Another Banner Year Seen by 5 Publicly Traded Insurance Brokers in 2023

February 9, 2024 by

Five of the largest publicly traded insurance brokers — Marsh & McLennan Cos., Aon, Arthur J. Gallagher, WTW and Brown & Brown – reported generally strong revenues in 2023, with annual increases ranging from 7% (Aon) to 18% (Arthur J. Gallagher).

A wrap-up of the results, listed in descending order by size of revenues, follows here.

MARSH & MCLENNAN

Marsh & McLennan’s total revenue in 2023 grew 10% to $22.7 billion from $20.7 billion in 2022. For the full year, the company generated underlying revenue growth of 9%. Consolidated revenue in the fourth quarter of 2023 was $5.6 billion, an increase of 11% compared with the fourth quarter of 2022, or an increase of 7% on an underlying basis.

Full-year GAAP operating income increased 23% to $5.3 billion, compared with $4.3 billion in 2022. and adjusted operating income rose 17% to $5.6 billion. Fourth quarter operating income was $1.1 billion, compared with Q4 2022 operating income of $680 million.

Net income attributable to the company for full-year 2023 was $3.8 billion, compared with $3.1 billion in 2022. Q4 2023 net income was $756 million compared with $466 million in Q4 2022.

Marsh & McLennan’s Risk and Insurance Services (RIS) segment (Marsh and Guy Carpenter) reported full-year revenue of $14.1 billion, an increase of 11% (on both a GAAP and an underlying basis) from $12.7 billion in FY 2022. Operating income was $3.9 billion, compared with $3.1 billion in 2022.

The RIS segment’s Q4 revenue was $3.3 billion in the fourth quarter of 2023, an increase of 11%, or 8% on an underlying basis. Operating income was $753 million, compared with $472 million in Q4 2022. Adjusted operating income increased 15% to $791 million.

Breaking down the Q4 results of the two RIS units, Marsh’s revenue was $2.9 billion ($2.7 billion in Q4 2022). The Q4 2023 revenue was an increase of 7%, or 6% on an underlying basis. In U.S./Canada, underlying revenue rose 5%. International operations produced underlying revenue growth of 7%, reflecting 11% in Latin America, 10% in Asia Pacific, and 5% in EMEA.

Guy Carpenter’s fourth quarter revenue was $252 million, an increase of 48% from $171 million reported in Q4 2022. The Q4 2023 revenue increased by 9% on an underlying basis.

During an analysts’ call to discuss the results, John Doyle, president and CEO of Marsh & McLennan, discussed the broker’s 2023 performance: “In summary, 2023 was another outstanding year for Marsh McLennan. All of our businesses delivered, generating excellent revenue and earnings growth. We executed on our strategic initiatives, invested in high quality acquisitions, made the largest dividend increase in 25 years, and made meaningful share repurchases. Looking forward, we are well positioned for 2024.”

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AON

Aon reported its total revenue for 2023 increased 7% to $13.4 billion (compared with $12.5 billion in 2022). The 2023 figure included organic revenue growth of 7%. Fourth quarter revenue increased 8% to $3.4 billion ($3.1 billion in 2022), which included organic revenue growth of 7%

Full-year 2023 operating income rose 3% to $3.8 billion from $3.7 billion in FY 2022. Q4 operating income dropped by 23% to $779 billion, compared with $1.0 billion in Q4 2022. Aon attributed these Q4 declines to the costs of its proposed acquisition of NFP, its restructuring program and its legal settlements. “Aon booked $197 million of legal expenses (associated with Vesttoo). There were also $17 million of expenses associated with NFP and $129 million of Aon United Restructuring Program expenses,” according to Wells Fargo Securities.

Net income attributable to Aon shareholders dropped by 1% for full-year 2023 to $2.6 billion. For the quarter, net income fell 24% to $498 million, compared with $657 million in Q4 2022.

Aon’s Reinsurance Solutions unit reported an increase of 18% in Q4 revenue to $332 million, compared with $281 million in Q4 2022. The Q4 2023 figure includes organic growth of 17%.

Its Commercial Risk Solutions unit reported 5% revenue growth in Q4 2023 to $1.9 billion, compared with $1.8 billion in Q4 2022. The Q4 2023 figure includes organic growth of 4%.

“In the fourth quarter and full year, our colleagues delivered 7% organic revenue growth, highlighted by double-digit growth in Reinsurance Solutions and Health Solutions. This top line growth contributed to full year adjusted margin expansion of 80 basis points, adjusted operating income growth of 10%, and $3.2 billion of free cash flow.” said Greg Case, chief executive officer, in a statement accompanying the results.

“In the fourth quarter, commercial risk grew 4% organically with strength in property, casualty and construction even against the headwind communicated in prior quarters of ongoing pressure from trends in the M&A and IPO markets,” he said during Aon’s Q4 analysts’ call. “Wealth solutions, organic growth of 5% in Q4 reflects strong growth in retirement, which includes growth from ongoing pension risk transfer projects and work to help clients address changing regulatory requirements.”

ARTHUR J. GALLAGHER

Arthur J. Gallagher’s total 2023 revenue was $10.1 billion, an 18% increase from $8.55 billion reported for full-year 2022. For the quarter, revenue rose nearly 20% to $2.4 billion, compared with 2.03 billion in Q4 2022.

The company’s brokerage adjusted net earnings were $2.1 billion in 2023, compared with $1.7 billion in 2022. For Q4, the adjusted net earnings were $445.1 million versus $357.3 million in Q4 2022.

“We had a strong fourth quarter, to wrap up another fantastic year,” said J. Patrick Gallagher, Jr., chairman and CEO, in a statement accompanying the results. “During the quarter, our core brokerage and risk management segments combined to deliver 20% growth in revenue, of which 8.1% was organic revenue growth. We also completed 14 new mergers in the quarter with estimated annualized revenues of $410 million.”

Gallagher’s brokerage segment saw organic growth of 7.2% and its ris mreported (adjusted) revenues of $2.052 billion (including organic growth of 7.2%) and its Risk Management segment had revenues of $379 million (including organic growth of 13.2%)

WTW

WTW reported revenue of $9.48 billion for full-year 2023, an increase of 7%, compared to $8.87 billion for 2022. On an organic basis, revenue increased 8% for FY 2023.

For the fourth quarter, revenue increased 7% to $2.9 billion, compared with $2.72 billion for Q4 2022. Excluding the impact of foreign currency, revenue increased 6%. On an organic basis, revenue increased 6%.

Net Income for full-year 2023 was $1.1 billion, an increase of 4% compared to net income of $1.0 billion in the prior year. For Q4 2023, net income was $623 million, an increase of 5% compared to Q4 2022 when the company reported net income of $593 million.

WTW’s Risk & Broking segment’s revenue rose 13% during Q4 to $1.076 billion (with organic growth of 12%), from $952 million in Q4 2022.

Corporate Risk & Broking generated exceptional organic revenue growth driven by strong new business, improved client retention and rate increases, the company said.

“WTW closed 2023 with robust momentum, delivering strong organic revenue, margin, and earnings growth in the fourth quarter to cap a solid financial performance for the year,” said Carl Hess, WTW’s chief executive officer, in a statement. “Our topline results and healthy pipeline for 2024 reflect the success of our growth initiatives with both new and existing clients. Alongside the strong revenue growth, our progress simplifying and transforming our operations drove efficiencies and margin expansion in the quarter. We also made progress on our commitment to improve cash flow.”

BROWN & BROWN

Brown & Brown reported revenues of $4.3 billion for full-year 2023 ($3.6 billion in FY 2022). The 2023 FY figures represented an increase of $683.7 million, or 19.1%, compared to 2022, with commissions and fees increasing by 17.9%, and organic revenue increasing by 10.2%.

Q4 revenues were $1.03 billion, increasing $124.8 million, or 13.8%, compared to the fourth quarter of the prior year when the company reported revenues of $901.4 million. Q4 2023 saw commissions and fees increasing by 12.4% and organic revenue increasing by 7.7%

Net income for the year was $870.5 million, an increase of $198.7 million, or 29.6%, from $671.8 million in 2022. Q4 net income was $268.6 million, an increase of $123.4 million, or 85.0%, from $145.2 million reported in Q4 2022.

“We are extremely pleased with our performance in the fourth quarter and for the full year, in which we grew our revenues 10.2% organically and crossed our intermediate revenue goal of $4 billion. We now embark on our next goal of $8 billion,” commented J. Powell Brown, president and chief executive officer, Brown & Brown.

In the fourth quarter, the company also announced a new alignment of its businesses in conjunction with the divestiture of certain businesses within its Services segment, moving from four to three segments beginning in 2024: Retail, Programs and Wholesale Brokerage.

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