Aon (AON) 28 Jul 232023 Q2 Earnings call transcript

Good morning, and thank you for holding, welcome to Aon Plc's Second Quarter 2023 Conference Call. At this time, all parties will be in a listen-only mode until the question-and-answer portion of today's call. I would also like to remind all parties that this call is being recorded. If anyone has any 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 historical concerning website. XXXX results differences well as cause press Information posted covering as that on been in our release quarter described the such second our having factors risk are could

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

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

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

across momentum to universal our our This thanking and clients capitalizing colleagues, the and win with has to client and long-term begin report capital portfolio. the We're by and do colleagues do delivered risk pleased almost There on meet we our results address immediate and by demand. address to today they demand greater. that our our another performance, strong help meet to around our human never quarter, delivered to call And more gives clients. demands for and balance is team innovation United ensures retain momentum. been the people. and us everything global investing more now demand this agreement more, ability risk we and to

above in For fifth example, notably our century $XXX first XXst half the losses disasters on XXXX catastrophe global of were highest natural estimated billion insight billion, the report average for record. and $XXX economic and of

resiliency hurricane, insurance its the rapid and a the placement addition recently the this reinsurance of Puerto of U.S. Commonwealth human program or the have of high in event end, advance Puerto sizable It's the we And commercial kind and costs, designed government disasters of our building the disaster. reconstruction. risk its and tragic ever quickly protection government in Even Rico. and receive know that to by placed. we recovery in for on liquidity Parametric economic program and To more program the of focus reinforces earthquake This these announced that value costs enabling was Rico largest will teams. has single profound, to

the firm, capabilities by Aon's analytics our and placement team. deep cemented really data, was by reinsurance public really, our our risk entity capital across understanding from of result of great This markets and work and demand,

Turning X% X% X% solutions including second financial line, health quarter, organic by a delivered core. of growth In in XX% organic reinsurance year in the the in performance. In of the last overall was XX% solutions half. we strength and growth in strong health and revenue our across first growth to contributing in and the top quarter growth to revenue driven solutions solution growth XX% on

the wealth is balancing ever. done while people steps also important demands navigate health their human rewards, when helping has benefits and at total inflationary their more than a team with people clients optimal taking their strategy are to time on bringing work, agendas benefits talent terrific for Our of capital cost together pressures deliver

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to markets previously, by half the the back communicated pressured M&A M&A IPO we ongoing results external now were and a conditions. external on we've given of the year, expect of impact continue headwind services, As in

for Al changing and QX, Overall, our to our in by into growth. and on our our of well long-term Aon expansion. our the driven risk in translated financial financial to client capital of demand, Aon growth of or capital. basis Net client of and greater In margin Business product This adjusted XXX first And revenue flow foundational United. ongoing XXXX our deliver needs cash organic quarter, very to strong United human platform. and expansion. of address this growth ongoing supporting term. long is points X% of ability operating revenue X% to growth to performance results performance momentum basis financial business we this the by guidance the to strategy strength in points ultimately in Services free XX performance positioned response margin contributed for half organic of expansion move the was margin revenue and And remain growth to fully evolve These the investment we mid-single-digit double-digit ability strength and to is maintain operating demonstrated organic

closely X our Take and human This already impact. needs address client more meaningful capital. lines better focus bringing yielding is is together client solution to

external work thinking their increasingly with facing remote about colleagues. We're an and Our how environment are around clients growth, complex and pressures cost, composition. changing they're workforce hybrid

considering internal skills people newer their health and rewards environment, around total On additions are strategies and complex, their and benefits own increasingly traditional future well-being.

human team data, In analytics solutions and to strategy developed address to diagnostic to clients that directly Our us a index, assessments clients need. individual and this to this a people execution. tool bring HSI for sustainability produces our tool our connectivity across great data wealth analytics-based team health, enable enables connect example, peer and or and combines with and benchmarking to talent, goals one

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In capability. already of focus and a capital direct their to opportunities strong their summary, understand and human and help strengthening business their this on to our and benefits performance recently take to is our improve protect challenges driving risk and is ability actions performance. result announced enhanced capital our clients better Further,

and outcome XX basis the year-to-date position very including and financial the to direct long of us continue growth points of the over term. revenue results, strong expansion, well margin in strategy organic Our and X% XXXX on delivering

financial and creation. over call outlook shareholder continued Christa to to her results for on like I'd thoughts turn long-term Now for Christa? the our value

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

into position building forward revenue As financial we growth first momentum. the the well this we translated delivering look on to of key operating to results the highlighted, organic over XXXX half, in very continued and our us and X% Greg results on continue adjusted margin points XX drive in These quarter term, both to metrics, year-to-date. expansion. long and we Through basis

As year-to-date. the first as I of through Greg growth QX noted, and reflect X% on revenue the our half X% year, was in organic performance

FX an and X% revenue from the and continue -- QX X% in expect I revenue that full of X% strong mid-single-digit QX, growth XXXX sorry, includes dollar currencies. organic We QX a or for year-to-date, driven in of and long in growth note X% most year-to-date, year impact changes X% by would QX year-to-date unfavorable X% term. in X% versus reported for and primarily greater the also over to

fiduciary periods. both income, growth, is million with which million included $XXX not revenue organic QX total investment revenue in in also in and of $XX highlight year-to-date I'd or X%

on performance. an operating We drive of margins improvement delivered colleagues to strong of increase overcoming driven investments May in and services, growth, with by Moving to expense half, points business adjusted operating and first growth. from technology long-term operational in efficiencies basis the revenue growth including XX XX.X%

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

point. key improvement, ongoing previously, delivery model Business long-term with client now and one three we remains the requires investments efficiency, on and evolving demand of response at innovation for As one to this and opportunity, growth, guidance basis. Services evolution leverage investment an which scale. our do disciplined also Services drives and we've of margin operating said that's that expansion Aon our inflection and to to we're of In operating client organization Business an has drivers margin manage accelerating service line improved to financial we like in increasingly areas, a in driving Aon ROIC in This expect reached all

operations platforms and brings creating and ecosystem digitizing data, that expertise encompasses for analytics We're platforms. and our together and standardized our existing an First, and technology connecting colleagues. our clients that

processes. there efficiency across bring all operations. solution further support together, we us bringing expertise lines, to Across scale see standardized and drive where our solution and to places lines, operations practices. are continue our Second, to opportunity We people clients process best together firm, across to enables have common

from new and the done we scale operations rapidly and see work across enable significant demand solutions standardize scale. to all innovative In organic which data-driven The content effectively develop capability deliver deliver and to to client to at and scale. opportunity both us investments. products inorganic new we've Third, develop, to clients to deliver response or products, portfolio. can platforms then We and

governance that can disciplined as and ensures value create Even Business such for the colleagues, on we importantly, operating around Aon more our as on quickly Services prioritization opportunities move we AI. organization initiatives clients see one with one and

our to year-to-date. offerings data the a see by analytics by of like capital existing strong adjusted translated productivity X% EPS a to the few our our risk environment building X% sets clients. here as to finally, enhance our to growth into opportunity assistance income colleague operating like We We And real an adjusted leveraging human in modeling. in create complementary examples. of risk and enhance Just framework enhance QX technology partners catastrophe protected AI for services growth

in XXXX. today's at impact impact or third X% impact share I'd and translation in balance per sheet we the expect year-to-date. and an unfavorable pension favorable per share nonoperating businesses stable $X.XX on as noted from impact periodic share of impact also full If the quarter other approximately fourth a As had expense a year rates, This $X.XX period. a of prior per in noncash is expense, in $X.XX impact or in per for FX QX, as no XX% per was remeasurement unfavorable gain materials, $X.XX current quarter unfavorable would in sale period increase note, of share unfavorable the of in impact the our the an net year-to-date. to unfavorable in currency well earnings reflects year FX $X.XX and and quarter share $X.XX an a for remain

operations flow was free in driven cash to and $XX year-over-year million, increase primarily allocation. $XXX capital free CapEx. by flow from X% cash million Cash to flat decreased a Turning and

As the be is quarter-to-quarter in we've generation seasonally year flow cash second communicated lumpy and than can first before, free the cash half half. flow of stronger the free

with drive lumpy I'd number be of first quarter-to-quarter. the the year. spend cash technology the We as for in deliver period the we a double-digit the investments continue like making Services. can half weighted elevated the prior note projects expect of to long-term compared evolve to half year to Aon CapEx we're Business first CapEx initiated to full growth heavily was in free across year flow to growth

moderate an of million investment the XXXX. in and of in $XXX expect to We year CapEx now expect back CapEx to the half million $XXX in

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

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

the We flow Given market of undervalued strong today growth remain believe our opportunity cash we free repurchase to significantly $X.X in highest we're outlook return repurchase capital approximately expect allocation. in and XXXX for for billion continue share highlighted on beyond, capital our year-to-date. share to by

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

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

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

We Now balance our turning debt and debt to through a remain liquidity and risk sheet our confident manage in capacity. strength balance of sheet profile. the maturity well-laddered

expect years. said approximately EBITDA to maintaining with maturity investment-grade growth X% rate average fixed over add an I'd approximately interest debt XX debt the term our and term long strong before, all we As as we've of a credit weighted of rate incremental profile. note is an average while weighted

Business Aon strong platform. In performance results summary, strategy our strong year-to-date driven reflects financial operational our the United Aon our quarter by and Services and for

long-term key over I'll the financial value and call operator, and our the drive to to We to to our metrics take delighted your make With creation. continue on that, commitment back we'd be expect questions. shareholder progress to turn

[Operator question of from Instructions] the And line Lederer our with Charlie comes first Citi.

driving You more this your about continued lapping? year comment it issue? pricing that can is a in in in on of we the of what's half remarks. should Or dynamic M&A prepared When think mentioned you back headwinds And services that?

really question, Charlie. I appreciate the

ours. was Just particular of a very strong strong very and you this part which geographies as services, XX%. It of fundamentals count just the -- X strength P&C. really question. M&A start Obviously, exceptional, core a is is know, volume down yield commercial But real business retention, lot new in around and that's deals strength area of around XX% to overall, generally.

half that the of in We expect the see of expect the year, first second in to half we year. the it

will we back, just position. comes back vent with that overall an given As come absolute our

anything add to else But you'd that? Eric,

historic more spending deal I saying, of been would expanding that driven the Greg, capabilities they're with we've down, and potential while the buyers. as the nature say sure the But those is we time product Yes, and client the time get spending The has with you're just the working been team volume have services base. used. been of making towards private corporate clients, how equity-type aware products

back, to it will today. when situated does back, that the we and market market So that come do come lead we'll as be

And second pressure just continued as that to the Charlie, to do we've the expect external the while I continue in lapped the has soft. would say downturn, half we outlook be

IP comment about wondering been growth? I'm business, the properties. then some articles that you And on recently. in meaningful intellectual is press the your if organic How can momentum to revenue it have And in there

to So results, affecting just you how see that trying business understand at if all? second half

question, It for you appreciate a opportunity love Really this business. raising Charlie. us. it. phenomenal this Love is We

if XX, tied value before, just think S&P And we you -- is this property assets. the is back which you go If hugely significant. about talked we intellectual this invested to This in XXXX, of colleagues. these representative to amazing XX% XX of of overall, the help investment, value these to to really platform intangible opportunity the XXX, back in We've started and Aon, unique risks with really a hundreds truly of colleagues it's market-leading assets. understand XXXWest an with and bringing now

in stronger marketplace with And the by demand We and many and future so that. feel billion aggregate about And the transaction we many almost than the opportunity. built third and we've in ever. the a insurers parties different ever there progress affect is made, love market, we different But value. we're out the than are insurers always sort evolving love insured of that the XX things we way, And marketplace marketplace so stronger $X XX, the in in position.

else anything you'd Eric, add?

percent One, still still its Greg. market a the is as it's maybe Yes, things, infancy. of -- revenue, in two

of rotate it overly your And question, specific wouldn't comment other the that I road. the potential see So than on going some we're activity Obviously, other market. parties. the we not on in to the to third down about

matching work capital risk our we of parties role bring say, with fundamental marketplace. capital, that to many the But part as I of of would to

does backstop kind the need capital the them for. we gain reinsurance capital let But the by to us third need that provide looking and it to use of credit of that Some parties. deploy used the clients a to they're capital, that

one of behalf together of our on match So clients. of the that just capital it's ways we risk

Markets. with the is Our line proceed Capital with of next question from Mike Please BMO your Zaremski question.

guess I organic to the back growth environment.

X% Just of on say growth greater you curious, would the you the too, were probably say you can about kind is other But you'd tailwinds half see. clear which should back kind some headwinds point still out Or M&A to There's we of out the in thinking is businesses in half outlook. decelerating? the would mentioned the your side. is M&A or some back considering tailwinds, or be to you trends the or or we the momentum to year any that call year? steady like of of back of into accelerating any than terms But of

Literally, love this Mike, question. Yes. I

back and of If evolved. platform how think and growth you sort it's about the step

First, just the course for think -- the year. benchmark about we context, the we really over put and all objectives of growth

think if the into growth growth free improvement, So by about cash the growth you and is way, for flow. is, organic it, us, translation revenue margin and absolutely is

about see half, and reinforced objective. And QX year really first momentum you our performance just full and we it's say, would the if you in around our really XXXX think meaning confidence

exceptional with across the in at this highlighted. reinsurance we risk that first even for health, just were commercial for the mid-single the in is certainly areas, look and the digit So headwind strengths in greater quarter the other board, or too, half, which and

very the side. on strong So solution line

When expansion. free double-digit you most XX basis basis heard the think margin to for the saw growth for XXX you half. Christa reemphasize growth you points exceptional points year. cash here and importantly, flow on first for the And then And also Q the movement about

are. Maybe, around us, additional goes foundation for we driving that. where context there's So lot trend this see Eric, that? turn to that what's continuing that And we behind a or

United Greg. you we as the your Puerto that complicated, are as did gets X them well And say examples and Parametric I getting But the I remarks Sure, X mentioned the think client of think Human Index. is written demand the working that more complicated. Aon more for of Rico the as around world in Those it's also I just evolving, would teams together. Sustainability

evolving when of I about strategy matter our risk gives to of to so situation a us that growth to I what take human a capital standpoint, And And risk think us it, global capital advance put just advantage I'm that access couple of capital things. take drive It uniquely capital, positions and think, to clarity no growth. from capital to -- drive it I it, of little to us think form. gives on sorry, a

our they a the to insurance, liability understand create to help want create today, to deliver transfer historically their exposure, to exposures. reinsurance, over more corporate parametrics helps the acute from more driven and who So ILS And need change, property that dynamic reinsurance large that I risk clients think it and as business as well have analytics cyber transfer, risk markets. clients also have to the to also climate the us

brokers, gives also market our insight client leaders best And dynamics. it the the leaders of and

So on the risk capital that's side.

employee benefit of with together from seeing looking are globally. effectively we're health hiring, gratifying business across We're is a the view employee in see side, relationships, they expanding clients, is training, And to way relationship cycle really aspects for wellness both that life growth that and today. and health, On wealth the our exciting. are where new core all strong Winning human health talent and them retirement. all to clients excited through for the that. meeting Clients bringing their capital holistic

develop So we see risk with we both our strong opportunity but sort of capital, capabilities. human new both lot a capital core in also of and as

you to But Christa, add anything that? could

we did year organic cash think would do expansion we ask for guidance, outlook. also over full We about mean, I And our track the was half free growth. double-digit And the greater course X%. you year. on just mid-single-digit results second are revenue say Well, about growth or margin full of our growth, and year-to-date Mike, flow

that have about year. first think the a And over really it so do but about and second we revenue, each half full quarter, the into different seasonality excited the in momentum half. of just the continuing of course we And think I we're really

the or And organic revenue so mid-single-digit year. for full growth greater

kind you And a my on of world this the in mover are in taking quick different company's guess, but of follow-up have strategy, which the to number to efficient them curious kind able to find and there's on. post-pandemic the expense some leaning of about ways over feels efficiency off more Playbook, each like were is be be I last, United to a side, of and talked nuances it of guys first competitors

margin you curious, there efficiencies you is you getting coming some out more call terms of in about anything of expense levers to call opportunities do Just out see the that's incrementally guys to or even want kind excited really year. in nothing more -- today for

do Mike. we actually, Look,

So thank innovation evolution to Services. accelerate service we scale, delivery, are remarks, on next really I expanding question. as and driving us customer opening at helping from Look, for my improve Aon mentioned just efficiency the in growth. of the And Business you

about think so we year, of course margins, and margins we the long over the term. think about And full sustainably over as again the

you And in we an of XX% particular, our standardized platforms, And as core through services. are basis of by help about to excited CapEx around in in saw Aon which you And standardized majority around technology. scale, people innovation IT, revenue growth. support platforms investments and increased at business is Business investment well, really year-to-date, saw continued margin up the saw our XX long-term and and again, we In margin driving offset investments the expansion, operations, in expansion clients and the this points business year-to-date. including

bring helped of efficiency, we but it was insight on comment human develop us able Index, that the Sustainability to one Yes, analytics the create inside question ability ABS the leverage we -- on clients. helped have because the us that the to we're I corporate to know

a how all that ABS their As it. they is think standpoint, from and execute of part how strategy about of exposure managing the together climate property we comes

while is our is help to I larger are solutions there to drive and clients efficiency, new products, them. there better looking think, us So solutions new opportunity, that great for

to been Mike, we in remind brought And XXXX, -- on XXXX. working we've you, to by actually since just prior this that

under we're literally with strong leadership our to we an amount COO others on of now India of very, that bear. the have a We together. and new pulled kind And very the Christa, capability brought tremendous next wave, on building platform

this. -- muscle it's us, it. reasons Eric described. and So about both Christa really we're outcomes Services. Aon the And for efficiency the excited about that very that of Very Business that very for described effectiveness foundation the and excited the is well

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

on in of quarter? first was up highlighted you on hiring be on risk the Can maybe maybe there and well. And over reinsurance pretty and a broadly? high as investments a rates the you the in looks there's It talent. you're Would in benefits. question and and curious based My pickup comment and attrition competition is X comp trend pace comp maybe quarter retention pretty like colleagues last commercial that seeing for more picked meaningfully

and year. if year-to-date. growth But year-to-date, of sort just X% see look just again, the sort did I'll you revenue a maybe you we Comp full of this, about ben if is of math of start with think organic so -- at over up year-to-date. X% and you'd And the

lumpiness quarter. there's in so And every

we And good so feel say we what would about is that.

note in pre-pandemic of And attrition, is would or that in levels. attrition below below terms we XXXX XXXX

that good And feel attrition And firm's the history. are we the the ever also they've in levels is board. would highest we note across really at where been so about engagement

And so we we're feel talent really good attracting. about the

side. in But to just of Eric, terms jump you talent may the in here want

benefit gets Yes, reading that think I some And the will significant headlines the shared are of some Christa, technology lot always you as great of people making health strategy steps. core industry a the we spends in business, there. our rotated industry it on reinsurance. about some And of the move I of here sure, talent I say inside and and rags in and our group investments pretty Christa. over think time

seeing our of growth geographies where Some key great we're opportunities.

of make risk you great comment and on things and capital shared it attrition actually metrics it, us and we engagement is capital a human would But one last Christa, platforms would there, flexibility talent opportunities. our the things like the So -- and lot to deploy of on where happening I I allows that. of to increase

do take us So I does, being real commercial to we pretty advantage. able like would heavily to analytics think, think and help in an in about talent, company client future. insurance analytics a invest continue other a gives we reinsurance that, to to expect competitive so our But come and than the

been business few I could Aon. highlighted you mid-single-digit And with a And see next the of solutions had the that That year, rest could performance where fees then on wealth then over is past my line you lower over if maybe digits second maybe the more growth in years. single impact? difficult in organic had question quarter. growth wondering you the is was on wealth know solutions organic. comp I quantify

seeing momentum we're curious there. So if maybe

the I'll for Look, solutions Maybe Greg. I a wealth take growth and see that over us, long mid great one, business is the business opportunities and do think we term.

mentioned regulatory pension is about whether the whether a in the it's the the just work, pieces derisking that think it's or to which activity. that There's drive Christa a business for continues retirement you changes solid us. of pension piece, actuarial it, be If

The America impact some down it the AUM go from But mid-single business The we overall, -- on from expect time. strong. part we that to And digits have be U.K., road. EMEA, quarter. us this that continued the the last delegated of for really as solid will pretty business investment it there's then continues in U.K. very talked and management advisory business. The movement and hit bullish North the about to

Our next with of with question. questions Bob Stanley. Please the proceed are Morgan Huang line your from

a implementation, dig from and recently, quite bit about AI-enabled twice down we've the AI-enabled you cost I products are seen AI tech example, little if announced of talked products. non Maybe road, potential as just bit know Microsoft innovation that tremendous Obviously, just expensive what can their the efficiency. but that right? a deeper on I for as

with how the that think in AR going AI cost your of fits of areas down can you help thinking, three us into now? Just -- business investments of that line right investing fits your about maybe the

very we're make sort of of and and looking so would to super very can colleagues super Yes. broadly about that inefficient automation and help automation, terms the they're you much we process it much get business, doing cheap do the low more day-to-day everything the implement helps processes stuff business. that sort we things of to think this say apply are for of Bob. end, that that out our AI to about interact really Look, basic across us drive robotic And pasting how our and thank to today really scalable, efficiency from all for And broadly cutting and to with learning, and equally at machine us and we and business. question, excited in easier clients our

end. And so the that's low of sort

much capital helping around it's and add with really say describing insight areas impact would Catastrophe drive interact of data and capital. capital the the that helping could human in analytical an like you high capital at then generative capital assistant, today. they was assistants, clients sets, us human expert in human end, helping And sort Eric AI, us the risk human modeling,

insight to and of about Bob, basic we're very more and use so automation, really robotic it's trying cost best clients have more just and to thoughtful technology, and because scalable we're and cheaper this, broadly. AI. learning, And it's impact the process with efficient generative machine use And where where

of scaling So and depending opportunity. on impact the we're it sort

observations, And I just had two on this.

been described, for as we've doing a First, AI, Christa really decade.

basically these Business So we get the ideas. XXX it's Because drove haven't X. not Services, moved this XXXX, have actually Aon world scale is a around since it to Absent platform of around countries ability literally, Services, kind Business second the business to this. an one as been It's incorporating the working my because we've we of reasons we on been Aon services. have That's observation. we

a you world. systematically So up come the in it move you can but good do actually idea how a around with geography,

So our do it Aon one effectively Business we're the Services. and about reasons is of ability do to this cost excited

just obviously, is few about talked to And that Asia the also Solutions, quarters. But the back -- is way it for is. in a U.S. regarding Risk second of to maybe segment depth been strong question, line things My right? the go you've noticed Commercial we why questioning of has the one you

Latin world. the you saw strength America rest the quarter, also and in of last In

Solutions how U.S., to normal next as back forward? in down the rest come world. the we about going durable just a the in gradually market trying Just Risk year, should I'm the is think growth to of Commercial think we growth more M&A how to

-- an to is by United Eric benefit of as Listen, the from the in capability that retention progress we very strong. strong back strategy, kind the wonderful we we're a the described, we've Even have good. core just as described, about way, feeling you our well. We very exceptional. overall America, we well business, M&A because which, but North P&C good we services, as embrace comes very good, business back, market fundamentals as Aon of new feel completely in as the highlighted now, very area geographically Core

them been we've that and and clients keeping fundamentals, the the described about track the is with strategy. literally we reasons all for winning more around longer But overall talked around everything more doing our them, and

about trajectory So we're good out that feeling market recognizing overall. conditions very, are about and very there but momentum, there, good

you that would perspective? else add to what Eric,

Yes. are Maybe and America the that sophistication continue would like Greg, the places is the Asia-Pacific as say, evolve. only to evolve entering Latin products the clients other angle of into I

the expand techniques, it's countries. their home risk as those outside whether specialty a it's whether international organizations products, financing whether So

continue So help whether other to as it's economies grow sophisticated more able to we're those develop, and of need it's whether them products. as India, Asia, they them with parts

term. very have growth see excited and the long the So good we about and that platforms Asia-Pacific, Latin we America are opportunities we in over do

backyard. exactly climate want Bob, on interconnected. it. Singapore just ago, the to global becoming our And They of see and point so and Christa a was make describing. clients Eric to perspective. opportunity that global we had different needs more what It see their Aon go opening with Their in other hub, more in to many it reflected put sort One is really that, global around phenomenal. I month in

very, well other way, analytics finding very, does something a in what risk really positive That standing It it overall reinsurance in was an bode And that of was really Eric's and that sort into kind we're effective bringing that. as of are. commercial very space opportunities some the as the also capital positive. of very about and around such means, take thinking to if what then you comments

particular a a you a America. just example highlighted, opportunity. in have region, So we where same is The as true specific in Latin

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

solutions, back Benfield news for reinsurance And provide cat sequential Can of see growth seen really the then but articles half would there? exposure color the strong reinsurance, in acceleration hired have to results competitor. U.S. in more being property of acceleration the -- thought business above-average in kind also or by on obviously, facultative chunk Aon you as regarding we've I would some a the you prospects So in some the a of an year the given

me Sure. that let take one. Greg,

proud, listen, second excited use first quarter, are So first whatever on can the half, coming couple great great word a great really of half, of first great a we half reinsurance really off on capabilities, years. our we

half, would own a and decisions. I been with treaty they've is the so dealing that finished. first now the But market, have clients of that in most made happens say that business of remember their changing the lot reinsurance Just as

layers, they differently. certain buy don't they buy less, sometimes buy they sometimes Sometimes

want bit decision capital they always they little of we by that's the how business. a to explain on it of as sitting they they take. risk primary they more dealing do in kind on what is are now how the around primary the the now and market use that so through do make our a price risk And going with clients their It way, insurers for help think reinsurance property, does, of as what's

an of system interconnected it So insurance. reinsurance and is

secondary we to So first facultative strong I on And out. and had business And a be ILS the to the think very that half, think the clients perils protection primary on as now what in is wildfires have reinsurance or continue or hailstorms fact. low-level that expectation have just half, may do should our more property second around I business. like less point or you. And tends catastrophe

manage basis. the to the so And risk would use individual for the they that ability that an is facultative insurers now reinsurance on exposure, tool

is used throw you to facultative make, And more being on I'll Greg, I'll risk and also things captives it or the repaying reinsurance is point like where the last also corporates maybe large themselves. of they're

So think just don't about reinsurance a it as tool.

fact, markets. corporates think markets, about also large trying to reinsurance but as traditional start that access, to in the that. insurance do they way it You should just not But are also is

you'd But maybe Greg, anything that? add on

but areas would things been and You of investment. technology capability, we've before, not doing summarized also content in colleagues, point continued about just our strength, strategy it work very you we tortious. what been Look, last we've world we're core this the described ILS, has in the reinsurance, add one It's the just couple and well. years. if done really a and on a It's group strength the substantial this I and is heavily the overall Eric lead bonds this, invested in in to of and just reinsurance. cat talent think reinsurance, over X

effort. the core this incorporated overall in have And with now capital into we reinsurance, this risk

-- and really, clients, the build, And here. so is have we we're continues which ongoing the to it's possibilities capability excited for and very year half it the so we help we're second feel strongly and why positive results to the about the of about us,

services to accelerated back M&A along renewal with the market the of that remainder these And risk. the the change maybe the we business sequentially, to accelerated If factors of saw in that fair quarter? business, moving assume commercial kind exclude on premium we this external is it

we I at AON. on a we're we transaction in mean, or XX% to about expect And that organic level? M&A is giving of softness volume, Rob, growth greater XX%, the overall specific to X% for and headwind What to year. not would year. growth the guidance revenue this year-to-date mid-single-digit is track down excited real obviously, we're extremely full on Greg commercial risk we've had for the as continue of given that And half second into area described, say

last And Really maybe just question on strong growth. solutions. health one

inflation? Any just growth outside of pointed United there? the guys curious I'm that? that share medical color could to And strong. you what's Is States you market Just the driving provide being particularly gains,

Remember of the gains ability would systems the market in share So everywhere the and world. to I are the say work globally through team together benefits. health global of more different

at in LatAm, U.S. anywhere very they're you U.K. versus -- different. Asia-Pacific Europe So the or when the look or system versus

globally. of are needs the need that But often organization one They expertise. expanding

together And so our local global to global well as working as able team really connected, help clients. to well clients

course the gains So two. what or countries been local in we the market think it's excited last about doing over the year share and of really they've

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

you I estimate quarter, Christa, to your question, think just to best to that, I year. still million had that's of confirm million for $XXX last first there. My the pointed want around CapEx of kind $XXX

the a with half, and from just back so CapEx improvement I going combination guess to it's in of the in lower in flow flow. cash come operating And free growth cash

have guidance drive and growth. Services we be Elyse, XXXX applications. $XXX to by million really increased Business the actually and we're that's Aon to to making driven our million platforms investments CapEx $XXX for future across

growth half And cash that. be capital. income for working cash growth and operating in double-digit driven so and did flow stronger than is free free by significantly excited half. about The that I to flow is we're really growth And flow free year the note first improvement the always second cash going

going my better half from will risk you business, easier headwinds there'll a of volume. the M&A relative the M&A right, be to some then risk, first expect within comps I Wouldn't low the year. recognize have that recognizing you commercial good in sequentially half to market back year? that the half growth right But of just share even have show still the in question, And slowed. the guys has commercial second to back you that back do

I we're M&A because second is the in again we first well the probably explain what right. we the into that's What lapping this of in year half this seeing market time. -- do external and the try I'll continued the comps absolutely environment. the didn't Elyse, are pressure But

expect So to that trend we continue.

for also you on And robust of then How -- are you of cap the then what in Greg, the you side reinsurance you I the just activity and have reinsurance kind into rest opportunities potential capital over year the the do thoughts solutions, within market seen. guys just on highlighted and think seeing XXXX.

incredibly Listen, do sure. pressure There matching options, Look, on capital still risk for pressure we're Eric overall, what finding navigating about in the it. every continues for there's side, capital day. of Elyse, we our to to here. terms vigilant and be on this, comment clients We're through

seeing movement ILS side. on the You're

we've XX billion $X about phenomenal. done in deals which been talked year-to-date, We has

it's we an still But There's pressure. there. So opportunity constrained. still see

what are you else that? to add Eric,

so allocate have Yes. it, is historically opportunity. have see in more as Look, of as bombs, Greg, had -- well returned do ILS new. seeing I side first invested sort would say away I'll we're from area either that Investors the investors they walked ultimately, to the cat that

expanded is some that which been I X market the first months. seeing why sort has think dynamic so market of opportunity, in So you're

on think capital see of reinsurance you're market, the equilibrium. the starting provision I overall to an

especially opportunities, You're big on side. property see seeing who the active, players more get cat the

sort support, And and not company in more or investors but the either of the support is creation, through cycle new which in necessarily you're their normally are already industry. look happen -- ways, to in other funds who in participate players of seeing leaders so would in existing what

equilibrium an to of property getting we're pricing So cat. around

I well the But as X the you what the property go it cat business. season and on an inflation, in market renewals of equilibrium summer think of that the of be has in found there'll there'll talk the in over talk as casualty events. X/X other moved, hurricane as months, as happens side do has into the be Certainly,

the is question with David Motemaden line from of Please proceed question. Evercore ISI. your coming Next with

question Just risk. follow-up on had commercial a

X-point ago, this drag the that had quarters quarter, on size growth in you commercial spoke organic had commercial it a in the about capital on You the drag risk. of fourth quarter? you activity of I guys was a risk much couple said this Could a believe markets how organic growth

we incredibly What So it forward. it on We as is back, invest not excited our as can detail. having because I real Greg comes well. did, in and we're is we're the impact you about this Eric know have this going well continuing disclosed that a volume and incredibly leader to But say as our in to we're QX disclosed mentioned, we space, capabilities, disclosed and haven't the described. business. and it M&A in business do we positioned fantastically have

continue look Christa greater guidance had about before. David, this literally exact as we think to we where described. we year the challenge of were, for face And even in for business, the we they that reinforce And the overall the

or so this the in of -- guess tough in And business 'XX clarify, to also the definitely second easier. half comps just I are comps

'XX I is half second very depressed. of think

to it it? see guys off but put aren't that -- expecting down be base, way guys to the depressed depressed recovery you a So you that Is it's is more of again right of you don't that that it base? off just --

you listen We talk bank divisions. can the calls. to literally as It's the simple as almost to those investment of CEOs

as Eric As core not with that broader back, applications, just areas positioned, the are the done in we we've incredibly activity comes before. well but also commercial before, described

the we're stronger. gotten the comes Literally just there. volume we've transactions So come back, back as and

we're well is you do can All to so predict clear. anyone. be as trying as And

to through to half. Should could OpEx, mean sounds like expenses tick then And compare the I'm to investment of margin And trying it in just making. just of through are year, that with and then outlook CapEx the you even improvement for the sounds running a in also to going that tech in be half it of the on like more back talent, are instead bit headwind CapEx talent of second there guys I a on to down increased just to continued investment and it's in take coming the going that and the little the year. the be more continued that

million little with what we've CapEx, for worked full you're $XXX slight it of on is guidance So CapEx absolutely loaded to this we million. $XXX million a projects to the do But XXXX. how over given the $XXX out CapEx, year, said really we about Yes, million $XXX think a year. course was right.

In of margin expansion, terms margin we year expansion. expect full

free and for growth. We mid-single for greater organic double-digit full digit cash flow are expansion margin the revenue on track mid-single-digit organic -- growth, or year

in should growth yes, CapEx the the first And expense course of things you about terms over think full half really, slightly these some and are so things But more growth. in of year. the pattening

is question the your Please from Meyer of line with Shields question. next KBW. The proceed with

give all is or how what in how I sort M&A that revenues. of us whether you've some recovers? I just margin of practice think guidance business it's the guess the implies hoping significant could we're what quarters, on when about line you to digesting for seen in this terms expansion impact, recent margin

Yes.

business. So would manage so margin I to you as the thank the is particularly What expansion. overall the not on of you for business And year continue full different they're margin say I an tell portfolio. And we Mark. are in the track we business rest to would much, this

a impact. analytical on services and focused higher-revenue supported to portfolio our higher-margin areas are continuing -- entire as We with invest in growth, by the

insight we another forward-looking really margin risk. as for to is, so analytics way much what think clients matter just about to drives our value create increasingly measure understand and say our clients, what is would because term, I data as look long And you that's the it's value expansion which why

the it so more And innovation more in efficiently, we're around and Aon it's get which Services, level create of to operational Business Business service to why value value we're next with increased scale. obviously, driving customer Services And that Aon to business those at for excellence, clients. that generate driving investing areas the really then is better

year driving that. and And so margin beyond about each really sustainable confident we're XXXX expansion in

reform, let I you internally, -- question, given up? OECD was so minimum you I expected tax tax and want tax change you unless are the you expecting go hoping to Second approach know could typically disclose rate now. rates know, don't to us you the

are exactly not the you rate we tax Meyer, So predicted, giving as going on forward. guidance

I positive negative, XX%. As look of can and the X over discrete of historically, was which items, historic back years exclusive be or impact underlying rate the last

our our really legislative our structure, and overall good ability and forward. global feel capital we So regulation navigate about cash global going to structure changes

is with Bhullar Jimmy Please of your question with last Our question. JPMorgan. the proceed from line

first, on on for side. just question But is think had margins. So of a your results? about talent you negative that push? a for impact overall? stays I or it assuming on the a than expenses helps a it how extent higher Or the it inflation for or competition the Christa But positive you Obviously, high, hurts there's is on IT revenue to inflation

inflation what we would seen overall is business. good on the we've And what So for our far so is impact say inflationary base. our is expense

base. expense on again 'XX, first We've saw the half You 'XX of through compensation 'XX. in that and the seen impacted in come

through inflation. come medical care the side, starting is on What see and impacts that's inflation to increased asset whether health that's we're revenue values whether or

So our in XX months. that health XX therefore, the and impact it's expect to risk impacting through prices And come we and our revenue over to commercial next insurance on inflation lines. revenue

side to And so would we inflation expect that coming positive through. of start

But Eric, anything else here on inflation? you'd add

I asset values think how are Listen, Yes. repriced.

a the something is especially property side. on that's more way, consistent sort that been in think the into of business I re-put

I liability side. think verdicts inflation the around on

I from standpoint. it an insurer impacting think saying, you're So is pricing that

that make. creates also client decision-making it say would of I sort the will

they use sheet on may -- their balance things may clients transferring they that requires So retentions, it. may the may captives take versus higher different take support. It own

turn capabilities service not it's can line just and straight So other we insurance pricing. often, for, rather up straight than it will provide that a into clients

to clients inflation any way reacting the are So business the would.

gives that of to as them opportunity us they're so to And an suite broader it. managing provide a capabilities

does the this higher last considering your years, free pattern this the heavier then well? flow assume free time Should half in thus first is second flow And we a be cash on the going buyback Or they've in few year the especially activity the and second than the in cash higher half? buybacks, incorporate already far as similar half. share been to that

Yes.

Jimmy, would on share So we is repurchase. highest opportunity allocating what and return on you think on cash capital, we on remains cash capital based tell return cash our return about

uses allocating us can back. as for buy think you of disproportionately all cash. the about so to Because And it we bar generate cash, sets other it

say actually across forecast can see use calendar quarter. what the highest any look, And cash it's would by buyback year, But we is we of the you don't in firm.

or that utilize whether buyback ROIC undervalued so organic a on it investment, our cash opportunity flow, as definitely M&A huge we see we today, to a or cash DCF debt return. we'll buyback we generate are coming operating way depending or to And cash, value on is invest from substantially based And the that basis. business in on the given we

now to Case closing the to turn for remarks. would over like back I call Greg

forward to just to that for discussion day. we great look quarter. a you, the everyone, and want next I thank say Have joining,

you conference. conclude Thank will today's This your participation. for

this disconnect at your time. now lines may You