Aon suffers $801m Q3 loss as it coughs up for failed Willis deal

Aon fell to a third-quarter loss of $801m after paying $1.3bn in termination fees and other related costs following the collapse of its planned mega-deal for Willis Towers Watson (WTW).

The loss compares to a profit of $441m in the same period last year and sees nine-month income fall 46% to $1.12bn.

Aon repurchased 4.4 million Class A Ordinary Shares for approximately $1.3bn in the third quarter. The company has about $3.7bn remaining authorisation under its share repurchase programme.

Despite the tricky third quarter, Aon saw revenues increase 13% to $2.7bn, with organic growth of 12%. Revenue was up 14%, or 13% on an organic basis, at Aon Commercial Risk Solutions to $1.5bn. Reinsurance business was up 10%, or 8% organically, to $353m.

Commercial Risk Solutions’ 13% organic growth reflects improvement across “every major” geography, said Aon.

“Strength in retail brokerage was highlighted by double-digit growth in the US, Latin America, and Asia-Pacific, driven by continued strength in core P&C, as well as double-digit growth in transaction liability and project-related work,” it explained.

“Results also reflect solid growth globally in the affinity business across both consumer and business solutions. On average globally, exposures and pricing were modestly positive, resulting in a modestly positive market impact,” it added.

Aon said it saw strong reinsurance treaty growth during the quarter, as well as double-digit growth in facultative placements, partially offset by a modest decline in capital markets transactions. “Market impact was modestly positive on results in the quarter,” the broker said.

Group revenue was up 12% to $9.11bn for the first nine months of this year. It rose 14% to $4.78bn in Commercial Risk Solutions and by 10% in reinsurance to $1.77bn.

Despite the money paid to WTW, CEO Greg Case said Aon delivered “outstanding results” in the third quarter, including 12% organic revenue growth translating into 14% growth in adjusted earnings per share.

“This performance is driven by great execution of our Aon United Blueprint and the work our colleagues do every day to ensure clients are better informed, better advised and able to make better decisions to protect and grow their businesses,” he added.

Back to top button