Brian Duperreault, CEO of Marsh & McLennan Companies, says the insurance industry has plenty of capacity to handle losses from Superstorm Sandy, but he says underwriters will be taking a closer look at the impacted region in the future.
“The storm underscores the critical nature of insurance and the crucial services it provides to clients,” said Duperreault during a conference call with financial analysts reviewing the brokerage's third-quarter results. “While the market impact from Sandy is yet to be determined, generally, there is sufficient capital in the market.
“However, we do expect that the Northeast and Mid-Atlantic regions will be under more scrutiny from underwriters on the heels of two major storms within 14 months.”
Later during the call, Alexander S. Moczarski, chief executive of Guy Carpenter, when asked about reinsurance rates, said capacity remains plentiful and rate increases are not expected across the globe. More attention will be paid to the Northeast, though, and “it will be tough for underwriters to reduce rates.”
Duperreault said that no employees suffered injuries from the storm and offices have not sustained “significant damages.”
For the 2012 third quarter, Marsh & McLennan says consolidated net income rose 78 percent, or by $106 million, to $241 million. Revenue increased 1 percent, or by $39 million, to $2.8 billion. Organic growth rose 3 percent in the quarter.
In its insurance segment, which includes insurance broker Marsh and reinsurance broker Guy Carpenter, third quarter total revenues rose 2 percent, or by $35 million, to $1.5 billion in the third quarter. Organic growth rose 4 percent.
MMC's net income for the first nine months of 2012 rose 24 percent, or by $183 million, to $938 million. Revenues for that period increased 3.5 percent, or by $304 million, to $8.9 billion.
This was the last financial call for Duperreault, who is retiring from the firm at the end of the year. Daniel S. Glaser, the company's group president and chief operating officer, will succeed him.
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