Marsh McLennan beats Q2 profit estimates on interest income boost

Marsh-McLennan Inc. on Thursday reported higher-than-expected second-quarter earnings, buoyed by the increased interest the company earned on client funds.

The company reported earnings of $2.20 per share, excluding one-time costs, for the three months ended June 30. Analysts had expected a profit of $2.12 per share, according to Refinitiv data.

Marsh-McLennan said its risk and insurance business, which accounts for the majority of the company’s revenue, has been helped by strong performance in the United States, Canada and other international markets.

But the biggest boost for the sector came from an eight-fold jump in credit interest income, to $108 million.

Ten consecutive increases by the US Federal Reserve have helped companies earn higher interest income on funds they hold on behalf of customers.

The rebound in markets this year, along with expectations of the Federal Reserve doing the bulk of its interest rate hikes, has also boosted sentiment even as fears of a downturn linger later in the year.

This prompted companies to resume spending on insurance premiums and advisory solutions after cutting such costs last year.

Marsh McLennan’s revenue jumped 9% to $5.88 billion in the first quarter.

(Reporting by Nikit Nishant in Bengaluru; Editing by Krishna Chandra Eluri)