Marsh & McLennan Companies’ progenitor, the Dan H. Bomar Company, is founded in Chicago — just weeks after the Great Chicago Fire in 1871. There was plenty of room for new thinking. Most insurance companies had either failed or paid less than full value on their policies.
Henry Marsh leaves Harvard and joins Bomar’s successor firm, the Robert A. Waller agency in Chicago. Almost immediately he sets his sights on a New York office and bigger clients.
Marsh formulates the idea of a broker acting as a buyer of insurance, representing the client — rather than as a seller of insurance. Donald R. McLennan begins his insurance career in Duluth, Minnesota, becoming an expert on railroads, one of the most complex industries of the time.
Henry Marsh’s insight that risk could be managed would enable the growth of technologies that defined a new century: electrification, the telephone, the automobile, skyscrapers, and flight. Donald McLennan’s mastery of industrial complexity would enable risk management on any scale. In 1905, Marsh and McLennan join forces, forming the world’s largest insurance agency.
Our founders formalize the purpose of the firm — solving problems associated with the management of risk — and lay out the strategies that still define the organization: depth of service in every area; a staff of industry specialists; and a network to serve clients wherever necessary. By 1919, Marsh & McLennan has offices from New York to California and Canada.
Guy Carpenter, another man solving problems associated with risk, develops the seminal idea that quantitative analysis could help cotton growers anticipate perils and manage their costs over time. In 1923, Carpenter’s reinsurance firm joins Marsh & McLennan, taking the science of quantitative analysis far beyond cotton. When Marsh & McLennan is incorporated, Henry Marsh is named Chairman.
Economic security dominates the nation’s agenda during the Great Depression. FDR’s Social Security Act prompts Marsh & McLennan clients to seek advice on retirement and group health insurance for their employees. The company hires its first actuaries and expands into consulting. Donald McLennan succeeds Henry Marsh as Chairman. In lean times, the company puts colleagues and their families first, issuing smaller paychecks rather than layoffs.
During World War II, Marsh & McLennan places a third of America’s war damage coverage. Henry Marsh and Donald McLennan die within 18 months of each other, and leadership falls to Ward Seabury, the third partner in the firm. The company’s consulting role grows as it advises industry leaders on the complexities of government contracting.
Marsh & McLennan had grown with America’s railroads. In the 1950s, the company decides to specialize in a wartime industry now transforming civilian life: aviation. Peace brings enormous opportunities as nations rebuild. At home, the company insures credit markets, helping to fuel astonishing growth in America’s consumer economy.
In 1962, Marsh & McLennan becomes a public company, with the capital to deliver solutions in more than 50 countries by the end of the decade. It also adopts a holding company structure to support an expanding array of professional services. In 1965, coverage for the first communications satellite in geosynchronous orbit launches the company’s leadership in space risks. Nuclear and environmental specialties emerge as the company evolves into a constellation of deeply specialized practices.
Overhaul of the US private pension system increases demand for employee benefits consulting. Marsh & McLennan consolidates human resource consulting under the Mercer name. The company’s practice of independently operating subsidiaries enables units like Mercer — and, in 1970, Putnam Investments — to innovate in the market segments they know best. As a Marsh & McLennan company, Putnam becomes one of America’s leading mutual fund families. It remains a part of Marsh & McLennan until 2007.
Through the acquisition of C.T. Bowring & Co., Ltd, Marsh & McLennan Companies becomes a Lloyd’s broker and establishes a wholly owned, integrated network of offices in major global marketplaces. Clients in complex, regulated industries like healthcare, securities, and communications benefit from the specialized expertise of National Economic Research Associates (NERA), a Marsh & McLennan company as of 1983. The next year, revenues top US$1 billion for the first time.
Marsh is the first insurance broker to open an office in East Berlin following German reunification. The momentum carries the company into most of the former East Bloc countries. By 1995, we are operating in 80 countries with global revenues of US$3.8 billion. 375 local offices are delivering our 1919 promise to “serve clients wherever necessary.”
Mercer acquires Delta Consulting Group, adding expertise in leadership, organizational development, and change management. Oliver Wyman comes aboard in 2003, bringing unrivalled skills in financial services and risk management consulting. Long known primarily as an insurance broker, Marsh & McLennan Companies is now one of the world’s leading management consultancies.
The decade proves to be the darkest in our history.
Marsh & McLennan Companies suffers profound tragedy when 295 colleagues and 63 business associates perish in the terrorist attacks on the World Trade Center on September 11th. Their loss will always be a part of our story.
New York State regulators raise significant issues about improper conduct at Marsh. We cooperate fully with the state investigation and conduct a sweeping internal review. As a result, we install new leadership; introduce major business reforms to ensure complete transparency in dealing with clients; and institute new compliance procedures.
Marsh & McLennan Companies emerges from the toughest economic climate since the Great Depression in the best financial and operational shape we’ve ever been in. As Donald McLennan might have predicted, a determined focus on client solutions improves our own fortunes as well.
We introduce a comprehensive, non-negotiable Code of Conduct for all of our colleagues around the world. Its title sums up what we’re aiming for wherever we do business: The Greater Good.