NU Online News Service, Oct. 29, 3:16 p.m. EDT
Chicago-based insurance broker Aon Corp. reported third quarter net income increased 20 percent over the previous year with the help of acquisitions.
The firm reported third-quarter net income of $24 million to $144 million over the same period last year, which translated into a 10 cent increase in earnings per share to 52 cents. Revenues were virtually flat at $1.8 billion.
For the first nine months of this year, net income is down 13 percent, or $74 million, to $475 million, or $1.71 a share. Revenues rose 1 percent, or $81 million, to $5.6 billion.
During a conference call with financial analysts, Aon's president and Chief Executive Officer Greg Case called it "an exciting quarter," capped off by completion of the acquisition of Hewitt Associates to form Aon Hewitt, a consulting company.
"Irrespective of economic conditions, soft market or other challenges outside of our control, we are executing on our strategy to strengthen our firm," Mr. Case said in a statement.
In the risk and insurance segment, organic growth stood at negative 1 percent, with retail brokerage coming in flat and reinsurance down 4 percent. Overall revenue, including investment income in the segment was flat.
Aon reported that by region, the Americas organic growth increased by 1 percent, due to strong growth in Latin America and benefits related to its Global Risk Insight Platform (GRIP), an electronic platform for quoting and binding business.
This performance partially offset continued weakness in construction and soft market pricing in the United States. In the United Kingdom, organic revenue decreased 8 percent, due to weak economic conditions and the soft market. Continental Europe and emerging markets there increased organic revenue by 4 percent. Strong growth in New Zealand and China led to a 2 percent increase in that region, helping to partially offset a weak economy in Thailand.
On the consulting side, organic growth was up 4 percent overall.
"Organic revenue overall, at a negative one percent, reflects three quarters in a row of sequential organic revenue improvement," Mr. Case said. "From negative three percent in Q1, to negative one percent in Q2, and now zero percent in Q3."
He added, "Across brokerage and consulting, our fundamental client serving capability continues to be substantially strengthened around the globe. These investments, fully funded in the context of further market improvement, position Aon very well to take advantage of an improving global economy."
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