Aon Reports Organic Reinsurance Revenue Growth of 13%

Reinsurance broker Aon has reported organic revenue growth of 9% in its Reinsurance Solutions division during the third quarter of 2020.

Source: Reinsurance News | Published on October 30, 2020

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The Reinsurance Division posted revenue of $321 million in Q3 2020, compared with $291 million for the same period last year.

This marks the fourth consecutive quarter of elevated growth for Aon’s reinsurance business, following organic revenue growth of 9% in Q2 and Q1 this year, and 17% in Q4 2019.

Aon explained that its reinsurance performance in Q3 was driven by double-digit growth across treaty, facultative, and capital markets transactions, reflecting continued new business generation.

However, the Reinsurance Solutions segment was the broker’s best performing division by some margin, meaning that Aon’s total revenue remained flat at $2.4 billion, including flat organic revenue.

Net income did, however, improve somewhat to $274 million in Q3 2020, compared with $223 million for the same period in the prior year.

Aon’s Commercial Risk Solutions division maintained mostly flat revenue, at $1.04 billion, versus $1.06 billion previously, and organic revenue growth of 2%.

The broker said this segment saw particular strength in Asia, driven by strong retention and management of the renewal book portfolio.

Results also reflect strong growth in core P&C in the US, and a decline in the more discretionary portions of its book globally, including transaction liability and construction.

On average globally, exposures and pricing were both modestly positive, resulting in a modestly positive market impact overall.

Retirement Solutions, meanwhile, saw its revenues decrease by 3% from $484 million to $468 million, including an organic revenue decline of 5% driven by a decline in Human Capital for rewards and assessment services, primarily from clients in the financial services space.

And Health Solutions revenues were fairly flat at $282 million versus $279 million previously, including organic revenue growth of 1%.

In this division, performance was driven by modest growth internationally, with particular strength in the Asia and the Pacific regions, partially offset by a modest decline in the US due to lower employment levels.

Finally, the Data & Analytics Services division posted a 3% increase in revenue from $271 million to $278 million, although organic revenue declined by 7% during the quarter.

The decrease was driven by a decrease in the travel and events practice globally, partially offset by growth in professional associations.

“Our third quarter results demonstrate the resiliency of our firm and our colleagues,” said Aon CEO Greg Case. “Year-to-date, we delivered strong operational performance with 170 basis points of operating margin expansion and free cash flow of $1.9 billion, up $908 million from last year.”

“Over the past decade, we have evolved to better address client need by making their voice core to our Aon United growth strategy. Taking a complete client view – instead of a traditional product view – is fundamental to delivering the next generation of solutions they have told us they need,” Case continued.

“In an increasingly volatile world, our pending combination with Willis Towers Watson will accelerate this proven strategy and establish the combined firm as a preeminent partner to help clients navigate today’s most pressing issues and the long-tail risks we will face in the future.”