The low insurance cycle has caused a mixed bag of results for the world’s big insurance and broking organisations’ financial results for the second quarter (and first half) of this year.

Some companies are revelling in the tougher economic climate while others are struggling.

Chicago-based Aon Corporation enjoyed higher revenue over the April-June period, but this was matched by increased expenses related to its restructuring plan. Net income rose just 1% to $US193 million ($249 million) for the period.

The company says its three-year overhaul of operations will be more expensive than previously planned for, but it should result in annualised savings of $US195 million ($255 million) by 2008.

President and CEO Greg Case says it was a solid quarter with good organic revenue growth and controlled expenditure. “We are making investments in our consulting business which hold great promise, but which are affecting current performance.”

Higher insurance premiums and unrelated investment income helped US investment giant Berkshire Hathaway record a 62% increase in net profit for the period. The $US2.45 billion ($3.2 billion) result included $1.1 billion ($1.4 billion) – up 29% on the same period last year – from the corporation’s insurance businesses.

New York-based Marsh & McLennan reported mixed results for the second quarter. Its overall net income rose a modest 3.6% to $US172 million ($224 million), but its insurance revenue weakened over the quarter compared with the same three months last year.

Risk and insurance service revenue fell 5% to $US1.3 billion ($1.7 billion). Broking group Marsh was responsible for much of the deficit, its revenue falling 6% to $US1.1 billion ($1.4 billion).

No 3 broker Willis also had relatively equal measures of good and bad news for its investors. It reported a 37% drop in income to $US72 million ($94 million), but this was still higher than many analysts predicted.

Higher revenue (up 8% on the same period last year) helped the company along but it was also hit by some unexpected expenditure.

Reinsurers fared well over the first half of the year. Zurich-based Swiss Re reported a 16% increase in net income for the first six months, compared with the same period last year. That 1.6 billion CHF ($1.7 billion) result included a 51% boost to Swiss Re’s property and casualty lines.

Its closest competitor, Munich Re, performed even better. Its €2.1 billion ($3.5 billion) result over the six months to June 30 represents three-quarters of its predicted full-year result.

The second half is usually more expensive for reinsurers, but Munich Re is confident of earning at least €2.6 billion ($4.4 billion) over the full year. “Our target for 2006 – a 15% return on risk-adjusted capital – is still within reach,” Chairman Nikolaus von Bomhard said.