Marsh & McLennan posts first-quarter loss

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Marsh & McLennan Cos. Inc. will seek to sell parts of its Kroll security unit after a $425 million write-down at the subsidiary caused a first-quarter loss, Bloomberg reported.

“There are businesses in Kroll that do not necessarily fit,” CEO Brian Duperreault said in a conference call today. “We will seek ways to divest these businesses.”

Marsh & McLennan, the world’s largest insurance brokerage, has been pressured by investors to spin off Kroll, which conducts investigations and sells security advice, because they say the unit is not a good match with the parent company’s insurance brokerage and consulting businesses. Marsh & McLennan rejected an approach from a private equity firm interested in buying Kroll, a person familiar with the situation said May 1.

The company posted a net loss of $210 million, or 40 cents a share, on the Kroll impairment, the company said today in a statement. The New York-based company earned $268 million, or 47 cents per share, in the same period a year earlier. Duperreault said some parts of Kroll were “underperforming.”

Marsh & McLennan reported revenues of $3 billion, an increase of 8 percent from the first quarter of 2007, or 2 percent on an underlying basis, which measures the change in revenue before the impact of acquisitions and dispositions, using consistent currency exchange rates.

Parts of Kroll that provide services to mortgage lenders and some government agencies “may have greater value outside” Marsh & McLennan, Duperreault said today. Those businesses “drove the impairment charge.” Kroll’s adjusted operating profit, excluding the impairment charge, fell 31 percent to $18 million. The unit’s adjusted profit margin of 6.9 percent was the lowest of Marsh & McLennan’s three operating divisions.

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