Burroughs, Marsh & McLennan was formed by Henry W. Marsh and Donald R. McLennan in Chicago in 1905. It was renamed as Marsh & McLennan in 1906.
The reinsurance firm Guy Carpenter & Company was acquired in 1923, a year after it was founded by Guy Carpenter. In 1959, it acquired the human resources consulting firm Mercer.
The 1960s were particularly notable for the company's development, including an initial public offering in 1962 and a 1969 reorganization that introduced a holding company configuration, with the company offering clients its services under the banners of separately managed companies.
In 1970, the company purchased Putnam Investments, adding a mutual fund business to
its portfolio (and sold it in 2007).
Developments leading to current structure
In 1997, the company significantly boosted its insurance brokerage business with a $1.8 billion acquisition of Johnson & Higgins, which, at the time, was one of MMC’s biggest competitors in its brokerage business. The purchase occurred during a time of consolidation in the industry, and pushed Marsh & McLennan back above Aon as the world’s largest insurance broker.
Throughout the 2000s, the company further transformed and focused its operating strategy through various acquisitions and divestment at its subsidiaries, including:
In 2000, Marsh & McLennan’s HR consulting unit, Mercer, acquired Delta Consulting Group for its organizational development and change management expertise.
In 2007, Marsh & McLennan sold its Putnam Investments mutual fund business to Power Financial Corp. for $3.9 billion in a divestment meant to focus the parent company on its risk and human capital businesses.
Also in 2007, the company announced that its insurance brokerage unit, Marsh, had received the first license for a wholly owned foreign company to operate an insurance brokerage business in China.
In 2010, the company sold Kroll, its corporate intelligence and investigative unit, to Altegrity Inc. for $1.13 billion. Prior to this final deal and divestiture, Marsh & McLennan had been selling off smaller divisions within Kroll to further focus on its core risk and consulting businesses.
In July 2017, Marsh & McLennan Cos. Inc. was ranked first in Business Insurance's world's largest brokers list.
2004 bid-rigging investigation
In 2004, Marsh, the company's insurance brokerage unit, was embroiled in a bid rigging scandal that plagued much of the insurance industry, including brokerage rivals Aon and Willis Group, and insurer AIG. In a lawsuit, Eliot Spitzer, then New York State’s attorney general, accused Marsh of not serving as an unbiased broker, leading to increased costs for clients and higher revenues for Marsh. In early 2005, Marsh agreed to pay $850 million to settle the lawsuit and compensate clients whose commercial insurance it arranged from 2001 to 2004.
Much of Marsh & McLennan's corporate strategy since 2005 stemmed from an effort to recover from this tumultuous period, eventually leading to the firm's current organization and simplified focus on insurance services and consulting.
September 11 attacks
At the time of the 2001 September 11 attacks in the United States, the corporation held offices on eight floors, 93 to 100, of the North Tower of the World Trade Center. When American Airlines Flight 11 crashed into the building, its offices spanned the entire impact zone, floors 93 to 99. Everybody present in the company's offices on the day of the attack died as all stairwells at impact zone were destroyed or blocked by the crash; the firm lost 295 employees and 66 contractors.
Operating segments and subsidiaries
Marsh & McLennan Companies is composed of two primary business segments: Risk and Insurance Services, and Consulting.
Risk and insurance services
Marsh, which provides insurance broking and risk management consulting. John Doyle has been the president and CEO since 2017.