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.