NU Online News Service, April 4, 3:00 p.m.EDT

Marsh & McLennan Companies reported first-quarter net incomerose 41 percent over the period last year as its business segmentscontrolled costs and benefited from economic improvement.

The New York-based services company, and parent company ofinsurance broker Marsh and reinsurance broker Guy Carpenter,reported net income rose $72 million to $248 million, an increaseof 12 cents a share to 45 cents. Revenues rose 7 percent, or $186million, to $2.8 billion.

During a conference call with investment analyst's today, BrianDuperreault, MMC's president and chief executive officer said thecompany was pleased with its performance and found the firstquarter results "very encouraging."

"Our performance is all the more impressive in light of thesubstantial challenges presented by the global recessions," saidMr. Duperreault.

Despite signs of economic improvement, he said "economicweakness affects our operating segments."

Sagging insurance rates, in their seventh year of decline, alsoaffected earnings, he said, adding that there was no sign of thosemarket conditions changing anytime soon.

He credited the company segment managers with successfullynavigating a difficult market environment to help produce theresults.

At Marsh, capturing new business, high retention rates andcontrolling expenses helped it record an 8 percent increase inrevenues, or $90 million, to $1.17 billion. Revenues at GuyCarpenter rose 12 percent, or $34 million, to $315 million.

Organic growth came in flat at Marsh, while Guy Carpenterrecorded a 1 percent increase in organic growth. Organic growth atthe Risk and Insurance segment as a whole was flat.

MMC's consulting segment, which includes Mercer and Oliver WymanGroup, saw revenues increase 7 percent, or $72 million, to $1.16billion. Organic growth grew 1 percent.

Risk consulting and technology, which consists primarily ofKroll, stood at negative 3 percent, or down $5 million, to $162million from the same period last year.

Mr. Duperreault said that as Marsh improves it is turning moreof its attention to growth. He said the broker has made sevenacquisitions in the past six months, the largest being HSBCInsurance brokers that closed in April, which he called a strongfit for the firm.

The merger, he said, strengthens Marsh's presence in the UnitedKingdom, Hong Kong, Singapore, China, and the Middle East, adding$200 million in annualized revenue to the firm.

Five of the seven acquisitions were for Marsh & McLennanAgencies. Mr. Duperreault noted that the acquisition strategy forthat segment involves acquiring a total of 10 hub agencies aroundthe United States.

Guy Carpenter reported revenue growth despite current economicconditions. Like Marsh, the reinsurance broker was able to capturenew business and had high business retention rates and adisciplined approach to expense management.

Underscoring the performance of its brokerage arm, Daniel S.Glaser, chairman and chief executive officer of Marsh, said newbusiness in Canada and United States was up 14 percent andinternational was up 2 percent, for a total increase of 7 percent,or $221 million of new business in the quarter.

"We are certainly winning in the marketplace," said Mr.Glaser.

In the area of broker compensation disclosure, Mr. Glaser saidthe firm is committed to transparency, and while compensationarrangements are not the same throughout the world, he repeatedthat the firm will not accept contingent commissions on core,United States business.

Mr. Glaser explained that the reason Marsh has decided to dothis is because clients that indicated that they preferred thebroker did not accept contingent commissions on their business. Headded that the firm is confident it can "be fairly compensated inthat segment."