Marsh to hire PR firm for UK fallout of Spitzer suit

Marsh & McLennan, the insurance broking giant fighting a US lawsuit over price fixing, is holding a pitch for UK PR support.

A source close to the company said its UK arm was in talks with up to three PR agencies in anticipation of the Financial Services

Authority’s response to the suit launched against Marsh by New York attorney general Eliot Spitzer.

Marsh uses agencies on a project basis in the UK, such as Tavistock Communications, which it used for crisis management eight years ago. Marsh also plans to appoint its first UK director of communications and is interviewing for the post.

Although the FSA does not regulate general insurance, it is due to take over responsibility for the industry in mid-January from the General Insurance Standards Council, the industry’s self-regulatory body.

Marsh has instructed staff at its subsidiaries that all communications around the Spitzer investigation are to go through its US headquarters, but the company has launched its UK search in preparation for the FSA’s new powers and adverse media coverage.

The FSA has maintained silence over the Spitzer lawsuit, which alleges that Marsh colluded with insurance companies to inflate prices and neglected its duty to find clients the best cover at the lowest premiums.

While the regulator will not be able to act retrospectively, a spokesman said it ‘would not condone the taking and offering of inducements’ between brokers and insurance companies.

Spitzer claims that since the late 1990s, Marsh has received illegal payments for steering clients to insurance firms. On 15 October, Marsh said it was suspending its practice of ‘market services agreements’.

On Monday, Marsh announced that Marsh Kroll CEO Michael Cherkasky would replace Jeffrey Greenberg as chairman and chief executive.

Anthony Hilton, p13

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