Marsh & McLennan Companies
Encyclopedia
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
-based global professional services
Professional services
Professional services is an industry of infrequent, technical, or unique functions performed by independent contractors or by consultants whose occupation is the rendering of such services....
and insurance broker
Insurance broker
An insurance broker finds sources for contracts of insurance on behalf of their customers. The three largest insurance brokers in the world, by revenue, are Aon, Marsh & McLennan, and Willis Group Holdings.-Purpose of insurance brokers:...
age firm. In 2007, it had over 57,000 employees and annual revenues of $
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
10.49 billion
1000000000 (number)
1,000,000,000 is the natural number following 999,999,999 and preceding 1,000,000,001.In scientific notation, it is written as 109....
. Marsh & McLennan Companies was ranked the 221st largest corporation in the United States by the 2009 Fortune 500
Fortune 500
The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and...
list, and the 5th largest U.S. company in the diversified financial
Diversified financial
The diversified financial services segment includes a range of consumer and commercially oriented companies offering a wide variety of products and services, including various lending products , insurance, and securities and investment products...
industry. It has its headquarters in Midtown Manhattan
Midtown Manhattan
Midtown Manhattan, or simply Midtown, is an area of Manhattan, New York City home to world-famous commercial zones such as Rockefeller Center, Broadway, and Times Square...
, New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
.
Subsidiaries
Marsh & McLennan Companies, Inc. is a diversified risk, insurance and professional services firm composed of:- Marsh Inc. and Marsh Brokers, insurance broking and risk management consulting through Marsh Risk Consulting;
- Mercer, a collection of consulting and services firms (including Mercer Human Resource Consulting, Mercer HR Services, and Mercer Investment Consulting);
- Guy Carpenter & Company, a reinsuranceReinsuranceReinsurance is insurance that is purchased by an insurance company from another insurance company as a means of risk management...
intermediaryIntermediaryAn intermediary is a third party that offers intermediation services between two trading parties. The intermediary acts as a conduit for goods or services offered by a supplier to a consumer...
; - Oliver Wyman Group, a collection of management consultingManagement consultingManagement consulting indicates both the industry and practice of helping organizations improve their performance primarily through the analysis of existing organizational problems and development of plans for improvement....
firms (including Oliver WymanOliver WymanOliver Wyman is an international management consulting firm. Founded in 1984, the firm adopted its current form in May 2007, when Mercer Oliver Wyman joined with Mercer Management Consulting and Mercer Delta to become one firm named Oliver Wyman. Oliver Wyman is headquartered in New York City with...
- formerly Mercer Management Consulting, Mercer Oliver Wyman and Oliver Wyman Delta, as well as LippincottLippincottLippincott is a consulting firm that primarily deals with brand strategy and the development of corporate identities. The firm was founded in 1943 by J. Gordon Lippincott and Walter P. Margulies as Lippincott & Margulies....
and NERA Economic ConsultingNERA Economic Consulting' is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities...
.)
History
Burrows, Marsh & McLennan was formed by Henry W. Marsh and Donald R. McLennanDonald R. McLennan
Donald Roderick McLennan was born in Duluth, Minnesota, son of William Lillingston McLennan and Julia MacLeod. He was the co-founder of the insurance brokerage firm Burroughs, Marsh & McLennan in 1905, which was renamed Marsh & McLennan in 1906 after the retirement of Mr. D. W. Burroughs...
in Chicago in 1905, becoming the world's largest insurance agency with annual premiums of $3 million ($59 million consumer price index
Consumer price index
A consumer price index measures changes in the price level of consumer goods and services purchased by households. The CPI, in the United States is defined by the Bureau of Labor Statistics as "a measure of the average change over time in the prices paid by urban consumers for a market basket of...
adjusted). It was renamed Marsh & McLennan in 1906. In 1997, the company bought Johnson & Higgins
Johnson & Higgins
Johnson & Higgins was one of the largest brokerage firms in the world until it sold out to Marsh & McLennan in 1997.-History:Initially founded in 1845 as Jones & Johnson by Walter Restored Jones, Jr. and Henry Ward Johnson, the company acquired its new name in 1854 when A. Foster Higgins replaced...
. and Sedgwick shortly after.
In August 2007, Marsh completed the sale of its Putnam Investments
Putnam Investments
Putnam Investments is a privately owned investment management firm founded in 1937 by George Putnam, who established one of the first balanced mutual funds, The George Putnam Fund of Boston...
division to Great-West Lifeco Inc., a financial services holding company controlled by Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
-based Power Financial Corp. after it settled charges of market timing.
Power Financial
Power Financial Corporation is a financial holding company. The Power Corporation of Canada holds a majority of the stock in the company.-Corporate governance:...
.
September 11 attacks
At the time of the September 11 attacks in the United States in 2001, the corporation held offices on eight floors of the North Tower of the World Trade CenterWorld Trade Center
The original World Trade Center was a complex with seven buildings featuring landmark twin towers in Lower Manhattan, New York City, United States. The complex opened on April 4, 1973, and was destroyed in 2001 during the September 11 attacks. The site is currently being rebuilt with five new...
, from 93 to 100. When American Airlines Flight 11
American Airlines Flight 11
American Airlines Flight 11 was American Airlines' daily scheduled morning transcontinental flight from Logan International Airport, in Boston, Massachusetts, to Los Angeles International Airport, in Los Angeles, California...
crashed into the building, their offices spanned the entire impact zone, from floors 93 to 99. No one present in the offices at the time survived the attack, and the firm lost 295 employees and 63 contractors.
Marsh Inc.
Marsh Inc. is a global risk and insurance services firm. It is a subsidiary of MMC. In 2003, Marsh employed about 40,000 people, with annual revenues of $6.9 billion, up from $4.8 billion in 2001.Marsh operates by collecting commissions from insurers and advisory fees from its clients — mainly large corporations but also small and mid-size businesses, municipal governments, school districts and some individuals — in exchange for locating property and casualty insurance coverage for them. At all relevant times, the Company stated that its "guiding principle is to consider (its) clients' best interests in all placements," and that it "(does not.) represent the (companies)" and held itself out as a "trusted adviser and advocate, in effect representing their best interests in the market place." even though it was caught in a bid rigging scandal where it pre-arranged winning quotes from insurers.
Marsh in the news
- On October 11, 2001, Marsh established a crisis consulting practice specializing in terrorismTerrorismTerrorism is the systematic use of terror, especially as a means of coercion. In the international community, however, terrorism has no universally agreed, legally binding, criminal law definition...
, with Ambassador L. Paul BremerL. Paul BremerLewis Paul "Jerry" Bremer III is an American diplomat. He is most notable for being the U.S. Administrator to Iraq charged with overseeing the country's occupation after the 2003 invasion. In his role as head of the Coalition Provisional Authority, he reported primarily to the U.S. Secretary of...
as Chairman and Andrew R. Daniels as President and COO. Marsh also announced a partnership with Control Risks GroupControl Risks GroupControl Risks is a global risk and strategic consulting firm specialising in political, security and integrity risk. Control Risks’ aim is to help its clients to understand and manage the risks of operating in complex or hostile environments...
to provide political risk assessment. - On July 8, 2004, they completed the acquisition of Kroll Inc.Kroll Inc.Kroll is a risk consultancy firm based in Midtown Manhattan, New York City. and established in 1972.- History:Kroll was founded in 1972 by Jules B. Kroll as a consultant to corporate purchasing departments...
Jeffrey W. Greenberg called it an important strategic step. The company had employed terrorism expert John O'NeillJohn P. O'NeillJohn Patrick O'Neill was an American counter-terrorism expert, who worked as a special agent and eventually a Special Agent in Charge in the Federal Bureau of Investigation until late 2001...
, formerly of the Federal Bureau of InvestigationFederal Bureau of InvestigationThe Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...
. - On October 14, 2004, New YorkNew YorkNew York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
State Attorney General Eliot SpitzerEliot SpitzerEliot Laurence Spitzer is an American lawyer, former Democratic Party politician, and political commentator. He was the co-host of In the Arena, a talk-show and punditry forum broadcast on CNN until CNN cancelled his show in July of 2011...
announced the initiation of a civil action against Marsh, alleging impropriety in the steering of clients to insurers with whom the company maintained payoff agreements, and for soliciting rigged bids for insurance contracts from the insurers. The Attorney General announced that two AIGAmerican International GroupAmerican International Group, Inc. or AIG is an American multinational insurance corporation. Its corporate headquarters is located in the American International Building in New York City. The British headquarters office is on Fenchurch Street in London, continental Europe operations are based in...
executives pleaded guilty to criminal charges in connection with this illegal course of conduct and stated, "There is simply no responsible argument for a system that rigs bids, stifles competition and cheats customers." Former CEO Jeffrey W. GreenbergJeffrey W. GreenbergJeffrey Wayne Greenberg is an American lawyer and business executive who served as chairman and CEO of Marsh & McLennan Companies.He earned a bachelor's degree from Brown University in 1973 and his law degree from Georgetown University Law School in 1976. He began his career at Marsh & McLennan...
resigned several weeks later. The suit was ultimately settled out of court. - In July 2007, Marsh & McLennan Cos. Inc. was ranked first in Business Insurances world's largest brokers list.
- On September 14, 2007, Brian M. Storms, the CEO of Marsh's insurance brokerage unit, resigned. As Michael G. Cherkasky explained his departure, "we now need a different set of leadership and operational skills."
MMC management
- President, CEO: Brian Duperreault
- Chairman: Stephen R. Hardis (non-executive Chairman of the Board 2006–Present)
- CFO: Vanessa Wittman
- SVP, Executive Resources and Development: Francis N. Bonsignore
Former Chairmen of the Board
- Chairman Henry W. Marsh (1923–1935)
- Chairman Donald R. McLennan (1935–1944)
- Chairman Charles Ward Seabury (1944–1955)
- Chairman Laurence S. Kennedy (1955-1955)
- Chairman William D. Maus (1955–1963)
- Chairman Hermon D. Smith (1963–1966)
- Chairman Albert A. Morey (1966–1970)
- Chairman Henry W. Otis (1970–1971)
- Chairman William F. Souder, Jr. (1971–1975)
- Chairman John M. Regan Jr. (1975–1986)
- Chairman Frank J. Tasco (1986–1992)
- Chairman A.J.C. Smith (1992–2000)
- Chairman Jeffrey W. Greenberg (2000–2004)
- Chairman Michael Cherkasky (2004–2005)
- Chairman Robert F. Erburu (non-executive Chairman 2005-2006)
External links
History
- Marsh & McLennan Companies - MMC's History
- Marsh Affinity Group Services Insurance
- Memorial Page for the Marsh employees who were killed on 9/11