Aon Reports Fourth-Quarter Drop in Net Income, Revamps Global Retail Operations
On Thursday Aon Corp reported a seven percent decrease in fourth-quarter net income, although its results beat Wall Street expectations.
One of world's top insurance brokers by market capitalization, Aon's net profit fell to $207 million, or 64 cents a share, from $223 million, or 67 cents a share, a year earlier.
Net income from continuing operations, excluding certain items, increased 17 percent to 69 cents, ahead of Wall Street expectations. Revenue rose 8 percent to $2 billion.
Analysts had, on average, expected earnings of 67 cents per share on revenue of $1.95 billion.
Risk and insurance brokerage revenue, which accounts for roughly 80 percent of total income, rose 8.5 percent while its consulting revenue rose 2.5 percent.
The company said it saw business taper off in some areas -- including organic growth in the United Kingdom and Asia Pacific -- as a result of softening market conditions, which have been depressing insurance rates.
"The soft market has been negatively impacting insurance premiums," said Jeff Goldberg, senior analyst with Celent, a Boston-based financial research firm.
Additionally, Aon announced on Thursday that it has consolidated its worldwide retail operations under a single banner, Aon Risk Services, the brokerage announced Thursday.
The move to place all of Aon’s retail operations within one unit is “the next logical step for Aon. We’re taking it now because our colleagues have been incredibly effective in building the global Aon,” said Greg Case, president and chief executive officer of the Chicago-based brokerage.
“Aon Risk Services is a name we’ve used before, but it now has a very different meaning. It represents the global business” of Aon’s retail operations, Mr. Case said.
Published on February 8, 2008
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