Beginning in the first quarter of 2009, many Main Street agents will have a new competitor. Marsh, the second-largest broker in the world, will open a new division, Marsh & McLennan Agency, targeting small and midsize businesses around the United States.

“The Marsh & McLennan Agency will be one of the largest agencies in the United States within a very short period of time,” said Jack Butcher, a long-term MMC executive who has been named chief executive of the new unit. “We see ourselves entering a space where agents and brokers tend to be parochial and are competing in a very competitive market in the local and regional agent and broker space. That’s our new domain.”

The agency will begin operating in some of MMC’s 65 offices in select cities, which Butcher said the company won’t identify until closer to the agency’s launch. It is also not known how much money Marsh will devote to competing with Main Street insurance agents – but there is a preliminary indication that it will be a lot. It was announced by MMC on November 24 that the company will have as much as 22.6 million shares of common stock available to fuel future acquisitions company-wide. And executives of its brokerage unit, Marsh Inc., have indicated that they will be aggressive in using acquisitions to fuel growth at its new unit, Marsh & McLennan Agency. 

“There are tens of thousands of agents in the U.S., who generally have revenues of $5 million or less,” said Marsh President and Chief Executive Officer Dan Glaser. “So there are an awful lot of mom and pop shops, and we do believe that we can be a consolidator in that space.”

MMC Sees Big Growth Opportunities in a Smaller-Market Initiative (BestWire 11/24/08)

December 2, 2008