Aon’s Reinsurance Solutions delivers 7% organic revenue growth in Q1’24

Global insurance and reinsurance broker Aon has reported a 5% increase in total revenue in the first quarter of 2024 to $4.1 billion, reflecting 5% organic growth and a strong performance its Reinsurance Solutions arm.

Aon attributes the $199 million increase in total revenue to ongoing strong retention, net new business generation and management of the renewal book, and also a 1% favorable impact from fiduciary investment income and a 1% favorable impact from foreign currency translation, partially offset by a 2% unfavourable impact from acquisitions, divestitures and other items.

All of the broker’s business segments performed well in the quarter, with Aon’s Reinsurance Solutions delivering 7% organic revenue growth to $1.2 billion compared with $1.1 billion in Q1 2023.

The reinsurance unit benefitted from strong growth in treaty, driven by strong retention and new business generation, as well as double-digit growth in the Strategy and Technology Group.

“The majority of revenue in our 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, while the second half of the year is typically driven by facultative placements, capital markets activity and advisory work that is more transactional in nature,” explains Aon.

In its Commercial Risk Solutions business, Q1 2024 organic revenue growth of 3% to more than $1.8 billion was driven by growth across most major geographies on the back of strong retention, management of the renewal book, and net new business generation.

Turning to Aon’s Health Solutions arm, and organic revenue growth was 6% to $733 million. Aon attributes this performance to strong growth globally in core health and benefits brokerage driven by new business generation and management of the renewal book.

Finally, in Wealth Solutions revenue hit $370 million in Q1 2024, reflecting organic growth of 4% as a result of strong growth in Retirement, driven by advisory demand and project-related work related to pension de-risking and ongoing impact of regulatory changes.

Group-wide, total operating expenses increased by $207 million to $2.6 billion in Q1 2024, compared with $2.4 billion in Q1 2023.

Aon’s operating income for the first quarter of 2024 amounts to $1.465 billion, a slight $8 million decrease on the prior year quarter.

All in all, the global re/insurance broker has today announced net income of $1.1 billion for the first quarter of the year, up 2% on the prior year period.

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Greg Case, Chief Executive Officer (CEO) of Aon, commented: “Our global team delivered strong operating results in the first quarter, including 5% organic revenue growth, 100 basis points of adjusted operating margin improvement, and 9% adjusted EPS growth.

“We’re delighted to welcome NFP to Aon and look forward to working together to help clients address increasing volatility across risk and people issues, enabled by Aon Business Services. With this earlier-than-expected close, we’re moving even faster to address client demand, create more opportunities for our 60,000 colleagues, strengthen the long-term free cash flow profile of the firm, and enhance long-term shareholder value creation.”

As Case highlights, Aon recently completed the acquisition of broker NFP in a $13 billion transaction.

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