Marsh & McLennan, one of the two largest insurance brokers in the world, said net earnings were $1.95 billion, or $3.60 a share, up from $176 million, or 31 cents a share, a year earlier.
According to CEO Michael Cherkasky, the $3.9 billion sale was arranged to leave the investment management arena and focus on Marsh & Mac’s primary business of helping companies shop for insurance coverage. The brokerage has yet to regain revenues lost after a New York State probe of collusion damaged the firm's reputation and forced it to give up fees from insurers three years ago.
"The company's still in the midst of a very long and painful turnaround, and management needed to take some sort of action to unlock shareholder value,'' said Mark Lane, an analyst with William Blair & Co. in Chicago.
Sales at Marsh & McLennan's insurance and reinsurance brokerage businesses rose 5.6 percent to $1.34 billion. Brokerage revenue increased 2 percent excluding the effect of currency fluctuations and acquisitions, less than the 3 percent increase at Aon Corp. and the 4 percent boost at Willis Group Holdings Ltd. on that basis.