Aon gets double-digit revenue growth in capital markets & ILS in Q2

Insurance and reinsurance broker Aon reported particularly strong growth for Q2, with 9% organic revenue growth in reinsurance overall, but double-digit growth in capital market transactions such as catastrophe bonds and insurance-linked securities (ILS).

Aon has reported that its overall revenues grew 16% to $2.9 billion, backed by organic revenue growth of 11% across its broking, consulting and advisory businesses.

Organic revenue growth continues to be very strong for the brokers and Aon reported 14% growth in commercial risk broking and 9% in reinsurance broking for the second-quarter.

As a result, reinsurance revenues reach $500 million for the quarter for Aon, 12% higher than the $448 million reported in the prior year period.

Reflecting high-levels of activity in the insurance-linked securities (ILS) market during the second-quarter of the year, which you can read all about in our latest report here, Aon reported a particularly strong quarter for its Aon Securities unit.

Aon said that its 9% reinsurance organic revenue growth reflects growth in treaty, thanks to net new business wins globally, and solid growth in facultative reinsurance placements as well.

But outpacing those, Aon also reports that it experienced double-digit growth in capital markets transactions.

Aon has a particularly active capital market unit (in Aon Securities), with a significant market share in ILS structures, especially catastrophe bonds, as our leaderboard shows.

Capital market transactions, such as ILS and catastrophe bonds, can deliver significant revenues, but tend to be lumpy across the year, due to peaks of issuance.

This year promises to perhaps be a little more balanced, as both the first and second quarters have already been active, while Q3 is already quite active for the time of year and more cat bonds are expected later this quarter.

The final quarter of the year is also anticipated to be busy and Aon recently said it expects a strong chance of a record year for the catastrophe bond market.

That should give the broker further opportunity to drive organic revenues higher with the help of capital market and ILS transactions over the rest of 2021.