Aon Net Income Off 3% on Expense & Investment

NU Online News Service, May 4, 1:23 p.m. EDT

Insurance broker Aon plc reports net income dropped 3 percent for the first quarter of this year as foreign exchange translation and investment in internal operations impacted the results.

Aon, which recently moved its headquarters from Chicago to London, reports first quarter net income of $238 million, or 72 cents a share, down $8 million from the prior year.

Revenues grew 3 percent, or $82 million, to $2.84 billion.

During a conference call with financial analysts today, Greg Case, president and chief executive officer of Aon says the company performed well in the first quarter, with organic growth of 4 percent “across every major business.” He says the firm recorded retention rates of 90 percent or better in its operating segments, underscoring strong growth throughout the global markets.

Christa Davies, Aon's chief financial officer, notes that the organic growth numbers are the highest in the last 15 quarters.

Discussing what one analyst termed the frustration with Aon's failure to produce better results this quarter, Case says that over the long term, the investment will pay-off later this year.

He suggests that the firm is investing more heavily in itself than anyone else in the industry. He says the focus in investment includes new talent and ramping up its GRIP (Global Risk Insight Platform) which tracks insurance placements throughout the world and gives client's a clearer picture of insurance markets.