Marsh & McLennan Companies plans to make up for revenues lost when the company surrendered hundreds of millions in contingency commissions by driving costs and inefficiencies out of its system rather than jacking up fees for clients, the firm's CEO said today.

In an exclusive interview with senior editors from National Underwriter, Michael G. Cherkasky–MMC's president and chief executive officer, as well as chairman and CEO of its Marsh brokerage subsidiary–said the firm is in the midst of an efficiency drive, including the elimination of tens of thousands of unprofitable accounts, after a layoff of some 5,500 employees.

"You don't make it up in revenue, you make it up in cost [cuts]," said Mr. Cherkasky, when asked how the firm plans to replace the loss of some $840 million in market service agreement commissions it agreed to return to corporate insurance buyers. The rebate deal was part of a settlement with New York State Attorney General Eliot Spitzer of a civil suit alleging bid-rigging and steering of business to trigger contingency fee deals.