Aon’s retail brokerage organic revenue increased 3% reflecting revenue growth in both the Americas and International businesses in the fourth quarter of 2013.
International organic revenue increased 2% driven by strong growth across emerging markets, New Zealand and Asia, partially offset by a decline in Ireland.
Reinsurance organic revenue was flat compared to the prior year quarter due primarily to growth in capital markets transactions and advisory business, as well as net new business growth in treaty placements, offset by an anticipated unfavorable impact from timing in the quarter.
Aon’s net income jumped to $439m for the fourth quarter of 2013, compared to $348m for the corresponding quarter in the prior year.
Total revenue increased 3% to $3.2bn when compared to the prior year quarter primarily driven by a 4% increase in organic revenue, partially offset by a 1% unfavorable impact from foreign currency translation.
Total operating expenses for the fourth quarter increased 2% to $3bn when compared to the prior year quarter due primarily to an increase in expense associated with 4% organic revenue growth and a $33m increase in formal restructuring costs, partially offset by savings related to the restructuring programs, an $20m favourable impact from foreign currency translation, a $13m decrease in expenses related to acquisitions, net of divestitures, and a $12m decrease in intangible asset amortization.
Net income per share attributable to Aon shareholders, adjusted for certain terms, increased 21%.
Depreciation expense decreased 2% to $72m when compared to the prior year quarter.
Intangible asset amortization expense decreased 10% to $113m when compared to the prior year quarter due to a $6m decrease in Risk Solutions and a $5m decrease in HR Solutions.
Restructuring expenses increased $33m to $74m when compared to $41m in the prior year quarter. The company has closed and completed all restructuring activities and incurred 100% of the total costs for the Aon Hewitt restructuring program. An analysis of restructuring-related costs by type and segment are detailed on page 14 of this press release.
"Our results reflect a strong finish to the year with improvement across each key financial metric for both the quarter and full year," said Greg Case, president and CEO. "In 2013, we made significant strategic investments across the firm, delivered record cash flow from operations of US$1.6bn and created significant value for shareholders through the repurchase of more than $1.1bn of ordinary shares. As we look ahead to 2014, our industry-leading platform is positioned for continued long-term growth, improved operational performance, strong free cash flow generation and significantly increased financial flexibility."
