Marsh & McLennan’s CEO has warned that the UK’s possible exit from the European Union will create an environment of uncertainty and volatility for the UK and the entire EU.
During the firm’s conference call on its first quarter earnings, MMC President and CEO Dan Glaser sounded the alarm on Brexit and discussed how it would affect its business.
MMC is the parent of several companies including the insurance brokerage Marsh.
“From a business perspective, we think Brexit would provide opportunities as well as challenges for MMC,” he said. “Frankly, there are too many variables to predict the revenue impact, positive or negative, at this time.”
Gasler said the Brexit’s immediate impact to MMC would be the increased foreign exchange volatility since their exposure to the pound is high.
“That said, we think the impact of a significant weakening of the pound on MMC would be negligible,” Gasler said.
“The RIS segment would have a positive impact, owing to its natural hedge of having some US dollar revenue on international placements in London, while the foreign exchange effect on Consulting would be negative,” he added.
Gasler maintained that the company believes Britain’s inclusion in the EU makes the country and the bloc “stronger economically, politically, and strategically” and he warned of the lasting impact Brexit would have.
“This could last for several years, with potentially significant economic and political outcomes,” Gasler said.
“The EU would be a weaker institution without the UK, which is its second-largest economy and third-largest population. And Britain's exit from the EU could jeopardise London's position as a major financial centre.”
