Aon profits plummet 35% on one-off cost blows, but revenue gains hold double digit

Profits at global broking giant  Aon slumped in the financial year 2021 due to one-off costs that blurred underlying margin gains and strong double-digit revenue growth. However, its chief executive Greg Case remains bullish on building "greater momentum" in 2022.

The company delivered $1.3 billion in 2021 net profits, a 35% decline from nearly $2 billion seen in the prior year period.

Total group revenue of $12.2 billion was up 10% on the prior year period, including 9% organic revenue growth. Commercial risk solutions led the charge with 13% organic revenue growth followed by a 10% gain reinsurance. Gains in wealth solutions and health solutions were more modest at mid-single digit rates.

"In the fourth quarter, our colleagues delivered 10% organic revenue growth, an outstanding finish to a very strong year, contributing to full year organic revenue growth of 9%, margin expansion of 160 basis points, and EPS growth of 22%." said CEO Case.

"We're accelerating innovation, with a focus on developing and scaling proven solutions to serve new and existing clients. This gives us confidence in our ability to build even greater momentum in 2022," he added.

Aon is guiding markets to expect mid-single digit revenue growth in 2022 and over the longer-term, an investor presentation showed.

Operating profits on the full-year count still suffered on exceptional 2021 costs, including from the collapse of the Willis merger deal, but management bragged of an adjusted measure showing 160 bps of improvement in underlying operating margins.

By the fourth quarter, organic revenue growth and margins came in largely above the full-year pace. Q4 organic revenue growth of 10% included a 12% gain for commercial, said to reflect strong new business generation, retention, and renewal management. Reinsurance solutions rendered 13% y/y growth, said to reflect double-digit growth in treaty.