Marsh & McLennan profits plunge 63%

Marsh & McLennan profits plunge 63% Darla Mercado Marsh & McLennan Cos. Inc. of New York reported that its second-quarter profit fell 63% to $65 million, or 13 cents per share. That is down from $177 million, or 31 cents per share, from the year-ago quarter. The numbers include a $115 million non-cash impairment charge from the firm’s write-down of its consulting and technology unit. Investment losses also took a bite out of Marsh’s quarterly figures, totaling $16 million due to mark-to-market declines on private-equity investments. That’s down from investment gains of $34 million in the second quarter of last year. Nationwide Financial Services Inc. yesterday said its second-quarter profits fell to $85.4 million, or 62 cents per share, down 57% from $197.3 million, or $1.37 per share, a year ago. Total sales also tumbled 19% for the Columbus, Ohio-based insurance company, hitting $1.24 billion, compared to $1.52 billion in the second quarter of 2007. Nationwide also announced that its private parent company, Nationwide Mutual Insurance Co., which currently owns two-thirds of the financial services firm, has bought up the remaining stock in a $2.4 billion deal. Nationwide Mutual is also based in Columbus. BNP Paribas SA, the Paris bank, yesterday reported that its net income tumbled to $2.27 billion during the second quarter, down from $3.08 billion the previous year. The bank also reported $814.8 million in write-downs and risk provisions related to bond insurance. Profits dropped at BNP Paribas’ corporate and investment banking division to $786.6 million from $1.65 billion in the year-ago period. Earnings plunged yet again at American International Group Inc. of New York, which reported a second-quarter net loss of $5.36 billion, or $2.06 per share. That’s down from net income of $4.28 billion or $1.64 per share, in the year-ago quarter. Part of that loss stemmed from a pre-tax charge of $5.56 billion for a net unrealized market valuation loss related to the AIG Financial Products Corp. super senior credit default swap portfolio. Another $6.08 billion in pre-tax net realized capital losses also accounted for the carrier’s earnings decline. The company’s life insurance and financial services business also suffered: Income from life insurance and retirement services tumbled 10% to $2.6 billion, while the financial services unit went into the red with a $5.88 billion loss for the quarter. Allianz SE of Munich reported quarterly net income of $2.25 billion, down from last year’s result of $2.84 billion. Total revenue also took a fall to $33.1 billion, down from $32.9 billion in the year-ago period. The difficult stock markets hampered Allianz’s life and health business, which saw its premium income fall to $16.4 billion, a 10.9% drop from the previous year’s period. Net income for that division fell to $650.9 million, a 12% loss from $648.6 million last year. AXA SA reported falling earnings for the first half, as net income slid to $3.25 billion, down 29% from the previous year. The Paris insurer’s life and savings unit reported that new business volume fell 6% to $5.43 billion, but variable annuity sales jumped 6% due to the global roll out of AXA’s accumulator products. Revenue for the company’s asset management unit fell to $3.16 billion, compared to last year’s $3.26 billion. Meanwhile, inflows also plummeted, falling to $3.31 million, compared to $44.1 million in the first half of 2007. Aegon NV of The Hague in the Netherlands reported that its net income for the second quarter fell to $276 million from $886.9 million the previous year. The insurer’s results included $147.5 million in investment impairments, $61 million of which is linked to U.S. subprime investments. Aegon also said that there could be more impairments to its U.S. subprime book, but that it thinks its current exposure of $3.76 billion is manageable.