Troubled insurance group Marsh & McLennan has revealed Q4 net profits that came in slightly below expectations at $35 million on consolidated revenues of $2.8 billion.
The figure marks a significant improvement on the $680 million net loss recorded in the same period a year earlier, but with revenues for the three months down slightly on previous quarters and net profits also failing to meet analysts’ expectations, Marsh’s shares slid in trading after the announcement.
The firm is still fighting to restore itself to an even keel after agreeing a costly regulatory settlement at the start of 2005. Marsh was heavily criticized in the inquiry into insurance sector malpractice led by the New York attorney general Eliot Spitzer. The charges of accounting fraud and bid-fixing cost eight senior executives their jobs.
Michael Cherkasky, president and chief executive officer of MMC, said that 2005 was a challenging year for Marsh.
We did what we critically needed to do…we preserved our great brands – Marsh, Mercer, Putnam, Kroll, and Guy Carpenter; and we overwhelmingly retained our clients and employees. [Marsh & McLennan] is a much stronger company today than it was a year ago. Marsh had better client and staff retention and better profitability in the fourth quarter than in the previous quarters of 2005. We expect those trends to continue in 2006, Mr Cherkasky added.