NEW YORK (Bloomberg) — Marsh & McLennan Cos.' Brian Duperreault, chief executive officer of the second-biggest insurance broker, said selling more of the company's simpler products helped bring down expenses and improve profit margins.

Duperreault, a Bermudian and the former CEO of Ace Ltd., hired 18 months ago to restore earnings that lagged bigger rival Aon Corp., boosted second-quarter operating profit at Marsh & McLennan's main brokerage division 63 percent to $245 million, according to a statement yesterday. The company rose 5.4 percent on the New York Stock Exchange.

Duperreault braced New York-based Marsh & McLennan for a recession by cutting more than 2,000 jobs and scaling back a security subsidiary, the company's least profitable, to focus on insurance sales. Revenue is under pressure as companies reduce staff and equipment, curbing demand for insurance coverage that Marsh & McLennan arranges.

"The customers are going to pay us what they're going to pay us," Duperreault said in an interview. "The revenue was appropriate for their needs; we were just overdoing it."

Marsh & McLennan rose $1.16 to $22.66 yesterday, making it the third-best performer in the KBW Insurance Index.

The profit margin at the company's brokerage division, which includes insurance-specialist Marsh Inc. and reinsurance dealer Guy Carpenter, advanced to 18.2 percent from 10.6 percent in the second-quarter of 2008. Revenue at the businesses fell 5.1 percent to $1.34 billion on changes in the foreign exchange, Marsh & McLennan said.

"If you have a middle-sized account, and that account doesn't have a complicated requirement for risk transfer, in the past we would look at it and give it a more complicated solution," Duperreault said. "We might have tried to design a policy tailor-made when in fact a more standard approach not only fit, but was also better for the customer."

Marsh & McLennan reported an 8.4 percent brokerage division operating profit margin last year. Pretax income margin at Chicago-based Aon's main business was 14 percent in the same period.

US property and casualty insurers posted the biggest sales decline in half a century, slipping 1.4 percent last year, as corporations and individuals scaled back purchases. Brokers make commissions by matching buyers and sellers of coverage.

Broker compensation from clients has been further squeezed as carriers cut insurance prices to win market share. US commercial rates dropped 4.9 percent in the three months ended June 30 and have fallen in every quarter since 2004, the Council of Insurance Agents and Brokers said in a July 22 statement.

A write-down of the security unit, Kroll, pushed Marsh & McLennan into a net loss of $193 million in the period ended June 30. The $315 million charge, tied to the sale of part of the unit, was the third at Kroll since Duperreault's arrival and brings the total goodwill impairments on the unit to $855 million since 2008.

Kroll is left with about $800 million of goodwill. Marsh & McLennan will evaluate the figure again in the third quarter as part of a "two-step process" to determine if any further adjustment is needed, Duperreault said.

"Kroll has had a couple years of deteriorating results and that reflects on the carrying value," Duperreault said.