We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Marsh's AI Strategy Offset Softer Insurance Pricing?
Read MoreHide Full Article
Key Takeaways
Marsh is expanding AI across risk, sales, claims, reinsurance and consulting as insurance rates soften.
Risk Companion and Atlas could turn Marsh's data and AI capabilities into scalable products and new revenues.
Marsh posted 5% underlying revenue growth and a 29.3% adjusted operating margin in the second quarter.
Marsh & McLennan Companies, Inc. (MRSH - Free Report) faces a tough insurance pricing environment as artificial intelligence becomes an increasingly important part of its growth strategy. AI could help support growth as pricing pressure builds. Primary commercial insurance rates fell 6% in the second quarter, following a 5% decline in the previous quarter. Global property rates fell 12%. Softer pricing can weigh on premium-linked revenues, making it harder for Marsh to rely on market conditions to drive growth.
MRSH is responding by using its data, technology and client relationships to build AI-enabled products and improve productivity. Its Risk Companion platform uses AI-powered analytics to help clients assess exposures and evaluate risk-mitigation options. The company is also developing AI applications across sales, claims, reinsurance and consulting.
Marsh expects AI to automate processes, support employees and improve efficiency. Its Business and Client Services unit is central to this effort, bringing operations and technology together to accelerate automation. This strategy is gaining importance as the company works through a softer market. In the second quarter, Marsh delivered 5% underlying revenue growth, 9% adjusted EPS growth and a 29.3% adjusted operating margin, showing that it can maintain profitability despite pricing headwinds.
If Marsh converts its proprietary data and AI capabilities into scalable products, the technology could become a meaningful contributor to growth and margins rather than simply another efficiency initiative. As MRSH expands AI platforms like Risk Companion and Atlas, it could also open new revenue opportunities from its data and analytics.
How Are MRSH’s Peers Placed?
Peers like Aon plc (AON - Free Report) and Willis Towers Watson Public Limited Company (WTW - Free Report) are also using technology to support growth and efficiency. Aon’s organic revenues increased 5% in the second quarter, while its adjusted operating margin rose 70 basis points to 28.9%. Aon continues to invest in technology through its Aon United strategy. Willis Towers Watson also reported 5% organic revenue growth, with adjusted operating margin improving 100 basis points to 19.5%. WTW launched Propel to expand AI and automation, targeting about $400 million in run-rate savings and a 30% adjusted operating margin by 2028.
MRSH’s Price Performance, Valuation and Estimates
Shares of Marsh have lost 4.7% year to date, outperforming the broader industry’s 15.7% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, Marsh trades at a forward price-to-earnings ratio of 15.91X, up from the industry average of 13.61X. MRSH currently carries a Value Score of C.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings implies a 7.1% rise year over year, followed by 9% growth next year.
View the Zacks #1 Rank List
Image: Bigstock
Can Marsh's AI Strategy Offset Softer Insurance Pricing?
Key Takeaways
Marsh & McLennan Companies, Inc. (MRSH - Free Report) faces a tough insurance pricing environment as artificial intelligence becomes an increasingly important part of its growth strategy. AI could help support growth as pricing pressure builds. Primary commercial insurance rates fell 6% in the second quarter, following a 5% decline in the previous quarter. Global property rates fell 12%. Softer pricing can weigh on premium-linked revenues, making it harder for Marsh to rely on market conditions to drive growth.
MRSH is responding by using its data, technology and client relationships to build AI-enabled products and improve productivity. Its Risk Companion platform uses AI-powered analytics to help clients assess exposures and evaluate risk-mitigation options. The company is also developing AI applications across sales, claims, reinsurance and consulting.
Marsh expects AI to automate processes, support employees and improve efficiency. Its Business and Client Services unit is central to this effort, bringing operations and technology together to accelerate automation. This strategy is gaining importance as the company works through a softer market. In the second quarter, Marsh delivered 5% underlying revenue growth, 9% adjusted EPS growth and a 29.3% adjusted operating margin, showing that it can maintain profitability despite pricing headwinds.
If Marsh converts its proprietary data and AI capabilities into scalable products, the technology could become a meaningful contributor to growth and margins rather than simply another efficiency initiative. As MRSH expands AI platforms like Risk Companion and Atlas, it could also open new revenue opportunities from its data and analytics.
How Are MRSH’s Peers Placed?
Peers like Aon plc (AON - Free Report) and Willis Towers Watson Public Limited Company (WTW - Free Report) are also using technology to support growth and efficiency. Aon’s organic revenues increased 5% in the second quarter, while its adjusted operating margin rose 70 basis points to 28.9%. Aon continues to invest in technology through its Aon United strategy. Willis Towers Watson also reported 5% organic revenue growth, with adjusted operating margin improving 100 basis points to 19.5%. WTW launched Propel to expand AI and automation, targeting about $400 million in run-rate savings and a 30% adjusted operating margin by 2028.
MRSH’s Price Performance, Valuation and Estimates
Shares of Marsh have lost 4.7% year to date, outperforming the broader industry’s 15.7% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, Marsh trades at a forward price-to-earnings ratio of 15.91X, up from the industry average of 13.61X. MRSH currently carries a Value Score of C.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings implies a 7.1% rise year over year, followed by 9% growth next year.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.