Aon reveals full-year financial results

It outlines factors that have impacted latest figures

Aon reveals full-year financial results

Insurance News

By Roxanne Libatique

Aon plc (Aon) has revealed its financial performance during the final quarter (Q4) and the full 2021 financial year (FY21).

For Q4 2021, Aon reported that its total revenue increased by 4% from Q4 2020 to a whopping US$3.1 billion, thanks to 10% organic revenue growth – partially offset by a 5% unfavourable impact from divestitures, net of acquisitions, and 1% negative impact from foreign currency translation. In addition, its operating margin increased by 760 basis points to 31.6%, and its operating margin after adjustment for certain items increased by 590 basis points to 32.8%.

Regarding shares, Aon revealed that its earnings per share (EPS) for Q4 soared despite the dire circumstances last year, reporting a 72% increase to US$3.90. Meanwhile, its EPS after adjustment for certain items jumped by 42% to US$3.71.

Meanwhile, its total operating expenses for Q4 2021 decreased by 6% to US$2.1 billion compared to the same period in 2020 due mainly to a US$200 million favourable impact from the repatterning of discretionary expenses within the year, a US$64 million decrease in expenses related to divestitures, net of acquisitions, a US$44 million drop in transaction costs, and a US$12 million positive impact from foreign currency translation, partially offset by an increase in expense associated with 10% organic revenue growth and investments in long-term growth.

“In the fourth quarter, our colleagues delivered 10% organic revenue growth, an outstanding finish to a very strong year, contributing to full year organic revenue growth of 9%, margin expansion of 160 basis points, and EPS growth of 22%.” said Greg Case, Aon CEO. “These results are a direct outcome of our Aon United strategy. We’re accelerating innovation, with a focus on developing and scaling proven solutions to serve new and existing clients. This gives us confidence in our ability to build even greater momentum in 2022.”

Breaking down its individual units, its Commercial Risk Solutions business saw 11% growth in the final quarter, Reinsurance Solutions was up 13%, Health Solutions dropped 13% and Wealth Solutions grew by 2%.

For the whole financial year of 2021, Aon boasted a 10% increase in total revenue to US$12.2 billion, including 9% organic revenue growth. However, its operating margin decreased by 800 basis points to 17.1%.

Focusing on shares, Aon saw a 34% decrease in EPS to US$5.55 for FY21 and a 22% increase in EPS after adjustment for certain items to US$12.00.

In addition, the cash flows from its operations dramatically dropped by 22% (US$601 million) to US$2,182 million compared to the previous year, mainly driven by the US$1 billion termination fee payment and additional payments related to terminating the combination with WTW, partially offset by solid revenue growth.

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