Marsh & McLennan Cos.’ Marsh Inc. insurance-brokerage unit has announced the formation of a crisis-consulting practice headed by L. Paul Bremer, former ambassador-at-large for counterterrorism under President Reagan.
According to a report in The Wall Street Journal, the new unit has been in the works for months, Bremer said, and isn’t a reaction to the Sept. 11 attacks. But he added that the strikes had sped up the unit’s launch. Bremer said the new practice will focus on catastrophic risks, those that have the potential in some cases to put a company out of business.
Marsh & McLennan, headed by Jeffrey Greenberg, has been among the companies responding most quickly to the changing business environment that has followed the attacks. Late last month, the company said it would raise $1 billion in capital to help form a new Bermuda-based insurer, Axis Specialty Ltd., one of the first efforts to take advantage of the higher insurance prices and increased demand for insurance that have resulted from the attacks.
Other insurers are getting involved to provide capacity as well, knowing that increasing prices could mean a better return on their investment. Bermuda reinsurer RenaissanceRe Ltd. said Oct. 10 that it would form a new catastrophe reinsurer called DaVinci Re with $500 million in capital. State Farm Mutual Automobile Insurance Co., Bloomington, Ind., will contribute $200 million of that, with RenaissanceRe “targeting” an investment of $100 million. RenaissanceRe didn’t name other potential investors.
Analysts have indicated brokers like Marsh and Aon Corp. already stood to benefit from the higher premium rates stemming from the attacks because some of their revenue comes from commissions based on the insurance premiums paid by their clients.
Marsh was also set to announce a partnership with Control Risks Group LLC, a risk, security and crisis-management specialist whose clients include major corporations and governments.