Marsh McLennan outlines program aimed at $400 million in cost savings

Marsh McLennan on Thursday outlined a program, including technology investments and workforce actions, that it expects will result in approximately $400 million in savings over the next three years.

Marsh McLennan will incur $500 million in charges related to the program, mainly due to severance, work transitions and efforts to simplify the organization, Mark McGivney, senior vice president and chief financial officer, said on a call with analysts Thursday to discuss the brokerage’s third-quarter earnings.

The program, called Thrive, comes days after Marsh McLennan announced that it will rebrand as Marsh across its business starting in January 2026 and has launched a new unit combining its technology, data and operations teams.

The new brand strategy, the Business and Client Services unit, and related efficiencies are key components of the Thrive program, Marsh McLennan President and CEO John Doyle said during the call.

“The program is designed to deliver greater value to clients, accelerate growth and improve efficiency,” Mr. Doyle said.

Marsh expects to reinvest part of the $400 million in savings into talent and technology, including expanding AI deployment, he said.

“The majority of the savings will result from efficiencies created by BCS, with a significant portion coming from further optimization of our global operating model,” Mr. McGivney said.

Meanwhile, Marsh McLennan reported third-quarter revenue of $6.35 billion, up 11% overall and 4% on an underlying basis from the same period last year.

Underlying revenue was affected by lower fiduciary interest income, declining property/casualty rates and economic uncertainty affecting clients, especially in the U.S., Mr. Doyle said.

The brokerage continues to forecast mid-single-digit underlying revenue growth in 2025.

Net income was flat for the quarter at $747 million.

Marsh, its main brokerage arm, reported $3.4 billion in revenue, up 16% overall and 4% on an underlying basis, driven by the acquisition of McGriff. Marsh’s business in the U.S. and Canada recorded $2.09 billion in revenue, up 22% overall and 3% on an underlying basis.

Reinsurance brokerage arm Guy Carpenter & Co. reported $398 million in third-quarter revenue, up 5% overall and 5% on an underlying basis.

In Marsh McLennan’s consulting business, Mercer reported $1.58 billion in revenue, a 9% increase overall, and 3% on an underlying basis. And Oliver Wyman reported $886 million, up 9% overall and 8% on an underlying basis.

Market conditions continue to be competitive, with slower growth from an uneven economy, stronger insurer results and ongoing rate declines, especially in property and property catastrophe reinsurance, Mr. Doyle said.

Marsh’s global insurance rate index fell 4% overall in the quarter, driven by property, the same as a 4% drop in the second quarter, Mr. Doyle said. Rates in the U.S. were down 1% and Canada was down 3%. In the United Kingdom, EMEA, Latin America and Asia, rates were down mid-single digits, and down double digits in the Pacific.

Global property rates were down 8% vs. 7% in the second quarter, but global casualty rates increased 3%, with U.S. excess casualty up about 16%.

Workers compensation rates declined 5%. Global financial and professional liability rates were down 5%, while cyber rates decreased 6%.

Increased competition is driving reinsurers to look for profitable ways to deploy capacity, Mr. Doyle said.

Current insurance and reinsurance market conditions are likely to continue into 2026, unless there are significant changes in large loss activity or the broader economic environment, he said.

Marsh McLennan stock was down more than 8% at Thursday’s close in a broadly falling market.