CHICAGO--(BUSINESS WIRE)--November 4, 1997--Aon Corporation
(Aon) today announced financial results for the quarter ended
September 30, 1997.
Third quarter revenue increased 54% to $1.45 billion in 1997
compared to $944 million in the same quarter in 1996, mainly due to
acquisitions. Operating income per share, before realized investment
gains increased 19% to $0.56 from $0.47 in 1996.
Average shares outstanding increased to 170.8 million shares from
164.1 million in the third quarter of 1996, due principally to the
conversion of the 6.25% Cumulative Convertible Exchangeable Preferred
Stock in November 1996. Also during this quarter Aon announced the
redemption of its 8% Cumulative Perpetual Preferred Stock outstanding
as of November 3, 1997.
Aon's insurance and consulting services segment reported third
quarter revenue of $966.7 million, up from $471 million in the same
quarter in 1996. The third quarter 1997 revenue includes Minet
Group.
Revenue in the underwriting segment experienced modest growth,
increasing 3.6% to $459 million from $443 million in the same quarter
last year. Income before tax in this group increased 2.7% to $72
million from $70 million. Within this segment, Combined Insurance
Company of America recorded modest growth in both revenue and income.
The extended warranty business continues to grow, with revenue up 23%
to $142 million. Extended warranty profits suffered slightly due to
an increase in loss experience in one line of the mechanical warranty
business. The "Other" underwriting category continues to be
profitable, although much of this business is in run off.
The Corporate and other pre-tax charge of $17.4 million, compared
to a credit of $1.9 million in the prior year, is due primarily to
higher interest expense and amortization of intangibles, both of
which are related to acquisition activity.
Patrick G. Ryan, chairman and chief executive officer of Aon,
commenting on the third quarter said:
"We are pleased to report that the consolidation in the brokerage
and consulting business is progressing substantially as expected.
The management teams are in place and their focus is the delivery of
comprehensive services to our clients on a global basis. At the same
time, we have been able to achieve substantial operating
efficiencies.
"The underwriting segment is in the early stages of introducing
new products in both the U.S. and internationally. Although
development costs have had a slight impact on margins, the business
is performing well."
Aon Corporation is a holding company that comprises a family of
insurance brokerage, consulting and insurance underwriting
subsidiaries. Aon's common stock (AOC) is listed on the New York,
Chicago and London stock exchanges.
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