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Aon profit down as Willis shines

Aon Corporation’s operating earnings in the fourth quarter of last year nearly doubled as revenue grew 7%. But annual profit is down 2.2% to $US721 million ($932.7 million).

The Chicago-based broker has been criticised by analysts who expected the company to achieve more.

The broking unit – Aon’s biggest business – achieved growth of only 2%. Net earnings in the quarter were $US224 million ($290 million) or US58 cents a share. Analysts had expected US63 cents a share.

However, revenue for the entire year from the brokerage was $US6.96 billion ($9 billion), a rise of 5.2%.

US analysts have pointed out that No 3 broker Willis Group had a pre-tax operating margin (profit divided by revenue) of 23.5%, compared with Aon’s 17.5%.

Willis revenue was up 7.1% to $US2.43 billion ($3.14 billion) and profit was up 59.8% to $US449 million ($581 million).

Aon President and CEO Greg Case says the annual performance is on track with the three-year improvement plan, which cost $US167 million ($216 million) to implement last year.

No 1 broker group Marsh & McLennan – which earlier this month sold its Putnam Investments division to a Canadian financial services company for $US3.9 billion ($5 billion) in cash – has not yet reported its annual result.

President and CEO Michael Cherkasky says the proceeds from the Putnam sale will go to investing in the business, stock repurchases and debt reduction.