US – Aon Corp., the Chicago-based insurance and consulting firm, says it had no ‘organic’ revenue growth in its consulting business in the fourth quarter.
“Consulting revenue rose four percent to $341m (€266m) during the quarter, with no organic revenue growth,” the firm said.
Aon says ‘organic’ growth excludes factors such as foreign exchange, acquisitions and divestitures.
“Benefits, compensation, management and communications consulting achieved two percent organic revenue growth primarily from international operations, while outsourcing revenues declined four percent on an organic basis,” the group said.
Pre-tax income at the unit rose two percent to $48m while the pre-tax margin fell to 14.1% from 14.3% in 2003. The margin was hit due to provisions for potential settlements arising from an insurance market bid-rigging scandal.
The firm has put aside $50m to cover settlements that could result from investigations by New York and other states – of which $7m was allocated to consulting.
It said: “Improved results in outsourcing and international consulting and effective expense management partially offset the margin decline attributable to the settlement provision.”
Aon’s total net income from continuing operations slipped 12% to $192m from $216m a year before.
"It remains a difficult environment in which to achieve meaningful revenue growth given industry pricing trends and our decision to terminate contingent commission agreements,” said chairman and chief executive Patrick Ryan.
“Nevertheless, we are doing everything possible to capitalize on the opportunities which exist in this period of industry transition. In addition, we are doing a much better job of controlling operating expenses and investment spending."