Soft market pressures made it challenging for the world's four largest insurance brokers to post profits for fourth-quarter 2007, with the quartete all reporting little organic growth and drops in net income compared to the same period in 2006.
• Marsh & McLennan Companies, the parent company of insurance broker Marsh and reinsurance broker Guy Carpenter, reported a 62 percent drop in its net income as soft market pressures and losses in investments weighed heavily on its performance.
Still, Marsh managed a 1 percent increase in organic growth, while Guy Carpenter's organic growth fell 2 percent.
• Aon Corp. reported that fourth-quarter net income dropped 7 percent, putting its earnings-per-share about in line with analysts' estimates after considering the fact that the broker repurchased less stock than anticipated and had increases in expenses related to growth.
• Willis Group Holdings Limited said net income fell 36 percent in the fourth quarter but managed to beat analysts' earnings-per-share estimate by 7 cents per share.
• Arthur J. Galla g her said it is cutting staff and selling its reinsurance brokerage unit as it reported a 5 percent drop in fourth - quarter net income for 2007.
MMC RESULTS
New York-based services firm MMC reported fourth-quarter net income of $85 million, a drop of $141 million from the same period in 2006.
Earnings per share fell 24 cents to 16 cents per share from 40 cents per share in fourth-quarter 2006.
However, fourth-quarter revenues rose 8 percent, or $218 million, to $2.9 billion.
For the year, net income increased 150 percent, or $1.5 billion, to $2.5 billion, which translated into $2.77 increase in earnings per share to $4.53.
Full-year revenues rose 8 percent, or $803 million, to $11.4 billion.
Insurance results were called weak by one executive, with fourth-quarter revenues from risk and insurance services virtually unchanged at $1.4 billion. Fourth-quarter consulting revenues grew 19 percent to $1.3 billion.
Within the risk and insurance services segment, the brokerage unit Marsh reported increasing fourth-quarter revenues by 6 percent, or $66 million, to $1.2 billion. The quarter's new business growth was the best since the first quarter of 2003 when the industry was in the middle of a hard market cycle, executives said.
Despite the soft market, Marsh increased organic growth by 1 percent in the quarter, but dropped 1 percent for the year.
