Aon, 2Q2020: Net income went up 44% year-on-year

3 August 2020 — press.release
Aon plc ended the second quarter of 2020 (April - June) with a net income attributable to the company of USD 397 million, 44% more year-on-year. Net income per share from continuing operations attributable to Aon shareholders, adjusted for certain items, increased 5% to USD 1.96, (2Q2019: USD 1.87).


Aon 2Q2020 preliminary figures, y-o-y changes


  • Revenues: USD 2,497 million (-4%), of which:
    • Commercial Risk Solutions: USD 1,126 million (-4%)
    • Reinsurance Solutions: USD 448 million (+7%)
    • Retirement Solutions: USD 393 million (-6%)
    • Health Solutions: USD 258 million (-19%)
    • Data & Analytic Services: USD 274 million (-4%)
  • Expenses: USD 1,903 million (-13%), of which:
    • Compensation and benefits: USD 1,361 million (-9%)
    • Information technology: USD 107 million (-15%)
    • Other general expense: USD 262 million (-24%)
  • Operating income: USD 594 million (+44%)
  • Net income: USD 397 million (+44%)


Total revenue in the second quarter of 2020 decreased USD 109 million (+4%), to USD 2,497 million compared to the prior year period, including organic revenue decline of 1%, reflecting a decline in the more discretionary portions of Aon's business, partially offset by strength in company's core business.
  • Commercial Risk Solutions organic revenue growth of 1% was driven by growth across most major geographies, including modest growth in the U.S. and EMEA and double-digit growth in Latin America and Asia, driven by strong retention and management of the renewal book portfolio, partially offset by a decline in the Pacific region.
  • Reinsurance Solutions organic revenue growth of 9% was driven by strong net new business generation in treaty and solid growth in facultative placements. Results in the quarter also include a modest net negative impact from the timing of certain revenue. Market impact was modestly positive on results in the quarter, both in the U.S. and internationally.
  • Retirement Solutions organic revenue decline of 1% was driven by a decline in the more discretionary portions of the business as a result of COVID-19, primarily in Human Capital for rewards and assessment services. Results were partially offset by solid growth in Investments, primarily in delegated investment management. Growth in the Retirement business was flat.
  • Health Solutions organic revenue decline of 18% was driven by a USD 34 million decrease primarily related to COVID-19, including a USD 19 million reduction primarily reflecting the annualized impact of lower employment levels and lower renewals, and a USD 15 million decrease from the timing of certain revenue and a decline in the more discretionary portions of the business.
  • Data & Analytic Services organic revenue decline of 8% was driven by a decrease in the travel and events practice globally.

Total operating expenses in the second quarter decreased 13% to USD 1.9 billion compared to the prior year period, due primarily to (1) a USD 127 million decrease in restructuring charges; (2) a USD 53 million favorable impact from foreign currency translation; (3) a USD 35 million decrease from accelerated amortization related to certain tradenames that were fully amortized in the quarter; and (4) a temporary reduction and deferral of certain discretionary expenses in an effort to proactively manage liquidity due to uncertainty surrounding COVID-19 and its impact on the Company, partially offset by USD 18 million of transaction costs related to the pending combination with Willis Towers Watson.

Operating income increased to USD 594 million compared to the prior year period. Adjusting for certain items, operating income increased USD 33 million, or 5%, and operating margin increased +240 basis points to 26.8%, each compared to the prior year period.


Greg Case, Chief Executive Officer, commented on the results:

"Our second quarter results reflect the resiliency of our business, the efficiency of our operations and the dedicated client service of our 50,000 colleagues around the world. (...) We are living in a time of increasing economic and geopolitical volatility - as evidenced by the COVID-19 pandemic and broader social injustice and unrest - which demands action within our firm and on behalf of clients. Our Aon United strategy has proven essential to delivering more relevant solutions today, and our combination with Willis Towers Watson will accelerate innovation and strengthen capability to meet the evolving, long-term challenges our clients will face in the future."



More financial information about Aon can be found at ir.aon.com


Source: aon.mediaroom.com

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