Across its commercial risk solutions segment, organic revenue growth increased by 9%, driven by growth across every major geography, reflecting strong retention and management of the renewal book portfolio, as highlighted by double-digit growth in the US, Asia, and Latin America. Aon noted that these results also reflect expansion in the more “discretionary” areas of the business, including a double-digit boost in transaction liability and increased project-related work.
“On average globally,” Aon said in its trading statement, “pricing was modestly positive, while exposures were flat, resulting in a modestly positive market impact.”
Its reinsurance solutions arms saw organic revenue growth of 6%, driven by growth in treaty, reflecting continued net new business generation globally, and double-digit growth in facultative placements. Aon highlighted that market impact was modestly positive on results in the first quarter. Its retirement solutions arm saw organic revenue growth of 5%, driven by growth across every major business, while its health solutions arm saw organic revenue growth of 4%.
Its data & analytic services segment saw an organic revenue decline of 2%, driven by a decrease in the travel and events practice globally. For the first three months of 2021, cash flows from operations increased 66% to $561 million, while free cash flow increased 91% to $532 million.
Commenting on its 4% increase in total operating expenses in Q1 2021, Aon attributed these as primarily due to: “a $73 million unfavourable impact from foreign currency translation, an increase in expense associated with 6% organic revenue growth, and a $17 million increase in transaction costs related to the pending combination with Willis Towers Watson”.
These operating expenses were partially offset by a $55 million decrease from accelerated repayment related to certain tradenames that were fully repaid in Q2 of 2020 and expense discipline, including lower travel and entertainment expense.
Commenting on the results, CEO of Aon Greg Case highlighted that Q1 2021 saw the brokerage’s colleagues deliver an “outstanding” operational performance, building on over a decade of progress on its key financial metrics, creating momentum for 2021, and demonstrating the power of ‘Aon United’.
“Today, clients are justifiably focused on the unprecedented impact of the COVID-19 pandemic,” he said, “but they are also increasingly aware of other challenges like climate change, supply chain disruption, the future of work, and the growing health-wealth gap. Our strategy is built to bring the best innovation, insight, and solutions from across our firm, and our potential to address client need only increases with our pending combination with Willis Towers Watson.”