A Canadian private-equity firm is calling for the breakup ofMarsh & McLennan Companies, saying that separating theconsulting and risk management units from the insurance brokeragewould maximize shareholder value and protect the individualcompanies' worth.

Toronto, Canada-based K.J. Harrison & Partners called forthe breakup of New York-based MMC on Monday. The company said itholds more than a million shares of MMC stock and has owned themsince 2004.

Jim Harrison, the chief executive officer of K.J. Harrison, saidin a statement that the company wants shareholders to vote on aresolution to separate Kroll, MMC's risk management subsidiary, andMercer, its consulting arm, from the insurance brokerage servicesof Marsh and Guy Carpenter.

“In our view, holding companies are effective only when theydemonstrate they can add value through excellence in capitalallocation and management selection and retention,” said Mr.Harrison. “Marsh & McLennan is currently doing neither.”

He said Marsh, “which was the gold standard,” is now falling farbehind Aon Corp. and Willis Group Holdings in profitability. Thefact that the company has been unable to retain good people, andtherefore is losing business to competitors, underscores itsinability to improve earnings. Both Mercer and Kroll's earnings arebeing hurt by Marsh's poor performance, he reasoned.

In an interview with National Underwriter, Mr. Harrison calledthe current combination inefficient and said that it was better tobreak them up than to try and replace current management. Heconceded that should the company break up it could achieve the sameresult.

While he did not know what the odds are of the proposal actuallygetting on the agenda of MMC's annual shareholder's meeting, hesaid that if there are enough shareholders who share the firm'ssentiments–and he believes there are–then there is a goodpossibility it would come up for a vote.

“We wouldn't go through all this trouble if we did not thinkthis was a possibility,” said Mr. Harrison.

In an e-mail a representative with MMC said, “Marsh &McLennan's board always considers shareholder suggestions and isfully committed to enhancing shareholder value.”

(This story was updated Dec. 4 at 10:20 a.m.)