‘We’re the risk adviser of the future’

Marsh Pacific’s Josh Roach says the broker’s road to growth will take it beyond the top end of town

By Wendy Pugh

Companies large and small are dealing with extreme weather, supply chain constraints, cybercrime and complex risks, and Marsh Pacific president Josh Roach says the global broker is looking to assist clients across the spectrum.

“I see our growth as being underpinned by taking the expertise that we’ve gained from serving our very large customers with respect to these risks … to the middle market and also to SME customers, and positioning us as the risk adviser of the future for businesses of all size,” Mr Roach tells Insurance News.

“That doesn’t mean we’re focusing any less on our large complex clients, because that has been our DNA for a very long time, but our acceleration of growth and opportunity will be in SME and middle market.”

Marsh McLennan, the largest broking company globally, has long been associated with the top end of town. The local middle market extends to companies with turnover of about $300 million and represents an important part of the economy.

As well as Australia, the Pacific region for Marsh encompasses insurance and risk advisory services across New Zealand, Fiji and Papua New Guinea, and includes more than 2500 employees.

Mr Roach, who took up the regional leadership role in January, started his career in civil engineering and worked on large projects in locations including Dubai before bringing a grounding in maths and project leadership to the insurance sector. “I am not one of those people who say that they ‘fell into the industry’. I specifically chose insurance and I saw it as a natural leap,” he says.

“Engineering as a discipline is around execution, managing a number of different stakeholders, orienting people around a common mission. There are many overlaps and similarities.”

Mr Roach worked for Willis Towers Watson before joining Marsh in 2009 in Hong Kong. He led the private equity and mergers and acquisition practice across Asia for three years, and welcomed opportunities the sector offers to deal directly with clients.

“We operate a relatively flat structure, immersing colleagues of all experiences in quite complex issues. When I joined the industry, pretty much within my first week I was sitting in front of clients, talking to them, hearing about their issues and their challenges and how we might be able to help them overcome those issues. Helping in that way became quite addictive.”

In other roles, Mr Roach was head of Marsh JLT Specialty – Pacific, gaining insights into risk areas including cyber, which has become a heightened focus for businesses.

“It’s really interesting to see new capacity in the market fighting for positions on programs … The market is hungry.”

From mid-pandemic until the end of last year, he was Marsh McLennan chief executive in New Zealand and president of Marsh New Zealand. In that time, the business was assisting many SME customers as they experienced flooding and extreme weather brought by Cyclone Gabrielle.

Mr Roach has returned to his home city of Sydney and taken up his current role as the local market undergoes a gear shift, with increased underwriting capacity and buyers better placed compared with the more difficult environment of recent years.

Marsh’s Global Insurance Market Index shows commercial rates in the Australia-dominated Pacific market declined for the first time since 2016 in the first quarter, falling 2%.

Trends in the first quarter are continuing, and Mr Roach spoke with Insurance News as clients and underwriters were preparing for the busy mid-year renewals.

“It’s really interesting to see new capacity in the market fighting for positions on programs, and we’re seeing incumbents fighting to defend their position, or even increase participation. The market is hungry, as evidenced in the conversations and the presentations we’re seeing in our offices.”

Insurers are in growth mode and new entrants have opened in Australia, with the country regarded as offering good opportunities and a favourable environment.

“I think they like the fact that it’s a mature and predictable insurance market, risk management here is a very sophisticated industry,” Mr Roach says.

“Generally, as a country and an economy, it’s a good place to do business.”

He says cyber risks are a key challenge for clients and supply chain risk management as it relates to cyber is critical, given the number of attacks that exploit weaknesses in that avenue.

“We’re very focused on that and we’re helping our clients with rigorous and ongoing assessments of their third-party contractors, and the infrastructure they might have, to better position them for superior outcomes.”

Cyber capacity generally has grown, with the Marsh index showing rates globally and in the Pacific falling in the first quarter.

Mr Roach says there’s a better understanding of the risk landscape, extensive questionnaires are completed, and the broking industry has taken a lead in advising clients.

“There’s a lot of pre-assessment, analysis and risk management conducted before the insurance purchase, and I think that is giving the market increasing comfort. It’s not just about pricing – we’re also seeing a really positive expansion of coverage in some areas as well, and we think this bodes well for our clients, including in the middle market and SME.”

Marsh has launched the Sentrisk platform, which uses artificial intelligence, mapping and geospatial satellite imaging to help companies identify and manage supply chain risks, with geopolitical tension and climate-related events presenting challenges. The platform has been developed in conjunction with the Marsh McLennan Oliver Wyman consultancy.

The company also recently formed a Global Alternative Risk Solutions practice, bringing together expertise in parametric cover, alternative risk transfer, captives and complex risk, assisting clients in markets including Australia.

“We’re always looking at opportunities and that’s very much a part of our strategy for growth.”

“We see a lot of opportunity in that area,” Mr Roach says. “We see ourselves as the risk adviser of the future, and that means we’re able to predict trends and develop innovative solutions for our clients’ evolving needs.”

Marsh McLennan last year had one of its biggest acquisition sprees in nearly two decades, second only to 2019, when it acquired JLT. It remains on the lookout for opportunities.

Deals included the purchase of Melbourne-based Honan Insurance Group, reportedly for about $700 million. The acquisition added a strong middle-market business, with more than 400 employees serving more than 30,000 clients from offices in Australia, New Zealand and Asia.

The acquisition was completed in December, Honan staff are now operating from the Marsh offices, and Mr Roach says the transaction has brought benefits for both parties, including expanded employee opportunities and strengthening of regional operations.

“It’s a very natural fit for us culturally and given where we want to accelerate our growth in the future. Combined, we make a great team.”

Media reports earlier this year suggested Marsh may also have eyed listed broker PSC Insurance Group, which reported to the market that it had received “multiple strategic approaches”. UK-based Ardonagh emerged as the buyer with a planned $2.3 billion transaction.

Mr Roach won’t be drawn on whether Marsh had been interested in PSC, noting only that the company has always pursued organic and inorganic growth, while in global markets it is a busy time for mergers and acquisitions.

“We’re very focused on organic new business growth, that’s one of the true measures when we look at our performance, and we’ve been very successful inorganically as an organisation as well. We’re always looking at opportunities and that’s very much a part of our strategy for growth.”

Marsh McLennan said in a first-quarter global results briefing that it is well positioned for a good year, and Mr Roach says it is a privilege to have taken up the Pacific leadership role.

“It’s a tremendous opportunity to serve our clients and the colleagues that I lead. We’re operating in a very complex risk environment and the risks that we are facing span clients of all sizes.”