NEW YORK (Bloomberg) - Marsh & McLennan, the world's largest insurance broker, had its credit rating cut to the lowest investment grade by Standard & Poor's (S&P), which cited the New York-based company's "disappointing" third-quarter results.

The company's Marsh Inc. brokerage unit faces "many challenges" in the next two years after reporting an operating loss on higher expenses in the period ended September 30, S&P said in a statement today explaining the cut to BBB- from BBB.

CEO Michael Cherkasky, facing pressure from investors and analysts to revive sales at the brokerage, fired the head of the unit in September and on December 3 appointed an American International Group executive, Daniel Glaser, to replace him.

Sales at Marsh have stagnated since a New York collusion probe in 2004 wiped out $11.7 billion in market value and forced the company to give up about $850 million in annual revenue.

"The current rating incorporates the expectation that prospective operating performance will continue to be adversely affected by the delay in modifying Marsh's business model," S&P said.

The new rating suggests the debt is safer than speculative grade while the company could have less capacity to meet its obligations amid "adverse economic conditions," according to S&P.

Marsh & McLennan spokeswoman Christine Walton said the company had no comment.