Insurance broker Aon Q2 profit rises on strong risk, health unit growth

July 25 (Reuters) - Insurance brokerage firm Aon AON.N reported a higher second-quarter profit on Friday, boosted by strong demand for its risk management and health solutions.

WHY IT'S IMPORTANT

Despite persistent recession fears and stubborn inflation, spending on insurance has remained resilient. Both businesses and individuals are prioritizing risk mitigation over discretionary expenses, fueling revenue for brokers like Aon, whose commissions are tied to premium levels.

BY THE NUMBERS

Adjusted net income attributable to Aon’s shareholders rose to $759 million, or $3.49 per share, for the quarter ended June 30, up from $624 million, or $2.93 per share, a year earlier.

Analysts on average had expected a profit of $3.40 per share, according to data compiled by LSEG.

Revenue from Aon's commercial risk solutions unit jumped 8% to $2.18 billion.

The company also posted double-digit revenue growth in both its health and wealth solutions units.

MARKET CONTEXT

Peer Marsh McLennan MMC.N also posted a strong quarterly profit last week, pointing to steady industry-wide demand.

Despite Aon’s earnings beat, its shares have dipped slightly this year, lagging behind peer Brown & Brown BRO.N, which is scheduled to report quarterly results on Monday.

KEY QUOTE

"We delivered strong second quarter results, including 6% organic revenue growth, 19% growth in adjusted EPS, and 59% free cash flow growth," said CEO Greg Case in a statement.