"It is much too early to talk about job losses," he told The Herald in an interview. He would not reveal how many people are employed by Marsh in Scotland, saying "we never disclose staff numbers". Marsh, which is US-based, has 23,000 employees world-wide while HSBC’s insurance arm has a total of 1400 staff, 1000 of whom work in the UK.
Nicholson said the deal would enable Marsh to expand its customer base and offer a wider range of products. "We see this (deal) as a coming together of two great companies," he added.
He said Marsh would acquire HSBC’s top insurance staff. "They have some very good people," he stated.
The cash and stock purchase is expected to be completed in the first quarter of 2010, New York-based Marsh & McLennan said. Marsh will have "preferred access" to provide brokerage business to customers of the London-based bank, the firm stated.
As part of the transaction, set to close in the first quarter, the US insurance broker and HSBC have also entered into a preferred strategic partnership under which Marsh will be able to provide insurance broking and risk-management services to HSBC’s corporate and private clients ahead of other providers.
"The beauty of this agreement is that on the one hand we are improving the breadth and sophistication of HSBC bro king services for our customers, while at the same time sharpening our strategic focus on the bancassurance model with emphasis on life, pensions and investments," said Clive Bannister, head of HSBC’s insurance business.
The London-based bank retains a significant insurance business following the deal, a company spokesman said.
City analysts said brokers including Marsh & McLennan and Aon will expand through acquisitions after the recession squeezed sales of property-casualty insurance, reducing commissions that brokers get for placing coverage. Marsh & McLennan’s re-insurance brokerage, Guy Carpenter & Company, agreed in October to buy Rattner Mackenzie from HCC Insurance Holdings to add sales in the Lloyd’s of London market.
In November, Marsh & McLennan swung to a third-quarter profit as the company saw particular strength at the risk and insurance-services segment. However, the company’s stock is down more than 9% this year.
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