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MMC profits despite lawsuit settlement

Marsh and McLennan Companies (MMC) has posted a strong return to profitability despite settling a $US435 million ($US489 million) lawsuit with the US Government over contingency payments.

MMC also weathered soft insurance conditions in the US and Canada and the global economic malaise to report net income of $US242 million ($272 million) in 2009 – a $US315 million ($354 million) turnaround from a disappointing statement the previous year.

The company saw fourth-quarter net income drop 52% to $US38 million ($42.7 million) on “securities and related class action” payouts, without admitting any wrongdoing.

About half of MCC’s settlement costs will be covered by insurance, with the remaining $US208 million ($234 million) tax deductible.

Insurance broker Marsh, MMC’s largest component, rallied 4% to post fourth-quarter revenues of $US1.2 billion ($1.35 billion), but full-year revenues dropped 5% to $US4.3 billion ($4.84 billion).

MMC CEO Brian Duperreault says Marsh’s year was “outstanding”, with operating income increasing by double digits.

Subsidiary company Guy Carpenter increased its fourth-quarter revenue by 23% to $US180 million ($202 million) due in part to the acquisitions of Collins and Ratner Mackenzie last year.