Aon books double-digit rise in Q3 profit
Aon has posted strong third-quarter earnings, underpinned by its key commercial risk division.
Net income in the three months to September increased 12% to $US456 million ($719 million) from a year earlier and revenue surged 10% to $US3 billion ($4.7 billion).
Aon says the higher revenue reflects a 6% rise in organic revenue growth as strong retention, management of the renewal book and net new business generation bolstered income.
At the same time operating income advanced 17% to $691 million ($1.08 billion) and operating margin improved to 23.4% from 21.9%.
“The increase in operating income reflects organic revenue growth and increased fiduciary investment income, partially offset by increased expenses and investments in long-term growth,” Aon said.
Crucially for Aon the Commercial Risk Solutions business – the broker’s biggest by sales – revenue gained 7% to $US1.58 billion. The business recorded organic growth of 4%, driven by strong demand across most regions including the Asia Pacific.
“On average globally, exposures and pricing were positive, resulting in a modestly positive market impact,” Aon said.
The Reinsurance Solutions business posted a 17% rise in revenue to $US465 million ($733 million), Health Solutions 12% to $US552 million ($870 million) and Wealth Solutions 8% to $US352 million ($555 million).
Aon says within the Reinsurance Solutions business, organic revenue went up 11%. The rise reflects strong growth in treaty, driven by strong retention and continued net new business generation, as well as strong growth in facultative placements and double-digit growth in Strategy and Technology Group.