Aon Reinsurance Solutions records 9% organic growth

Aon Reinsurance Solutions showed consistent 9% organic growth, both for its second quarter and also for the first half of the year, respectively.

The reinsurance broker saw robust growth in treaty business, driven by strong retention and continued net new business generation, as well as double-digit growth in both facultative placements and investment banking, and solid growth in its strategy and technology group.

Market impact was modestly positive on results in the quarter, Aon said.

The majority of revenue in the broker’s treaty portfolio is recurring in nature and is recorded in connection with the major renewal periods that take place throughout the first half of the year.

Second quarter revenue within its reinsurance arm reached $607m, up from $537m in the same quarter a year ago, representing a 13% rise before currency adjustments.

Revenue for the first half was $1.68bn, up from $1.51bn in the same period of last year.

“Our strong financial results in the second quarter and year-to-date reflect strong operational performance driven by our Aon United strategy and Aon Business Services platform,” said Christa Davies, Aon’s chief financial officer.

“These results position us very well to continue driving results in 2023 and over the long term, and we look forward to building on this momentum.”

Overall, Q2 net income attributable to Aon shareholders increased 12% to $560m or $2.71 per share on a diluted basis, compared to $501m, or $2.33 per share, in the prior year period.

Total Q2 revenue increased 7% to $3.2bn, including organic revenue growth of 6%.

Operating margin increased 300 basis points to 26.5%, and operating margin, adjusted for certain items, increased 110 basis points to 27.3%

For the first six months of 2023, cash flows from operations was flat, and free cash flow decreased 7% to $986m.

Greg Case, Aon’s CEO, said: “Our global team delivered strong operating results in the second quarter, including 6% organic revenue growth and 110 basis points of adjusted operating margin improvement, demonstrating the strength of our Aon United strategy and ongoing progress against our financial goals.

“By aligning solution development around Risk Capital and Human Capital, we’re accelerating innovation in our core business and more effectively leveraging our Aon Business Services platform to address growing client demand for analytical tools that will help them make better decisions on risk and people challenges and opportunities,” Case continued.

Speaking in the investor call, Case added: “Our clients need help to understand and anticipate the future landscape. Their organizations need the right expertise, insights and intelligence to drive more innovative and adaptable strategies.

“By aligning solution development around risk capital and human capital, we’re accelerating innovation in our core business and leveraging our Aon Business Services platform to address growing client demand for analytical tools to help them make better decisions on risk and people challenges and opportunities.”