Previous Statements by AON
» Aon's CEO Discusses Q2 2011 Results - Earnings Call Transcript
» Aon's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Aon Corporation Q2 2010 Earnings Call Transcript
Consistent with previous quarters, I'd like to cover 3 areas before turning the call over to Christa for further financial review. First is our performance against key metrics we communicate to shareholders; second is continued areas of investment across Aon; and third is overall organic growth performance.On the first topic, our performance versus key metrics. Each quarter, we measure pressure performance against the 3 metrics we focused on achieving over the course of the year: grow organically, expand margins and increase earnings per share. In the third quarter, organic revenue was 1% overall, highlighted by strong growth of 4% in our Retail Brokerage business. Adjusted operating margin decreased 180 basis points driven by the inclusion of Hewitt results, including a significant increase in intangible amortization expense, which had a 220 basis point negative impact. EPS increased 13%, driven by strong underlying performance and effective capital management. Overall, a quarter of continued progress against our key metrics as we remain focused on our long-term strategy. On the second topic, further areas of investments. We believe Aon is in a unique position. Solid, long-term operating performance combined with expense discipline and strong cash flow continues to enable substantial investment in colleagues and capabilities. Just a few examples. In Risk Solutions, we continue to invest in innovative technology, such as our Global Risk Insight Platform, which is the world's leading global repository risk and insurance placement information. We now have 1.2 million trades in more than 59 billion of valid [ph] premium and the growing client list of more than 20 insurance carriers utilizing the platform analytics and services capabilities. Also, we're driving our Aon Broking initiative to better match client needs with insurer appetite for risk, resulting in better economics for all participants. As highlighted by a significant D&O program of more than 175 million in premium, we're placing in the market on behalf of clients.
We're also investing in additional capability and talent through recently completed acquisitions such as Aon Grieg in Norway and Glenrand in South Africa, significantly strengthening our international footprint. A final example is our investment in client leadership to drive greater productivity and efficiency, with the rollout of the revenue engine in EMEA and Asia Pacific, as well as the rollout of Client Promise, which is driving greater retention and rollover rates as clients gain better understanding of our value proposition.As we discussed previously, we are proving the concept of these investments in 2011, and as we move into 2012 and 2013, we're going to continue to drive greater scale and increased operating leverage as a result of these investments in our Risk business. In HR Solutions, we continue to strengthen our industry-leading position in both public and corporate healthcare exchanges, with the significant investment we're making in our Aon Hewitt Navigators business, enabling clients to prepare for ultimate changes in healthcare legislation with design, purchasing and administration capability. We're also expanding our capability in compensation consulting. With the recent acquisition of Ward Financial Group, a leading provider of benchmarking for insurance carriers in North America. We're also expanding our international footprint as the workforce has increasingly becoming more global, with investments in key talent and capabilities across Asia. And finally, we're continuing to invest in expanding our core HR BPO offerings through point solutions opportunities, such as dependent eligibility audits and absence diagnostics. In summary, as we focus on the long term across Risk and HR Solutions, our fundamental client-serving capability continues to substantially strengthen around the globe. Finally, on the third topic of growth, I want to spend the next few minutes discussing the quarter for both our segments. In Risk Solutions, overall organic revenue growth was 3%, with improved rates of organic revenue in each business despite soft pricing, excess capital and fragile economic conditions globally. Against these headwinds, which are primarily market-related, we're driving a set of initiatives that continue to strengthen our performance and give us confidence that our Risk Solutions business is firmly positioned for long-term growth and leveraged to an improving economy. With the management of our renewal book portfolio through Client Promise and retention rates of 90% or better on average, highlighting strong client satisfaction. Read the rest of this transcript for free on seekingalpha.com