Insurance giants post bumper revenues

by |

Two of the world’s biggest insurance brokers, both with strong Australian presences, have defied analysts’ estimates to post strong results.

JLT boosted its revenue by 7% as the insurance broker achieved strong organic growth of 6.3% during the first half of 2012, while Aon bounced back from an underwhelming first quarter to post total revenue of US$2.8 billion for the second quarter, with organic revenue growth of 4%.

For JLT, total revenue climbed to £441.7m (AU$664.1m) for the six months to 30 June 2012 from £411.3m (AU$618.5m) for the same period in 2011.

Panmure Gordon analyst Barrie Cornes wrote in a research note: “JLT has delivered a strong set of interim 2012 results, with headline underlying profit before taxation at £89.4m ($134.4m / +12%) well ahead of our £82.6m ($124.2m) forecast.

“A particular highlight is that of organic growth, which on a continuing basis was 6.3% (H1 2011: +7%). The outlook statement is cautiously upbeat, with talk of ‘confidence…to deliver year on year financial progress’.

“Our recently upgraded buy recommendation reflects our view that the trading environment is gradually improving and that JLT is well placed to capture the benefit of rising rates.”

As for Aon, president and chief executive officer Greg Case said the second results reflects improved organic revenue growth across all of its major businesses as it makes significant investments to strengthen its client-serving capabilities.

“While macro conditions remain fragile globally, we continue to anticipate improved performance in the second half of the year, our underlying performance is on track with our long-term targets and we have completed significant steps to position the firm for long-term growth, strong free cash flow generation and increased financial flexibility as highlighted by the repurchase of $250 million of ordinary shares in the quarter,” added Case.

The final broker in the global ‘Big Three’, Marsh & McLennan Companies, will post its second quarter results on 7 August.

Corporate Risk & Insurance forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions