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Aon plc net income up to US$769 million in Q2 2017 from US$300 million in Q2 2016


August 8, 2017   by Canadian Underwriter


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Aon plc has reported a net income attributable to shareholders of US$769 million for the three months ending June 30, a drastic increase from US$300 million in the prior-year period.

Total revenue increased 4% to US$2.4 billion from US$2.3 billion in Q2 2016, driven primarily by 3% organic revenue growth and a 3% increase related to acquisitions, net of divestures, partially offset by a 2% unfavourable impact from foreign currency translation. Total organic revenue increased 3% compared to the prior-year period, reflecting growth across every major revenue line and highlighted by strong growth in Reinsurance Solutions and Health Solutions, Aon said in a press release issued late last week.

Commercial Risk Solutions organic revenue increased 2% compared to the prior-year period, driven by strong growth across the Pacific region, in both Australia and New Zealand, and solid growth in the United States and Canada, partially offset by a modest decline in Latin America and Asia. For the second quarter of 2017, Commercial Risk Solutions revenue increased 5% from Q2 2016 to US$1.04 billion from US$990 million.

The release said that Reinsurance Solutions organic revenue increased 6% compared to the prior-year period, driven by strong growth in capital markets, as well as growth in facultative placements and net new business generation in treaty, partially offset by a modest unfavourable market impact globally. Reinsurance Solutions revenue was up 4% to US$344 million in the most recent quarter from US$332 million.

For Retirement Solutions, organic revenue increased 1% in Q2 2017 from Q2 2016, driven by continued growth in investment consulting, primarily for delegated investment management, partially offset by a decline in Aon’s talent practice. Second quarter 2017 revenue was US$389 million, down 4% from US$405 million in the second quarter of last year, the release noted.

Health Solutions organic revenue increased 5% in the most recent quarter compared to the prior-year period, driven by solid growth globally in health & benefits brokerage, highlighted by strong growth in the U.S., Asia, and Europe, the Middle East and Africa. The segment’s revenue was up 11% from US$281 million in Q2 2016 to US$312 million in Q2 2017.

The last segment, Data & Analytic Services, saw a 4% increase in organic revenue from the second quarter of 2016, driven by strong growth across Affinity and particular strength in the U.S. Revenue was also up 4% from US$275 million in Q2 2016 to US$285 million in the second quarter of this year.

“Our second quarter results reflect growth across all major lines of revenue, solid operating performance with 110 basis points of adjusted operating margin improvement and 13% earnings per share growth, highlighted by the repurchase of US$1 billion of stock in the quarter,” said Greg Case, Aon’s president and CEO, in the release. “During the quarter, we took significant steps to strengthen our industry-leading global professional services platform, including the completed divestiture of our outsourcing businesses and initial investments in our Aon United single operating model.”

Aon plc is a global professional services firm that provides a broad range of risk, retirement and health solutions. The company has about 50,000 employees in 120 countries.