NEW YORK (Reuters) ? Marsh & McLennan Cos. will see improving earnings and revenue, the world's top insurance broker's chief executive said in an interview, but he cautioned not to expect a quick turnaround.

"I think we will see an uplift in revenue," CEO Michael Cherkasky told Reuters. "2006 will be better than 2005 and 2007 will be better yet."

Cherkasky, a former prosecutor who took over as Marsh's CEO in 2004 amid a bid-rigging scandal, also dismissed talk that the company's consulting, brokerage and investment units should be broken up.

He acknowledged that its Putnam asset management unit is expected to grapple with fund outflows through the end of 2006 but said institutional fund flows would be positive by the third quarter. Institutional business is separate from Putnam's retail clientele, where business is still declining.

"Marsh has turned," added Cherkasky. He has been under fire from some investors for not moving fast enough to rebuild the New York-based company, shares of which have lost nearly 20 percent since the start of the year.

That compares with a 2.2 percent drop in the Dow Jones US insurance index over the same period.

The shares fell two cents, or 0.1 percent, on the New York Stock Exchange, to close at $25.51.

"I have better confidence in earnings today, confidence that they will be better, more profitable and more predictable. The trend is positive," he said. He declined to give specific targets. Marsh agreed in January 2005 to pay $850 million to settle charges of rigging bids and steering business to insurers that paid hidden fees. Settling the charges brought by New York Attorney General Eliot Spitzer also cost the company ten percent of its U.S. clients because of "reputational issues," Cherkasky said.

Some investors are suggesting that he should break up the company, which has $12 billion in annual revenue, into its consulting, brokerage and investment units.

"Marsh took the biggest hit from the scandal, and then swept itself clean," said Donald Light, an analyst with Celent LLC. "But with its mixed bag of businesses, it has to show a high level of profitability, or people will say 'spinoff'."

But Cherkasky continued to dismiss this idea, saying the company's "great businesses" should be working together.

"Our businesses Kroll, Marsh and Mercer are synergistic and we need to do the hard work of executing on these brands," he said. "Within a year and a half, I'll be able to quantify what we can earn from cross-selling our products, but that won't happen overnight."

Cherkasky would not comment on whether there were plans to sell Putnam in the future.

"Overall we are a higher margin company than we were a year ago, with an operating margin up three percent in the latest six months over a year ago," Cherkasky said. "We are no longer losing market share to other insurance brokers as we were in 2005."

Cherkasky said that "by every measure" Marsh is still much bigger than its nearest competitor, Aon Corp, although Aon had taken business from Marsh in 2005. Aon chief executive Gregory Case said recently that Aon had exceeded Marsh in brokerage business, which involves placing insurance policies with business clients.

Cherkasky countered that Marsh's overall business, including its consulting arm and risk management, was nearly double the size of Aon."I don't want people to lose faith," Cherkasky concluded. "A year ago it was 'if' we recover. Now it is 'when'."