SALE OF TWO UNITS BOOSTS EARNINGS FOR AON

Chicago-based broking and consulting group Aon Corp has recorded big jumps in Q2 and H1 net income after posting a $1bn after-tax Q2 gain from the sale of its Combined Insurance Co of America and Sterling Life Insurance. For Q2, net income of $1.13bn was almost five times higher than the year-ago $240m on commissions and fees of $1.91bn, up 7.7%. Income from continuing operations fell 8% to $168m on a 2% rise in organic revenue growth, while income from discontinued operations (including the sold companies) jumped to $965m from $57m. “Our core assets are now strategically aligned as we completed the sales of our remaining insurance underwriting businesses”, said Aon CEO Greg Case. “Our 2007 restructuring programme is on-track and beginning to deliver benefits, driving margin improvement, while funding investments to generate future revenue growth”. The group said that its 2005 restructuring is expected yield cost savings of $270m in 2008, while the 2007 restructuring is expected to generate savings of up to $70m this year and up to $200m next year. For the first half of the year, net income nearly tripled to $1.35bn from the year-earlier $453m on commissions and fees of $3.79bn, up 8%. Income from continuing operations was flat at $347m, while income from discontinued operations was up nearly 10-fold to $1bn from $105m.