Aon reports 6% organic growth as EPS beats consensus in Q4

By Scott Vincent

Jan 31 - (The Insurer) - Aon reported adjusted earnings per share of $4.42 for the fourth quarter, beating analyst consensus of $4.25.

Q4 organic revenue growth of 6% (Q4 2023: 7%)

Commercial Risk organic revenue at 6% for Q4, 5% for FY

Commercial Risk reports organic growth of 6% for third successive quarter in Q4

Adj operating margin at 33.3% in Q4 and 31.5% in FY

New guidance for mid-single-digit or greater organic growth in 2025

The broker reported organic revenue growth of 6 percent for the quarter. Within its Risk Capital segment, both Commercial Risk Solutions and Reinsurance Solutions also saw organic growth of 6 percent.

For Commercial Risk, Aon said the result reflected mid-single-digit or greater increases across all major geographies, driven by net new business and ongoing strong retention.

The broker highlighted strong performance in North America core P&C, strong growth internationally, an increase in construction business and a double-digit increase in M&A services.

Within Reinsurance Solutions, Aon said it saw strong growth in its Strategy and Technology Group and in treaty.

This was partially offset by a modestly unfavourable market impact. Aon said the Reinsurance Solutions results also reflect a double-digit increase in insurance-linked securities.

The Risk Capital segment generated total revenue of $2.5bn during the quarter, an increase of 13 percent year on year. Commercial Risk represented $2.186bn of the total, with Reinsurance Solutions accounting for $351mn.

At group level, Aon reported total revenue of $4.1bn for the quarter, a 23 percent year-on-year increase. The group’s Human Capital segment – which comprises its health and wealth units – saw revenue rise 41 percent to $1.6bn. Health and wealth generated organic growth of 5 and 8 percent respectively.

For the full year, Aon’s total revenue rose 17 percent to $15.7bn, with reflected acquired revenues through the NFP deal as well as 6 percent organic growth.

KBW analyst Meyer Shields said the market would likely react positively to Aon’s earnings beat, with a 34.4 percent adjusted Ebitda margin also beating Wall Street’s 33.8 percent estimate.

The broker said its Aon United restructuring program will now deliver estimated run-rate savings of ~$350 million, to be achieved by the end of 2026, which will contribute to ongoing, sustainable long-term margin expansion.

Aon also announced 2025 guidance for mid-single-digit or greater organic revenue growth, adjusted margin expansion, strong adjusted EPS growth and double-digit free cash flow growth.

Greg Case, CEO of Aon, said: “We ended 2024 with another quarter of strong performance and outstanding execution across all aspects of our strategy.

"We generated 6 percent organic revenue growth for the fourth quarter and full year, with mid-single-digit growth or better across all our solution lines. This top-line strength and continued cost efforts drove strong margins, double-digit EPS growth, and $2.8 billion of free cash flow.

“As expected, executing our 3x3 Plan creates differentiation in how we serve our clients across Risk Capital and Human Capital, powered by Aon Business Services. As clients navigate increasingly complex market dynamics, demand for our solutions remains strong. We are well-positioned to build on our momentum in 2025 and drive long-term value creation for our colleagues, clients and shareholders."