Aon reports record earnings for the fourth quarter and the year.CHICAGO--(BUSINESS WIRE)--Feb. 8, 1996--Aon Corporation today announced financial results for the fourth quarter and the year ended December December: see month. 31, 1995. Due to the previously announced agreements to sell Life of Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). and Union Fidelity Fidelity is a notion that at its most abstract level implies a truthful connection to a source or sources. Its original meaning dealt with loyalty and attentiveness to one's duty to a lord or a king, in a broader sense than the related concept of fealty. , Aon has classified these business units as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , which excludes after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. realized investment gains, grew 11.3% to $3.45 per share in 1995 compared to $3.10 reported for 1994. Of this 1995 operating income, $2.49 per share was derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the . Net income for the year amounted to $3.48 per share against $3.14 last year, or a 10.8% gain. Aon's income tax rate on continuing operations was 33.7% in 1995. Fourth quarter operating income was $0.80 per share against $0.73 in 1994, of which $0.52 per share was from continuing operations in 1995. Net income in the fourth quarter was $0.80 per share compared to last year's $0.74 per share. Both the Life of Virginia and Union Fidelity sales are expected to close during the first half of 1996. Aon does not anticipate either a material gain or loss on these transactions. Patrick G. Ryan Ryan may refer to: Places
adj. Being between 10 and 99 percent: double-digit inflation. growth in operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before . We were pleased with the solid performance of Aon Group, our newly renamed worldwide commercial insurance brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. and consulting operations. Our insurance underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. businesses, which provide individuals with life, health and extended warranty The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. coverages, demonstrated favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. results throughout the year. Aon is poised to continue its momentum." For the year, Aon Group produced significant revenue and earnings gains due to internal growth and acquisitions. Our retail brokerage operation performed well with strong underlying growth in the quarter, though results continued to be influenced by the highly competitive property and casualty pricing environment. Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. and wholesale brokerage had a strong year reflecting internal growth and the international expansion of our alternative market services. Consulting produced favorable results due to our expanding integrated human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. consulting practice. Aon has classified its continuing insurance underwriting operations into one segment. Supplemental information, consistent with prior segmentation, is attached. Favorable operating results for the continuing operations of our insurance underwriting businesses were in part offset by the run-off run-off n (in contest, election) → desempate m (= extra race); carrera de desempate run-off n (in contest, election) → of certain specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. p/c p/c or P/C abbr. 1. petty cash 2. prices current and unit-linked programs in the fourth quarter. Our direct sales organizations had a good year and produced improved revenue and earnings results. The extended warranty business performed well by demonstrating domestic and international expansion. Lower investment income in the quarter and alternative uses of corporate capital countered the growth in servicing fees in the corporate line. Additionally, realized investment gains from continuing operations in 1995 and 1994 were offset by realized losses Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. related to the discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: capital accumulation Most generally, the accumulation of capital refers simply to the gathering or amassment of objects of value; the increase in wealth; or the creation of wealth. Capital can be generally defined as assets invested for profit. business. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. at December 31, 1995 totaled $2.7 billion, equivalent to $22.77 per share, compared to $18.30 at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 1994. In the fourth quarter, discontinued operations reported good results largely due to improved interest spreads and favorable claims experience at Life of Virginia compared to the prior year. Throughout 1995, both Life of Virginia and Union Fidelity produced favorable results. Mr. Ryan concluded, "Aon's insurance services and distribution businesses will continue to advance our leadership in the global marketplace." Aon Corporation (AOC AOC, n an acronym for the Aromatherapy Organizations Council. ) is an insurance services and global distribution company listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . -0-
Aon CORPORATION
CONSOLIDATED SUMMARY OF OPERATIONS
(millions except per share data)
Fourth Quarter Ended
--------------------------------
Dec. 31, Dec. 31, Percent
1995 1994 Change
--------- --------- --------
REVENUE
Brg. comm. & fees $ 419.3 $ 354.6 18.2 %
Premiums earned 368.0 348.7 5.5
Net inv. income 84.4 72.3 16.7
Realized inv. gains 3.8 16.0 (76.3)
Other income 19.4 19.5 (0.5)
--------- --------- --------
Total revenue 894.9 811.1 10.3
--------- --------- --------
BENEFITS & EXPENSES
Comm. & general expenses 537.4 472.0 13.9
Benefits to policyholders 184.7 164.7 12.1
Amort. of deferred policy
acquisition costs 54.0 49.5 9.1
Amort. of intangible assets 21.8 21.6 0.9
--------- --------- --------
Total benefits & expenses 797.9 707.8 12.7
--------- --------- --------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAX $ 97.0 $ 103.3 (6.1)%
Provision for income tax 32.5 33.7 (3.6)
--------- --------- --------
INCOME FROM CONTINUING OPERATIONS $ 64.5 $ 69.6 (7.3)%
INCOME FROM DISCONTINUED OPERATIONS,
NET OF TAX (1) 28.4 16.4 73.2
--------- --------- --------
NET INCOME $ 92.9 $ 86.0 8.0 %
========= ========= ========
Per share: -------------
Net income (2)(3) $ 0.80 $ 0.74 8.1 %
========= ========= ========
Average common & common
equivalent shares outstanding 109.2 107.4
--------- ---------
(1) In fourth quarter 1995, Aon reached definitive agreements
to sell two of its insurance subsidiaries,
Union Fidelity Life Insurance Company and
The Life Insurance Company of Virginia. Their results
are classified as discontinued operations.
(2) Includes the effect of $5.3 million and $24.7 million, and $6.8
million and $26.8 million of dividends incurred on the 8%,
6.25% and Series C preferred stock in fourth quarter and
twelve months ended December 31, 1995 and 1994,
respectively.
(3) Operating income per share data is provided below.
Aon CORPORATION
CONSOLIDATED SUMMARY OF OPERATIONS
(millions except per share data)
Twelve Months Ended
--------------------------------
Dec. 31, Dec. 31, Percent
1995 1994 Change
--------- --------- --------
REVENUE
Brg. comm. & fees $1,628.2 $1,369.6 18.9 %
Premiums earned 1,426.5 1,322.3 7.9
Net inv. income 329.4 257.1 28.1
Realized inv. gains 13.1 19.1 (31.4)
Other income 68.5 73.1 (6.3)
--------- --------- --------
Total revenue 3,465.7 3,041.2 14.0
--------- --------- --------
BENEFITS & EXPENSES
Comm. & general expenses 2,019.6 1,751.9 15.3
Benefits to policyholders 698.5 626.2 11.5
Amort. of deferred policy
acquisition costs 207.5 189.3 9.6
Amort. of intangible assets 82.1 76.8 6.9
--------- --------- --------
Total benefits & expenses 3,007.7 2,644.2 13.7
--------- --------- --------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAX $ 458.0 $ 397.0 15.4 %
Provision for income tax 154.3 128.5 20.1
--------- -------- --------
INCOME FROM CONTINUING OPERATIONS $ 303.7 $ 268.5 13.1 %
INCOME FROM DISCONTINUED OPERATIONS,
NET OF TAX (1) 99.1 91.5 8.3
--------- -------- --------
NET INCOME $ 402.8 $ 360.0 11.9 %
========= ========= ========
Per share:
-------------
Net income (2)(3) $ 3.48 $ 3.14 10.8 %
========= ========= ========
Average common & common
equivalent shares outstanding 108.7 106.2
--------- ---------
(1) In fourth quarter 1995, Aon reached definitive agreements
to sell two of its insurance subsidiaries, Union Fidelity
Life Insurance Company and The Life Insurance Company
of Virginia. Their results are classified as discontinued
operations.
(2) Includes the effect of $5.3 million and $24.7 million, and $6.8
million and $26.8 million of dividends incurred on the 8%,
6.25% and Series C preferred stock in fourth quarter and
twelve months ended December 31, 1995 and 1994,
respectively.
(3) Operating income per share data is provided below.
Aon CORPORATION
MAJOR LINES OF BUSINESS - CONTINUING OPERATIONS
(millions)
Fourth Quarter Ended
-------------------------------
Dec. 31, Dec. 31, Percent
1995 1994 Change
-------------------------------
Revenue
------------
Insurance brg. & consulting svcs. $439.2 $ 372.5 17.9 %
Insurance underwriting (1) 425.2 396.8 7.2
Corporate & other 30.5 41.8 (27.0)
-------- -------- ------
Total revenue $ 894.9 $ 811.1 10.3 %
======== ======== ======
Income Before Income Tax -------------------------------------- Insurance brg. & consulting svcs. $ 37.4 $ 30.8 21.4 % Insurance underwriting (1) 62.1 58.5 6.2
Corporate & other (2.5) 14.0 N/A
-------- -------- ------
Total income before income tax $97.0 $ 103.3 (6.1)%
======== ======== ======
OPERATING INCOME PER SHARE (2) ----------------------------------------- Income from continuing operations $ 0.52 $ 0.48 8.3 %
Income from discontinued operations 0.28 0.25 12.0
------ ------- -----
Total operating income per
share $ 0.80 $ 0.73 9.6 %
==== ===== =====
(1) Continuing insurance underwriting operations are presented
as one segment; prior period segments have been restated to
conform to the 1995 presentation.
(2) Operating income per share excludes after-tax realized
inv. gains and losses.
Aon CORPORATION MAJOR LINES OF BUSINESS - CONTINUING OPERATIONS (millions)
Twelve Months Ended
-------------------------------
Dec. 31, Dec. 31, Percent
1995 1994 Change
-------------------------------
Revenue
------------
Insurance brg. & consulting svcs. $1,701.3 $1,422.1 19.6 %
Insurance underwriting (1) 1,639.9 1,509.5 8.6
Corporate & other 124.5 109.6 13.6
-------- -------- ------
Total revenue $3,465.7 $3,041.2 14.0 %
======== ======== ======
Income Before Income Tax --------------------------------- Insurance brg. & consulting svcs. $ 204.6 $ 158.8 28.8 % Insurance underwriting (1) 246.3 235.2 4.7
Corporate & other 7.1 3.0 136.7
-------- -------- ------
Total income before income tax $458.0 $ 397.0 15.4 %
======== ======== ======
OPERATING INCOME PER SHARE (2) ----------------------------------------- Income from continuing operations $ 2.49 $ 2.16 15.3 %
Income from discontinued operations 0.96 0.94 2.1
------ ----- ----
Total operating income per
share $ 3.45 $ 3.10 11.3 %
===== ==== =====
(1) Continuing insurance underwriting operations are presented
as one segment; prior period segments have been restated to
conform to the 1995 presentation.
(2) Operating income per share excludes after-tax realized
inv. gains and losses.
Aon CORPORATION
REVENUE BY MAJOR PRODUCT LINE - CONTINUING OPERATIONS
(millions)
Fourth Quarter Ended
-------------------------------
Dec. 31, Dec. 31, Percent
1995 1994 Change
-------------------------------
Insurance brg. & consulting svcs.
Retail brg. $ 270.5 $ 219.1 23.5 %
Reinsurance & wholesale 104.9 96.8 8.4
Consulting 63.8 56.6 12.7
-------- -------- ------
Total revenue $ 439.2 $ 372.5 17.9 %
======== ======== ======
Insurance underwriting (1)
Combined direct sales $ 260.7 $ 256.4 1.7 %
Specialty property & casualty 104.6 82.7 26.5
Other 59.9 57.7 3.8
-------- -------- ------
Total revenue $ 425.2 $ 396.8 7.2 %
======== ======== ======
Corporate & other
Inv. income on capital & other $ 19.8 $ 20.9 (5.3)%
Premium & auto financing -
service revenue 6.9 4.9 40.8
Realized inv. gains 3.8 16.0 (76.3)
-------- -------- ------
Total revenue $ 30.5 $ 41.8 (27.0)%
======== ======== ======
(1) Continuing insurance underwriting operations are presented
as one segment; prior period segments have been restated to
conform to the 1995 presentation.
Aon CORPORATION
REVENUE BY MAJOR PRODUCT LINE - CONTINUING OPERATIONS
(millions)
Twelve Months Ended
-------------------------------
Dec. 31, Dec. 31, Percent
1995 1994 Change
-------------------------------
Insurance brg. & consulting svcs.
Retail brg. $ 993.7 $ 829.3 19.8 %
Reinsurance & wholesale 457.0 370.6 23.3
Consulting 250.6 222.2 12.8
-------- -------- ------
Total revenue $1,701.3 $1,422.1 19.6 %
======== ======== ======
Insurance underwriting (1)
Combined direct sales $1,014.2 $ 976.3 3.9 %
Specialty property & casualty 385.6 315.6 22.2
Other 240.1 217.6 10.3
-------- -------- ------
Total revenue $1,639.9 $1,509.5 8.6 %
======== ======== ======
Corporate & other
Inv. income on capital & other $ 85.7 $ 70.3 21.9 %
Premium & auto financing -
service revenue 25.7 20.2 27.2
Realized inv. gains 13.1 19.1 (31.4)
-------- -------- ------
Total revenue $ 124.5 $ 109.6 13.6 %
======== ======== ======
(1) Continuing insurance underwriting operations are presented
as one segment; prior period segments have been restated to
conform to the 1995 presentation.
Aon CORPORATION SUPPLEMENTAL REVENUE BY MAJOR PRODUCT LINE
Fourth Quarter Ended
--------------------------------
(millions) Dec. 31, Dec. 31, Percent
1995 1994 Change
--------------------------------
CONTINUING OPERATIONS:
Insurance brg. & consulting svcs. $439.2 $ 372.5 17.9 %
========= ========= ========
Life
Capital accumulation products $ 8.6 $ 5.8 48.3 %
Combined direct sales 34.0 33.6 1.2
Other 21.0 21.9 (4.1)
--------- --------- --------
Total revenue $ 63.6 $ 61.3 3.8 %
========= ========= ========
Accident & health
Combined direct sales $ 226.7 $ 222.8 1.8 %
Other 30.3 30.0 1.0
--------- --------- --------
Total revenue $ 257.0 $ 252.8 1.7 %
========= ========= ========
Specialty property & casualty $ 104.6 $ 82.7 26.5 %
========= ========= ========
Corporate & other $ 30.5 $ 41.8 (27.0)%
========= ========= ========
DISCONTINUED OPERATIONS:
Life
Capital accumulation products $ 140.0 $ 132.9 5.3 %
Other 51.0 47.7 6.9
--------- --------- --------
Total revenue $ 191.0 $ 180.6 5.8 %
========= ========= ========
Accident & health
Direct response & Group $ 79.7 $ 80.4 (0.9)%
Other 5.9 4.2 40.5
--------- --------- --------
Total revenue $ 85.6 $ 84.6 1.2 %
========= ========= ========
Corporate & other
Inv. income on capital & other $ 19.4 $ 19.5 (0.5)%
Realized inv. losses (3.1) (15.4) N/A
--------- --------- --------
Total revenue $ 16.3 $ 4.1 297.6 %
========= ========= ========
Aon CORPORATION SUPPLEMENTAL REVENUE BY MAJOR PRODUCT LINE
Twelve Months Ended
(millions) --------------------------------
Dec. 31, Dec. 31, Percent
1995 1994 Change
--------------------------------
CONTINUING OPERATIONS:
Insurance brg. & consulting svcs. $1,701.3 $1,422.1 19.6 %
========= ========= ========
Life
Capital accumulation products $ 36.1 $ 21.4 68.7 %
Combined direct sales 132.3 130.4 1.5
Other 84.4 81.6 3.4
--------- --------- --------
Total revenue $ 252.8 $ 233.4 8.3 %
========= ========= ========
Accident & health
Combined direct sales $ 881.9 $ 845.9 4.3 %
Other 119.6 114.6 4.4
--------- --------- --------
Total revenue $1,001.5 $ 960.5 4.3 %
========= ========= ========
Specialty property & casualty $ 385.6 $ 315.6 22.2 %
========= ========= ========
Corporate & other $ 124.5 $ 109.6 13.6 %
========= ========= ========
DISCONTINUED OPERATIONS:
Life
Capital accumulation products $ 542.5 $ 529.9 2.4 %
Other 196.6 183.6 7.1
--------- --------- --------
Total revenue $ 739.1 $ 713.5 3.6 %
========= ========= ========
Accident & health
Direct response & Group $ 316.0 $ 314.1 0.6 %
Other 21.3 22.0 (3.2)
--------- --------- --------
Total revenue $ 337.3 $ 336.1 0.4 %
========= ========= ========
Corporate & other
Inv. income on capital & other $ 77.5 $ 79.4 (2.4)%
Realized inv. losses (8.8) (13.3) N/A
--------- --------- --------
Total revenue $ 68.7 $ 66.1 3.9 %
========= ========= ========
Aon CORPORATION SUPPLEMENTAL INCOME BEFORE INCOME TAX BY MAJOR PRODUCT LINE
(millions) Fourth Quarter Ended
--------------------------------
Dec. 31, Dec. 31, Percent
1995 1994 Change
--------- --------- --------
CONTINUING OPERATIONS:
Insurance brg. & consulting svcs. $37.4 $ 30.8 21.4 % Life 9.8 6.6 48.5 Accident & health 40.2 39.0 3.1 Specialty property & casualty 12.1 12.9 (6.2)
Corporate & other (2.5) 14.0 N/A
--------- --------- --------
Total income before
income tax $ 97.0 $ 103.3 (6.1)%
========= ========= ========
DISCONTINUED OPERATIONS: Life $ 28.2 $ 23.1 22.1 % Accident & health 7.8 7.3 6.8
Corporate & other 7.7 (5.3) N/A
--------- --------- --------
Total income before
income tax $ 43.7 $ 25.1 74.1 %
========= ========= ========
Aon CORPORATION SUPPLEMENTAL INCOME BEFORE INCOME TAX BY MAJOR PRODUCT LINE
(millions)
Twelve Months Ended
--------------------------------
Dec. 31, Dec. 31, Percent
1995 1994 Change
--------- --------- --------
CONTINUING OPERATIONS:
Insurance brg. & consulting svcs. $204.6 $ 158.8 28.8 % Life 36.9 32.0 15.3 Accident & health 156.4 149.7 4.5 Specialty property & casualty 53.0 53.5 (0.9)
Corporate & other 7.1 3.0 136.7
--------- --------- --------
Total income before
income tax $ 458.0 $ 397.0 15.4 %
========= ========= ========
DISCONTINUED OPERATIONS: Life $ 91.3 $ 81.2 12.4 % Accident & health 28.2 28.0 0.7
Corporate & other 32.8 31.4 4.4
--------- --------- --------
Total income before
income tax $ 152.3 $ 140.6 8.3 %
========= ========= ========
CONTACT: Aon Corporation, Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. Joan Joan of Arc, St. (1412–1431) heroically followed call to save France. [Christian Hagiog.: Attwater, 187] See : Patriotism Steel, 312/701-3016 |
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