Aon (AON) 28 Apr 232023 Q1 Earnings call transcript

Good morning and thank you for holding. Welcome to Aon plc's First Quarter 2023 Conference Call. [Operator Instructions] I would like to also remind parties that this call is being recorded. If anyone has an objection, you may disconnect your line at this time.

It is important to note that some of the comments in today's call may constitute certain statements that are forward-looking in nature as defined by the Private Securities Reform Act of 1995. to to and results differ anticipated. subject cause that or are results actual materially statements certain uncertainties risks could those Such from historic concerning website. XXXX results differences well as cause press Information posted covering as that on been in our release quarter described the such first our having factors risk are could

CEO plc. Now, it’s the turn Aon to call over of my pleasure to Greg Case,

CFO; first and and good Andersen, Christa morning, quarter our conference much to by call. very Thanks Davies, President. Welcome our Eric our joined I'm everyone.

As quarters, financial previous for in posted your a presentation reference, detailed website. we on our

begin, to help the day for always, clients we Before doing the around as other. we our thank our every they're work want and colleagues to world, each great

volatility, in to as increasing. our complexity and our remaining to in solutions, and continue sufficient. ever. defensive faster see not We uncertainty realize strong as this that many being demand asked our ongoing reactive where And is clients make are mode decisions result, we or And than for live in a world clients and environment, are advice of a

better And objectives. in us, firm, these are to enable fact, for looking are necessary which our to is advantage, they're requires the and decisions, a make challenges there we is our where primary urgently Clients two areas core telling out that Aon across achieve from and competitive a to win Addressing clients this ultimately risks United. pivot their offense people. to bring

mitigate their and across and their Environmental traditional offense cut capable, Governance ESG helping demands people. these Social impact clients interconnected that strategy uniquely to engagement an go our These on business that make decisions Take categories ongoing example. and are of the as silos. of or positions major as Aon and maximize better Given risk

ESG. risks. risks capabilities Our clients all and for to solve these strategic targeted around a view broad and understand any And the to assess need solutions

work our report our areas. in as clients impact helping long firm. to commitments against report as the progress published our recently describes across on well issues own address essential delighted Our impact ESG these standing these we're And

we're our toward zero And from by centralization and Business Scope and on goal X, X First, our of XXXX, emissions progress footprint emissions by X, by overall supplier our XXXX enabled Aon XX% working environmental, smart net in reduced X%, and efforts by baseline, Services. through XXXX. like making

of to I&D increased On ourselves commitment of Social reflects at it's Aon our around and and specifically we're principles practices it the colleagues. our strategy, levels wellbeing Board our diversity, oversight year, is hold colleagues, culture, of Starting Directors. to not and our continuing with embed the a and to accountable transparency at the United organization. top all with and This inclusion, the just and our

Diversity, and On and and diverse In reported for female also percentage of engagement U.S. we development, XXXX, people the XXXX, progress managers, and in enhance racially managers. in on example, learning, focus develop wellbeing, we only ethnically that do grow is but it support the we we ensures best our to to clients. because also talent the them, to for not right our continue know supporting colleagues retain thing

management steps long And standing from all finally, actions committee, enterprise our and strategy. ESG Board review We've ESG privacy and well related as with our climate of align on Governance. top highlighted as senior cybersecurity risks overall on risk and

to our as risks help we're And do. work these time, there's report, core While same clients to with progress about at the work to to we're still report steps on doing many we're more the excited in our connected proud ESG even on align businesses.

mechanics, many across bringing One different existing specific geographies, recent facing realize organizational develop new compensation of capabilities to engagement. same at to continue drive which together our while employees would the ladders, reduce knew costs and titles, we needs. career simplicity, efficiency time, significant were they example, client, to increase change for unsure and and side client unclear people and the markets On needed this about solutions address

the brought We from firm. address. To expertise around

understanding culture. deep brought client this team risk and desired of strategy commercial Our

Business example of their them reduce served powerful how platform simplify as Aon we Our a help Services costs. and could operations

our solutions, capital skills themes and alignment, brought strategy benefits, to Finally, increase and engagement. taxonomy health optimization a human global employee and of series including as and

existing puzzle provided together, Now these Aon along for many model, innovation the leverages so services bringing who change pieces Business expertise a clients. Services business around management our an with piece of moving insight real solution the our was and offerings, to team, essential

our client clearer outsourcing and our our help benefit this when the time that firm examples structure opportunity scale by our efficiency the has is enabled client’s drive never teams coming And innovative all at will a needs They demonstrate and to The Aon as engagement driving clients been and we more see capabilities we delivering manage their like that every strategy, effective people. and United. address together doing day, with more solutions across at we a help unmet increased result, talent risks simplicity support continue important. so to have

and the very Wealth and strong team's across environment, growth guiding reinsurance, of Solutions. execution Turning X% and renewal Solutions organic growth teams with clients demonstrating quarter, and Solution strength driven our to in data the In Commercial X/X we were X% our our analytics, financial both Health in in revenue our growth advice, growth delivered capabilities. the reinsurance, exceptional modelling performance. X% line, Solutions first In to Risk

core we Solutions, capital for and a quarter strength Health renewals. In saw H&P health larger seasonally human in in European

ongoing the has engagement their employee wellbeing. rewards, helped team people, As for our and navigate encompassing health, challenging environment clients

performance impact our strong risk around pension trends income by changes, delivered GMP another like lingering market fixed In Equalisation, X% ongoing very regulatory Wealth volatility. and with the growth, transfer, the Solutions, team driven of

period. We year clients prior be and quarters reassess two impacted that fees help in 'XX note teams QX adjust potentially strong strategies. our after performance very As their would the will by

at grew we observe primary remains Risk Overall, quarter. Market our market seasonally risk, means and the volatility. property which more area reinsurers in in and placements clients. increasing dynamics of Solutions for looks the appetites, Commercial to finally, strength are even X% shift and an with largest challenge quarter UK are challenging in turn And are risk causing more carriers property regarding Europe

and is to way, and environment, In clients at across respond strength this reinsurance, agnostic the need capability to analytics capital risk bringing ability our for and cover commercial a essential.

risk including insurance capabilities Our working securities. and analyse to traditional assess captives, enable wholesale, facultative, us MGA, integrated and like options, placing,

of By able to options helping risk and ensure capital we total clients sources, we’re sets their own across and cost appetite. risk, that optimize

insurance to With over classes. one billion XX property a came For asset us in program to client across to example, looking values. XX property consolidate single

accounted, within Our completing we've team cost to around barriers the significant program that the break for and driving to develop across clients. leverage program seamlessly together came work done geographies down carriers through world our All by United. specialties, Aon and traditional our the savings and enabled firm successfully a

us term. well to this increasingly interconnected help period for and position of XXXX continue our strategy business services margin very the points quarter, translated in our us and external the in Overall, to results we're than volatility, ever, revenue long driving platform, for X% the net opportunity it business strength growth, is organic pleased clients risks, Aon growth. ongoing investment the with operating of ongoing the of long in greater United is basis term of expansion, and In of over performance XX

turn Now Christa and over continued I'd thought long value to like to our term on for the creation. financial a call Christa? for outlook performance shareholder

so much, everyone. Thanks Greg. morning, And good

adjusted highlighted results first strong have highlighted, to year performance we Greg into and quarter well long the expansion. translated margin a growth that the the driving points is just very operational over XXXX by of strong a and basis term. we're in continue in to This organic revenue As X% positioned start XX

the retention generation. driven As by on quarter, Greg I noted, growth organic business was reflect and revenue strong net both ongoing as X%, new

organic for XXXX We continue term. the digit revenue year greater expect to the full long growth or over and mid-single

QX impact seasonally in of primarily changes growth our X.X%. I for in our a note million, income, includes revenues. reported driven denominated which included investment was quarter would U.S. organic fiduciary X% as revenue dollar, growth or is versus X%, is also revenue also unfavourable from Euro highlight $XX an largest FX weaker I'd by the by that not Euro of

some XX.X%, efficiencies from and Moving we was COVID-XX. operational still in with when and operating of Services. expense prior growth, growth, improvement margins growth drive XX adjusted Business ongoing strong of increase basis including especially investments revenue period travel to an the compared delivered operating colleagues Aon performance, technology by organic T&E, long-term by and Overcoming to driven business suppressed of points resumption to some

an on of we basis. expect long-term continue the over in and our managing in growth investments expansion forward, to and deliver long we as term record margin XXXX discipline, cost track Looking ROIC

by As full communicated, for we've three areas. the think we over driven previously course the margins about year,

first The revenue growth. top line is

we areas area increased businesses is The from portfolio Business the our second as driven demand, operating client invest third margin platform. mix Aon disproportionately Services for shift from of And leverage in by productivity is improvements solutions. supported data ongoing increasingly high

be Our to in a a and Services Business inflationary key highlight, contributor Aon continues represents expansion, competitive to especially margin markets. advantage,

and efficiency increased drive and quality Services scale. continues service Aon platform Our innovation improved gains, at Business to

to net-zero Business And Aon related essential goals. in Services, climate to highlight Aon enabling like the our I'd Business of Services role

spend emissions also is Aon chain. biggest organization, Business our and efficiency supply services As of deploy own the strategies. preferred drive the Services the enables which is decarbonisation managed channels, through us professional a XX% firm, part of from Through our to

reduction while our Aon of that us both this strategy. of supply around in inclusion resulted diversity, accomplishments Greg As and goals said, meaningful a increase enabled U.S. year, spend our to last also by are to emissions in allowing diversity support X% United utilization our addressable in X%

translated expansion of Organic into and EPS growth adjusted growth margin X%.

rates, per expect $X.XX unfavourable share noted material, impact If year stable remain in quarter second $X.XX approximately of $X.XX would the per XXXX. FX was unfavourable impact approximately share of an As current for at share. per we translation today's and earnings our data full in the an

FX per from expense share periodic quarter, previously, pension period. as I'd a $X.XX net communicated share including business we had well an gain impact current in impact increase per in balance what in on $X.XX the sheet an note sale prior of other a as also in non-cash impact the remeasurement unfavourable from the line unfavourable period costs, year a and with in unfavourable

unfavourable be to and share year. costs per full year, immaterial $X.XX expect gains increased for net on divestitures pension for the periodic we continue this currently from impact each expect quarter the We to

cash higher cash by increase decreased flow and quarter-to-quarter. in lumpy free can $XX before, from million, XX% driven due allocation. tax flow our Turning to I'd capital standpoint, cash And has and to been historically free quarter flow from we've primarily incentive note as smallest flow cash Free a QX primarily million $XXX cash communicated payments. compensation payments be seasonally CapEx. to a

compared smart initiated CapEx quarter elevated year aligned a period long-term of projects, lumpier million million growth QX in number technology investment drive in real expect be of and quarter-to-quarter, XXXX. with was to working as $XXX estate the with weighted first our we the to and to CapEx we across note, can an heavily to I'd strategy. $XXX prior spend

said like our on before, disciplined of we've all CapEx basis. investments we As ROIC manage a

we working growth free outlook double-digit flow capital XXXX beyond income and full flow operating expect continue to cash cash by term, free growth Our and driven over and the in for the year and long for improvements. remains growth strong,

allocation. flow of outlook capital to We in share to continue approximately undervalued we share in free remain million quarter. we're cash market repurchase highlighted growth our significantly our repurchase and strong today, expect for the in believe highest opportunity $XXX by ROIC XXXX beyond, for the Given

to expect also scale continue we can that address We inorganically organically and content and in to to unmet invest client needs. capabilities

areas clients' focused priority continues our to to evolving solutions our be pipeline bring and M&A that challenges. Our on scalable will growing

actively to manage an allocation continue ROIC on and portfolio all basis. assess will We decisions capital the

current our remain issued add sheet strength past profile. and We confident as the balance in liquidity with long the In incremental credit Turning grows now while and expectation of of our QX, practice, to debt our XX-year EBITDA million a consistent senior investment-grade debt manage our balance well-laddered term, notes, sheet ratings. $XXX to capacity. and maintaining risk maturity over through we debt

Factoring rate in average debt our this all X% term XX a issuance, approximately weighted fixed years. that interest rate, of is and approximately I'd weighted maturity average with of note a

on driven in strong to of Our our year the our to Aon first progress strategy. quarter to and long-term performance, reflect commitment We strength operational financial results expect drive metrics start a our and continue position United shareholder creation. value key make by

delighted that, your questions. back and turn over the With I'll the to operator, we'd call to take be

proceed the with with from JPMorgan. Jimmy comes question question. first Please your line Our Bhullar Instructions] [Operator of

good Hey, morning.

So high. XXXX. tax first, the on I just had your expectations was a for for question It rate

are had quarter. it XX% the few I range this in to what year? XX.X% expectations years. what the than drove for last XX% first around But you've for was rate tax that? your That's higher think the And the

much Jimmy. question, so Thanks the for

give As the our back for look you impact I tax years. if has be rate on quarter, been which of negative know, historical we rate five the But XX% of or discrete guidance don't underlying items, the any historically, forward. going can in last exclusive positive

And then is expect the there and should be year in material different a impact? those places, Singapore the the to past? few other rate than a Or to this any in changes reason have

us global a in gives pulling our we any future overall really and flexibility run confident feel we Ireland, legislation. and about structure we about We're structure, Jimmy, global company. capital enormous that pool, think run capital domiciled we as a cash the for

then rates several are, your of past stay full expect already of gone? there you'd in your is portfolio Okay. numbers? is income, rates they sort rise it where the investment over where the And reflected to in further fiduciary that, assuming has impact as the on rates in ramp-up just have Or that resets lastly, quarters, like

Yes.

we what last QX really is, we would through, in as year. So say investment fiduciary the in roll pickup we income saw

in on then as we in less investment XXX our the you'll point end bottom is see fiduciary upside and think of the -- and I have, And $XX the million, the would move we QX interest every fiduciary about year. basis average, assets. through So overall rest you note, the balances, of increase line. $X.X curve billion short top line as rate fiduciary of of

split Jimmy, and between the You XX-XX should think as U.S. fiduciary assets, about those roughly international.

Thank Okay. you.

with proceed question next from Our Suisse. with Please your of Andrew question. comes the Credit line Kligerman

morning. good Hey,

a growth Commercial release tough the Solutions. modestly in U.S. Risk terms transaction in was with of very mentioned in revenue in comp. M&A You And the grew that organic probably

as like you tough quarter give significant Could next we the a year, second sense rest So to what the impact the it the of looks that And quarter? that expect was we three the a and anymore. should not contribution going in we into organic get could that's growth? really quarters any into comp of see

board, by us, growth for it's of all, X% all first would for We think way, strong across Andrew, as sort the very you a So lines. thanks We the much organic about quarter, observe, been question. appreciate for the across of the it. quarter the solution

that been I be really think a it may the it's first time and long accomplished in terrific. we've time,

On the it's exceptionally business. strong an U.S. side,

You we highlighted great have just strong of been But a areas very, year terrific strong that to then we the very going capability continue in they're in which few specialty invest pressure. a very term. very, because know last and them to comp long be under

that. shifts going benefit a anything from Eric, continued listen, side, board. obviously the So the transaction you'd market add? and M&A for we're us, momentum across bit as to And the on else

think No, it well. I you covered Greg,

we're work happening broad can analytics, with on today still market, for the captives, strong. our dynamics, help risk side in the it's strong. as all are market navigating very it's commercial think whether The with still of that's they're foundationally doing the risk that suite I we capabilities very the them clients

And so pretty it. on positive

had a away, these even I'm next potentially interpreting pretty quarter you things doing, from that you're transaction basically, me we if drag better just it all see right, goes amazing So quarter? organic M&A., with tell growth an big could

commercial that Solutions Greg that would obviously, as subject strong great first last a about us I business, set risk. holding when the skill outside but we feel for to, certainly such quarter say for very Transaction And capability team. back, that market comes said, that it. value strongly was The dynamics some quarter for driver I about year great excited is a clients -- we're think, really that

it. Got

year. Christa for million million Okay. this mentioned targeted of And then $XXX $XXX expenditure about CapEx to

with that things technologies. so now future in investing right ABS stand drive You're Anything growth? doing will interesting and many that you're other out

focused mentioned, is mean, the IT drive to that million, I long-term the growth. I investments say, primarily CapEx Andrew, I $XXX on would million $XXX to

connectivity, insight. clients Aon Services clients our in security better whether better so analytics, our to a our in our lot to And clients value our Business scale help great platform, really data to better deliver better firm that's our whether to helping clients protected, our clients. we're investments better and or keep great -- innovate So in value platforms infrastructure protected and it's that's and deliver investing colleagues the

as of anything Got and it. last progresses? pipeline year right expect quickly, just we interest Great. M&A areas the And Should now? any then

the for Thanks question. Yes.

like it We the opportunities. growth, firm. capability and highest have data areas highest last be our analytics, areas And our offerings that is it across ERM pipeline, manage margin, clients a highest you risk better. return that area, like scale health capital areas and human fantastic to like intensive Tyche able analytic areas continue and core helping do content and saw capital, the wellness we of year us can and invest in on model we and focused and on areas data risk M&A to in, reflects our In

globe, of got of we've excited around great it. really so And opportunity the and areas about we're lots

it. Got you. Thank

comes from Robert proceed Please Cox your Sachs. with of the question Goldman question. with line next Our

the if Hey, higher understand better you there's any help expense is the base? us thanks inflation or for and an taking on Curious that my impact question. T&E way quantify help can having

was if of usually you primarily COVID. -- driven quarter of is XX%, expense, year unusually an And at T&E. comparing thing terms would what look I a other that is in general which in against I by low the you're note So you because of QX up tell that would T&E, terms is, is XXXX, it low which

of to something And more the -- doing investment the the terms that for I to into there expansion is of growth. sort of look that in things this just that? presentation Or anything added Okay. Is Got -- investing? that of look there is that in long-term you year out noticed net are in calling you is guys margin into it.

the exactly It's same as always.

would then what the or higher XX basis margin been year. every basis basis long-term last that margins year. And is has XX been last points basis say our a years margin in expansion XX a and we're making the investments points, expansion we So X,XXX points points grow gross approximately for has And each of XX growth. and year net the years over nets XX that, to than a we it

that with consistent we each and the So way margins year. drive is every

should Okay. Perfect. investment And tailwinds maybe Wealth a kind quarters? the in thinking growth of straight long how above-average you very to Is business. it and segment, that? for second these play out? How could expect the some long then Wealth headwinds a about we Curious just shifting in be strong year? quarter Is despite it

what's as regulatory The there. terrific to changes and We have the Listen, Robert, exceptional, of really GMP we overall performance a others, were well transfer, positioned two just the job really over lot out that. sort done you around highlighted look reflecting going and quarters, teams of the uniquely on highlight, address in years. at a world in they multiple risk last pension

from driving really the the client and standpoint, team has done the a demand terrific that's So job. what's

comp exceptionally fundamentals, Eric, next to particularly highlight in and terms for the terrific to we add are. of the of else strong, job. that? But opening Wealth challenging listen, what the has you done be going in is would comments, where sort quarter did a We

that in in seeing it's U.K., particular, in minimum guaranteed pension say, the Yes, the America North growth but Greg, a is piece, I and also minor around in would We're Europe. the answer. especially global point

Wealth retirement been the and of investment for called advisory and really side -- you like us strong so very out consulting, investment the And has business.

lap there you've described So the will eventually, challenges it right. but

Thanks Great. for the color.

your line next with UBS. from of Please proceed Our the Bloomer question comes Weston question. with

fair question, Is for XXXX. year-over-year noticed were first a since the real in continue Good thanks. primarily investments I costs to given throughout up in function smart to of guess, made, My I assume just the that estate the that XXXX? investments course grow And Hi, just you've CapEx that, working? that time, making the first morning. is you're should of it year-over-year

Yes.

last in estate FX. the real Last this a up reflecting XX margins every investments that reflecting expansion basis the to the I office, gross points year. XX much each points, made context, going look, But margin margin we margin It's in grow higher in a X%. expansion So than XX by said. years the in And year is fact, we're smart I put has been offset working, And as investments mentioned, by you Weston, would and to was as that year. back expansion basis reflects the business. of impacted over

in for to in growth full on million point, CapEx year includes our expense million again, the year. you and growth. working to each That full every smart with in then for of And long-term in initiatives. guided And the CapEx CapEx $XXX should the IT, we've and investments grow overall $XXX the estate, expect year CapEx line to real in

you. on Great. performance Wealth fees. the Thank a follow-up And

You a is headwind is as to there impact year there XQ an the the in well? it there. quarter? that isolated margin from Is And highlighted of second half headwind just a back well? Or the as associated

impact. there's is no, And an a QX not It margin just associated impact.

you. Thank Great.

Wells question proceed from Greenspan the with your next Fargo. with line Elyse comes Please question. Our of

Christa, Hi, guys discussion margin back So of basis -- that together I goes XX thanks. the margins, first points over tying morning. years. Good you has historical seen the on to question, Aon the you right? past guess, My prior some mentioned of expansion XX

guys the you reinvest the fiduciary we from quarter? choosing you was of So Or because calculate investment understand getting trying in addition have investment points more to I so why income, higher in the I'm points, basis which benefit around XX expect to shouldn't fiduciary that from basis business are the to tailwind just are level, strong that XX this income? we

year. X,XXX the look, margins course points you each we've points years the investments over over And basis higher, driven we said, expansion of as for XX much basis or reflecting much we last in that the each And XX year. question, margin year. so XX gross and a year think basis do a about points the And Thanks business Elyse. a make is every net of

balancing them expect ROIC. then our income -- and of favourable fiduciary And in on and revenue including basis which points QX, expansion XX we do XXXX. And an the investment from you underlying disciplined we of about over our in Elyse, we points by margin headwind investment impact based a And way the and income, just factors, see look growth, XX people, from of T&E ongoing fiduciary with takes of think to and all and of in year number T&E, resumption puts we full drive basis did of margin we a and course said, the quarter offset investments business, margins growth, expense over full at team, in all expansion, FX. technology as around manage together the in a investment

balance just reinsurance saw in sequentially. that year. X% of quarter. rates And the fourth you of Thanks. little January then second -- of up that trends might thought you impacted reinsurance, in us how business the renewals that a a that, X% about quarter, should right, we and quarter the saw I just Can just the question give in the think picked have That some really bit the my that growth that one the during but have on organic we strong the that with might with the stable was

of just around we'll the really that's and clients to if done go terrific. really been the they unique about extraordinary want in with platform here. least very reinsurance level number our years, what Eric, driven you you disclaimer it's to over globe think have I at with last colleagues a have highlight, one the performance of been

them we're rate. aren't that remember, means understand, to again, not rate unique, help measure decisions. mitigate but analytics And clients connected to better are shifting programs, tied and muscle are We're things risk, the to helping our flexing doing around -- make efforts which

which want which we which see seen client growth, what top to real into have and we've So line is we've we impact, seen. translate seen growth,

that just But long-term and the for I the piece, of to Eric, year. So over highlight quarter, out the playing want we additional that thoughts? see course

done for And Yes, Look, been Elyse, would that Greg, been the growth spectacular I last It X/X honestly, has the renewals. double-digit of And We reinsurance in strength-to-strength us around their growth, of others a STG was in team couple X% work in the right? team nothing feel story short was over work a 'XX. performance thanks. in significant fact, double-digit forward, say, years. QX that growth year-to-date. Advisory clients had with really doing the in the good is our about the Treaty. the business, new looking wins We of and is insurer that's demand,

that. value are portfolios marketplace as think do to What their they navigate the trying real own to -- to through as manage carriers providing they this has really our them is team

not of it. future but years, proud the over done, that work and the the team looks last this that, only for has really several So quarter bright

And back comp comment. QX one, one going to that tough last Wealth

Wealth X% last saw in organic guys You QX.

it fees It doesn't were performance So offset seem a just -- comp. were was it just tough that and these just businesses that? that like other elevated there

just not sure to I I'm something. missing So want make

Yes, it's simply about the performance fee.

are as we know, lumpy performance you As communicated. Elyse, fees

Okay. Thank you.

next question David Our from Evercore of with Motemaden comes Please the line your question. with ISI. proceed

thanks. morning. Hey, Good

discretionary So were you good more and and economically of Risk a had of in the the of the sensitive. talk bit just and wondering just release slides. Travel if how events I'm the Commercial more press the those be little about in discretionary parts -- human question. the out capital It looked and Solutions a singled in pipeline businesses, had and given looks business health tend I some quarter. just could like both to that you a

say, Capital double-digit, significantly. part up up the both had was Core business health analytics our Consumer in quarter. Solutions Global The solid benefits and of Human was Sure. I and very that first Benefits, a spaces. the and health X%. would solution advisory data

start really of the through they year. pipeline strong go a the for year solid So them the rest with for as

it. Got

up the about appreciate exit? in would outlook second running I'm Okay. be guess, that we less of just is $XXX some enter COVID there is that sort maybe around year CapEx of year, than pre-COVID million. occurred we just million level XXXX that or Thanks. $XXX during those If guess And this to and been as it's as investments above at looking ramp, -- bigger back up the we I'm into XXXX? here look wondering, I Just in of that a $XXX the and then that the ticked the and I should I ramp thinking level, half have million XXXX. at XXXX,

Thanks David. to will XXXX. expect expenses. so and going for $XXX $XXX then would line question, grow with we much for forward, think beyond, it's the XXXX in that say, I to CapEx And reasonable million million

you're right grow that right a to XXXX just more overall XXXX normalized really the there situation. we as of absolutely growth. normalized is will from COVID of level XXXX So lower, then to And because with on start and return and levels CapEx, expense based

Got it.

Okay.

just more if Okay. then And I could sneak one maybe in.

Business where in implications the step Christa, Greg margin just was can to sort next Business a couple Services? might have many what wondering, how back, think have? get employees that Aon And mentioned you a you just years? of of on lot, Services. I And And and located Aon you You that taking do over

the bringing these actually David, to as infrastructure, helping efficiency, the strategy. organization part of Business and clients drive analytics say business is the Yes. scale improved our Simon, are for together scale. insights one excited Services and and incredibly question. we're COO, platforms and together bringing security innovation lot fantastic would led Mindy we what about at Because core you It's organization drive by to and firm Aon to of Aon you Look, in a an data thank deliver making, investments us a in impact. and drive to service we're IT saw to quality And

innovation allow And to so expansion of excited the but drive we're productivity from service improved all one potential of drive area our to and equally business and and the and clients us clients across to to to of all quality our accelerate ABS, immediately. countries in really margin about

next the advantage amazing many be years. to competitive proven it's over so us And an for

Thank Okay. you.

comes question Mike next of Capital with line the Our BMO Markets. from Zaremski

on This for Good Jack Mike. morning. is

outlook. M&A had one the regarding Just follow-up

First are some media the quarter in to space M&A volumes down XX% over according reports. brokerage

size would given in moving consider some the where currently a employer or U.S. into terms isn't wondering, Aon the brokerage, equity player, middle-market private players are major area being European of Aon of downmarket insurance aggressive? that So less

Jack, of pipeline, to would lots and terrific of say going to I in at from be them we've a business. standpoint, as see. highlighted opportunities always going strengthen got before, We're how terms we our our build looking they're Christa

can scale we is really this firm. the content around So capability

So meets is you opportunities standard. the that looking the sort buying we that, has we which of invested which for to and a the entire across imagine, continue spectrum, these on benchmark, capital criteria might look do back, return at kinds of really

for looking and broad-based the opportunities looking we're So world. around

then And maybe your the more discretionary it. Got parts of a follow-up on business.

today's in Is viewed if more as world. competitors discretionary, project are used acting which that you're Some work, clients also on something now any have to just seeing? that. thoughts as as maybe necessary guess is that said that be viewed I more some

-- We absolutely. Yes. would

what's if year, down overall, next effective, amounts just business not really back discretionary in first, sometimes get it's timing of year. There's you baseline, is as it's nondiscretionary kind you year, So very look highlight, not and when this discretionary is limited to to our it. but the I of want this

very standpoint. highlighting what that And exactly from so level low you're But a correct. is

and some you do, -- dynamic do add Complexity to you and that? that that analytics to nice really don't comes about make Eric, which the think we is to be human with these that. complexity capital been with as have what particularly risk is driving the connecting And almost would and driving why would demand, urgency of of demand. at some around have necessary

maybe would been considered around Yes. examples. I human two wellness discretionary. capital offer One is business have would that historically the and

thinking think wellness engage You conversation return People have they Officer about who colleagues. including work, people a how their with health today Chief a overall, can't own about is as to

than discussion ever blended a of more before. becoming is that so And

how piece, risk challenging whether clients Greg, maybe going risk analytics around bring the part market, risk the process manage cost more feel and historically other and a that you business I two the studies, thinking work think, just would to we're demand in of Those the have trying significant understand that would examples. of the out forward their able it's they than basis, they how total are skills And more in to nature. Today, to the actually can better. process project-by-project a captives, navigate on through is give to you and discretionary it's said commercial have clients the as jumps this are that whether advisory been risk

Thank you.

Our from Shields the of next line your Please with with question. proceed Meyer KBW. comes question

quick Two Thanks. ones. Great.

the First, Like what to can we actually sort we a what when color thing that -- recur? the performance led of expect the to can year? last was And fees that are fee? what little that get performance drove on

as asset in volatility of of it market. at under the terms discussion the an management look would I

it And second you'll But that. platform more so what as stable comes begin a in around, that of back to that's the quarter. see drove on

Greg. this Okay. second And is perfect. Fantastic. Greg, That's think question, for I

almost Should about think we efficiency? improved roles comp that that to filled? need some maybe in that be Or are concern saw So is XXX basis of as ratio. the there improvement there points we a

Business drives -- this the So holistically, the where sort units we're are the strengthen efficiency, as in across looking about, we process, Christa across we years to of which Christa were it's think overall continuing, that what that. underneath make Meyer, business I at of doing, you do sort said, Services as investments described. to mean overall, Aon business

it Aon than and efficiency. drive I it's to capability, It better more efficiency. not but is just efficiency. much emphasize, is does do at service and is Business innovation it Services want scale so

helps It colleagues in more groups clients. serving individual clear. clients effective of effective be serving colleagues and be more Let's then

reflected that we to seeing continue through. investments we'll make continued substantial content in to But would talent and you're add that? else you capability, that. So and really have what in all to Christa, do

thing we And in expansion to and think the drive commit net in growth. fiduciary the over investment income, year. and delivering And year as really a FX Meyer, course And about long-term QX including you're full of quarter, over observing and think in goal And we the XXXX of we IT we're lumpiness I of with and adjusted the after of what's margin of balancing for that. impacts number all and is any rest about well course full margin T&E sustainable expenses exactly as of in would that's happening say, investment expansion investments every people, XXXX. of year. margins happen The the a factors, one in margin the overall and will expansion

you very Thank perfect. Okay, much.

from question of Please the Michael line Ward question. with Citigroup. comes next your with Our proceed

Thanks, guys. Good morning.

you implied more think if was year. means was that over you expansion I larger guys first headwind the expect that the in balance of the I T&E wondering much the quarter. margin

What I points guidance lumpy. or for XX we And say QX 'XX point, margin dependent what it's It per a bigger full given say, our driving Michael, amount is. it expansion we opportunities the each on we with expense, specifically on had of expansion investments. basis points expansion drive every XX is a long-term upon would your not net year. year T&E we because XX don't And is years, every last growth. T&E T&E headwind was to margin because per for the this -- year. really basis was what expansion gross X,XXX It's it going we've year. us COVID. approximately the quarter over low margin give expect margin very neatly of invest points can driven is It's basis and year

Got it.

somewhat to a I believe different it's somewhat about solutions business. wanted the small then for I IT And you guys. ask question. Okay.

I billion of think $X you've that you've quoted lending helped there. achieve like

hoping of could as this business. discuss maybe even or that maybe just and if size market was maybe and this I So business earnings quantify you revenues, possible, -- the

all, I'm too. both -- I and to Eric commentary can And is it. on address area. it. thanks But of for give this color first raising happy this, phenomenal a his give Michael,

I think every step that addressable things is which to day to this be? sort you of could move market, If the in about back, an what we area total you do market, think,

zero what connected value start XX% assets. it and in back now Well, world's could is at build the of right to? tangible

defend our those gosh, this has be? it to value borrow Nothing which means my So could to asset, it. started how you today, to industry done means such what which insured, understand tradable the it's a IP until assets? should way, against can real that be we By what really

growth which these last up giving capital without $X XX, It that, doing we've entrepreneur? fantastic. means without But interested that right, ownership, of the giving a which of is up who's are capital an number And done amounted XX deals growth raising months, think you're course over debt, just raising has in you're of entrepreneurs the to ownership. about billion if

And the We're that It to answer to to going market It's is momentum, develop. take not the we we and build time love is the always markets to And potential. takes love as time possibilities massive. and it does. going quantify about see application, Eric, quite would will a you that? have really does add specific the and to time, what very we're else it it out it but We'll what needs. over excited play progress.

it. probably about Maybe piece terms been we the Yes. have due But on lending diligence the IP. M&A is of most go valuation also a what process. the got in talking most you've Certainly, bit CPI around just advanced the little that's to

where IP it want to traditional against a is not liability to got trying You've lend it. actually us protect corporate but

need But time. a is we've of to last been things, make all of couple over which what the right, that you happen, building period

liquidate understand value you do themselves, need risk to the partners you a You you trust How to How upmarket to how right? an the do market? an the How process, insurer you capital get understand both stressed in do devote valuation, would it actually valuation liquidate IP, and example? to to it?

in whole into team risk the time. understanding get is the a connected front as institution are as clients very with They're optimistic and commercial to Greg we it our relationships. of said, market. connected bit little each ecosystem about. been how we've And And So build building build building or that we've financial that there's a focused partners in it been they

year. and future So progress there's last it see to bit of a And been for excited to a we're has it us. happening of little about that lot started the

guys. much, so Thanks

Please of the your from with question. comes question Shanker of Our Josh line with proceed next Bank America.

Thank you you. good morning my all for questions. taking And to

not Are the segment, quarters, acquisition-related so trying much of piece quarter lot and at for year, had given for be to over smart you the for which to the revenue three about mismodelled is going reinsurance. back me quarter obviously. reinsurance it, in reinsurance of half smaller just XQ it? revenues First the that XQ, last In quarter in volatility the strongest year? about I'm the help in But I later a you last growth a acquisition think is XQ looking

I this tale the business that much of about almost business. through do more Think of it? Listen, Certainly, the the half don't kind first two the reinsurance -- crack at is as dominated by of And throughout with the first those Treaty ability half services a year halves. advisory acquisition a is take Why some year. obviously, facultative of Still Tyche, the to business. always. we good

a some facultative reinsurance as capital market to cat then i.e., transactions, as through the The is well. second much that on, if lot property of done end to half weighting helps. of which and that through the year of is weighted year, largely tends cat, focus as people if more bonds But June, to well is trying the the think casualty reinsurance go what by you're

in cat terms that In property a is of there the acquisition, acquisition?

not mean you by exactly what I'm by acquisition. sure

I'm I'm and back any less I reinsurance to segment the in -- XQ, X% XX-month X% to yes, make. only half due you impact in boost the assume of yes. the your XQ. volumes, 'XX because revenues was a acquisitions in acquisitions on guess, think saying in to I that of trying pronounced It there's

more in Tyche last clients. support activity around analytics was those the data support by services, for acquisition advisory driven cat the less of pricing year and cat, the of but property bonds. FAC A second and more So half lot much and was

think would it. I how about that's say would I So

want little a up I follow And to then bit on... Okay.

And, Josh...

Yes, go ahead.

closed we Josh, sorry, Well, in QX. Tyche

with And and included technology reinsurance. said, will our growth as It of strategy see Eric be you Tyche be advisory growth so under, group organic in part onwards. will QX from

and variance a the between T&E something imagine a you, would I maybe XQ 'XX been to And have I 'XX. Thank a greater Mike's And and XQ perfect. about the wanted and business between I’ll T&E 'XX about cycle just on question variance little follow whatnot. That's just Christa. XQ little up us there's Clearly, XQ But tell bit. would 'XX. mind, my in

If event? situation you're so that with a And are that your is spending more expect more 'XX T&E a than spending? should to a resumption regards we event two, broad really headwind now, how clients on 'XX of T&E a is

Josh. question, Great

we we And quarter-to-quarter. basis drive growth, lot so read a we've is what we headwind basis long-term why to we expansion say would full been margin XX full that's into quarter. And this It's say would investments to of There's years technology points the charge. over XXXX, from XX or year, year. points of the FX. going really, for year It's things. investment back some But lumpy a to approximately driven expansion for driven is, last into what the the T&E, one of is, by margin X,XXX by things a which and similar come overly by expansion look, in wouldn't a offset think any lot driven in about our margin people

you message. much, Christa. appreciate And I very Well, staying on thank you

Thank back I'll you. gentlemen, turn to session. concludes floor Case the that Greg our Ladies and question-and-answer closing comments. for

much. very Thanks

forward the joining you to much. to everyone, Just next Thanks want discussion look our say appreciate to really we call very quarter. and

call. conference today's concludes This you. Thank

participation. at You your time. you may lines Thank disconnect your for this