Global broker Aon’s Reinsurance Solutions arm achieved organic revenue growth of 11% in the third quarter of 2023, as revenue across the group increased by 10%, year-on-year, to $2.95 billion, reflecting organic revenue growth of 6%.
This growth in organic revenue in the reinsurance arm was driven by strong retention and continued net new business generation, as well as strong growth in facultative placements and double-digit growth in Strategy and Technology Group, the broker noted.
Higher total revenue of $2.95 billion includes the 6% organic revenue growth and a 2% favourable impact from fiduciary investment income and a 2% favourable impact from foreign currency translation.
Across the group, total operating expenses in Q3 2023 increased 7% to $2.3 billion when compared to the prior year period due primarily to an increase in expense associated with 6% organic revenue growth, investments in long-term growth, and a $45 million unfavourable impact from foreign currency translation.
“Our global team delivered strong operating results in the third quarter, including 6% organic revenue growth and 120 basis points of adjusted operating margin improvement, contributing to 7% organic revenue growth and 80 basis points of adjusted margin expansion year to date, demonstrating the strength of our Aon United strategy,” said Greg Case, Chief Executive Officer.
All in all, net income attributable to Aon shareholders in the third quarter of 2023 increased by 12%, year-on-year, to $456 million.
In Reinsurance Solutions, revenue increased by 17% to $465 million in Q3 2023 compared with $396 million a year earlier, with 11% organic revenue growth reflecting strong growth in treaty, driven by strong retention and continued net new business generation, as well as strong growth in facultative placements and double-digit growth in Strategy and Technology Group.
In Commercial Risk Solutions, revenue rose by 7% to $1.59 billion, Aon notes organic revenue growth of 4% on the back of growth across major geographies driven by strong retention, management of the renewal book, and net new business generation. Growth in retail brokerage was highlighted by strong growth in EMEA and the Pacific, driven by continued strength in core P&C.
The Health Solutions segment saw revenue rise from $494 million in Q3 2023 to $552 million in Q3 2022, with organic revenue growth of 10% reflecting growth globally in core health and benefits brokerage primarily from net new business generation and management of the renewal book.
Aon’s Wealth Solutions arm also reported a rise in revenue in Q3 2023 to $352 million compared with $326 million in Q3 2022. Aon says that organic revenue growth was 4% and reflects growth in Retirement, driven by advisory demand and project-related work related to pension de-risking and ongoing impact of regulatory changes.
For the first nine months of 2023, cash flows from operations was $2,174 million, and free cash flow decreased 4% to $1,971 million, the broker noted.
In the third quarter of 2023, Aon repurchased 2.6 million class A ordinary shares for approximately $850 million.
“We see an ongoing evolution in client demand that will require new and integrated solutions, powered by better analytics, and delivered through Aon Business Services across Risk Capital and Human Capital. To capture this opportunity, we are accelerating our strategy to take Aon Business Services to the next level to enable sustainable value creation for clients, colleagues, and shareholders,” Case commented.
