The growth contributed to the overall rise in revenue across the insurance and reinsurance broking group, reaching $3.4 billion, an increase of $245 million.
The notable expansion in the reinsurance segment was attributed to several factors. Strong growth in treaty stemmed from robust retention rates and sustained net new business generation. Additionally, impressive growth in facultative placements and investment banking further bolstered the performance.
Aon’s Health Solutions division experienced an 11% organic growth, amounting to $763 million in revenue for the quarter. This growth was fueled by robust expansion globally in core health and benefits brokerage, driven primarily by net new business generation and effective management of the renewal book.
The Wealth Solutions division achieved a 5% organic revenue growth, totaling $377 million in Q4 2023. This growth was attributed to a surge in retirement-related activities, driven by increased demand for advisory services and project-related work linked to pension de-risking and regulatory changes.
Within the Commercial Risk Solutions segment, revenue increased by 4% organically, surpassing $1.9 billion. The growth was propelled by solid performance across major geographies, supported by strong retention, effective management of the renewal book, and net new business generation.
Although Aon reported a 7% increase in total revenue for Q4 2023 compared to the prior year quarter, reaching $3.4 billion organically, operating income experienced a decline of 23% to $779 million. However, interest income surged by $9 million, driven by higher interest rates.
The net income for the quarter declined by 24% to $498 million in Q4 2023, compared to $657 million in the same period a year earlier. For the full year 2023, Aon recorded a 7% organic revenue growth to $13.4 billion, while net income decreased from $2.589 billion in 2022 to $2.564 billion in 2023.
Interestingly, during the fourth quarter, Aon disclosed that it recognized actual or anticipated legal settlement expenses related to transactions facilitated by insurtech Vesttoo. These settlements primarily involved letters of credit from third-party banks alleged to have been fraudulent.
According to an official statement released by Aon, the broker said that: “certain actual or anticipated legal settlement expenses totalling $197 million have been recognized in the current period, where certain potentially meaningful amounts may be recoverable in future periods. Additionally, a $58 million charge was recognized in the second quarter of 2022 with certain other legal settlements reached in matters unrelated to Vesttoo.”
Commenting on the results, Greg Case, Aon’s Chief Executive Officer (CEO), said: “In the fourth quarter and full year, our colleagues delivered 7% organic revenue growth, highlighted by double-digit growth in Reinsurance Solutions and Health Solutions. This top line growth contributed to full year adjusted margin expansion of 80 basis points, adjusted operating income growth of 10%, and $3.2 billion of free cash flow.”
He added: “This strong performance demonstrates how we are going further, faster with our 3×3 plan, which is an acceleration of our proven Aon United strategy. Our Risk Capital and Human Capital structure has unlocked new opportunities to grow, and Aon Business Services is a catalyst for innovation delivering new products and tools at scale across client segments and geographies.”
