Marsh & McLennan Companies (MMC) has rated higher than Aon because of its lower financial leverage and increased interest coverage ratio, Moody’s says.

Last month the ratings agency upgraded MMC’s senior debt rating from Baa2 (positive) to Baa1 (stable), and affirmed Aon at Baa2 (outlook downgraded to stable from positive).

Moody’s Senior Credit Officer Bruce Ballentine says the companies are “global leaders in insurance brokerage and consulting” with extensive product offerings that set them apart from competitors.

“But MMC’s lower leverage and better interest coverage are the keys to the rating differential.”

Mr Ballentine says MMC has paid less than Aon to shareholders through dividends and share buybacks, which is more favourable from a credit perspective.

The companies have similar profit margins, and Moody’s expects them to sustain or improve margins in the coming year based on organic growth and savings from restructuring programs.