View this article online: https://www.insurancejournal.com/magazines/mag-currents/2007/05/21/80633.htm
The October 2004 attack by then New York Attorney General, now Governor, Eliot Spitzer against bid rigging and contingent commissions generated significant losses, both in income and competitiveness, for the world’s three biggest global insurance brokers.
Fortunately for Marsh & McLennan, Aon Corp. and Willis Group Holdings, the legal and regulatory fallout from the allegations and their aftermath is substantially over, leaving them to tackle the earnings fallout through a combination of cost and revenue initiatives, concludes a new report from Standard & Poor’s Rating Services titled, “Global Insurance Brokerage Peers Focus on Core Operations.”
According to Standard & Poor’s, these global brokers still face several pressures. For example, insurance-carrier pricing has been softening for over a year, and Standard & Poor’s expects rate pressure to continue through 2007.
Also, S&P reports, although declining insurance pricing is somewhat mitigated by increasing insurance exposures and broker compensation, the dampening net effect will result in low to potentially no organic revenue growth for many brokers and will slow global broker recovery from the Spitzer allegations.