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Aon posts lackluster second quarter results

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Aon P.L.C.'s revenues for the second quarter of this year dropped 1.4% from those of the same period a year earlier to $2.77 billion, Aon announced Friday.

Revenues for its Risk Solutions segment, which includes retail brokerage and reinsurance, increased slightly less than 1% to $1.85 billion, including interest income. Both the retail and reinsurance components of the segment posted revenue increases of less than 1%.

In its earnings announcement, Aon said that increase in revenue was driven by a 3% organic growth in commissions and fees, partially offset by a 2% unfavorable impact from foreign currency translation.

The results “reflect solid growth across every major region,” said Aon President and CEO Gregory Case during a Friday earnings call.

Revenues for Aon's HR Solutions, which deals with employee benefits, however, dropped 4.9% from those of the same period a year earlier to $931 million, which Aon attributed to a 5% decrease in commissions and fees resulting from net divestitures and a 1% unfavorable impact from foreign currency translation, partially offset by 1% organic growth in commissions and fees, in its earnings statement.

Net income for the quarter rose 48.9% from that of the corresponding period a year earlier to $280 million. Income for the same quarter in 2015, however, had fallen 40.0% from the same period in 2014.

For the first six months of the year, revenues dropped 1.7% to $5.56 billion. Revenue for the Risk Solutions segment remained virtually flat at $3.72 billion, while those of the HR Solutions business fell 4.5% to $1.86 billion. Net income for the first half of this year increased 14.7% to $607 million.

During the earnings call, Mr. Case fielded a question about the impact of The United Kingdom's withdrawal from the European Union, a move British voters approved in June. Mr. Case replied that the so-called Brexit has caused a “lot of uncertainty” among clients. He said it provides Aon “an opportunity to help and support clients” dealing with the situation.