Re/insurance broker Aon has reported overall revenue growth of 2% to $3.2 billion in the first quarter of 2020, including organic revenue growth of 5%.
The result was supported by organic revenue growth of 9% in its Reinsurance Solutions division, the strongest growth of all Aon segments, but still slightly down on the increase of 17% in reported in Q4 2019.
Aon attributed the reinsurance growth to strong net new business generation globally in treaty and solid growth in facultative placements, partially offset by a modest decline in capital markets transactions.
The broker’s total net income came to $773 million, compared to $659 million in Q1 2019, while operating income increased to $1.03 billion, up $88 million on last year.
This increase mainly reflects the organic revenue growth, as well as increased operating leverage across Aon’s portfolio, and the pre-emptive reduction and deferral of certain discretionary expenses.
However, the company warned that its Q1 results would not necessarily be indicative of the full year, due to the ongoing impact of the coronavirus (COVID-19) pandemic.
“We are fortunate to operate from a position of strength, as demonstrated by the strong results our team delivered in the first quarter, including 5% organic revenue growth and substantial operating margin expansion of 200 basis points,” said Aon CEO Greg Case.
“I want to thank our 50,000 colleagues around the world for their remarkable support of each other and our clients as we navigate through this humanitarian and economic crisis,” he continued.
“Our Aon United Strategy and pending combination with Willis Towers Watson are more important than ever as we focus on accelerating innovation to bring the best of our firm to clients during this time of unprecedented volatility.”
In addition to the 9% organic revenue growth for its Reinsurance Solutions division, Aon reported growth of 4% for Commercial Risk Solutions, driven by growth across every major geography.
Growth for this unit was particularly strong in Canada and Latin America, which both saw double-digit increases in organic revenue, owing to strong retention and management of the renewal book portfolio.
On average globally, Aon said that exposures and pricing were both modestly positive, resulting in a modestly positive market impact overall.
The Health Solutions division also saw organic revenue growth of 5%, with the best performing regions including Latin America, Asia, and EMEA.
In contrast, Retirement Solutions organic revenue growth was flat, despite solid growth in Investments, including double-digit growth in delegated investment management, as well as modest growth in Human Capital.
These results in were offset by a decline in core retirement, reflecting a decrease in billable hours and discretionary project-related work, primarily as a result of COVID-19.
And Data & Analytic Services similarly only saw organic revenue growth of 1% due to pressure in certain parts of the business, also as a result of the pandemic.