Second quarter profit dips 2% as a result of higher expenses

Greg Case, Aon

Global broker Aon made a profit after tax of $502m (£327.5m) in the first half of 2013, up 4% on the $484m it made in the same period last year.

Total revenues increased 3% to $5.8bn (H1 2012: $5.7bn), and organic growth in fees and commissions was 3%.

However, Aon’s profit for the second quarter of 2013 alone was down 2% at $241m (H1 2012: $246m), despite a 3% revenue growth to $2.9bn (Q2 2012: $2.8bn) and organic growth of 3%.

Expenses increase

This was largely because of a 4% increase in expenses to $1.7bn (Q2 2012: $1.6bn).

Aon chief executive Greg Case said: “Our second quarter results reflect organic growth across each of our major segments, continued margin improvement in Risk Solutions, 20% growth in free cashflow, and the repurchase of $225m of ordinary shares in the quarter.

“Our solid financial performance has absorbed significant investments made in areas such as the Global Risk Insight Platform and in healthcare exchanges, strengthening our platform for long-term growth, strong free cashflow generation and increased financial flexibility.”

Risk Solutions upturn

Aon’s broking division, Risk Solutions, reported a 3% increase in revenues in the first half of 2013 to $3.9bn (H1 2012: $3.8bn).

Its operating profit increased by 6% to $794m (H1 2012: $750m).

In the second quarter alone, Risk Solutions’ revenue grew 3% to $1.94bn (Q2 2012: $1.90bn), while operating profit rose 2% to $391m (Q2 2012: $384m).