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Aon revenue dips 3.9% in second quarter

Aon revenue dips 3.9% in second quarter

Aon P.L.C.'s s second-quarter 2015 revenue decreased 3.9% to $2.81 billion, due in part to unfavorable foreign currency translation, the brokerage reported Friday.

Net income decreased 39.9% to $188 million, the broker said.

Commission and fee revenue for the quarter was $2.80 billion, a 3.9% decline from the second quarter of 2014.

A 7% “unfavorable impact from foreign currency translation” was offset in part by 2% organic growth and a 1% rise in commissions and fees that Aon said in a statement was “related to acquisitions, net of divestitures.”

Revenue for Aon's Risk Solutions segment was $1.83 billion, down 5.9% from the prior-year quarter on a 5.3% decline in its retail business and an 8.3% drop in its reinsurance business.

For the first half of the year, Aon's overall revenue was $5.65 billion, a 3.6% decline from the first half of 2014. Its net income dipped 18.5% to $529 million. Risk Solutions' revenue decreased 5.4% to $3.72 billion.

Even though the brokerage reported lower revenue and profit figures, Aon President and CEO Greg Case was optimistic.

“Despite macroeconomic headwinds, we expect solid performance across each of our four key financial metrics for the second half of the year, including significant free cash flow growth, placing us firmly on track towards our goal of delivering $2.3 billion or more of free cash flow for the full year 2017,” he said in the statement.

When asked for Aon's opinion in an analysts' conference call Friday about the effect the consolidation of intermediaries in the market was having, Mr. Case responded that the industry is seeing today exactly what it saw 10 years ago, and that he believes “the trends are real and they create great opportunities for all of us.”

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