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Brokerage operations lead third-quarter organic growth at Aon

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Brokerage operations lead third-quarter organic growth at Aon

Aon PLC reported 6% organic growth for the third quarter of 2018 on Friday, including 8% organic growth in its  commercial insurance brokerage operations and its reinsurance brokerage unit.

Like other brokerages, Aon in 2018 adopted new accounting rules from the Financial Accounting Standards Board that affect when certain revenues are recognized in financial results. As a result, the brokerage reported less than 1% growth with $2.35 billion in total revenue for the third quarter of 2018 compared with $2.34 billion in the same period last year, but excluding the $126 million impact of the new revenue rules, total revenue grew 6%, according to an Aon statement.

The commercial risk solutions unit reported revenue of $1.03 billion, a 12% increase over the same period last year, with the revenue rules change having no effect; reinsurance solutions reported revenue of $279 million, down 21% from the same period in 2017, but the rule change reduced revenue by 30% on a comparable basis; retirement solutions reported revenue of $501 million, up 2%, with the rule change having no effect; health solutions reported $278 million in revenue for the quarter, down 5%, which was attributable to the rule change; and data and analytic services reported $263 million, down 9% from the 2017 quarter, with the rule change accounting for a 1% decline.

“In the third quarter, we delivered positive performance across each of our key financial metrics; highlighted by strong organic revenue growth of 6% overall, with four of our five revenue lines delivering organic revenue growth of 5% or greater, and 18% operating income growth, of which 9% was driven by core operational improvement,” said CEO Greg Case in the statement.

The brokerage reported net income of $153 million, down 20.3% from the same period last year.

For the first nine months of 2018, Aon reported revenue of $8 billion, a 12.9% increase over the same period in 2017, and net income of $821 million, down 35.6%. The 2017 figure included profit from discontinued operations.

 

 

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