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By Cyril Tuohy

A firming insurance market and a stronger economy helped power the commercial brokers doing business in the U.S. to higher first-quarter profits compared with a year ago, according to first-quarter earnings reports.

The company's risk and insurance services business units, Marsh Inc. and Guy Carpenter & Co., posted operating income of $417 million, up 8.8 percent from the year-ago period, on revenue of $1.74 billion, up 7 percent from the year-ago period, MMC said.

Operating income from the consulting segment, Mercer and Oliver Wyman Group, was $159 million, up 24 percent compared with the year-ago period, on revenue of $1.31 billion, up 4 percent from the previous year.

London-headquartered Willis Group Holdings PLC reported first quarter net income of $225 million, up from $34 million in the year-ago period. The increase was due in large part to a 13.2 percent cut in salaries and benefits. Revenues were $1.01 billion, up 1 percent from $1 billion in the year-ago period, the company also reported.

The dramatic growth in the quarter came mainly from the company's reinsurance, specialty retail and capital market segments, the company also reported.

Commissions and fees in the North America segment drop 3 percent to $346 million compared with the year-ago quarter, due in part to a $13 million write-off for alleged fraud involving overcharging of fees and commissions from 2005 to 2011 by one of the company's business units.

First-quarter net income at Arthur J. Gallagher & Co., were up 78 percent to $31.8 million on revenues of $546.1 million, up 22 percent from the year-ago period, the company reported.

"We are seeing further evidence of market firming and our customers' businesses are showing growth," said J. Patrick Gallagher Jr., chairman, president and CEO of Itasca, Ill.-based Arthur J. Gallagher, in a statement (pictured above).

The company reported first-quarter brokerage segment net income of $21.4 million, up 24 percent from the year-ago period on revenues of $384.6 million, up 22 percent from the year-ago period.

Risk management segment net income of $11.7 million were up 16 percent over the year-ago period on revenues of $141.3 million, up 8 percent from the year-ago period, the company also reported.

Brown & Brown Inc., a Tampa and Daytona Beach, Fla.-based multiline retail insurance, reinsurance and risk management services broker with a strong presence in the U.S. Southeast, reported net income of $49.43 million, up 6.3 percent over the year-ago period, on revenues of $302.48 million, up 15.4 percent over the year-ago period.

Aon PLC was the exception in this round of quarterly earnings results. The company reported net income of $238 million, down 3 percent from the year-ago period, on revenue of $2.84 billion, up 3 percent from the year-ago period.

The company's Risk Solutions retail brokerage and reinsurance division, reported commissions and fees of $1.89 billion, up 3 percent from the year-ago period. HR Solutions, which includes Aon Hewitt, reported commissions and fees of $945 million, also up 3 percent from the same period last year.

June 1, 2012

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