results benefited from the accelerated hiring of recent years, Mr. South said. 

Marsh McLennan has delivered consistent results in terms of its top line growth, said Elyse Greenspan, managing director, equity research, insurance, at Wells Fargo Securities LLC in New York.

Marsh’s brokerage business has performed strongly in the past couple of years, she said. After slightly weaker-than-expected results in the fourth quarter of last year, results bounced back in this year’s first quarter.

Even in its consulting businesses Mercer and Oliver Wyman LLC, which are more sensitive to the state of the economy, results have been “pretty good,” she said.

A restructuring program — announced in January last year and involving reducing headcount, consolidating real estate and streamlining technology — is “broadly done,” Mr. South said. 

The program, which is expected to deliver around $400 million of total savings, commissioned Marsh McLennan’s four businesses to work together for greater impact on clients, Mr. South said. “The culture is not about cross-selling, but the effect can look like that,” he said.

Among executive changes at the brokerage, Pat Donnelly took over as president of Marsh Specialty and global placement, in July of last year, succeeding Lucy Clarke, who joined Willis Towers Watson PLC, and Michelle Sartain became president of Marsh U.S., succeeding Mr. Donnelly.