Marsh & McLennan's (MMC) first quarter profits have been slashed by 70% in the wake of a company restructure and an $850m reimbursement to clients misled by the company's former contingent commission practice.
First quarter profits tumbled from $227.8m in the first quarter of 2004 to $134m in the same period in 2005.
Total revenues for the first quarter of 2005 declined by less than 1% to $3.18bn.
Revenues from MMC's risk and insurance services segment—which includes risk management services, insurance and reinsurance brokerage and services, and related insurance services—dropped 11% to $1.75bn in the quarter.
In the group's risk management and insurance brokerage portion of that business revenues fell a sharp 19% to $1.17bn.
In a statement MMC said: “As expected, restructuring and other noteworthy expenses significantly affected risk and insurance service operating income of $171m.
“Approximately $65m of savings associated with the fourth-quarter restructuring were more than offset by $96m for additional restructuring, $43m of incremental regulatory and compliance costs, and $15m for employee retention programs in the first quarter.”
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