Henry W. Marsh dropped out of Harvard to seek his future in Chicago. The Great Fire of 1871 had wiped out most insurers and Marsh saw opportunity for insurance brokers that could distribute great risks across many firms. Almost upon arrival, his ambitions were bigger than the new company he joined. Marsh wanted to open an office in New York. Then he set out to win U.S. Steel, the world's first billion-dollar corporation. Colorful, urbane, high living, and audacious, Marsh was the kind of man who would book a transatlantic passage so he could pitch AT&T's Theodore Vail aboard ship. On Vail's return voyage, there was Marsh again. He got the business.
Donald R. McLennan of Duluth, Minnesota, became his family's sole support at age 14. In business life, his intense competitiveness took the form of thoroughness. McLennan was all diligence, researching insurance clients' operations until he knew as much as the owners. During 1901, while Marsh was pursuing U.S. Steel, McLennan was mastering the intricacies of railroads, winning one line after another. He spent weeks at a time inspecting every property along thousands of miles of road — a man who believed in research, and in seeing for himself.
When the two men merged their firms in 1904, the new company was the largest insurance agency in the world with annual premiums of US$3 billion — and it was only the beginning.
In the American south of the early 20th century, cotton was a major industry. But cotton insurance — young Guy Carpenter's area of interest and business — was haphazard and reactive. Bad years sent premiums rocketing out of growers' reach. Lucky years sent premiums down, exposing insurers to huge risks.
Like other Marsh & McLennan Companies founders, Carpenter looked at the business before him and saw a better way. His insight: quantitative analysis of losses over time could reveal the signal within the noise of year-to-year fluctuations. For the first time, producers and insurers could anticipate rates and manage costs. The insight that data — the more the better — could help clients anticipate perils and measure risks put Guy Carpenter on a trajectory that is still transforming the industry. In 1921, Guy Carpenter met Henry Marsh and Donald McLennan during a transatlantic crossing. Guy Carpenter & Company would become part of Marsh & McLennan and take the nascent science of analytics far beyond cotton.
In 1944, William Mercer was a young economist at Canada's Powell River Company, then one of the world's largest paper manufacturers. Mercer was assigned to design a pension plan for the company, and he came to the task as the objective economist he was. He had no preconceptions about what kind of plan it should be, and instead worked out from scratch the most beneficial scheme possible for Powell River's people, whom he thought of as his clients.
The difference between his plan and those that were commercially available led him to launch his own pension consulting business a year later with $25 of his own and a $100 loan. In 1949, Mercer's firm joined Marsh & McLennan, which had created an employee benefits area of expertise in 1938. William Mercer's legacy can be seen across Marsh & McLennan Companies today. Mercer believed in hiring the brightest people he could find, and in objective, clean-sheet-of-paper analysis of the challenge at hand. The best answer is always better than a good answer, no matter how well 'good' has worked before.
In 1984, Alex Oliver and Bill Wyman saw that the landscape of business was about to change in fundamental ways. Deregulation and privatization of financial services, communications, and other industries around the world meant that CEOs would need more than better ways to run their companies; they'd need clarity on the future, whole new business models, and multifaceted strategies to implement change while continuing to make the most of their current businesses.
And, because entire industries were changing, they'd need deeply specialized advisors — people who wouldn't need to be educated about the client's world because they'd lived it. Oliver and Wyman left partnerships at Booz Allen Hamilton to set up a company to deliver this new kind of advice for organizations in dynamic environments.
Thirty years on, as industries continue to evolve, Oliver Wyman is an advisor (and employer) of choice for leaders who would rather be change agents than fast followers.