So How Did Your Favorite Publicly Traded Insurance Broker Do in 2013

By Mark E. Ruquet

With the first quarter of 2014 fast approaching, I thought I would take a moment to check out the performance of the publicly traded insurance brokers in 2013 in terms of revenue and income. They may not admit it publicly, but they compete between them, and not just in terms of gaining new customers or keeping the old.

In terms of pure revenue dollars, Aon comes out on top for the fourth quarter reporting $3.2 billion in revenue, followed by Marsh & McLennan at $3.12 billion. Willis was third at $919 million closely followed by Arthur J. Gallagher with $890 million. Rounding out the top five publicly traded brokers was Brown & Brown with $343 million.

For the year, MMC edged out Aon by $446 million reporting $12.3 billion. Willis and Arthur J. Gallagher were in the $3 billion club, but Willis came out ahead with $3.66 billion compared to AJG’s $3.2 billion. Brown & Brown also edged into the billion-dollar club reporting revenues of $1.4 billion.

When it came to net income, Aon beat out MMC, producing $360 million in net income for Q4 compared to MMC’s Q4 $303 million. However, for the year, MMC was ahead with $1.36 billion while Aon reported $1.15 billion. If one wants to look at performance, Willis could claim the prize of most improved, rising from Q4 loss of $801 million in Q4 2012 to net income of $74 million. For the year, Willis net income came in at $377 million, much better than 2013 net loss of $433 million.

Willis’ poor showing in 2012 was the result of a net loss of $804 million in the fourth quarter of 2012 resulting from the combination of:

• $492 million related to goodwill impairment in North America

• $200 million related to the write-off of unamortized cash retention awards

• $252 million related to the accrual of 2012 cash bonuses

• $113 million tax charge to establish a deferred tax asset valuation allowance

In terms of their insurance and risk segments – the commissions and fees the firm’s earned from insurance brokering – Aon came out ahead reporting Q4 revenues of more than $2 billion and $7.8 billion for 2013. MMC followed $1.6 billion for Q4 and $6.6 billion on the year. Willis claimed third reporting $911 million Q4 and $3.6 billon on the year. AJG held a solid fourth with $593 million Q4 and more than $2 billion on year. Brown & Brown’s efforts for 2013 produced Q4 risk and insurance revenue of $339 million for Q4 and $1.4 billion on the year.

The full year results are as follows: