Aon posts growth in reinsurance solutions but group revenue drops 4%
Re/insurance broker Aon's revenues dropped in the second quarter of 2020 despite witnessing strong growth in reinsurance solutions driven by new business generation.
Total revenue in the second quarter decreased 4 percent to $2.5 billion compared to the prior year period, driven by a 2 percent unfavorable impact from foreign currency translation, organic revenue decline of 1 percent, and a 1 percent unfavorable impact from fiduciary investment income.
The results also included a decline in the more discretionary portions of its book as a result of COVID-19, including transaction liability, construction, and project-related work.
The company's net profit from continuing operations was $398 million, compared with $277 million in the prior year period.
Commercial risk solutions organic revenue growth of 1 percent was driven by growth across most major geographies, including modest growth in the US and EMEA and double-digit growth in Latin America and Asia.
Reinsurance Solutions organic revenue growth of 9 percent was driven by strong net new business generation in treaty and solid growth in facultative placements.
Greg Case, chief executive officer of Aon, said: "Our second quarter results reflect the resiliency of our business, the efficiency of our operations and the dedicated client service of our 50,000 colleagues around the world. We delivered strong results including 240 basis points of operating margin expansion in the quarter and free cash flow of $1.1 billion, up $875 million from the first half last year.
"We are living in a time of increasing economic and geopolitical volatility - as evidenced by the COVID-19 pandemic and broader social injustice and unrest - which demands action within our firm and on behalf of clients. Our Aon United strategy has proven essential to delivering more relevant solutions today, and our combination with Willis Towers Watson will accelerate innovation and strengthen capability to meet the evolving, long-term challenges our clients will face in the future."
