The world’s largest insurance broker Aon reported a 3 percent rise in net income for the third quarter to $204 million, including an improvement in the performance of its human resources services business, HR Solutions.
HR Solutions revenue increased one percent to $971 million with organic revenue growth of 4 percent. HR Solutions operating margin was 8.2 percent. Aon has been investing in its HR services business since it bought the former Hewitt Associates in 2010.
Aon’s total revenue increased 1 percent to $2.7 billion compared to the prior year quarter driven by a 4 percent increase in organic revenue, offset by a 3 percent decrease from unfavorable foreign currency exchange rates and a 27 percent decline in investment income.
Total operating expenses for the third quarter were flat compared to the prior year quarter at $2.4 billion.
In other divisions, Risk Solutions revenue was flat at $1.8 billion with organic revenue growth of 3 percent. Risk Solutions operating margin was 17.4 percent.
Retail Brokerage organic revenue increased 2 percent, reflecting revenue growth in both the Americas and International businesses. Americas organic revenue increased 2 percent in the third quarter primarily, which the company said was the result of strong management of the renewal book portfolio across Latin America and Affinity. International organic revenue increased 3 percent driven by strong growth in emerging markets, health and benefits, and the renewal book portfolio across continental Europe. Reinsurance organic revenue increased 7 percent with strong growth across all businesses including new business growth in treaty placements internationally and a favorable near-term benefit from pricing, capital market transactions and advisory business and facultative placements
“Our third quarter results, led by strong operating performance in HR Solutions, reflect solid progress against each of our three key metrics including four percent organic revenue growth, 30 basis points margin improvement and eight percent earnings growth,” said Greg Case, president and chief executive officer. “As we invest heavily in long-term growth opportunities such as our GRIP platform and healthcare exchanges to empower results for clients, we are delivering savings from our restructuring programs, generating strong free cash flow and effectively allocating capital, as highlighted by the repurchase of $275 million of ordinary shares in the quarter.”