Marsh & McLennan Cos. Outlook Revised to Negative; Ratings Affirmed

November 5, 2003

Standard & Poor’s Rating Services reported that it revised its outlook on Marsh & McLennan Cos. (MMC) to negative from stable and affirmed its ‘AA-/A-1+’ counterparty credit rating on the company.

“The revised outlook reflects Standard & Poor’s concern that the adverse effect of the highly publicized legal actions instituted by the State of Massachusetts and the SEC against its subsidiary, Putnam Investments, might, over the long term, weaken Putnam’s strong business position, which along with MMC’s industry leading position
as the world’s largest risk and insurance services firm, is a key underpinning of MMC’s diversified business profile,” said Standard & Poor’s credit analyst Steven Ader.

Although MMC has recently initiated proactive steps, including the naming of a new senior management team and the commencement of an independent review of Putnam’s policies and controls, the potential long-term weakening of Putnam’s business position could reportedly result in MMC’s financial profile being increasingly reflective of the currently strong performing risk and insurance operations, that through September 2003, generated 60 percent of total revenue and 68 percent of pretax operating income.

Although Standard & Poor’s believes that MMC’s operating margins will remain relatively strong on a consolidated basis, the effect of the highly publicized legal actions against Putnam over the long term could weaken MMC’s diversified business profile that is incorporated into the current rating.

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