September 27, 2006 by Canadian Underwriter
Insurance brokers worldwide face challenges as a result of New York 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. (MMC), Aon Corp. (Aon), and Willis Group Holdings Ltd. (Willis)-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 says as a result of investigations all of the aforementioned brokers have stabilized, and made material changes to operations focus on maximizing profit through expense initiatives rather than focusing on profits derived from volume-driven organic growth. However, credit analyst Steven Ader says the global insurance brokers have not proven they have “fully addressed this rapidly evolving competitive landscape.”