Results season is in full swing in the insurance industry. Hot on the heels of Arthur J Gallagher and Marsh & McLennan (read about Arthur J Gallagher’s results here and read about Marsh & McLennan’s results here), which both revealed their financial results yesterday, today it is the turn of Aon to step into the spotlight.
Overall, it was a positive year and final quarter for the company. For the fourth quarter, total revenue increased by 4% compared to the prior year to stand at $2.9 billion, leaving the brokerage giant with a 2% increase for the year as a whole at $11.0 billion. Total operating expenses meanwhile, reached $2.4 billion for the quarter – a jump of 4% compared to the prior year period. Its operating margin for the year, meanwhile, increased to 19.7%. Of note, the firm highlighted that it has now completed all charges relating to a restructuring program – and it expects that move will help it deliver around $580 million in annualized savings over 2020.
“Our fourth quarter results reflect strong operational and financial performance to finish the year, highlighted by organic revenue growth of 7%, including growth of 5% or greater in four of the five solutions lines, and substantial operating margin improvement of 210 basis points. For the full year, we delivered our strongest level of organic revenue growth in over 15 years and adjusted operating margin of 27.5%,” said Greg Case, chief executive officer.
“Our strong performance reflects continued momentum as we strategically position the firm to bring the best of global Aon to clients and execute against our Aon United strategy. We enter 2020 in a position of strength to continue to improve the long-term growth profile of the firm that we believe will unlock significant value for clients and shareholders.”
Looking at some of its individual segments, commercial risk solutions saw organic revenue growth of 7% for the fourth quarter, highlighted by double digit growth in the US. Meanwhile, reinsurance solutions enjoyed organic revenue growth of 17% with double digit increases across every major business. Retirement solutions, meanwhile, saw organic revenue climb 3% and health solutions was up 5% on the same scale.
Overall, net income for the year stood at $1,553 million compared to $1,060 million over 2018.