Aon has released its results for the first quarter of 2007, reporting an 8% rise in net income to $213m, compared to $198m for the prior year quarter. Net income from continuing operations increased 23% to $212m.
Greg Case, Aon president and chief executive, highlighted the important role played by growth achieved in the US. He said: "Our first quarter results reflect a strong start to the year highlighted by organic revenue growth of 8% in Brokerage Americas, excluding contingent commissions, despite soft market conditions.”
Case added: “Our balance sheet is strong and we repurchased $345m of stock during the quarter, highlighting our commitment to creating long-term shareholder value and a belief in the underlying strength of Aon."
Total revenue increased 10% to $2.4bn with organic revenue growth of 5%. Total expenses increased 9% or $171m to $2.1bn due primarily to a $69m increase in benefits to policyholders, a $61m unfavorable impact from foreign exchange and a $21m settlement of litigation for acquired employees in the reinsurance business, partially offset by a $23m decrease in restructuring expense.
Restructuring expense was $10m compared to $33m for the prior year quarter. The previously announced three-year restructuring plan is anticipated to result in cumulative pretax charges of $365m and annualized cost savings of approximately $235m in 2007 and $280m in 2008, on track with previous estimates. Restructuring savings realized in the first quarter are estimated at $46m compared to $18m in the prior year quarter. Of the estimated restructuring savings in the first quarter, $35m was related to the Brokerage segment, primarily for workforce reduction.
