Marsh & McLennan Cos., the biggest insurance broker by market value, has climbed to a 9-year high, bouncing back from the plunge that followed then-New York Attorney General Eliot Spitzer’s lawsuit against the company.

The broker has rallied 35 percent this year, including a 2.3 percent gain last week to $46.56 in New York. That compares with $46.13 on Oct. 13, 2004, the day before Spitzer sued, accusing Marsh & McLennan of rigging bids and taking kickbacks from insurers.

Chief Executive Officer Daniel Glaser is building on the strategy of his predecessor, Brian Duperreault, who cut costs, streamlined operations and expanded through regional and international acquisitions. Glaser is Marsh & McLennan’s third CEO since Jeffrey Greenberg resigned after Spitzer’s suit.

“It was a culture that was frankly not focused on operating as efficiently as they could,” Fred Fialco, co- manager at investment firm Torray LLC, which manages about $600 million in assets, said in an interview last week. “When Brian Duperreault came in, that was one of the areas he targeted aggressively, as well as driving revenue growth in international expansion and trying to acquire smaller, regional insurance brokerage businesses.”

An improving economy, higher insurance pricing and investor interest in health-care exchanges are fueling the insurance- brokerage industry, Meyer Shields, an analyst at Keefe Bruyette & Woods Inc., said in a phone interview.

Marsh & McLennan rival Aon Plc gained 2.9 percent in last week’s trading after reporting that third-quarter profit climbed. Both brokers invested this year in the exchanges, in which they help clients’ employees buy coverage online.

“There is a lot of investor excitement regarding the possibility of health-care exchanges driving incremental revenue in the future,” Charles Sebaski, an analyst with Bank of Montreal, said in an interview last week. “Aon, its largest and only true competitor, was the first to build out a health-care exchange and the stock has done very well.”

Shares of New York-based Marsh & McLennan had their biggest drop in at least two decades on Oct. 14, 2004, the day of Spitzer’s suit, plummeting as much as 26 percent. The stock posted annual declines until 2010.

Marsh & McLennan agreed in 2005 to pay $850 million to settle the case. It apologized, saying some employees had “unlawfully deceived” customers, without admitting or denying any claim in Spitzer’s suit. The broker won release from lawsuit-related restrictions in 2010.

CEO Changes

Greenberg was replaced as CEO in 2004 by Michael Cherkasky, a former prosecutor who cleaned up relations with regulators and was then ousted in 2007 after he was unable to regain lost clients and profit. The next CEO, Duperreault, joined the company after a career at American International Group Inc. and Ace Ltd. He retired last year.

Glaser, 53, took over the top job on Jan. 1 this year after serving as chief operating officer and head of the flagship insurance brokerage. His company is scheduled to post third- quarter results on Nov. 6.

Spitzer gained national prominence for bringing cases against Wall Street firms, and was elected New York governor in 2006. He was driven from office in March 2008 after patronizing prostitutes. Spitzer lost the Democratic primary race for New York City comptroller this year

–With assistance from Noah Buhayar in New York. Editors: Dan Reichl, Dan Kraut