NU Online News Service, May 3, 1:55 p.m. EDT
Chicago-based insurance broker Aon Corp. reported its first-quarter net income dropped 36 percent as economic headwinds and soft market conditions took a toll on earnings.
On Friday, Aon reported net income dropped $102 million to $178 million compared to the same period last year. Earnings per share fell 33 cents per share to 63 cents. Overall organic growth stood at negative 3 percent in the quarter.
One positive note, total revenues--including the impacts of acquisitions, foreign currency translation, investment income and organic growth--rose 3 percent, or $58 million, to $1.9 billion.
During a conference call with investment analysts, Greg Case, Aon's president and chief executive officer, said economic headwinds caused decreases in insured values and soft market conditions contributed to the overall results. He said the trends extended to a couple of sectors primarily construction.
The firm was also hit with "unfavorable timing of renewals" that impacted Aon's performance to a point to point-and-a-half of growth, said Mr. Case.
The firm also experienced a 48 percent decline in investment income which went from $25 million last year to $13 million this quarter.
However, Mr. Case noted the company continues to see a high retention rate in the 90 percent range and recorded new business captured of $200 million.
Mr. Case said the firm expects headwinds to "begin to stabilize" in the coming months.
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