One of Canada’s largest providers of risk management, insurance and reinsurance, has released their financial results for the first quarter of 2016.
Aon plc announced a decrease in total revenue by 2% to $2.8 billion compared to the previous quarter. The loss can be attributed to turbulence caused by the lower loonie, withstanding a 3% unfavorable impact from foreign currency translation.
However, currency challenges were partially offset by a 4% uptick in retail brokerage organic revenue and a 100-basis-point-expansion to adjusted operating margin in Risk Solutions. The insurer also saw healthy returns on investments, including the allocation of capital via the repurchase of $750-million in Class A Ordinary shares.
"Investments in our industry-leading platform of client serving capabilities across risk, retirement, and health continues to position the firm for long-term revenue growth, further margin expansion, and strong free cash flow generation towards our near-term goal of $2.4 billion for the full year 2017," stated Aon President and Chief Executive Officer Greg Chase in a release.
Aon also reduced total operating expenses by 3% in Q1 to a total of $2.3 billion compared to the previous quarter – an $82-million favourable impact due to the loonie’s tumultuous tumble. The insurer also saw a $41-million decrease in expenses related to net divestitures, a $13-million decrease in intangible asset monetization.
Cash flow decreased throughout the beginning of 2016, shrinking $25 million (8%) to a total of $273 million, due to “unfavorable timing of certain tax related items impacting the first three months that we expect will favorably impact the first six months of 2016, partially offset by working capital improvements and a decline in cash paid for pension contributions and restructuring.”
Net income attributable to Aon shareholders was $315 million, or $1.15 per share, compared to $328 million, or $1.14 per share, for the prior year quarter.
