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Professional services and insurance conglomerate Marsh & McLennan published its fourth quarter and fiscal year 2010 results yesterday, revealing major gains in both revenue and profit. While the company saw progress across all of its divisions, the Wall Street Journal reports that overall revenue was "helped especially by its consulting and insurance businesses." And indeed, it was.
"consulting businesses" are better known as Mercer, the worldwide HR consulting powerhouse, and Oliver Wyman, a prestigious strategy outfit of international repute. Combined, the pair raked in nearly $5 billion in revenue in 2010, up 5 percent from a relatively stagnant 2009. Both firms continue to gain momentum as well; Mercer, the larger of the pair, saw revenue increase by 6 percent in Q4 (to a whopping $910 million), and Oliver Wyman's revenue increased at the same rate to $400 million.
Overall, Marsh & McLennan's consulting operations (which also include NERA Economic Consulting and Lippincott) are now good for well over $1 billion in revenue each quarter.
The parent company has made a visible effort to strengthen its consulting division in the past year, funding acquisitions of small, specialized consultancies like Hammond Associates, Strategic Benefit Solutions, and announced today, Kinloch Consulting Group out of Boston. What's behind the trend? Perhaps M&M thinks that it needs to bulk up in order to challenge the Big Four and other global consulting players who have done the same. Perhaps the company has followed the advice of the Financial Times' Andrew Hill, who says that modern businesses only want to engage one-stop shops, or "advisors with global reach", to solve their issues. Or maybe they just wanted to get their hands on a bigger piece of the consulting pie. Whatever its motive, Marsh & McLennan has clearly benefitted from its robust investment in consulting—net income for 2010 reached $855 million, a huge increase the $227 profit the company claimed in 2009.
For more information:
WSJ: Marsh & McLennan Earnings Soar
Marsh & McLennan Companies Reports Fourth Quarter and Full-Year Results (PDF)
Marsh & McLennan Agency Acquires Boston Operation of Kinloch Consulting Group
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