DOW JONES NEWSWIRES
Marsh & McLennan Cos.' (MMC) Guy Carpenter & Co. risk
and reinsurance unit agreed to acquire privately held reinsurancer
John B. Collins Associates Inc. as Carpenter moves to bolster its
position in North America.
Terms were not disclosed for the deal, slated to close in the
second quarter.
Guy Carpenter cited benefits from Collins' strength in crop,
Florida property and regional specialty lines and said Collins'
medical-malpractice business will complement Carpenter's
professional-liability offerings. Collins has 190 employees.
The deal comes three weeks after Marsh & McLennan posted a
5.9% drop in fourth-quarter net income amid higher restructuring
costs. Earnings from the risk and insurance division - including
its core brokerage unit Marsh Inc. and Guy Carpenter - more than
doubled on improved results at both operations. Unit revenue fell
6% on lower reinsurance rates, but operating margin soared to 8.2%
from 3.7%.
Part of the reason for the unit's results is McLennan's
continuing effort to revamp the business, making Guy Carpenter more
diversified through acquisitions.
The unit has been a bright spot for Marsh & McLennan as
insurance brokers are hit by the economic recession on top of a
bruising policy price war tied to below-average catastrophe rates.
Fitch Ratings last month has projected flat to modestly weaker
profits for insurance brokerages this year amid economic
pressures.
Marsh shares closed Friday at $17.93 and were inactive
premarket. The stock is down by half since mid-September.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com