Interim Results

Marsh & McLennan Co Inc
24 July 2001

FOR IMMEDIATE RELEASE 

Contact:     Barbara Perlmutter          Jim Fingeroth
             MMC                         Kekst and Company
             [phone]              [phone]

MMC REPORTS INCREASED SECOND QUARTER,
SIX MONTHS RESULTS

Risk and Insurance Services Delivers Strong Performance

NEW YORK, NEW YORK, July 24, 2001-Marsh & McLennan Companies, Inc. (MMC), a
leading global professional services firm, today reported increased revenues
and earnings for the quarter ended June 30, 2001.  
 
Consolidated revenues rose 1 percent to $2.5 billion, net income grew 6
percent to $293 million, and earnings per share increased 6 percent to $1.02,
compared with the second quarter of 2000. For the six months, consolidated
revenues were essentially unchanged at $5.1 billion. Net income rose 8 percent
to $662 million, and earnings per share grew 7 percent to $2.29. 
 
J.W. Greenberg, chairman of MMC, commented, 'MMC continued earnings growth in
the first six months of the year as the breadth and quality of our businesses
enabled us to respond successfully to mixed business conditions as we invest
for future growth and manage expenses carefully.' 

(more) 
 
Second quarter revenues from MMC's risk and insurance services businesses
rose 8 percent to $1.3 billion. Underlying revenues, which exclude the effects
of foreign exchange, acquisitions, and dispositions, increased 10 percent.
Margins rose 2 percentage points to 20 percent, and operating income increased
24 percent to $253 million. Marsh's performance reflects improved operating
efficiencies and continued consolidation savings from the Sedgwick acquisition.
Marsh's institutional business in North America, international specialty
operations, consumer and program practices, and reinsurance broking contributed
to these strong results. 
 
Putnam's average assets under management decreased 14 percent to $340 billion
in the second quarter, a reflection of declines in the equity markets over
the last year. On June 30, 2001, assets under management were $339 billion, a 6
percent increase over the end of the first quarter. Revenues decreased 12
percent to $696 million, and operating income declined 18 percent to $207
million.   Margins for the first six months were 31 percent. Led by Putnam's
institutional businesses, net new sales for the first half of the year totaled
$11 billion.  
 
Mercer's revenues grew 4 percent to $558 million, and operating income rose 6
percent to $91 million in the second quarter. Margins for the first half of
the year approached 15 percent. Underlying revenues for human resource
consulting, which is more than 80 percent of Mercer's business, increased 11
percent. Management consulting revenues declined 23 percent. The slowing economy
is having an effect on some of Mercer's practices.  
 
Cash flow has remained strong throughout the year. This has enabled MMC to
repurchase 2.2 million shares of common stock in the second quarter and to
increase its dividend effective in the third quarter. 
 
Marsh & McLennan Companies (MMC) is a global professional services firm with
annual revenues of $10 billion. It is the parent company of Marsh, the
world's leading
(more)
risk and insurance services firm; Putnam Investments, one of the largest
investment management companies in the United States; and Mercer Consulting
Group, a major global provider of consulting services. Approximately 57,000
employees provide analysis, advice and transactional capabilities to clients
in over 100 countries. Its stock (ticker symbol: MMC) is listed on the New
York, Chicago, Pacific and London stock exchanges. MMC's website address is
www.mmc.com.

 
This press release contains certain statements relating to MMC's future
results, which are forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. Such statements may
include, without limitation, discussions concerning revenue and expenses,
cash flow, capital structure, cost savings and efficiencies expected from the
integration of Sedgwick Group plc, as well as market and industry conditions,
interest rates, foreign exchange rates, contingencies, matters relating to
MMC's operations and income taxes. Forward-looking statements by their very
nature involve risks and uncertainties. Factors that may cause actual results
to differ materially from those contemplated by any forward-looking
statements contained herein include, in the case of MMC's risk and insurance
services and consulting businesses, the integration of the business of
Sedgwick Group plc (including the achievement of synergies and cost
reductions) or other adverse consequences from that transaction. Other
factors that should be considered in the case of MMC's risk and insurance
service business are changes in competitive conditions, movements in premium
rate levels and other changes in the global property and casualty insurance
markets, the impact of natural catastrophes and mergers between client
organizations, including insurance and reinsurance companies. Factors to be
considered in the case of MMC's investment management business include
changes in worldwide and national equity and fixed income markets; and with
respect to all of MMC's activities, changes in general worldwide and national
economic conditions, fluctuations in foreign currencies, actions of
competitors or regulators, changes in interest rates, developments relating
to claims, lawsuits and contingencies, prospective and retrospective changes
in the tax or accounting treatment of MMC's operations and the impact of tax
and other legislation and regulation in the jurisdictions in which MMC
operates. Please refer to Marsh & McLennan Companies' 2000 Annual Report on
Form 10-K for 'Information Concerning Forward-Looking Statements,' its
reports on Form 8-K and quarterly reports on Form 10-Q.
 
MMC is committed to providing timely and materially accurate information to
the investing public, consistent with our legal and regulatory obligations.
To that end, MMC and its operating companies use their websites to convey
meaningful information about their businesses, including the posting of
updates of assets under management at Putnam, and from time to time, Marsh
Inc.'s view of insurance market conditions. Monthly updates of assets under
management at Putnam will be posted on the first business day following the
end of each month, except at the end of March, June, September and December,
when such information will be released with MMC's quarterly earnings
announcement. Investors can link to MMC and its operating company websites
through www.mmc.com.  
 
                       Marsh & McLennan Companies, Inc. 
                      Consolidated Statements of Income 
                   (In millions, except per share figures) 
                                (Unaudited) 
 
 

                                                                              
                                Three Months Ended           Six Months Ended 
                                       June 30,                   June 30, 
                                    2001      2000             2001      2000 

  Revenue:                                                                    
  Risk and Insurance              $1,251    $1,155          $ 2,605    $2,449  
  Services                                                                    
  Investment                         696       788            1,386     1,639 
  Management                                                                  
  Consulting                         558       538            1,108     1,058 

  Total Revenue                    2,505     2,481            5,099     5,146 

  Expense:                                                                    
  Compensation and                 1,222     1,211            2,438     2,515 
  Benefits                                                                    
  Amortization of                     48       44                97        88 
  Intangibles                                                                 
  Other Operating                    709       712            1,393     1,410 
  Expenses                                                                    
  Total Expense                    1,979     1,967            3,928     4,013 

  Operating Income                   526       514            1,171     1,133 
                                                                              
  Interest Income                                7        6       12       11 

  Interest Expense                            (56)     (68)    (108)    (128) 

  Income Before Income Taxes and Minority      477      452    1,075    1,016 
  Interest                                                                    

  Income Taxes                                 179      171      403      394 

  Minority Interest, Net of Tax                  5        5       10        9 

  Net Income                                 $ 293    $ 276    $ 662    $ 613 

  Basic Net Income Per Share                 $1.07    $1.02    $2.40    $2.28 

  Diluted Net Income Per Share               $1.02    $0.96    $2.29    $2.15 

  Average Number of                                                           
       Shares Outstanding - Basic              276      270      276      269 

  Average Number of                                                           
       Shares Outstanding - Diluted            287      283      287      281 
                                                                              
  Note: Minority interest for 2000 has been reclassified to be consistent     
  with the 2001 presentation.                                                 
 
                       Marsh & McLennan Companies, Inc. 
                          Supplemental Information
                  (In millions, except assets under management) 
                             (Unaudited) 
 
 
                                Three Months Ended           Six Months Ended 
                                       June 30,                   June 30, 
                                    2001      2000             2001      2000 

  Operating Income                                                            
  Including Minority                                                          
  Interest Expense:                                                           

  Risk and Insurance                $ 253    $ 204            $ 634     $ 528 
  Services                                                                    
  Investment Management               207      252              424       511 
  Consulting                           91       86              161       149 
  Corporate                          (30)     (33)             (58)      (64) 
                                    $ 521    $ 509           $1,161    $1,124 
  Minority Interest                                                           
  Expense, Net of Tax,                                                        
  Included Above:                                                             
  Risk and Insurance                  $ 1      $ 1              $ 2       $ 2 
  Services                                                                    
  Investment Management                 4        4                8         7 
                                      $ 5      $ 5             $ 10       $ 9 
  Segment Operating                                                           
  Margins:                                                                    
  Risk and Insurance                20.2%    17.7%            24.3%     21.6% 
  Services                                                                    
  Investment Management             29.7%    32.0%            30.6%     31.2% 
  Consulting                        16.3%    16.0%            14.5%     14.1% 

  Consolidated Operating            21.0%    20.7%            23.0%     22.0% 
  Margin                                                                      
  Pretax Margin                     19.0%    18.2%            21.1%     19.7% 
  Tax Rate                          37.5%    37.8%            37.5%     38.8% 

  Underlying Change in                                                        
  Revenue:                                                                    
  Risk and Insurance                  10%       8%               9%        7% 
  Services                                                                    
  Investment Management             (12%)      19%            (15%)       27% 
  Consulting                           6%      12%               6%       12% 
  Consolidated                         2%      12%               1%       14% 

  Basic Shares                        275      271                            
  Outstanding at End of                                                       
  Period                                                                      

  Potential Minority                                                          
  Interest Associated                                                         
  with the Putnam                                                             
  Equity Partnership                                                          
  Plan, Net of Dividend                                                       
  Equivalent                                                                  
  Expense Related to MMC              $ 2      $ 4              $ 6       $ 9 
  Common Stock                                                                
  Equivalents                                                                 

  Through the first six months of 2001, the incremental savings associated    
  with the Sedgwick integration has amounted to $30 million of the $40        
  million (and totaling $160 million overall) anticipated for 2001.           

  Underlying change in revenue on a comparable basis excludes the effect of   
  such items as foreign exchange, acquisitions and dispositions.              

  Minority interest, net of tax, is presented as a separate line item on the  
  face of the Consolidated Statements of Income.                              

  The Financial Accounting Standards Board approved the issuance of Statement 
  of Financial Accounting Standards (SFAS) No. 142, 'Goodwill and Other       
  Intangible Assets,' which changes the accounting for goodwill from an       
  amortization method to an impairment-only approach. Amortization of         
  goodwill will cease upon adoption of that statement in January 2002. The    
  full impact of applying this standard is yet to be determined, however,     
  reported annual earnings for MMC are expected to increase by at least $.40  
  per share beginning in 2002.                                                

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                       Marsh & McLennan Companies, Inc. 
                Supplemental Information - Putnam Investments
                (In millions, except assets under management) 
                                (Unaudited) 
 
                                 Three Months Ended          Six Months Ended 
                                        June 30,                  June 30, 
                                      2001     2000              2001    2000 

  Putnam Assets Under                                                         
  Management (billions):                                                      
  Mutual Funds:                                                               
  Growth Equity                        $ 76    $149                           
  Core Equity                            64      52                           
  Value Equity                           55      55                           
  Fixed Income                           47      46                           

                                        242     302                           

  Institutional Accounts:                                                     
  Growth Equity                          28      37                           
  Core Equity                            46      42                           
  Value Equity                            7       6                           
  Fixed Income                           16      20                           

                                         97     105                           

  Total Ending Assets                 $339     $407                           
  (June 30)                                                                   

  Assets from Non-US                   $ 29    $ 30                           
  Investors                                                                   

  Average Assets                       $340    $394              $346    $398 

  Net New Sales including               $ 5     $ 8              $ 11    $ 18 
  Dividends Reinvested                                                        
 
 
 
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