An industry survey of risk managers of large companies found that despite investigations by New York Attorney General Eliot Spitzer that led to charges of bid-rigging and price-fixing by Marsh, the brokerage is still their first choice overall.
The survey, conducted by Banc of America Securities, also found that a number of risk managers are seeking to divide their business between several brokers and that broker fees have remained flat, despite a softening market.
"I thought that maybe the sentiment toward Marsh would have decreased a little bit more, given the scandals that are going on," said Brian R. Meredith, senior property-casualty insurance analyst with Banc of America Securities in New York.
Marsh's popularity stayed number one with 46 percent of respondents favoring the company versus 49 percent a year ago, according to the survey.
"The fact that it has only deteriorated by 3 percent was surprising," he said, adding that the high approval was due to risk managers' personal relationships with their broker as well as the strengths of the Marsh franchise.
He said, however, that he is not surprised Marsh has remained in the number one slot. "It is still the largest insurance broker in the world, it's still got the largest platform in the world, it's still got a tremendous amount of experience and great services," Mr. Meredith said. "Arguably it is one of the few companies with the ability to service a global company."
He noted, however, that "there has been a fair amount of turnover [at Marsh], which is a concern." Part of the reason for the turnover, he said, may be because of recent substantial layoffs.
"Hopefully that subsides," he said, "To the extent the relation with the service team is significantly disrupted, it gives [insurance buyers] a reason to put out a request for proposal to a new broker."
According to the survey, Aon was listed second, with 15 percent, up from 14 percent last year, and Willis was third at 6 percent, up from 5 percent last year.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.