Chicago-based insurance broker Aon Corp. reported third-quarter net income dropped 43 percent, but organic growth rose 2 percent despite declining prices.
Aon's net income for the third quarter fell by $87 million, going from $204 million, or 69 cents a share last year, to $117 million, or 43 cents a share. Revenues increased 6 percent, or $98 million, to $1.85 billion.
For the three quarters combined, net income rose 123 percent, or $811 million, to $1.47 billion, or $5.07 a share, compared to $657 million, or $2.22, for the same period last year. Revenues for the nine months rose 7 percent, or $350 million, to $5.7 billion.
Brokerage services saw 2 percent organic growth, primarily helped by 5 percent growth in its Europe, Middle East and Africa units. All other brokerage service areas reported organic growth of 1 percent, except the United Kingdom, which reported negative 1 percent.
During an analyst's conference call, Greg Case, Aon's president and chief executive officer, said that despite the soft market and economic turmoil, the firm is positioned "for long-term growth and shareholder value creation."
"It is a quarter of continued progress against our goals," said Mr. Case.
Christa Davies, chief financial officer, said the firm remains on track with its deal to acquire London-based insurance broker Benfield Group after receiving shareholder and regulatory approval.
The transaction is expected to close before the end of this year.
Earlier this month, Aon completed an agreement to sell its personal lines insurance business, Automobile Insurance Specialists, for $120 million in cash and a potential earn-out of $34.7 million. The deal is expected to close in the first quarter of next year.
Despite the financial turmoil, Mr. Case said he is confident that clients will continue to choose Aon because of the value it affords them.
On a question about insurance market rates, Mr. Case said declines persist but appear to be slowing.
"From our standpoint, [pricing] will continue to decrease or become stable, with an outlook still to be determined," he said.
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