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Aon revenue up 1% in first quarter of 2014

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Aon P.L.C. posted revenue of $2.95 billion in the first quarter of 2014, a modest 1.0% increase over the same period a year earlier, the insurance broker reported Friday.

Aon's net income increased 24.5% over that of the same period last year to $325 million during the first three months of the year.

In a statement announcing the results, Aon said the effective tax rate on net income in the first quarter was 18.9% compared with 26.1% in the prior-year quarter.

“The effective tax rate in the first quarter of 2014 was favorably impacted by changes in the geographic distribution of income,” said Aon, adding that “potential unfavorable discrete tax adjustments in future quarters of 2014 could cause the effective tax rate for the full year 2014 to be higher than the effective tax rate reported in the first quarter of 2014.”

Aon's Risk Solutions operation, which consists of brokerage and risk management services, posted revenues of $1.99 billion for the quarter, a 1% gain over the same period a year earlier.

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Risk Solutions' retail organic revenue increased 3%, “reflecting revenue growth in both the Americas and international businesses,” said Aon in a statement announcing the results. It added that reinsurance organic revenue increased 3% compared with the prior-year quarter due “primarily to growth in facultative placements and capital markets transactions and advisory business, as well as net new business growth in treaty placements, partially offset by an unfavorable market impact in the quarter.”

Aon's HR Solutions operation's revenues for the first quarter of this year increased 1.2% over that of first quarter 2013 to $965 million, driven by 1% organic growth in commissions and fees, Aon said in the statement.

“Our first-quarter results reflect a solid start to the year with double-digit earnings growth, highlighted by strong performance across Risk Solutions and effective capital management,” said Aon President and CEO Greg Case in the statement. “We are returning a record amount of capital to shareholders, highlighted by the repurchase of $600 million of ordinary shares in the quarter and the recently declared 43% increase in our quarterly cash dividend, while continuing to invest in innovative solutions across the firm to strengthen our industry-leading platform for long-term growth, strong free cash flow generation and increased financial flexibility.”