No recession ‘red flag’ for Marsh yet, says CEO

Learn extra: Marsh McLennan announces Q2 2022 results

“I don’t assume there’s a extra resilient organisation that you may truly put money into,” was the CEO’s bullish message.

“I do assume it’s necessary to notice that in in all previous recessions since 1952, we grew adjusted EPS and we all know the right way to run a enterprise in good instances and in unhealthy instances,” Glaser mentioned.

The broking boss described recessions as a “pure type of the financial cycle in a capitalist society.”

“We don’t fret over that, and we don’t plan all that a lot round it,” Glaser mentioned.

The insurance coverage market “is agency and stays agency”, Glaser mentioned, with reinsurance on the property facet “even tightening”.

Financial downturn impacts are usually first seen in its non-insurance companies, Oliver Wyman and Mercer, Glaser instructed analysts.

“The pink flag will not be going up fairly but, however we watch it fastidiously,” the CEO mentioned.

Marsh McLennan made 6,000 internet hires final 12 months and the Glaser described this as “fairly excellent [in retrospect]”. The enterprise has slowed hiring into 2022, Glaser confirmed, having returned to a “extra regular” sample in keeping with 2017 to 2019.

The slowdown “will not be cautious”, Glaser mentioned, however as a substitute recognises the dimensions of latest hires in 2021.

As for the place the worldwide dealer may put measures in place if financial circumstances warrant this, Glaser mentioned the enterprise stays within the “early to mid levels” of having the ability to drive operational enhancements and reduce inner prices.

“Most of our prices are fairly identifiable – you might have compensation and advantages, you’ve received expertise, you might have premises or actual property, and you’ve got T&E [travel and expenses],” Glaser mentioned.

“So the levers you could then utilise are worthwhile and I’ve to say we’ve a really giant […] compensation pool pushed by profitability.

“It’s dramatically bigger than it was a decade in the past or 5 years in the past as a result of our profitability is dramatically bigger, and that provides us great flexibility of defending shareholders within the occasion that we hit some headwinds on development or macro-economic components.”