Aon sets new 25% target

Aon reported total revenue for 2009 increased 1% to $7.6bn due to a 7% increase from acquisitions, primarily Benfield but said risk and insurance brokerage services total revenue increased 2% to $6.3bn.

It said it made 20% profit from brokerage and set a new target for 25% profit from now on.

Aon claimed a 4% unfavorable impact from foreign currency translation and a $97m or 57% decline in investment income. Consulting total revenue decreased 7% to $1.3bn.

Financial highlights (2008 in brackets)

• Commission and fees $7,521m ($7,357m)
• Total income $7,595m ($7,528m)
• Commission and fees from continuing operations $6,232 ($6,029m)
• Revenue from risk and broking services $6,305m ($6,197m)
• Pre-tax income from continuing operations $949m ($879m)
• Net income $792 ($1,478m)
• Net income to Aon stockholders $747m ($1,462m)

In Q4 total revenue increased 9% to $2.1m with a decline in organic revenue of 2%. Brokerage revenue increased 8% to $1.7m with a decline in organic revenue of 1%.

The Q4 brokerage pre-tax margin was 11.5% and the adjusted pre-tax margin, excluding certain items, increased 160 basis points to 21.4%.

Solid performance

Greg Case, president and chief executive officer said: "Our fourth quarter results reflect solid operational performance across both brokerage and consulting.

“On an adjusted basis, total pre-tax margin increased 190 basis points and EPS from continuing operations increased 20%, despite difficult economic conditions and a 63% decline in investment income.

“Colleagues globally have done an outstanding job supporting our clients in a very challenging year, and we begin 2010 in a position of strength in the industry."

“With the achievement of a 20% adjusted pre-tax margin in Brokerage for 2009, we are establishing a new long-term pre-tax margin target of 25% for the Brokerage segment.”