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Marsh & McLennan (MMC) Arm Acquires Employee Benefits Group

Zacks Equity Research

Marsh & McLennan Companies, Inc. MMC recently announced that its subsidiary Marsh & McLennan Agency LLC (“MMA”) has completed the buyout of Employee Benefits Group, Inc. The acquired company is a Bethesda, MD-based independent insurance agency, which deals with employee benefits and retirement consulting. However, terms of the transaction were not disclosed.

With this deal, MMA would be able to offer consumers unique employee health, benefit and retirement solutions. The combination of both companies’ expertise will allow MMA to boost its ability to serve customers in the greater Washington or Baltimore region.

Notably, Employee Benefits Group would benefit from joining MMA as it would have proper access to a broad range of solutions, with which it will be able to address its clients’ requirements.

This is yet another strategic initiative by Marsh & McLennan to enhance its portfolio and establish its presence in the United States. Several acquisitions made over the past many years, significant capital expenditures undertaken for growth, launch of products and services, upgrade of digital capabilities and branching out into new businesses will further drive the company's growth.

Of late, the company completed significant consolidations, such as Pavilion Financial Corporation, Summit Strategies Group, Otis-Magie Insurance Agency, Klein Agency and Insurance Associates, Houston-based Wortham Insurance plus Eustis Insurance & Benefits.

The company is also going to buy JLT Specialty, currently subject to certain closing conditions. All these integrations augur well for the company’s overall growth.

In 2018, the company spent a total of nearly $1.04 billion of its acquisitions. It should be noted that $120 million of the company’s total revenues and $2 million of its operating income are related to its accretive acquisitions.

Given the insurance industry’s all-time high available capital, there has been a spate of acquisitions in the domain of late. Recently, Beecher Carlson Insurance Services, LLC, a unit of Brown & Brown, Inc. BRO, has purchased certain assets of Donald P. Pipino Company. The transaction will not only enable the insurance broker to enrich its service portfolio but also provide a wide array of resources and extended service plus consulting capabilities to its clients. Arthur J. Gallagher & Co. AJG has acquired Interstate Insurance Underwriters to drive Risk Placement Services in northern Louisiana.  Cincinnati Financial Corporation CINF recently closed the buyout of MSP Underwriting Limited, a reputed global specialty underwriter and an arm of Munich Re.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of this Zacks Rank #3 (Hold) company have gained 10.9% in a year’s time, underperforming its industry’s rise of 15.5%.


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