Marsh execs seek to allay risk manager concerns over JLT deal

Marsh executives have sought to allay risk manager concerns that the JLT acquisition will lead to a lack of focus, loss of talent and seriously harm competition in the sector. Speaking the day after the deal completed, they said the combined company will redouble efforts to put clients at the centre of its thinking and decision-makers close to the front line of risk. Marsh & McLennan Companies (MMC) completed its $5.6bn acquisition of JLT on Monday, after clearing regulatory hurdles. While the firm heralded a “new era” based on projected growth, some risk and insurance managers remain concerned that what might be good for MMC will not be such good news for them. They fear the deal could see Marsh take its eye of the ball as the two companies merge and work on developing the new combined Marsh-JLT Specialty unit. Risk managers are also worried about the loss of a serious broking option in JLT, that key staff might be tempted away from Marsh and that overall staff numbers, and therefore service, could fall. John Doyle, president and CEO of Marsh, and Lucy Clarke, president of Marsh JLT Specialty, attempted to reassure risk managers that they will remain top of the agenda as the two companies merge operations. “People taking their eye of the ball would be a number one concern from my perspective. We have made it perfectly clear to everybody who works for us that we are redoubling our focus and efforts on clients,” said Ms Clarke. “Their best interests continue to be our main priority,” she added. This is, of course, in Marsh’s financial interests, if nothing else. If the new business gets the client part right, “all the numbers will follow”, said Ms Clarke. Mr Doyle told those gathered in London that he is motivated by “getting the best of Marsh in front of clients”. He wants to see the new company working more closely with risk managers, and more responsive to their needs. “We should be making decisions closer to the clients than we have historically. I have been working quite hard to push decisions and authority out to the field. I think we are moving more quickly. I think Marsh colleagues would share that sentiment broadly. It is a work in progress,” he said. Mr Doyle said client engagement is crucial to this end. “It is the way I operate and the way I expect the Marsh leadership team to invest its time. I meet with clients more than once a day on average, and those meetings are opportunities to learn,” he said. The executives stressed that Marsh and Marsh-JLT Specialty will invest heavily in data analytics, and develop risk consulting services to meet the changing needs of risk managers. The pair also suggested risk managers need not fear a loss of expertise and large numbers of support staff from the new company. Mr Doyle began by saying there will be “limited” staff attrition from the deal. Ms Clarke added that the company has “made an undertaking” to clients that it “won’t be mandating any team changes”. She hopes as many JLT staff as possible will stay and work in the new business. “Keeping the talented people and clients will be the measure of success,” she explained. Neither of the executives believes risk and insurance managers should be overly concerned by a lack of market options following the deal. While there is one less option for risk managers, there remain many others and healthy competition, they argued. Nor are there any areas where the combined firm has started to, or plans to, pull back from, the pair added. Ms Clarke was keen to stress that, particularly in specialty classes, the combined Marsh-JLT will offer an “unmatched depth in terms of expertise and resource”. Mr Doyle said the deal is predominantly about growth but also offers scale. “This gives Marsh greater ability to invest in people, technology and other capabilities to help solve clients’ problems,” he added. “In a number of different areas, we [Marsh and JLT] think about some areas of risk in different ways. We can capitalise on that to develop even better tools as we go forward,” continued Mr Doyle. The new Marsh-JLT Specialty unit will focus on seven global specialities. These are aerospace, construction, credit, energy and power, finpro, marine and private equity, mergers and acquisitions. JLT had to sell its aerospace unit to Arthur J Gallagher to secure EC regulatory approval for the Marsh deal. Ms Clark said this demand from the EC “wasn’t totally shocking”, given that Marsh and JLT had two of the strongest aerospace divisions in the market. But she doesn’t see the sale as a problem. “We still have the biggest aviation team in the world,” she said.

Marsh execs seek to allay risk manager concerns over JLT deal

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