Aon Q1 revenue up as data center pipeline triples

Aon on Friday reported first-quarter revenue of $5.03 billion, up 6% from the prior-year period, with organic revenue growth of 5%, as demand for data center construction accelerated, with its pipeline roughly three times higher than a year earlier.

Net income rose 18% to $1.29 billion.

Aon’s top executives reaffirmed its full-year outlook for mid-single-digit or higher organic growth on an earnings call with analysts.

Aon is investing about $1.3 billion in talent and technology to support growth and client demand, President and CEO Greg Case said during the call.

“By year-end, we expect to invest approximately $1.3 billion in talent and technology, enhancing productivity and strengthening our ability to better diagnose risk, design integrated solutions, access capital efficiently and execute consistently for our clients,” Mr. Case said.

Risk capital revenue increased 10% to $3.5 billion. Within the segment, commercial risk solutions revenue increased 11% to $2.22 billion, with 7% organic growth, while reinsurance brokerage revenue increased 8% to $1.28 billion, with 4% organic growth.

Commercial risk growth was broad-based, said Edmund Reese, chief financial officer. “Organic revenue growth of 7% marked the fourth consecutive quarter of growth at 6% or higher,” Mr. Reese said.

“Results reflected meaningful contributions from both North America, where growth was double-digit and EMEA, as well as strong performance in our core P&C business,” he said.

In commercial risk, new business contributed about 12 points to organic revenue growth in the quarter, Mr. Reese said.

Demand remained strong despite pricing pressure in property and reinsurance markets, he said.

Construction posted double-digit growth, boosted by demand from data center projects, with the brokerage’s data center pipeline roughly three times higher than a year earlier, he said.

Reinsurance growth was driven by treaty placements and double-digit growth in facultative business, offsetting rate pressure at renewals, Mr. Reese said.

In Aon’s human capital segment, health and benefits consulting revenue increased 9% to $1.12 billion, with 4% organic growth, while wealth management and investment advisory revenue fell 19% to $420 million, with 1% organic growth.