Aon PLC on Friday reported 7% organic revenue growth in the first quarter, driven by strong results in its reinsurance business, and expects to report mid-single-digit or higher organic growth for the whole of 2023.

U.S. retail insurance broking saw modest growth after double-digit gains in the year-earlier period as its transactional risk business was impacted by a tough mergers and acquisitions market, Aon said.

Retail broking revenue in Europe, the Middle East and Africa, Latin America and the Pacific saw double-digit growth, however.

Aon reported total revenue of $3.87 billion for the first quarter, a 5% increase over the same period last year. It said a 1% favorable impact from fiduciary investment income was partially offset by a 3% unfavorable impact from foreign currency headwinds.

Foreign exchange effects were driven primarily by a weaker Euro versus the U.S. Dollar as the first quarter is Aon’s seasonally largest quarter for Euro-denominated revenue, said Christa Davies, the brokerage’s chief financial officer, on a call with analysts Friday.

Aon’s core commercial brokerage operations reported $1.78 billion in revenue for the quarter, up 6% on an organic basis, which excludes the effect of foreign exchange fluctuations and mergers and acquisitions.

Reinsurance brokerage revenue rose 10% to $1.08 billion and 9% on an organic basis, driven by strong growth in treaty business following Jan. 1 reinsurance renewals. Its health solutions revenue rose 5%, and 8% on an organic basis, to $671 million; its wealth solutions revenue rose 1% to $350 million but was up 6% on an organic basis.

Aon reported net income of $1.05 billion for the quarter, a 3% increase over the prior-year period.

The property market remains an increasingly challenging and volatile sector, Aon CEO Greg Case said on the earnings call.

“Market dynamics are causing reinsurers to shift risk appetites, requiring primary carriers to accept more risk, which in turn means property placements are more challenging for our clients,” Mr. Case said.

Aon is making greater use of analytics and integrated broking options, including traditional risk placements, wholesale, managing general agents, facultative and captives to help clients optimize their total cost of risk, he said.

Total operating expenses in the quarter increased 4% to $2.40 billion as compensation and benefits and business travel post-COVID-19 increased.

Capital expenditures increased in the first quarter as Aon initiated various technology projects to drive long-term growth and real estate initiatives aligned with its “smart working strategy,” Ms. Davies said.

Aon’s capital expenditures are expected to be around $200 million to $225 million this year, and “it’s reasonable to expect going forward in 2024 and beyond that capex will grow in line with expenses,” she said.