Aon P.L.C. on Friday reported revenue of $2.92 billion for the second quarter of 2014, an increase of less than 1% over the same period a year earlier.
Net income for the quarter, however, surged 26.1% from that of the prior-year period to $304 million as the brokerage reported expense reductions.
Aon noted in its earnings statement that “restructuring savings in the second quarter related to the Aon Hewitt restructuring program are estimated at $100 million compared to $78 million in the prior-year quarter. Of the estimated savings in the second quarter, approximately $76 million were related to the HR Solutions segment compared to $62 million in the prior-year quarter, and approximately $24 million were related to the Risk Solutions segment compared to $16 million in the prior-year quarter.”
Second-quarter revenue for Aon's Risk Solutions brokerage and risk management operation remained virtually flat compared with the same period in 2013 at $1.95 billion. Aon said the performance reflected 1% organic growth in commissions and fees, offset by a 1% decrease in commissions and fees resulting from acquisitions, net of divestitures.
Retail organic revenue increased 2%, reflecting revenue growth in both the Americas and international businesses. “International organic revenue increased 3% driven by solid growth across Asia, New Zealand and strong management of the renewal book portfolio in continental Europe,” the Aon statement said.
But reinsurance organic revenue fell 4% compared with the prior-year quarter, primarily due to lower treaty rates and a decline in facultative placements, partially offset by growth in capital markets transactions and advisory business and net new business growth in treaty placements globally.
Aon's HR Solutions operation's total revenue increased 2.7% to $982 million compared with the prior-year quarter reflecting 2% organic growth in commissions and fees and a 1% favorable effect from foreign currency translation.
Aon said total revenue for the first half of the year increased 1.0% over the prior-year period to $5.87 billion. Net income for the first half of the year also increased, rising 25.3% to $649 million.