6 February 2015 Insurance

Aon profits hike 26% in 2014

Aon posted a strong set of results for 2014. It benefited from a big jump in profits, despite a fall in organic revenues in its reinsurance segment.

Its profits grew by 26 percent to $1.4 billion for the year ended December 31, 2014, compared with $1.1 billion for 2013.

Aon’s revenues increased by 2 percent to $12 billion. Its organic growth in commissions and fees was with 3 percent. This was partially offset by a 1 percent unfavourable impact from foreign currency translation.

In its reinsurance segment, organic revenue decreased by 2 percent.

Aon said that its retail organic revenue increased by 1 percent. Within this, organic revenue in the Americas increased by 3 percent, while its international division posted a 1 percent decrease in organic revenue.

Cash flow from operations increased by 1 percent to a record $1.6 billion in 2014, which Aon said was driven primarily by growth in net income and a decline in pension contributions, partially offset by an unfavourable impact from timing of significant receivable collections in the prior year period.

Greg Case, president and chief executive officer, said: “We delivered twenty-three percent earnings growth in the fourth quarter driven by organic revenue growth and strong operating margin improvement in both segments, a lower effective tax rate and effective capital management.

“Results reflect a strong finish to 2014, having made significant investments in client serving capabilities while returning a record amount of capital to shareholders.  Looking forward, we have positioned the firm for increased operating leverage, strong free cash flow generation and significant shareholder value creation in 2015."

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