NU Online News Service, Nov. 2, 2:39 p.m.EDT

Marsh & McLennan says third-quarter net income was down 23percent, or $38 million, to $130 million due to a $72 millioncharge for early extinguishment of debt.

Revenues increased 11 percent, or $282 million, to $2.8 billion,and earnings per share came in at 24 cents a share, in line withanalysts’ expectations.

Marsh & McLennan Companies’ business units showed strengthin the quarter, and the company’s two insurance-brokerage unitscombined for organic growth of 5 percent.

Brian Duperreault, president and chief executive officer ofMarsh & McLennan told financial analysts during a conferencecall that the revenue growth at Marsh was attributed to strongretention rates and growth in new business.

Reinsurance broker Guy Carpenter continued its contribution torevenue growth as it has over the past three years, he notes. Thefirm’s consulting segment also was on the plus side.

“Throughout Marsh & McLennan Companies, we have seen revenueincreases and higher levels of profitability,” saysDuperreault.

Over the past four quarters, the company has produced revenuegrowth of 5 percent, he notes, adding that each of the operatingcompanies contributed to the result.

The company’s aim is to produce organic growth while controllingexpenses, a formula Duperreault believes will generate 10 percentorganic growth in adjusted operating income “over the longterm.”

He says the firm is achieving this goal, noting the company hasseen organic growth in adjusted operating income over the past fourquarters of 13 percent.

For the first nine months of this year, net income increased 13percent, or $85 million, to $737 million. Earnings per share rose15 cents to $1.33. Revenues rose 11 percent, or $853 million, to$8.6 billion.

In response to a question concerning insurance-rate development,Peter Zaffino, president and CEO of Marsh, says most rates havebeen flat to slightly down over last year.

There is increased attention to underwriting discipline ascarriers are examining each risk and determining the need for rateon an individual basis, he says.

Overall, Zaffino says, there is no discernable trend ininsurers’ underwriting terms and conditions or in the overall rateenvironment.

Concerning Marsh & McLennan Agencies, Zaffino says the firmis “very comfortable where we are” in the growth of that businesswith around $300 million in revenue. He says the acquisitionpipeline “remains strong” and there is no time line for additionalacquisitions, but notes the business is “underweight” in middlemarket accounts. He adds that the firm believes Marsh &McLennan Agencies will be accretive to the firm’s earnings in thenear future.