Canadian Underwriter

Reinsurance, commercial risk solutions revenue increases at Aon

November 1, 2017   by Canadian Underwriter

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Aon plc reported revenues in commercial risk solutions of $917 million in the three months ending Sept. 30, up 3.7% from $884 million during the same period in 2016, while net income dropped 42%. All figures are in United States dollars.

London-based Aon reported Oct. 27 its third-quarter financial results. Total revenue was $2.34 billion, compared to $2.2 billion in Q3 2016, while net income was $192 million in the latest quarter, down from $326 million in the prior-year Q3.

During the first nine months of 2017, Aon recorded $257 million in workforce reduction costs.

A global restructuring plan, in connection with the sale of divested businesses, “is intended to streamline operations across the organization and deliver greater efficiency, insight, and connectivity,” Aon reported adding it “expects these restructuring activities and related expenses to affect continuing operations through 2019, including an estimated 2,400 to 2,850 role eliminations.”

Cumulative costs are forecast at $750 million through the end of the plan, “consisting of approximately $303 million in employee termination costs, $146 million in technology rationalization costs, $80 million in lease consolidation costs, $40 million in asset impairments, and $181 million in other costs, including certain separation costs associated with the sale of the Divested Business,” Aon said.

Aon said in February it has about 69,000 workers worldwide, of whom about 33,000 were in risk solutions. In risk solutions, Aon places commercial insurance, including property liability, general liability, professional and directors’ and officers’ liability, transaction liability, cyber liability and workers’ compensation, among others. Aon also places reinsurance and provides capital management transaction and advisory services. In human resources solutions, Aon provides health, retirement and talent management products.

During the most recent quarter, Aon recorded revenues of $355 million in reinsurance solutions, up 7.9% from $329 million in the same period in 2016. Data analytics revenue increased 11.1%, from $260 million in Q3 2016 to $289 million in the latest quarter.

For the first nine month of the year, commercial risk solutions revenue increased from $2.835 billion last year to $2.943 billion in 2017. Reinsurance solutions revenue increased, year-to-date, from $1.032 billion in 2016 to $1.07 billion in 2017, while data analytics revenue for the first nine months was $842 million in 2017, compared to $794 million 2016.

Net income for the first nine months was $1.275 billion this year, up from $971 million in 2016 while Aon’s total revenue was $7.1 billion in the first nine months of this year compared to $6.76 billion in the same period in 2016.

Aon separately announced Nov. 1 it completed its acquisition of Unirobe Meeùs Groepa, a brokerage based in The Netherlands, for 295 million euros.

Other recent acquisitions by Aon include Australian commercial brokerage Mark Kelly Insurance and Financial Services PTY LTD, completed Aug. 31, and market research firm Finaccord Limited, completed March 3. On May 2, 2017, Aon “completed the transaction to acquire cut-e Assessment Global Holdings Limited, a high-volume online psychometric assessments provider based in Ireland,” Aon noted in its Q3 financial report.

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