Global insurance and reinsurance broking group Aon has reported a 26% y-o-y rise in total revenue to USD 3.7 billion for the third quarter of 2024, reflecting acquired revenues from NFP and 7% organic revenue growth.

The report key takeaways are:

• Total revenue was USD 3.7 billion, including organic revenue growth of 7%
• Operating margin was 16.7%, and adjusted operating margin increased to 24.6%
• EPS was USD 1.57, and adjusted EPS increased to USD 2.72
• For the first nine months of 2024, cash flows from operations was USD 1,835 million, and free cash flow was USD 1,672 million.

Total operating expenses in the third quarter increased 37% to USD 3.1 billion compared to the prior year period due primarily to the inclusion of NFP's ongoing operating expenses, an increase in intangible asset amortization associated with the acquisition of NFP, an increase in expense associated with 7% organic revenue growth, Accelerating Aon United restructuring program charges, and investments in long-term growth, partially offset by USD 25 million of restructuring savings realized in the quarter.

Foreign currency translation in the third quarter had a USD 3 million, or USD 0.02 per share, unfavorable impact on both U.S. GAAP net income and adjusted net income. If currency were to remain stable at today's rates, the Company would expect an unfavorable impact of approximately USD 0.01 per share, or an approximately USD 3 million decrease in adjusted operating income for the fourth quarter, resulting in an unfavorable impact to adjusted operating income of approximately USD 0.07 per share, or approximately USD 21 million for full year 2024.

Effective tax rate was 20.9% in the third quarter compared to 16.6% in the prior year period. After adjusting to exclude the applicable tax impact associated with certain non-GAAP adjustments, the adjusted effective tax rate for the third quarter of 2024 was 18.0% compared to 17.2% in the prior year period. The primary drivers of the change in the adjusted effective tax rate were the changes in the geographical distribution of income and a net unfavorable impact from discrete items.

Weighted average diluted shares outstanding increased to 218.4 million in the third quarter compared to 204.6 million in the prior year period due to the issuance of 19.0 million shares in the second quarter of 2024 to fund the NFP acquisition. The Company repurchased 0.9 million class A ordinary shares for approximately USD 300 million in the third quarter. As of September 30, 2024, the Company had approximately USD 2.5 billion of remaining authorization under its share repurchase program.

Greg Case, CEO of Aon, commented: “Our global team delivered another quarter of excellent results in the third quarter, with 7% total organic revenue growth, including all Solution Lines at 6% or greater, which contributed to adjusted operating margin expansion and 17% growth in adjusted EPS. “Our performance through the first three quarters positions us well to deliver full year results in line with our financial guidance, and demonstrates the success of our 3×3 Plan to bring better client solutions across Risk Capital and Human Capital, powered by Aon Business Services”.