Segment reports organic growth of 2% despite 2% drop in reinsurance broking revenue
Aon’s broking division made an operating profit of $1.2bn (£753m) in the first nine months of 2014, up 7% on the $1.1bn it made in the same period last year.
The broking unit’s operating profit margin increased to 20.9% from 19.6%.
The unit’s revenue grew by 1% to $5.76bn (First nine months of 2013: $5.72bn) while organic growth for the nine-month period was 2%.
Within this, Aon’s retail broking revenue increased by 2% to $4.62bn (First nine months of 2013: $4.55bn), while reinsurance broking suffered a 2% revenue drop to $1.14bn (first nine months of 2013: $1.17bn.
Aon attributed the retail increase to growth in the Americas and its international business.
Reinsurance revenues were hit by falling treaty reinsurance rates as well as a decline in capital markets and transaction advisory business.
As a group, Aon made a net profit after tax of $938m in the first nine months of , up 24% in the $758m it reported in the same period last year.
Total revenues were up by 2% to $8.75bn (first nine months of 2013: $8.6bn).
Third quarter performance
In the third quarter of 2014 alone, Aon’s broking business made an operating profit of $343m, up 3% on the $333m it made in the third quarter of 2013.
Revenue was up 1% to $1.83bn (Q3 2013: $1.81bn, and organic growth was also 1%.
Retail brokerage revenue increased 2% to $1.46bn (Q2 2013: $1.42bn), while reinsurance brokerage revenue fell by 5% to $371m (Q3 2013: $389m).
Group profit after tax increased by 21% to $309m (Q3 2013: $256m) and revenue increased by 3% to $2.88bn (Q3 2013: $2.79bn).
Aon chief executive Greg Case said: “Our third quarter results reflect double-digit earnings growth of fourteen percent in our seasonally weakest quarter driven by underlying operational performance and effective capital management.
“We expect to deliver strong operating performance across both risk and HR solutions in the fourth quarter, benefiting from investments in client serving capabilities such as our Global Risk Insight Platform and health care exchanges, resulting in a solid year of operational improvement and record free cash flow generation.”