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Duperreault sets priorities at MMC

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NEW YORK—On his first conference call with analysts as the chief executive officer of Marsh & McLennan Cos. Inc., Brian Duperreault said Tuesday that his first priorities are to "ensure the recovery" of MMC's Marsh Inc. brokerage unit and to make a "clear decision of the future" of its risk consulting and technology unit Kroll Inc.

Mr. Duperreault took over the helm of the struggling New York-based MMC late last month, succeeding Michael G. Cherkasky, whom the MMC board ousted in December.

Mr. Duperreault, who is the former CEO of ACE Ltd., told analysts that MMC faces a lot of challenges, which is why he took the job.

"Obviously, the company as a whole is underperforming and there are problems that need to be addressed," he said, noting that the problems are "not systemic."

While he said that he is still in the "assessment phase" of the firm, his first priorities will be with Marsh and Kroll.

Mr. Duperreault said that Marsh needs to "dramatically improve" its cost structure and "simplify" how it works. He said that the hiring of Dan Glaser to lead Marsh was a step in the right direction and that he intends to support Mr. Glaser and his senior management team in those areas.

Mr. Duperreault described Kroll as a business "that has shown both volatility and overall disappointing performance. I'm digging into Kroll to understand its parts and how they relate to each other. My objective is to have a clear decision about the future of Kroll soon," he said.

Disgruntled shareholders recently have been demanding that MMC sell off certain assets to shareholders, including Kroll.

Overall, MMC reported a 7.6% rise in revenue in 2007, to $11.35 billion, buoyed by a strong performance from its human resources and management consulting units Mercer L.L.C. and Oliver Wyman Group.

While MMC's two consulting units recorded a combined $4.88 billion in 2007 revenues, a 15.6% rise compared with 2006, revenues from Marsh rose 2.5% for the year to $4.5 billion, MMC said.

Likewise, revenues from its reinsurance brokerage unit Guy Carpenter & Co. L.L.C. rose 2.5% to $902 million in 2007, while revenues from Kroll rose 1.6% to $995 million. Revenues from its Risk Capital Holdings investment unit fell 15.5% for the year to $163 million.

Net income, which includes $1.93 billion of income from discontinued operations—which reflects the gains on the sale of Putnam Investments—more than doubled to $2.48 billion in 2007, MMC said. Income from continuing operations, however, fell 14.9% to $538 million in 2007.