Broker giant reveals fourth quarter income drop of $507m
Marsh’s annual operating income has plunged by over a quarter to $507m, parent company MMC’s fourth quarter results have revealed.
During the fourth quarter of 2007, Marsh’s operating income declined by $58m from $127m year on year, driven by a $66m loss in revenue from Risk Capital Holdings.
Marsh’s operating margin declined by 5% in the period to just 4.2%. For the year, Marsh’s margin stood at 9.1%, down from 12.4% in 2006.
In a statement, MMC said that its performance had been affected by $44m in restructuring costs and $13m in legal charges related to the lawsuit filed by former New York Attorney General, Eliot Spitzer.
It added that premium rate declines in the commercial insurance market had continued to accelerate during 2007, and had continued into the January 2008 renewal period.
Brian Duperreault, who was recently appointed as global chief of Marsh’s parent company, MMC, said its immediate focus was to improve profitability at Marsh and consulting unit, Kroll.
The blow for Marsh came just days after major rival Willis’ revealed results showing a fall in net income during the quarter of over a third to $95m. Willis said that higher retention rates by primary carriers throughout 2007 had impacted its revenue streams.