Aon Sees Biggest Reinsurance Growth Since 2009

Aon Corp. posted a 19% increase in fourth-quarter net income as the company saw organic growth across every major business.

Total revenue increased 3% to $3 billion for the quarter, as net income rose 19% to $277 million.

In the Americas, organic revenue growth was 3%, as pricing and exposures were relatively flat, Greg Case, president and chief executive officer, said during a conference call. On the international side, organic growth was 1% as pricing was flat to down modestly, with firmer pricing in catastrophe-exposed regions. This was in addition to 6% increases from the prior-year quarter, he said.

"We saw strong growth in emerging markets and across Asia-Pacific, including double-digit growth in areas such as Thailand, China, Japan and Malaysia," Case said.

The United Kingdom and Europe continue to be pressured from economic conditions, he said.

In reinsurance, organic revenue grew 4%, compared with falling 1% in the previous quarter.

That level of growth hasn't been seen since the second quarter of 2009, Case said.

Case declined to say what rate increases its reinsurance brokerage Aon Benfield had seen at January renewals.

Last month, Aon, the second-largest global broker, announced plans to move its headquarters from Chicago to London to be closer to Lloyd's and the emerging markets that Lloyd's services, including Africa and the Middle East, Asia and South America (Best's News Service, Jan. 13, 2012).

As part of the transaction, Aon will change its jurisdiction of incorporation from Delaware to England.

That change will require stockholder approval, and if approved, each stockholder will be entitled to receive one Class A ordinary share (U.S. dollar denominated) of the newly formed English public limited company in exchange for each share of common stock of Aon the stockholder currently holds. Aon UK expects to be listed on the NYSE and to report earnings and other financial statements in accordance with U.S. Securities and Exchange Commission regulations, including dollar-denominated financial statements.

The transaction is anticipated to close in the second quarter of 2012.

On the afternoon of Feb. 3, shares of Aon (NYSE: AON) were trading at $47.75 a share, down 3.28% from the previous close.

(By Meg Green, senior associate editor, BestWeek: [email protected])