Aon reported net income of $153 million in the second quarter 2010, compared to $149 million for the prior year quarter. Net income from continuing operations increased 22 percent to $179 million, compared to $147 million for the prior year quarter.
Aon reported that total revenue increased 1 percent to $1.9 billion from the prior year quarter due to a 2 percent increase from acquisitions, primarily from the Allied North America acquisition, net of dispositions, and a 1 percent increase from foreign currency translation, partially offset by a 1 percent organic decline in commissions and fees and a 21 percent decline in fiduciary investment income.
Risk and Insurance Brokerage Services total revenue increased 1 percent to $1.6 billion compared to the prior year quarter.
Retail organic revenue declined 1 percent compared to the prior year quarter. By geographic region in Retail, the Americas organic revenue increased 2 percent due to strong growth in Latin America and benefits related to the global risk insight platform (GRIP), partially offset by the impact of soft pricing and lower exposure units on the renewal book portfolio in U.S. Retail, Aon reported.
U.K. organic revenue decreased 6 percent due primarily to weak economic conditions and lower exposure units, the broker said. EMEA organic revenue decreased 3 percent due to weak economic conditions and lower exposure units in Continental Europe and Ireland, partially offset by modest growth in emerging markets. APAC organic revenue increased 3 percent reflecting solid growth in Australia and New Zealand, partially offset by weak economic conditions in Japan and Thailand.
Aon also reported that reinsurance organic revenue decreased 3 percent due primarily to higher cedent retentions and soft pricing globally in treaty placements, partially offset by an increase in revenue from capital markets transactions.
Compensation and benefits for the second quarter decreased 2 percent or $23 million compared to the prior year quarter due primarily to a $42 million decrease in restructuring related costs and benefits related to the restructuring programs, partially offset by the inclusion of operating expenses related to recent acquisitions and a $4 million unfavorable impact from foreign currency translation. Aon reported other expenses for the second quarter decreased 16 percent or $71 million from the prior year quarter due primarily to a $21 million decrease in restructuring related costs and benefits related to the restructuring programs, partially offset by a $3 million unfavorable impact from foreign currency translation and the inclusion of operating expenses related to recent acquisitions.
“Our second quarter results reflect strong operational performance in Brokerage and Consulting,” said Greg Case, president and CEO. “In Brokerage, our Americas business delivered a two percent increase in organic revenue highlighted by strong growth in Latin America and benefits related to the global risk insight platform. Consulting delivered a two percent increase in organic revenue highlighted by strong growth in international health and benefits and compensation consulting.” Case added that the recent merger of Hewitt with Aon “will substantially strengthen our position as the preeminent global professional services firm focused on risk and human capital solutions.”
Source: Aon Corp.
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