Aon's Q3 Net Income Increases 3% as Revenues Edge Upward

Insurance broker Aon says it's 2012 third-quarter net income attributable to shareholders increased 3 percent compared to the same period a year ago due to a slight increase in revenues and essentially flat expenses.

Speaking to the reported 2012 third-quarter net income attributable to shareholders of $204 million, Aon President and CEO Greg Case says in a statement, “Our third-quarter results, led by strong operating performance in HR Solutions, reflect solid progress against each of our three key metrics, including 4 percent organic-revenue growth, 30 basis-points-margin improvement and 8 percent earnings growth.” 

In a conference call with analysts, Case said Aon's focus each year centers on those three metrics — organic growth, expanding margins and increasing earnings per share — and he noted that 2012's third quarter showed improvements in all three metrics for the first time since 2009.

Total revenue for Aon was up 1 percent to $1.78 billion. Expenses inched up to $1.47 billion compared to $1.46 billion a year ago.

Aon's Risk Solutions segment contributed $309 million in income, down 1 percent from $311 in income in last year's third quarter, while HR Solutions contributed $80 million in income, up from $61 million last year.

In the conference call, Case said organic growth in Risk Solutions was up 3 percent in the quarter, compared to 2 percent a year ago. He added that Americas saw 2 percent organic growth in the quarter with steadily improving pricing over the last 12 months. International saw 3 percent organic growth with flat pricing on average. Emerging markets showed strong growth, Case said, particularly New Zealand and across Asia.  Europe, despite a challenging macro economic environment, showed modest growth, according to Case. 

Regarding possible acquisitions in the future, Case told analysts he likes the platform and portfolio already put into place, where acquisitions are done with eye toward building content. He said, “For us, the M&A strategy is not about size, it's about adding true content and capability that will support our clients, and in that regard, we continue to see the $200 million to $300 million investments in these smaller tuck-in acquisitions around the world really being a formal part of the strategy.”