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Aon earnings increase 'reflects momentum'

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Aon net income rose 32% to $US501 million ($716.6 million) in the second quarter as revenues and operating margins improved.

Revenue increased 3% to $US3 billion ($4.3 billion), with an 8% gain in organic growth partly offset by foreign exchange impacts, while the adjusted operating margin expanded 40 basis points to 26.2%.

“In the second quarter, our team delivered strong financial results that reflect the momentum of our business,” CEO Greg Case said.

Commercial Risk Solutions revenue increased 3% to $US1.69 billion ($2.42 billion), or 7% on an organic basis, with double-digit growth reported for Europe, the Middle East and Africa (EMEA), the Pacific and Latin America.

The group noted continued strength in core property and casualty, as well as strong growth in project-related work, partially offset by a decline in transaction solutions due to lower deal volume.

“Results also reflect solid growth globally in the affinity business across both consumer and business solutions, including growth in the travel and events practice,” Aon says. “On average globally, exposures and pricing were modestly positive, resulting in a modestly positive market impact.”

Reinsurance Solutions revenue rose 7% to $US537 million ($768 million), while on an organic basis it jumped 9%.

Health solutions organic revenue rose 11% and the wealth business reported a 3% increase.

CFO Christa Davies told an earnings conference call that the company was well positioned for current economic conditions.

“Inflation increases insured values, which has a positive impact on our business, and we've continued to see modest tailwinds from insurance pricing, which remains strong,” she said. “Interest rate increases benefit costs through fiduciary investment income and reduced pension liabilities.”