Formed in 1923 as a cotton harvest reinsurer, Guy Carpenter has become a top provider of intermediary services for insurance firms seeking to reinsure their risks. The reinsurance broker helps insurers find coverage for property/casualty, life and annuity, and accident and health policies. Its GC Analytics unit offers related services including catastrophe modeling, reinsurance utilization, and regulatory consulting, while its GC Securities division provides alternative risk financing options. The company has some 20 offices in the US and about 35 international offices, employing thousands of brokers worldwide. Guy Carpenter is a subsidiary of insurance brokerage giant Marsh & McLennan Companies (MMC).
The company deals with both treaty and facultative property and casualty reinsurance. It places treaty reinsurance policies to cover a portfolio of risks, and facultative reinsurance to cover risks associated with a single insurance policy. Its Specialty Practices group provides coverage for niche areas including accident and health, agriculture, aviation, construction and engineering, energy, marine, political risk, professional liability, terror risk, and workers' compensation, among others.
Even with its broad portfolio of offerings, Guy Carpenter accounts for less than 10% of its parent's annual revenues. The firm is part of MMC's Risk and Insurance Services (RIS) division, which is led by insurance brokerage and risk management subsidiary Marsh. Other MMC companies include Mercer (financial consulting and staffing) and Oliver Wyman (management consulting).
The company has been growing its business through both strategic acquisitions and internal expansion programs in recent years. Acquisitions have included the 2009 purchase of John B. Collins Associates, another top global reinsurance firm, to strengthen its operations in North America in areas including agriculture, medical malpractice, and regional property and specialty coverage. The company also acquired London-based specialty reinsurer Rattner Mackenzie Limited from HCC Insurance Holdings that year.
Along with broadening its portfolio of offerings and its geographic scope, the company's acquisitions have aimed to strengthen its competitive position in the reinsurance market, which is particularly susceptible to the risk of industry consolidation given the limited number of clients and reinsurers in the marketplace. MMC's acquisition activities in 2010 and 2011 were focused on other business segments, while efforts within the Guy Carpenter business targeted organic growth.
MMC's strategy in regards to the Guy Carpenter business has paid off in recent years. The unit achieved a 7% increase in revenues to $1 billion in 2011, attributed to successful new business development and customer retention efforts. Overall, MMC's revenues increased 9% to some $11.5 billion in 2011. – less
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