(Adds lawsuit settlement with Connecticut, updates stock price.)
DOW JONES NEWSWIRES
Marsh & McLennan Cos. (MMC) reversed a year-earlier loss in
the first quarter caused by a $425 million write-down of its Kroll
security business as the insurance broker saw weaker operating
results on woes at its consulting business.
Meanwhile, the company agreed Wednesday to a $2.4 million
settlement in a 4-year-old lawsuit filed by Connecticut Attorney
General Richard Blumenthal related to alleged bid-rigging. When the
suit was filed, Marsh agreed to pay $850 million to settle
allegations by the New York attorney general of bid rigging and of
steering business to insurers who paid Marsh the highest
"contingent commissions."
Economic volatility is boosting business at Marsh &
McLennan's core insurance brokerages as customers look for help
managing risk, with Chief Executive Brian Duperreault in February
saying the company's relative strength will help it.
But the recession has weighed on the company's other operations,
such as its consulting and technology segments. Insurers are also
in the midst of policy price wars because of below-average
catastrophe rates.
Marsh & McLennan, one of the world's biggest insurance
brokerages, reported a profit of $176 million, or 33 cents a share,
compared with a prior-year loss of $210 million, or 40 cents a
share. Excluding items such as the Kroll write-down, earnings fell
to 40 cents a share from 45 cents.
Revenue decreased 13% to $2.63 million, or 4% on an underlying
basis, which excludes acquisitions, divestitures and other
impacts.
Analysts surveyed by Thomson Reuters projected earnings of 43
cents a share on $2.95 billion in revenue.
The company's risk and insurance division, which includes its
core insurance brokerage business Marsh Inc. and the Guy Carpenter
unit, saw a 27% earnings increase as underlying revenue rose
1%.
Earnings excluding items at its Mercer and Oliver Wyman
consulting businesses, more exposed to economic woes, were halved
on reduced demand at Oliver Wyman. Underlying revenue decreased
7%.
Marsh & McLennan shares were recently up 6.2% at $21.87.
-By Joan E. Solsman and Kevin Kingsbury, Dow Jones Newswires;
201-938-5500; joan.solsman@dowjones.com
