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Aon reports organic reinsurance revenue growth of 12%

5th February 2021 - Author: Matt Sheehan

Re/insurance broker Aon has reported organic revenue growth of 12% in its Reinsurance Solutions division during the fourth quarter of 2020.

Aon logoThe Reinsurance Solutions business posted revenue of $197 million in Q4 2020, which was 5% up on the $187 million it recorded for the same period in 2019.

And the high level of organic growth in this segment has become an ongoing trend, following organic reinsurance revenue growth of 13% in Q3 of this year, 9% in Q2 and Q1, and 17% in Q4 2019.

Aon attributed the Q4 performance to double-digit growth in treaty, driven by continued net new business generation globally and growth in facultative placements, partially offset by a decline in capital markets transactions.

Looking at the broker’s overall results picture, Q4 revenue increased 3% to $3.0 billion compared to the prior year period driven by 2% organic revenue growth and a 1% favorable impact from foreign currency translation. Net income similarly increased from $374 million to $524 million.

Aon said this reflects growth in its core business driven by ongoing strong retention and net new business generation, as well as a 5% reduction in operating expenses, which stood at $2.3 billion for the quarter, including $44 million of costs relating to the pending combination with Willis Towers Watson.

For the full year, total revenue increased from $2.89 billion to $2.97 billion and net income increased from $374 million to $524 million.

The Reinsurance Solutions contributed revenue of $1.81 billion over 2020, compared to $1.69 in 2019, representing an 8% increase or 10% on an organic growth basis.

Meanwhile, the Commercial Risk Solutions segment posted revenue of $1.38 billion during the Q4 period, with organic growth of 4% reflecting growth across most major geographies. Over the full year revenue for this segment remained flat at $4.69 billion.

Retirement Solutions revenue remained flat over Q4 at $495 million but shrank by 4% over the year to $1.75 billion. Health Solutions grew by 5% to $613 for the quarter but also decreased by 1% to $1.66 over 2020 as a whole. And finally Data & Analytics Services revenue fell by 1% for both the Q4 and 2020 periods, totally $288 million and $1.17 billion, respectively.

“We delivered a strong finish to 2020, with 2% organic revenue growth and 4% EPS growth in the fourth quarter,” said Aon CEO Greg Case. “For the full year, free cash flow increased by $1.0 billion to $2.6 billion, the highest in our firm’s history, demonstrating the stability of our business and the efficiency of our Aon Business Services platform.”

“Our team is incredibly proud of the tremendous resiliency demonstrated by our colleagues,” he continued. “Understanding the opportunity and the need in front of them, they responded by bringing the best of our firm to our clients and each other, allowing the firm to excel during a year filled with unprecedented challenges. We enter 2021 in a position of strength, with momentum for Aon and our pending combination with Willis Towers Watson.”

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