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Marsh & McLennan (MMC) Unit Buys Honan to Boost Services Suite
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Marsh & McLennan Companies, Inc.’s (MMC - Free Report) business, Marsh, inked a deal to purchase the entire outstanding share capital of the Australia-based specialist insurance broker Honan Insurance Group Pty Ltd. Subject to regulatory nod, the agreement is likely to complete in late 2023. However, the terms of the same have been kept under wraps.
Honan seems to be a prudent pick by the Marsh business since the former has witnessed a period of solid growth in the form of pursuing numerous buyouts and boosting revenues in the past three years. This stellar performance in the said time frame can be attributed to the assistance, which it has received from the global private equity firm and the majority shareholder of Honan, TA Associates. Therefore, the acquisition of Honan will enable the MMC unit to hold 80% stake in TA.
Honan boasts a widespread customer base of more than 30,000 stretched across Australia, New Zealand, and Asia. For nearly six decades, it has exceled in providing corporate risk advisory, employee benefits, and strata and real estate insurance services to large residential buildings, agents and landlords.
Management of Marsh believes that the inclusion of Honan’s well-established capabilities, specifically in the field of corporate risk and strata insurance, will enhance its specialist competence. This, in turn, will enable Marsh to better serve its client base across Australia and New Zealand. In fact, the collective expertise of Marsh and Honan will roll out cutting-edge solutions for equipping customers to more effectively steer the risks encountered.
Acquisitions form one of the core growth strategies of Marsh & McLennan and buyouts similar to the latest one add strength to its capabilities, expand services offerings and enable the company to enter new geographies as well as solidify its foothold across existing markets. An upgraded services suite is likely to lure more customers and contribute more to the revenues of MMC in the days ahead.
Marsh & McLennan spent $859 million and $572 million on acquisitions in 2021 and 2022, respectively. It remains quite active this year as well, by expending $292 million on buyouts in the first half of 2023.
When it comes to acquisitions, Marsh McLennan Agency (MMA), a division of MMC’s Marsh business, requires a special mention. MMA delivers business insurance, employee health and benefits, retirement and wealth management, and private client insurance solutions to individuals and mid-market organizations. MMA boasts an impressive acquisition history of purchasing more than 100 agencies since 2009. This June, it acquired the Texas-based SOLV Risk Solutions for an undisclosed amount.
The sound performance of MMA boosts the performance of the Marsh business, which along with Guy Carpenter, forms a part of the Risk and Insurance Services segment. It has to be noted that the segment usually contributes the most significant chunk to the total revenues of Marsh & McLennan. In the first half of 2023, the contribution of the Risk and Insurance Services segment to MMC’s total revenues stood at 64.6%.
Shares of Marsh & McLennan have gained 15.1% in the past six months compared with the industry’s 12.3% growth. MMC currently carries a Zacks Rank #2 (Buy).
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AXIS Capital’s earnings surpassed estimates in three of the trailing four quarters and missed the mark once, the average surprise being 9.75%. The Zacks Consensus Estimate for AXS’s 2023 earnings suggests 44.8% year-over-year growth while the same for revenues indicates an improvement of 7.9%. The consensus mark for AXS’s 2023 earnings has moved 2.3% north in the past seven days.
Shares of Brown & Brown and Erie Indemnity have gained 26.4% and 17.2%, respectively, in the past six months. However, the AXIS Capital stock has declined 10.7% in the same time frame.
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Marsh & McLennan (MMC) Unit Buys Honan to Boost Services Suite
Marsh & McLennan Companies, Inc.’s (MMC - Free Report) business, Marsh, inked a deal to purchase the entire outstanding share capital of the Australia-based specialist insurance broker Honan Insurance Group Pty Ltd. Subject to regulatory nod, the agreement is likely to complete in late 2023. However, the terms of the same have been kept under wraps.
Honan seems to be a prudent pick by the Marsh business since the former has witnessed a period of solid growth in the form of pursuing numerous buyouts and boosting revenues in the past three years. This stellar performance in the said time frame can be attributed to the assistance, which it has received from the global private equity firm and the majority shareholder of Honan, TA Associates. Therefore, the acquisition of Honan will enable the MMC unit to hold 80% stake in TA.
Honan boasts a widespread customer base of more than 30,000 stretched across Australia, New Zealand, and Asia. For nearly six decades, it has exceled in providing corporate risk advisory, employee benefits, and strata and real estate insurance services to large residential buildings, agents and landlords.
Management of Marsh believes that the inclusion of Honan’s well-established capabilities, specifically in the field of corporate risk and strata insurance, will enhance its specialist competence. This, in turn, will enable Marsh to better serve its client base across Australia and New Zealand. In fact, the collective expertise of Marsh and Honan will roll out cutting-edge solutions for equipping customers to more effectively steer the risks encountered.
Acquisitions form one of the core growth strategies of Marsh & McLennan and buyouts similar to the latest one add strength to its capabilities, expand services offerings and enable the company to enter new geographies as well as solidify its foothold across existing markets. An upgraded services suite is likely to lure more customers and contribute more to the revenues of MMC in the days ahead.
Marsh & McLennan spent $859 million and $572 million on acquisitions in 2021 and 2022, respectively. It remains quite active this year as well, by expending $292 million on buyouts in the first half of 2023.
When it comes to acquisitions, Marsh McLennan Agency (MMA), a division of MMC’s Marsh business, requires a special mention. MMA delivers business insurance, employee health and benefits, retirement and wealth management, and private client insurance solutions to individuals and mid-market organizations. MMA boasts an impressive acquisition history of purchasing more than 100 agencies since 2009. This June, it acquired the Texas-based SOLV Risk Solutions for an undisclosed amount.
The sound performance of MMA boosts the performance of the Marsh business, which along with Guy Carpenter, forms a part of the Risk and Insurance Services segment. It has to be noted that the segment usually contributes the most significant chunk to the total revenues of Marsh & McLennan. In the first half of 2023, the contribution of the Risk and Insurance Services segment to MMC’s total revenues stood at 64.6%.
Shares of Marsh & McLennan have gained 15.1% in the past six months compared with the industry’s 12.3% growth. MMC currently carries a Zacks Rank #2 (Buy).
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Other Stocks to Consider
Some other top-ranked stocks in the insurance space are Brown & Brown, Inc. (BRO - Free Report) , Erie Indemnity Company (ERIE - Free Report) and AXIS Capital Holdings Limited (AXS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Brown & Brown’s earnings surpassed estimates in three of the trailing four quarters and missed the mark once, the average surprise being 3.98%. The Zacks Consensus Estimate for BRO’s 2023 earnings suggests 18% year-over-year growth while the same for revenues indicates an improvement of 17.6%. The consensus mark for BRO’s 2023 earnings has moved 7.2% north in the past 30 days.
The bottom line of Erie Indemnity outpaced earnings estimates in two of the last four quarters and missed the mark twice, the average surprise being 2.05%. The Zacks Consensus Estimate for ERIE’s 2023 earnings and revenues suggests a rise of 32.9% and 12.5%, respectively, from the prior-year reported figures. The consensus mark for ERIE’s 2023 earnings has moved 5.4% north in the past 30 days.
AXIS Capital’s earnings surpassed estimates in three of the trailing four quarters and missed the mark once, the average surprise being 9.75%. The Zacks Consensus Estimate for AXS’s 2023 earnings suggests 44.8% year-over-year growth while the same for revenues indicates an improvement of 7.9%. The consensus mark for AXS’s 2023 earnings has moved 2.3% north in the past seven days.
Shares of Brown & Brown and Erie Indemnity have gained 26.4% and 17.2%, respectively, in the past six months. However, the AXIS Capital stock has declined 10.7% in the same time frame.