Aon and Willis lead the broker comeback

In the wake of recent investigations into contingency commissions and bid rigging initiated by New York Attorney General Eliot Spitzer, brokers Aon Corp. and Willis Group Holdings Ltd. have managed to successfully restructure their business practice and successfully pull themselves from a negative to stable rating and, according to Standard & Poor’s Rating Services, this gives evidence to the fact that the industry is on the road to recovery.
In it’s report “Some Insurance Brokers Manage To Prosper Without Contingent Commissions” S&P says the Spitzer elicited cessation of the collection of contingent commissions meant that some large brokerages had lost a strong source revenue. In order to regain revenue and maintain player status, these companies were forced to revisit their operations and develop plans to reduce leverage, cut costs and secure alternative revenue sources. According to the report, Aon and Willis have done just that.
Such success in small brokerages, where contingent commissions persist, is negligible because smaller operations may not be able to adjust if the collection is forced to stop.
Unlike Aon and Willis, S&P says the allegations against Marsh may have left the company with a very serious negative impact.