Management: Chief executive Rob Brown has spent much of the past year dodging flak over his new commission charge and the continuing controversy over Aon’s Global Risk Insight Platform (GRIP), a database of client information that insurers pay to access. Brown is a tough customer and, accordingly, Aon retains poll position in the Top 50. In June he announced a bigger profit on smaller revenues in the UK for 2010.
Strategy: Aon UK’s profit after tax rocketed 134% to £60.9m in 2010 from £26m in 2009, while revenues fell 0.8% to £640.5m from £646m. Falling revenues resulting from softening insurance prices were countered by savings through a sharp drop in restructuring charges in 2010 to £14.8m from £84.2m. Operating profit before exceptional items rose by 14.5% to £128.4m in 2010 after administrative expenses fell 4.1% to £512.1m. Aon put this down to savings from its 2009 reorganisation and restructuring.
The company bought Hewitt Associates in October 2010, which largely accounted for a 52% profit boost to $504m (£306m) in the first half of 2011 compared with that period in 2010. But it says further large acquisitions are not on the agenda.
Expertise: Aon is the UK’s biggest insurance broker. With more than 5,000 staff in 29 offices round the country, it offers the full range of insurance and risk management services to companies and individuals. Its size does not stop it from innovating – witness GRIP, now in its second year. But GRIP continues to divide the market. Some argue the platform offers insurers insufficient data for the fee charged and a number of insurers have voiced fears that not signing up to GRIP could mean losing Aon-brokered business.
Big story: The firm’s new carrier charge – a 3.5% commission fee for administrative services, which Aon is asking insurers to pay on top of normal fees – was initially attacked for lacking transparency and raising conflict-of-interest issues. Then in April the Lloyd’s Market Association warned that commission increases could lead to brokers being liable under the Bribery Act.
Aon has defended the charge robustly. A spokesman told Insurance Times: “We really don’t see there is any suggestion of anything being done here that will fall foul of the Bribery Act … This is a commission, and paying any commission to a broker does not, as far as we are aware, cause any problems in relation to the forthcoming Bribery Act.”
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