Global insurance brokers face future challenges (November 01, 2006)

Insurance brokers worldwide face challenges as a result of New York state attorney general Eliot Spitzer’s investigation into bid rigging in the insurance broker industry, according to a recent report published by Standard & Poor’s Rating Services.

S&P’s report, entitled Challenges Still Loom For Global Insurance Brokers In Post-Scandal Era, references specific major brokers in the market.

“For the past two years, the global insurance brokerage market’s three most visible players – Marsh & McLennan Cos. Aon Corp., and Willis Group Holdings Ltd. – have been buffeted by the aftershocks of the bid-rigging and steering investigation launched in October 2004 by New York Attorney General Eliot Spitzer,” according to the report.

S&P’s also reported that as a result of investigations, despite all of the aforementioned issues, brokers have stabilized. Each brokerage has made material changes to operations, focusing on maximizing profit through expense initiatives instead of profits derived from volume-driven organic growth.