Marsh Q3 Results Published

by Stewart Douglas

Story link: Marsh Q3 Results Published

Marsh & McLennan, the holding company behind Marsh has today released its third quarter financial reports, reflecting improved performance on the period as compared to last year in spite of problems with its investments as a result of the US sub-prime situation and wavering stock portfolio book values.

The company announced it had improved revenue on the third quarter of 2006 by over 10%, to a little under $3 billion, whilst it realised income of $0.15 per share, down from $0.24 in 2006 as a result of unexpected charges to tax and slight devaluations in asset value. Other incomes highlighted $43 million of profit, largely as a result of the group’s disposal of division Putnam Investments earlier in the summer.

However the chief executive of Marsh & McLennan, Michael Cherkasky was today highly critical of the role of Marsh and its continuing underperformance in the insurance brokering industry, suggesting that it was going a long way towards contributing to the downturn in financial performance.

Major insurance broker Marsh has been faltering in recent times, failing to capitalise on natural market advantages and leaking profitability through what has been described as ineffectual management. The Marsh & McLennan decision today to announce its drive towards improving profitability will see it look to contain costs whilst maximising revenue within the division.

The parent company has recently reorganised the management of Marsh in order to improve efficiency and profitability from its insurance brokering business, after previous top level management were deemed to be ineffectual. The company has now suggested that under Marsh’s new leadership, it should be able to increase profit margins and improve performance to help contribute positively to the group accounts as a whole.

Speaking today on the results, Mr Cherkasky said that the performance was ‘unacceptable’, primarily with regard to the performance of the Marsh division, despite reporting an increase in revenues and strong profit figures across the board.