Marsh stresses client focus as JLT integration gets underway

The $5.6bn (£4.3bn) acquisition was completed yesterday, cementing Marsh’s position as the world’s largest insurance broker.

The deal is expected to save Marsh $250m in synergies and puts an estimated 3750 of the combined workforce at risk.

John Doyle, pictured left, Marsh president and CEO, and Clarke, pictured right, said that that employees had a decision to make and were hopeful about staff retention, though Doyle said “natural attrition” would be used to meet redundancy objectives.

Marsh JLT Specialty, which Clarke heads, combines the specialty operations of both Marsh and JLT under a single banner.

The brand was announced in November and has identified seven key global specialties: aviation and aerospace, construction, credit, energy and power, financial lines and professional indemnity, marine, and private equity mergers and acquisitions.

Doyle and Clarke’s comments about the road ahead for the enlarged company follow comments made last week by former JLT group commercial director, Robert Twining, who slated the deal as having the potential to be a “train wreck.”

For his part, Doyle said today: “This is about growth first as opposed to scale. Increased scale and growth will give us greater ability to invest in people, in technology and in other capabilities that will help us help our clients manage risk ultimately.”

Speaking about where that growth was likely to come from, Doyle said: “Generally speaking, Marsh has a broader offering in many parts of the world so a revenue synergy will be where JLT has developed a really strong client relationship in a specialty and where the legacy Marsh, if you will, didn’t have that prior client relationship.”

Giving her read of where the opportunities for growth lay, Clarke said: “Our clients’ expectations are changing in terms of what they want from their broker and the combination gives us a real opportunity, particularly in the consulting and data analytics segment, to really up our game in terms of what we can collectively bring to them.”

Client focus

Doyle and Clarke were united in saying that, whatever the challenges of integration, clients remain their utmost concern, with Clarke promising that the merger would deliver “an unmatched depth in terms of expertise and resources” for specialty clients.

“That’s my number one concern,” she said, referring to client relationships. “We’ve made it perfectly clear to everybody who works for us that we’re redoubling our efforts and focus on clients, and also speaking to clients about the integration insofar as their interested.

“We just made undertakings to our clients that we’re not mandating any team changes, their best interests continue to be our first priority, and their resources are greater not less.”

Doyle was unequivocal in his confidence that the integration would not take over client relations, saying: “Both firms finished the year strong: our financial performance in the second half of last year was very good which shows that, while there’s potential for distraction, we’re able to focus on our clients while executing the things we need to do.

Elaborating on how Marsh plans to achieve this, Doyle said: “I want us to be simpler. I want us to be agile and empower our colleagues. We should be making decisions closer to the client than we have done historically. I’ve been working hard to push decision-making to the field.”

Staff

On the topic of staff retention and redundancies, Doyle acknowledged “there will obviously be some duplication of roles and some redundancy as a result. Both of us have been thoughtful and careful leading up to the close, using natural attrition to help us begin to get at some of the objectives that we’d set.”

Doyle emphasised this attrition was not out of the ordinary. “We always have attrition, both firms,” he said. “That’s normal and quite healthy. So far, the attrition attributable to the combination is very limited around the world.

“Success on this transaction will ultimately be about growth and for us to do that obviously we have to have the right talent.

“We couldn’t take our people for granted last week, and we certainly can’t take them for granted today. This was a change for a lot of people, for many people they didn’t pick that, it wasn’t a choice that they made.

“We’re quite optimistic that our teams around the world will continue to want to invest their career with Marsh and Marsh JLT Specialty.

Doyle’s optimism for staff retention was echoed by Clark, who said: “People have to make choices and not everybody will make that choice. We worked so hard at JLT to build this incredible team of people and I hope as many of us will remain at Marsh.”

Marsh plans to move those that do stay into the same office sooner rather than later.

“There’ll be a lot of traffic between our big blue building and Tower Place,” said Clarke, referring to offices of JLT and Marsh respectively. “But we’ll be looking to bring those two groups together in the next couple of months.

“Being physically together that quickly will have a dramatic impact on how they’re able to work together.”

Doyle agreed, saying: “We have a lot of experience in M&A and co-locating the teams as quickly as possible is really important.”