Best Time For Clients To Expand Coverages At Competitive Pricing, Says Marsh CEO
The $13-billion Marsh & McLennan Group is looking to expand in India. The group owns the world’s largest reinsurance broker Marsh, management consultancy firm Olivery Wyman which has advised Sebi and Reserve Bank of India, and talent advisory firm Mercer which already has a headcount of 3,000 in India. Daniel (Dan) Glaser, president & CEO, Marsh & McLennan Companies, is credited with rejuvenating Marsh Inc after its settlement with the New York Insurance Superintendent. In an interview with TOI, Glaser speaks of how India can be a regional insurance market. Excerpts:
What is your approach to growth? How much do you expect it internationally and from which region?
Over the past 25 years, insurance has consistently outpaced GDP growth because risk exposure has increased and insurance-market penetration in emerging markets has also increased. So, the overall level of insurance market growth annually exceeds GDP growth in almost all countries. For Marsh & McLennan Companies, our strongest levels of growth have been in Asia and Latin America. In the past 10 years, the percentage of our revenue generated outside the US has grown from 43% to 55%.
Insurance broking has been the mainstay of the group’s business. But the last decade has seen several acquisitions on the consultancy side.Which will be the major growth business for you?
We are a leading global professional services firm in the areas of risk, strategy , and people. We believe all three areas are critical to providing businesses with advisory ser vices as well as protection.We expect to grow both organically and through acquisitions in the areas of risk and insurance services as well as consulting.
Oliver Wyman has received several mandates from regulatory authorities. Is this turning out to be an area of specialization for the firm?
In 2014, Oliver Wyman was our fastest growing operating company -it grew by 15% on an organic basis. Deep industry knowledge and entrepreneurial spirit drive the firm to continually discover better ways to address clients’ needs, ultimately effecting positive change for them, for their industries, and for the world. Oliver Wyman’s largest practice is financial services, which represented about 40% of its overall revenues, and we received a significant engagement from regulatory authorities and several jurisdictions. We believe this is a core competency for Oliver Wyman.
Will you hike your stake in Marsh India following the new insurance legislation?
We are very interested in India’s growth prospects and we would absolutely consider increasing our stake in the future.
Indian regulators are hopeful of the Indian market turning into a regional reinsurance hub.Your thoughts…
India has the potential to be a major insurance market by continuing to adopt international insurance and insurance intermediary best practices. The high level of talent available in the local insurance market creates the right environment to participate more broadly and could lead to growth not only in insurance, but also in risk management, loss control, and data analytics.This benefits the business community as a whole, as well as creating a vibrant local job market.
Insurance market conditions have been soft. What is your advice to clients?
Insurance market conditions are very dependent on the level of overall losses, which can vary dramatically over time.In general, this is a good time for clients to expand their coverages and obtain competitive pricing. Many of our clients are taking this opportunity to obtain insurance protection in new areas such as cyber risk and contingent business interruption.
For a predominantly service economy like India, what are the risks that you see for businesses?
The world is moving from a level of interconnectedness to interdependency . India is a market where businesses, in both manufacturing and services, are particularly prone to macro-economic risks related to commodity prices, inflation, and regulatory changes that can have sharp impacts on demand or supply.We are also seeing cybersecurity quickly becoming a boardroom agenda item for our clients, especially those in the services sector.
Source : The Times of India
Date : 9th June 2015