Aon profits sink in Q2
Aon has reported a dramatic fall in profits and revenues for the second quarter of 2015 driven by unfavourable market conditions and adverse foreign exchange movements.
In the second quarter of 2015 its profits fell to $178 million, compared with $304 million in the same period of 2014 – a 41 percent decline.
Aon’s total revenues also decreased 4 percent in the second quarter of 2015 to $2.8 billion, driven primarily by a 7 percent unfavourable impact from foreign currency translation. However, this was partially offset by organic revenue and commissions and fees related to acquisitions which both reported growth of 2 percent and 1 percent, respectively.
In its reinsurance segment, organic revenue decreased by 1 percent in the quarter, driven by an unfavourable market impact and a decline in capital market transactions.
Within Aon’s risk solutions division, retail organic revenue increased 3 percent reflecting revenue growth in both the Americas and international businesses.
Americas organic revenue increased 4 percent driven by strong growth across Latin America and the affinity business, as well as record retention in US retail. Its international organic revenue increased 2 percent driven by strong growth across Asia and solid growth in New Zealand.
Greg Case, president and chief executive officer of Aon, said: "Our second quarter results, adjusted for certain items, reflect double-digit earnings per share growth of 11 percent, after excluding the impact from foreign currency translation, driven by organic revenue growth in both risk and HR solutions, operating margin improvement from our investments in innovative client-serving capabilities and effective capital management, highlighted by the repurchase of $300 million of ordinary shares in the quarter.
"Despite macroeconomic headwinds, we expect solid performance across each of our four key financial metrics for the second half of the year, including significant free cash flow growth, placing us firmly on track towards our goal of delivering $2.3 billion or more of free cash flow for the full year 2017."
