NU Online News Service, April 19, 2:34 p.m.EDT

Publicly traded insurance brokers are expected to underperformstocks on the S&P 500 Index coming out of the recession, andAon is rated the best of the bunch, according to an analyst's notefrom Citigroup.

In a first-quarter 2010 preview from Citigroup Global Markets,the analysts said historically in a recession, the stock ofpublicly traded brokers has exceeded the S&P Index. Currentlythe brokers--Aon, Arthur J. Gallagher, Brown & Brown, Marsh andWillis--are outperforming the S&P Index by 1.6 percent.

From Dec. 2007 to now, broker stock performance is at negative16.7 percent, while the S&P 500 stands at negative 18.3percent, the note said.

However, coming out of a recession, brokers historically havenot fared as well, said Citigroup. From March 9, 2009 to today,Citigroup said the S&P has outperformed brokers by 41percent.

Of the publicly traded brokers, Aon is rated the best byCitigroup because of increased margin with a long-term marginexpansion goal of 25 percent, which the analysts said they expectChicago-based Aon to meet by 2012.

Marsh was also credited with growing margin by Citibank, drivingmargin in the last eight quarters from 8.6 percent to 18 percent.However, Citigroup cautioned that "expense efficiencies arebeginning to become more difficult to extract."

While a new agreement with the New York Attorney General'sOffice allows for the taking of contingent commissions once again,the revenues are expected to take time to work into earnings,according to the analysis.

Overall, Citigroup said it estimates that being allowed tocontingents will add 5-to-10 percent to the revenue streams of thebrokers.