Aon income up; reinsurance book shrinks
Aon has posted a strong quarter with total revenues hitting $2.9 billion, driven entirely by organic revenue growth.
In the third quarter of 2013, its total revenues hit $2.8 billion.
Aon’s profits also hiked to $309 million in the third quarter of 2014, compared with $256 million in the same period of the prior year. Its operating margin increased 150 basis points to 14.5 percent, and operating margin, adjusted for certain items, was flat at 17.6 percent.
In its reinsurance segment, organic revenue decreased 4 percent compared to the prior year quarter. This was primarily due to an unfavourable market impact in treaty, a decline in capital markets and transaction advisory business, and a $3 million unfavourable impact from timing of certain revenue, partially offset by net new business growth in treaty placements and growth in facultative placements.
Aon said that its retail organic revenue increased 2 percent, reflecting revenue growth in both the Americas and international businesses. The Americas organic revenue increased 2 percent, reflecting strong growth in Latin America and US Affinity. This was partially offset by an $8 million unfavourable impact from timing of certain revenue in US Retail and Canada.
International organic revenue increased 2 percent driven by solid growth across Asia and New Zealand and strong management of the renewal book portfolio in continental Europe, partially offset by a $4 million unfavourable impact from timing of certain revenue.
"Our third quarter results reflect double-digit earnings growth of fourteen percent in our seasonally weakest quarter driven by underlying operational performance and effective capital management," said Greg Case, president and chief executive officer. "We expect to deliver strong operating performance across both Risk and HR Solutions in the fourth quarter, benefiting from investments in client serving capabilities such as our Global Risk Insight Platform and health care exchanges, resulting in a solid year of operational improvement and record free cash flow generation."
