NU Online News Service, April 26, 3:27 p.m. EST
BOSTON--Brian Duperreault, Marsh and McLennan Inc.'s chief executive, said the company is no longer in survival mode and that he expects it to continue to grow through acquisition now.
Mr. Duperreault, who is also president of New York based MMC, the parent company of insurance broker Marsh, said the company has seen a "remarkable turnaround" from when he came onboard two years ago.
At that point, the major talk at Marsh with Daniel S. Glaser, chairman and chief executive officer of Marsh was how they would save the company. Today, he said, the discussion is about how they will reinvest in the company "and continue to produce talent to be the thought leader in the industry."
His comments came this morning during a breakfast talk with Marsh clients held here during the Risk and Insurance Management Society Conference.
He said one area of major investment for the company is technology.
"There is a war going on for technology superiority," he observed, adding that the focus is to provide technology answers that will benefit risk managers.
Mr. Glaser noted that Marsh spends seven percent of its revenue on technology, more than any other broker, and he added that is giving risk managers access to top executives in the C-suite to give more voice to finding answers to a company's risk needs.
He said we are now in an age "of relentless acceleration" with technology information and that reality will continue to accelerate in the future.
Because of this, the role of a risk manger is no longer about insurance, but about risk.
"Risk is good," he said, adding, "There is no improvement or creativity without risk."
On the acquisition front, Mr. Duperreault said that MMC grew through acquisition and that it remains an important aspect of growth for the firm.
He said he expects acquisition activity to begin heating up this year as the industry seeks to consolidate its markets.
Mr. Glaser said Marsh is interested in "investing in complementary companies" and that as long as he has the approval "of his banker" (Mr. Duperreault), Marsh will continue to acquire other entities. He indicated that a major area of that acquisition strategy will be overseas, noting that 50 percent of its revenue comes from that area.
In answer to a question about contingent commissions, Mr. Glaser noted, as he did during a discussion yesterday on the subject, that the company is not accepting contingents on its core brokerage business in the United States and Canada.
He repeated his assessment that no compensation system is free of conflict, despite what some argue that contingents are an inherent conflict, and added that the majority of brokers make money from commissions and not fee business.
Transparency and disclosure, he said, are the primary answers to avoiding accusations that brokers are suffering a conflict of interest.
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