Aon’s Reinsurance Solutions arm delivered organic revenue growth of 14% in the fourth quarter of 2023 to $332 million, as total revenue across the insurance and reinsurance broking group rose $245 million to $3.4 billion.
The broker attributes the growth in its reinsurance segment to strong growth in treaty as a result of robust retention and continued net new business generation, as well as strong growth in facultative placements and also investment banking.
Impressive growth in the reinsurance arm was supported by 11% organic growth in Health Solutions to $763 million for the quarter, reflecting strong growth globally in core health and benefits brokerage, primarily from net new business generation and management of the renewal book.
In the company’s Wealth Solutions division, organic revenue growth of 5% was achieved to $377 million for Q4 2023, which Aon attributes to strong growth in retirement on the back of advisory demand and project-related work related to pension de-risking and ongoing impact of regulatory changes.
Within Commercial Risk Solutions, revenue increased 4% on an organic basis to more than $1.9 billion, as the broker achieved solid growth across most major geographies driven by strong retention, management of the renewal book, and net new business generation.
All in all, Aon has today reported total revenue for Q4 2023 of $3.4 billion, up 7% on the prior year quarter on an organic basis.
Operating income did fall year-on-year by 23% to $779 million, while interest income rose $9 million on the back of higher interest rates.
Group-wide, net income for the quarter fell 24% to $498 million for Q4 2023, compared with $657 million a year earlier.
For the full year 2023, Aon has recorded 7% organic revenue growth to $13.4 billion, while net income fell from $2.589 billion in 2022 to $2.564 billion in 2023.
Interestingly, Aon has also revealed that during the fourth quarter, it recognised actual or anticipated legal settlement expenses in connection with transactions for which capital was arranged by insurtech Vesttoo, primarily in the form of letters of credit from third party banks that are alleged to have been fraudulent.
The broker explains that “certain actual or anticipated legal settlement expenses totalling $197 million have been recognized in the current period, where certain potentially meaningful amounts may be recoverable in future periods. Additionally, a $58 million charge was recognized in the second quarter of 2022 with certain other legal settlements reached in matters unrelated to Vesttoo.”
Greg Case, Chief Executive Officer (CEO), commented on the results: “In the fourth quarter and full year, our colleagues delivered 7% organic revenue growth, highlighted by double-digit growth in Reinsurance Solutions and Health Solutions. This top line growth contributed to full year adjusted margin expansion of 80 basis points, adjusted operating income growth of 10%, and $3.2 billion of free cash flow.
“This strong performance demonstrates how we are going further, faster with our 3×3 plan, which is an acceleration of our proven Aon United strategy. Our Risk Capital and Human Capital structure has unlocked new opportunities to grow, and Aon Business Services is a catalyst for innovation delivering new products and tools at scale across client segments and geographies.”
