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After Marsh, Where's the Love?

The CEOs of the three biggest insurance brokerages talk about what the business will look like post-Spitzer

By Russ Banham | Updated on July 05, 2005

Guilty pleas by Marsh Inc. executives in a bid-rigging scheme tarnished the insurance brokerage industry’s reputation and, for a while, even raised fears of an Arthur Andersen-type implosion. As the dust settled, Marsh & McLennan Cos. brought in a squeaky clean former prosecutor as CEO and all three of the largest brokers–Marsh, Aon Inc. and Willis Group Holdings Ltd.–renounced the practice of accepting contingent commissions from insurers. (To prove remorse, the group coughed up a $1 billion settlement to New York State Attorney General Eliot Spitzer.) Now, brokers must restore the client trust they squandered.

It will not be an easy task. First, Spitzer has not finished with the insurance industry yet–currently alternative risk transfer products like finite insurance, captives and self-insured workers compensation are under the microscope. Second, a debate has begun as to the need for federal regulation of the entire industry, which could expose other potentially damaging revelations about industry practices.

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