Aon reports revenue growth; net loss on Willis break-up fee

Greg Case

Aon PLC reported double-digit revenue growth for the third quarter, but the more than $1 billion it paid in costs related to the scuttled merger with Willis Towers Watson PLC dragged the company into the red for the period.

Aon reported $2.7 billion in revenue in the third quarter, a 13% increase over the prior-year period, when revenue grew less than 1% in the economic slowdown during the COVID-19 pandemic, and up 12% on an organic basis.

In its core commercial retail insurance operations, Aon reported $1.51 billion in revenue, up 14% compared with the prior-year quarter and up 13% on an organic basis. Its reinsurance business reported $353 million in revenue, up 10% and 8% on an organic basis, which excludes the effects of acquisitions, divestitures and foreign exchange.

CEO Greg Case said on a conference call with analysts Friday that the broker recorded 9% organic growth year-to-date and expects to report mid-single-digit organic growth or greater for “the full year 2021, 2022 and over the long term.”

Operating expenses increased 80% to $3.5 billion due to $1.3 billion in charges related to the failed merger with rival Willis,  which was scrapped in the face of regulatory opposition. Aon had to pay Willis a previously agreed-upon $1 billion breakup fee when the deal was terminated in July.

The company reported a loss of $891 million for the quarter compared with a $282 million profit for the same period last year.

Mr. Case noted that the company began a stock award program for all Aon staff during the quarter.