Judging by third-quarter results released yesterday, financial and business service firm Marsh & McLennan (NYSE:MMC) may finally be recovering from an insurance bid-rigging debacle that first rocked the company in October 2004.

Yesterday's quarterly results represented the strongest overall sales growth the company has posted in the two years since the insurance scandal erupted. Though not stellar by any means, total revenue grew 4% to $2.9 billion. The embattled insurance segment still reported a 1% decrease in sales, but strong 13% top-line growth at the Mercer consulting business was enough to offset both insurance and an 8% decrease in revenue at the Putnam investment management segment. Kroll, the risk-consulting and technology segment Marsh most recently acquired, saw 4% growth, though it represents the smallest of the business units.

Bottom-line profitability trends are a bit harder to discern, since March Mac is still taking a number of restructuring charges to cut expenses and reposition itself in a new insurance environment, but reported diluted earnings more than doubled to $0.31 for the third quarter as compared with last year. Additionally, earnings came in ahead of analyst targets, suggesting that profitability trends are starting to accelerate.

But Marsh Mac isn't out of the woods yet. Putnam continues to be a problem child, having experienced its own challenges at the forefront of a mutual fund trading scandal involving the unethical timing of trades for certain favored clients. Since that time, assets under management have continued to plummet, and although things may be stabilizing, growth has yet to return to the division. As a result, management is thinking about spinning off the unit to shareholders, or selling it to private equity investors or competitors such as Legg Mason (NYSE:LM) or Federated Investors (NYSE:FII).

The best improvement appears to be in the flagship insurance division. While growth was still flat, Marsh is beginning to hire talent once again. Getting the talent on board is crucial, since the business is based on making sales and acting as a middleman between insurance providers and their prospective clients. In any case, investors are hoping that employees and clients have finally stopped migrating to competitors such as Aon (NYSE:AOC), Brown & Brown (NYSE:BRO), and Willis Group Holdings (NYSE:WHS), who have been the primary beneficiaries of Marsh's woes.

All of Marsh & McLennan's businesses are based on human capital, and the ability to generate business by brokering insurance, providing risk and consulting services, and managing investment assets for individuals and institutions. In other words, reputation is important, and Marsh Mac is working hard to repair its tarnished image in the insurance and investment industries.

The repair has been slow, but this quarter may represent one of the first times that management has been able to focus on growing the business rather than solely performing damage control from past scandals. The next few quarters will confirm whether the company is out of the woods just yet.

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Fool contributor Ryan Fuhrmann is long shares of Marsh Mac but has no financial interest in any other company mentioned. The Fool has an ironclad disclosure policy. Feel free to email him with feedback or to discuss any companies mentioned further.