Filed Under:Agent Broker, Commercial Business

Brokerage Business Drives 10% Increase in Aon's Q4 Net Income

London-headquartered insurance broker Aon plc. says fourth-quarter net income was up 10 percent, primarily due to the strength of its insurance-brokerage business, where revenues grew by 15 percent.

The firm says net income in the quarter climbed by $28 million to $305 million. Revenues were up 4 percent, or $121 million, to $3.12 billion.

The increase was fueled by the insurance brokerage segment, where retail-brokerage and reinsurance revenues combined rose 3 percent, or $55 million, to $2.04 billion.

Organic revenues increased 3 percent in both Aon’s Americas and international business. Americas organic revenue was up 4 percent, Aon says, thanks to a “record quarter of new business for U.S. retail.” On the international side, Aon says organic revenues rose 2 percent with strong growth in Asia and emerging markets, and modest growth in continental Europe. The increase was offset by decline in Australia.

Revenues in the firm’s human-resource-solutions segment rose 7 percent, or $75 million, to $1.08 billion. Part of that increase was due to strong growth in healthcare exchanges and new clients.

As part of its restructuring efforts, Aon says it spent $311 million on workforce reduction in both its human-resource and reinsurance divisions for 2012.

“We finished 2012 having made significant investments in GRIP (Global Risk Insight Platform, a global-risk database) and in healthcare exchanges, took significant steps to increase our strategic position and financial flexibility with the re-domicile to London, delivered record cash flow from operations of $1.4 billion and created significant value for shareholders through the repurchase of more than $1.1 billion of ordinary shares,” says Greg Case, president and CEO of Aon in a statement. “As we look ahead to 2013, we have positioned our industry-leading platform for solid long-term growth, improved operational performance, strong free cash flow growth and effective capital management.”

During a conference call with financial analysts, Case and Christa Davies, Aon’s chief financial officer, say they expect 2013 to see continued growth based on the groundwork that was laid in 2012 with overall growth in the business.

Case focused on the success of the firm’s health-exchange solution for businesses, which now has over 100,000 enrolled employees.

For the year, net income was up 1 percent, or $14 million, to $993 million, or $2.99 a share. Revenues rose 2 percent, or $227 million, to $11.5 billion.

Top Story

What does TRIA denial mean for workers’ compensation?

What does the denial of a TRIA renewal mean to the workers’ compensation industry?

Top Story

Shock, dismay and disappointment: P&C insurance industry's reaction to TRIA news

The U.S. Senate adjourned for the year on Dec. 15 without passing the Terrorism Risk Insurance Program Reauthorization Act.

More Resources

Comments

eNewsletter Sign Up

Agent & Broker Insider eNewsletter

Proven success tips and essential information to help agents and brokers grow their practice – FREE. Sign Up Now!

Mobile Phone
         

Advertisement. Closing in 15 seconds.