Analysts reacted positively to the news of Brian Duperreault's appointment as Marsh & McLennan Companies' chief executive officer, with many saying that his lack of brokerage experience would not be a liability as the company moves forward.

The company announced his appointment yesterday to replace Michael G. Cherkasky as head of the parent company for New York-based Marsh Inc. insurance brokerage, which has been financially troubled since it was tied by authorities to a commercial insurance price fixing scheme.

David Small, a financial analyst with Bear Stearns, wrote that while Mr. Duperreault does not have insurance brokerage experience, his past career at ACE Ltd. and American International Group “should serve him well in this new role.”

Alain Karaoglan, an analyst with Bank of America, called the hiring of Mr. Duperreault “a significant positive” because of his “immense experience in the [property-casualty] insurance arena” and his role at ACE.

Mr. Duperreault was chief executive officer of Bermuda-based ACE Limited from 1994 to 2004. He was chairman of the board from 2004 to 2007. Prior to ACE, he was with American International Group for more than 20 years, rising to the position of executive vice president of AIG Foreign General Insurance and chairman and chief executive of AIG's American International Underwriters.

“We think it was very important for MMC to bring in somebody from outside their organization,” said Greg Dickerson, a director with Fitch Rating Services in New York.

MMC's action, he said, brings in “somebody with a very strong track record who will provide the benefit of an outsider's perspective on the challenges that Marsh faces. He also brings industry expertise and the relationships in place to help him hit the ground running without taking too long to get up to speed.”

Mr. Dickerson said that his years at ACE give Mr. Duperreault plenty of understanding about the value of insurance brokers. He added that there is plenty of experience at Marsh now, with the hiring of Daniel S. Glaser in December as its chairman and CEO, to fill any gaps in experience.

“We frankly cannot imagine a better choice for the company,” wrote Meyer Shields, an analyst with Stifel Nicolaus.

He said Mr. Duperreault can address MMC's ongoing weakness at Marsh, “including weak revenue growth, poor margin performance and low employee morale”–something the outgoing CEO, Mr. Cherkasky, was unable to do.

Mr. Shields said Mr. Duperreault should be able to address these issues by attracting “significant talent” to the company and “greater success in winning higher revenue levels from both clients and insurance carriers.”

All the analysts said they felt the hiring of Mr. Duperreault would cease any speculation that MMC would be acquired by Willis or anyone else.

Fitch's Mr. Dickerson said he did not think the sale of MMC was an option because he was “somewhat skeptical that [Mr. Duperreault] would come out of retirement to dress up MMC for sale. But I wouldn't rule out divestiture of certain business units once he has had a chance to charge his strategic vision for the company.”

Mr. Karaoglan said a takeover was less likely in the short term, with the board making moves that indicate it wants to address the problems at Marsh.

“We expect the revival of the insurance brokerage unit to be a major focus of management in the coming quarters,” he said.

'It is too early to tell whether Mr. Duperreault will keep or sell the non-insurance components of MMC,” said Mr. Shields.

“We suspect this news takes some of the M&A speculation out of MMC shares as it is unlikely Mr. Duperreault came aboard to split up the company,” Mr. Small said.

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Reaction Positive To New MMC CEO Duperreault

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