Marsh & McLennan suffers on back of Kroll writedown
MARSH & MCLENNAN (MMC), the world’s second largest global insurance broker, posted quarterly results in line with expectations yesterday and forecast improved profitability for its brokerage business.
The US firm reported a second-quarter net loss, hurt by a $315m (£185m) charge on the restructuring of Kroll, its security consulting business. The firm posted a $193m net loss in the quarter, compared with a year-earlier profit of $65m.
But excluding the Kroll charge, it posted a profit that matched Wall Street’s average forecast and said it expects an improvement in profit at its brokerage business this year.
While falling insurance rates in recent years have cost brokers, who are largely compensated by commissions, most have curbed spending, helping to cushion the bottom line.
Once the world’s largest insurance brokerage, MMC faltered after a 2005 investigation into commission agreements with insurers it represented, triggering a costly settlement charge and loss of business. Over time, it lost its dominant position to Aon.
But investors hope MMC, under new management, is about to turn the corner.