Marsh Bets on AI as Insurance Rates Fall 6%

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Marsh & McLennan Companies is leaning on artificial intelligence to offset a softening insurance pricing environment, as primary commercial insurance rates fell 6% in the second quarter following a 5% decline in the previous quarter and global property rates fell 12%. The company is building AI-enabled products such as its Risk Companion platform, which uses AI-powered analytics to help clients assess exposures and evaluate risk-mitigation options, and is developing AI applications across sales, claims, reinsurance and consulting, with its Business and Client Services unit central to the automation effort. In the second quarter, Marsh delivered 5% underlying revenue growth, 9% adjusted EPS growth and a 29.3% adjusted operating margin. Peers are pursuing similar strategies: Aon posted 5% organic revenue growth and a 28.9% adjusted operating margin, up 70 basis points, while Willis Towers Watson reported 5% organic revenue growth and a 19.5% adjusted operating margin, up 100 basis points, and launched Propel targeting about $400 million in run-rate savings and a 30% adjusted operating margin by 2028. Marsh shares have lost 4.7% year to date, outperforming the broader industry's 15.7% decline, and trade at a forward price-to-earnings ratio of 15.91X versus the industry average of 13.61X, with the Zacks Consensus Estimate implying a 7.1% rise in 2026 earnings followed by 9% growth next year.

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