History
Marsh & McLennan Companies (MMC) was founded in 1871. Marsh is now one of the world's leading insurance brokers and risk management advisors. In 1923, Marsh got into the reinsurance broking industry when it acquired Guy Carpenter & Company.
In 1959, MMC acquired the Canadian benefits consultation company William M. Mercer Limited. This acquisition allowed Marsh to enter the human resource consulting industry. The company is now known as Mercer Human Resource Consulting and it is a global leader in the field of HR and related financial products, advice and services. In 1970, Marsh bought Putnam Investments and entered the field of investment management (the mutual funds industry). In the 1980’s, MMC expanded into specialty consulting and included strategy and operations consulting (Mercer Management Consulting), organizational change consulting (Mercer Delta), economic consulting (NERA), design and brand strategy consulting (Lippincott Mercer), and financial services strategy and risk management consulting (Mercer Oliver Wyman).
In 2004, MMC bought Kroll, a company that provides a large number of investigative, financial, security, intelligence and technology services. This gave a boost to MMC’s risk consulting services. In 2004, Marsh won the Asian Insurance Broker of the Year Award as well as the Broker of the Year Awards in Australia and New Zealand for consistently high consumer service standards, innovation, professionalism, responsiveness to customer needs and exceptionally good financial performance. MMC has annual revenues of approximately $12 billion and has 55,000 colleagues in more than 100 countries that help sell MMC products to clients and advise them about how to deal with critical business risks and issues. A Marsh insurance broker will be employed by the following companies and will work in one of the following areas :
- Risk and Insurance Services - This includes global risk management, financial solutions, risk consulting, insurance program management services for associations, businesses, public entities, professional services organizations, and private clients and insurance broking. These services are provided by Guy Carpenter subsidiaries on a fee basis.
- Risk Consulting and Technology - Using Kroll’s expertise, Marsh provides a variety of a large number of investigative, financial, security, intelligence and technology services. Kroll serves law firms, corporations, nonprofits, government agencies, financial institutions and individuals all over the world.
- Human Resource Consulting - Mercer Human Resource Consulting is a global leader in the field of HR and related financial products, advice and services. Mercer HR includes units such as Mercer Investment Consulting and Mercer Global Investments, Mercer Health & Benefits and Mercer HR Services. Mercer Health & Benefits helps clients create and implement employee health care and insured group benefit programs. Mercer Investment Consulting and Mercer Global Investments helps investors as well as retirement plan participants and sponsors achieve long-term returns without too much risk. Mercer HR Services provides a variety of outsourcing services related to HR.
- Investment Management - Through Putnam Investments, Marsh offers a full range of equity and fixed income products to individual and institutional investors that are invested globally and domestically. “At the end of January 2007, Putnam had $191 billion in assets under management. Mutual fund assets were $123 billion and institutional assets were $68 billion”.
- Mercer Specialty Consulting - Mercer Management Consulting helps enterprises create and manage strong businesses that ensure “shareholder value growth”. Mercer Management Consulting includes Mercer Oliver Wyman (a leader in financial services and risk management consulting), Mercer Delta Organizational Consulting works (which works with boards of directors, executives and CEOs to help organize institutions and bring about positive changes), NERA Economic Consulting (which provides information and guides law firms, corporations, courts and government entities about regulation and finance) and Lippincott Mercer (which helps clients create and manage brands and their corporate identity).
Marsh Legal
Like many large insurance companies and brokerage firms, Marsh has had its share of litigation and scandals. Marsh is paying $850 million to settle a lawsuit that accuses it of cheating customers by steering business to insurers in exchange for incentive payments and rigging prices. This amount will be paid over a four-year period and will be used to compensate approximately 100,000 corporations and smaller businesses whose commercial insurance was arranged by Marsh from 2001 and 2004. The lawsuit was brought by the New York attorney general (Eliot Spitzer) stated that “Marsh received kickbacks from insurance companies that increased the cost of coverage for its customers and did not serve as an unbiased broker”.
Eliot has negotiated billions of dollars in restitution and penalties from mutual funds and banks for fraudulent activity. The largest single payment so far has been $300 million paid by Citigroup. Citigroup’s analysts were accused of providing misleading advice on stocks. The chief executive of Marsh said “we don’t believe that our corporate entity has ever been involved in a pattern of covering up or a pattern of criminal behavior” and apologized for the “shameful” and “unlawful” behavior of “a few people” at the company.
After the charges were filed in October 2004, Marsh stopped taking incentive payments from insurers and its chief executive, Jeffrey W. Greenberg, was forced to resign. The company agreed to “make fundamental changes in the way it does business” and it is believed that as a result of this lawsuit, Marsh is no longer involved in any illegal practices.
|
