One of the biggest insurance brokers in the Irish market, Marsh Ireland Ltd, has gone into the red with pretax losses last year of more than €5 million.
The losses at the company, a subsidiary of US insurance giant Marsh & McLennan, were revealed in newly-filed accounts for 2004. They come a year after the company told regulators of a €6.7 million hole in its 2003 accounts.
A spokesman attributed the deficit to a fall in insurance premiums generally and restructuring and redundancy charges and an exceptional pension charge. There will also be a charge in the current year for further redundancies, he said.
The latest accounts show that its commission revenues fell last year to €46.5 million from €46.79 million. While it turned a pretax profit of €6.47 million in 2003, the pretax loss for 2004 was €5.28 million.
"In 2004, the commission and fees within the insurance industry continued to reduce in a very soft market," said the directors' report with the accounts.
"The directors believe that it is prudent, in the light of prevailing circumstances, to restructure the organisation for the future and took an exceptional expense on redundancy costs to reflect resourcing needs moving forward."
The board went on to say that it believed the state of company was satisfactory "and the decisions made will contribute towards enhanced financial performance in the future".
The accounts show that the exceptional expenses last year amounted to €7.49 million.
The biggest of these was a €3.47 million provision in respect of the firm's operating lease on its building in South Leinster Street, Dublin. Also included were redundancy costs of €2.34 million and a special pension contribution of €1.68 million.
The company's staff was reduced by 25 to 368 during the year. Its spokesman said that a further 20 redundancies were planned this year.
The accounts also show that the company pension scheme had a deficit of €12.25 million at the start of 2004 and incurred an actuarial loss of €13.78 million in the course of the year.
The 14 directors who served during 2004 received a total of €2.97 in emoluments during the year.
This included payments to three directors who resigned during 2004 - David N Caird, Michael Holland and Eamonn Brennan - and payment to three new appointees to the board.
The €6.7 million write-off by Marsh Ireland Ltd in 2003 followed an internal review which found that certain "balances" included in the firm's annual returns over five years had been overstated.
Earlier this year, Marsh & McLennan in the US agreed to pay $850 million (€725 million) to settle charges in a lawsuit from the New York attorney general, Eliot Spitzer, over the rigging of bids for insurance contracts by certain brokers in the US arm of the firm.
