2 The following factors, among others, could cause actual results to differ from those set forth in or anticipated by the forward looking statements: changes in the competitive environment, due to macroeconomic conditions (including impacts from instability in the banking or commercial real estate sectors) or otherwise, or damage to Aon's reputation; fluctuations in currency exchange, interest, or inflation rates that could impact our financial condition or results; changes in global equity and fixed income ...

Core Insights - Aon reported a revenue of $4.15 billion for the quarter ended December 2024, reflecting a year-over-year increase of 22.9% and an EPS of $4.42, up from $3.89 in the same quarter last year [1] - The revenue fell slightly short of the Zacks Consensus Estimate of $4.19 billion, resulting in a surprise of -1.06%, while the EPS exceeded expectations by 4.25% [1] Financial Performance Metrics - Consolidated organic revenue growth was 6%, surpassing the average estimate of 5.7% based on eight analysts [4] - Organic revenue growth in Reinsurance Solutions was 6%, compared to the average estimate of 3.9% from seven analysts [4] - Wealth Solutions saw an organic revenue growth of 8%, exceeding the estimated 5.6% by seven analysts [4] - Commercial Risk Solutions achieved a 6% organic revenue growth, slightly above the 5.5% average estimate from seven analysts [4] - Health Solutions reported a 5% organic revenue growth, which was below the estimated 6.6% by seven analysts [4] Revenue Breakdown - Health Solutions revenue was $1.07 billion, below the average estimate of $1.12 billion, but represented a year-over-year increase of 40.2% [4] - Wealth Solutions generated $542 million in revenue, exceeding the average estimate of $506.09 million, marking a year-over-year increase of 43.8% [4] - Reinsurance Solutions revenue was $351 million, slightly above the average estimate of $346.46 million, with a year-over-year change of 5.7% [4] - Commercial Risk Solutions revenue was $2.19 billion, below the estimated $2.22 billion, but still represented a 14.7% increase compared to the previous year [4] Stock Performance - Aon's shares returned +4.8% over the past month, outperforming the Zacks S&P 500 composite's +2.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - For the full year 2024, the company achieved organic revenue growth of 6% and total revenue growth of 17% [5][20] - Adjusted operating income increased by 17%, leading to a 10% growth in adjusted earnings per share (EPS) [5][20] - Free cash flow reached $2.8 billion, reflecting strong operating income growth and working capital improvements [29][20] Business Line Data and Key Metrics Changes - In Q4, organic revenue growth for commercial risk was 6%, driven by strength in North American core P&C business and international contributions [21][22] - Reinsurance organic revenue also grew by 6% in Q4, supported by strong treaty placements and interest in catastrophe bonds [23] - Health solutions experienced 5% growth in Q4, while wealth solutions delivered 8% organic revenue growth, driven by demand for pension risk transfer consulting [24] Market Data and Key Metrics Changes - The company noted a flat net market impact from growth and exposures in rates, with a modestly negative rate impact in reinsurance [24][25] - The overall market remains under-penetrated, with increasing demand driven by megatrends in trade, technology, weather, and workforce [76] Company Strategy and Development Direction - The company is executing its 3x3 plan, focusing on risk capital and human capital, Aon client leadership, and Aon Business Services [8][15] - The integration of NFP is progressing well, with expectations of achieving $45 million to $60 million in targeted acquired EBITDA in 2025 [19][42] - Continued investment in client-facing talent and innovative technology-driven solutions is prioritized to support growth [15][36] Management's Comments on Operating Environment and Future Outlook - Management highlighted increasing volatility and complexity in client environments, necessitating enhanced risk management solutions [6][7] - The company expects to maintain mid single-digit or greater organic revenue growth, continued margin expansion, and strong adjusted EPS growth in 2025 [5][36] - Management expressed confidence in achieving a double-digit compound annual growth rate (CAGR) in free cash flow from 2023 to 2026 [20][36] Other Important Information - The company paid down $2.1 billion in debt and returned $1.6 billion in capital to shareholders through dividends and share repurchases [19][29] - Adjusted operating margin for Q4 was 33.3%, reflecting a 140 basis point expansion [26] Q&A Session Summary Question: Integration of NFP and future M&A opportunities - Management confirmed that the integration of NFP is on track and expressed confidence in pursuing additional M&A opportunities as the platform becomes more integrated [43][44][46] Question: Growth in Reinsurance Solutions and ILS market - Management noted that the ILS business is a smaller component of reinsurance but is driving growth, with interest in catastrophe bonds and other innovative risk transfer solutions [51][53] Question: Retention improvement efforts and M&A Services rebound - Management highlighted strengthening retention rates, particularly in North America, and noted that M&A services are expected to pick up modestly [60][63] Question: Seasonal expectations for Q1 in commercial risk - Management indicated that there are no specific seasonal expectations for Q1, but they remain committed to achieving mid single-digit growth [72][74] Question: EPS growth guidance - Management provided detailed guidance on organic revenue growth and margin expansion, indicating confidence in achieving strong EPS growth [85][88]

Core Viewpoint - Aon reported quarterly earnings of $4.42 per share, exceeding the Zacks Consensus Estimate of $4.24 per share, and showing an increase from $3.89 per share a year ago, indicating a positive earnings surprise of 4.25% [1][2] Financial Performance - Aon posted revenues of $4.15 billion for the quarter ended December 2024, which was 1.06% below the Zacks Consensus Estimate, but an increase from $3.38 billion year-over-year [2] - Over the last four quarters, Aon has surpassed consensus EPS estimates two times and topped consensus revenue estimates twice [2] Stock Performance - Aon shares have increased approximately 3.6% since the beginning of the year, outperforming the S&P 500's gain of 3.2% [3] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates of $6.14 on revenues of $4.93 billion for the coming quarter, and $17.37 on revenues of $17.46 billion for the current fiscal year [7] - The estimate revisions trend for Aon is currently mixed, resulting in a Zacks Rank 3 (Hold), suggesting shares are expected to perform in line with the market in the near future [6] Industry Context - The Insurance - Brokerage industry, to which Aon belongs, is currently in the top 20% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Revenue Growth - Total revenue for Q4 2024 increased by 23% to $4.1 billion, with organic revenue growth of 6% and a 1% unfavorable impact from foreign currency translation[7]. - Full year 2024 total revenue reached $15.7 billion, a 17% increase compared to 2023[3]. - Total revenue for 2024 increased 17% to $15.7 billion, driven by acquired revenues from NFP and 6% organic revenue growth[30]. - Total revenue for Q4 2024 was $4.147 billion, a 23% increase from $3.375 billion in Q4 2023[42]. - Total revenue for Q4 2024 reached $4,147 million, a 23% increase from $3,375 million in Q4 2023[44]. - Organic revenue growth for Q4 2024 was 6%, with a notable 10% growth in Commercial Risk Solutions[47]. - Health Solutions revenue increased by 40% year-over-year in Q4 2024, reaching $1,070 million[47]. Earnings and Income - Adjusted EPS for Q4 2024 rose by 14% to $4.42, while diluted EPS increased by 33% to $3.28[4]. - Net income attributable to Aon shareholders in Q4 2024 increased 44% to $716 million compared to $498 million in Q4 2023[29]. - Adjusted net income per share increased 10% to $15.60 on a diluted basis, despite a $0.12 unfavorable impact from foreign currency translation[31]. - Adjusted net income attributable to Aon shareholders for Q4 2024 was $965 million, a 23% increase from $785 million in Q4 2023; for the full year, it was $3,316 million, up 14% from $2,899 million[56]. - Aon reported a net income of $2,720 million for 2024, compared to $2,628 million in 2023[62]. Operating Performance - Operating income for Q4 2024 increased by 40% to $1.1 billion, with an operating margin of 26.3%[26]. - Operating income for Q4 2024 rose 40% to $1.091 billion compared to $779 million in Q4 2023[42]. - The operating margin improved to 26.3% in Q4 2024, up from 23.1% in Q4 2023[44]. - Adjusted operating income for Q4 2024 was $1,380 million, a 21% increase from $1,141 million in Q4 2023; for the full year, it was $4,939 million, up 17% from $4,223 million[56]. - Adjusted operating income for the full year 2024 was $4,939 million, compared to $4,223 million in 2023[51]. Cash Flow and Capital Management - Free cash flow for 2024 was $2.8 billion, reflecting an 11% decrease compared to the prior year[14]. - The company expects to achieve mid-single-digit organic revenue growth and double-digit free cash flow growth in 2025[5]. - Cash provided by operating activities for 2024 was $3,035 million, down from $3,435 million in 2023[62]. - The company reported a 12% increase in cash provided by operating activities for the twelve months ended December 31, 2024, totaling $3,035 million[50]. - The company repurchased 0.6 million shares for approximately $200 million in Q4 2024, with $2.3 billion remaining under its share repurchase program[11]. - The company repurchased approximately 3.1 million class A ordinary shares for about $1.0 billion at an average price of $325.56 per share during 2024[32]. - Aon had approximately $2.3 billion of remaining authorization under its share repurchase program as of December 31, 2024[32]. Expenses and Costs - Total operating expenses for Q4 2024 rose by 18% to $3.1 billion, primarily due to the inclusion of NFP's operating expenses[8]. - Compensation and benefits expenses increased by 27% to $2.120 billion in Q4 2024, up from $1.671 billion in Q4 2023[42]. - The effective tax rate for Q4 2024 was 17.6%, up from 16.7% in the prior year period[10]. - The effective tax rate for the twelve months ended December 31, 2024, was 21.4%, compared to 17.1% for the prior year[42]. Acquisitions and Investments - Aon completed the acquisition of NFP on April 25, 2024, incurring $40 million in transaction costs for Q4 2024 and $191 million for the full year[54]. - The company plans to continue investing in technology-related costs to streamline operations and reduce headcount[52]. - The company incurred $6 million in debt extinguishment charges related to the repayment of NFP debt, classified as transaction-related costs[58]. Balance Sheet and Debt - Total assets increased to $48,965 million as of December 31, 2024, compared to $33,959 million in 2023[61]. - Long-term debt rose to $16,265 million in 2024 from $9,995 million in 2023, reflecting a significant increase in leverage[61].

Core Viewpoint - Aon plc reported strong financial results for Q4 and full year 2024, highlighting a 23% increase in total revenue for Q4 and a 17% increase for the full year, driven by organic growth and acquisitions, particularly from NFP [2][30]. Financial Performance Summary - Total revenue for Q4 2024 was $4.1 billion, a 23% increase from $3.4 billion in Q4 2023, while full year revenue reached $15.7 billion, up 17% from $13.4 billion in 2023 [2][30]. - Organic revenue growth for both Q4 and the full year was reported at 6% [2][30]. - The diluted EPS for Q4 increased by 33% to $3.28, while the full year diluted EPS was $12.49, a slight decrease from $12.51 in the previous year [2][31]. Segment Performance - Aon realigned its reporting segments into Risk Capital and Human Capital, with Q4 Risk Capital revenue increasing by 13% to $2.5 billion and Human Capital revenue rising by 41% to $1.6 billion [3][4]. - Within Risk Capital, Commercial Risk Solutions saw a 15% increase in revenue, while Reinsurance Solutions grew by 6% [16][17]. - In Human Capital, Health Solutions revenue grew by 40%, and Wealth Solutions increased by 44% [18][19]. Expense Overview - Total operating expenses for Q4 increased by 18% to $3.1 billion, primarily due to the inclusion of NFP's operating expenses and organic growth-related costs [5][20]. - Compensation and benefits expenses rose by 27% to $2.1 billion, reflecting ongoing expenses from NFP and organic growth [20][41]. Cash Flow and Shareholder Returns - Free cash flow for 2024 was $2.8 billion, a decrease of 11% compared to the previous year, attributed to lower cash flows from operations [11][30]. - The company repurchased approximately 3.1 million shares for about $1 billion during 2024, with $2.3 billion remaining under its share repurchase authorization as of December 31, 2024 [32][8]. Guidance and Future Outlook - Aon introduced guidance for 2025, expecting to maintain mid-single-digit organic revenue growth, adjusted margin expansion, and strong adjusted EPS growth [13][30].

We are in the initial stages of the fourth-quarter 2024 earnings season. So far, results have come in line with expectations. As of Jan. 29, 112 companies of the broad-market index — the S&P 500 — reported their quarterly financial numbers. Total earnings of these companies are up 10.8% year over year on 5.5% higher revenues, with 80.4% beating earnings per share (EPS) estimates and 68.8% beating revenue estimates.Looking at the fourth quarter as a whole, total earnings for the S&P 500 Index are expected to ...

Core Viewpoint - Aon plc is expected to report its fourth-quarter 2024 results on January 31, 2025, with earnings estimated at $4.24 per share and revenues at $4.19 billion, indicating a year-over-year earnings increase of 9% and revenue growth of 24.2% [1][2]. Financial Performance - The earnings estimate for Aon has remained stable over the past week, with a consensus indicating a positive outlook for the upcoming quarter [2]. - Aon has missed earnings consensus estimates in three of the last four quarters, with an average surprise of negative 0.5% [3]. Earnings Predictions - Aon's Earnings ESP is +2.75%, and it holds a Zacks Rank of 3 (Hold), suggesting a potential earnings beat this quarter [4]. - The Commercial Risk Solutions segment is projected to see revenues grow by 16.7% year-over-year, while the Health Solutions segment is expected to grow by 46.3% [6][8]. Segment Performance - The Reinsurance Solutions segment is estimated to grow by 4.4% year-over-year, supported by favorable retention rates and new business generation [9]. - The Wealth Solutions segment is anticipated to increase by 34.2% from the previous year, driven by demand for advisory services [10]. Expense Considerations - Total operating expenses are expected to rise by over 21%, primarily due to increased compensation and benefits costs, with other general expenses estimated at nearly $533 million and compensation costs at $2.09 billion [11][12].

Global Natural Disaster Trends - Global natural disaster events caused $368 billion in economic losses in 2024, a 14% increase above the 21st-century average, marking the ninth consecutive year of losses exceeding $300 billion [2] - Weather-related events are becoming more frequent and costly, with global insurance losses in 2024 reaching $145 billion, 54% above the 21st-century average [3] - The protection gap stood at 60% in 2024, representing a significant financial challenge for communities, businesses, and governments [3] Key Events and Their Impact - Hurricane Helene was the costliest global event in 2024, causing $75 billion in damages and 243 fatalities [4] - Hurricane Milton was the costliest single global insured loss event, causing $20 billion in losses [4] - 78% of global insured losses were recorded in the U.S., driven by hurricanes and severe convective storms (SCS) [4] Severe Convective Storms (SCS) and Urban Exposure - There were at least 54 global events in 2024 that each resulted in economic losses above $1 billion, driven by SCS in the U.S. [5] - Growing exposure to SCS in high-risk areas like Dallas, Houston, and Denver increases the likelihood of billion-dollar disasters [5] Climate Trends and Record Temperatures - 2024 was the warmest year on record, with 20 countries and territories recording their highest temperatures [6] - The year saw the end of 15 consecutive months of record global high temperatures in August [6] Insurance Industry and Resilience Measures - $223 billion in uninsured losses in 2024 highlights the need for investments in technology and analytics to model and price risks [7] - Improved warning systems, weather forecasts, and evacuation planning contributed to a reduction in fatalities, with 18,100 lives lost in 2024 compared to the 21st-century average of 72,400 [7] Global Economic Loss Events - The top 10 global economic loss events in 2024 included hurricanes, floods, earthquakes, and droughts, with Hurricane Helene and Hurricane Milton being the most costly [9] - Spain, Brazil, U.A.E., and Vietnam recorded their costliest insurance events in 2024 [8] Industry Collaboration and Innovation - The insurance industry and broader financial community have the opportunity to bring new sources of capital to protect vulnerable communities and create greater economic resilience [8] - Collaboration between stakeholders is crucial for developing public-private partnerships and innovative insurance products to close the protection gap [8] Aon's Role and Expertise - Aon's 2025 Climate and Catastrophe Insight report provides actionable insights to help businesses and communities prepare for natural hazards using the latest forecasting models and analytics [9] - The company operates in over 120 countries, offering globally integrated Risk Capital and Human Capital expertise to help clients make better risk and people decisions [10]

Core Insights - Aon's 2025 Human Capital Employee Sentiment Study reveals a "hustle reset" among employees as they reassess their work-life balance and well-being priorities [1][4][6] - A significant 60% of employees are considering or actively seeking new employment within the next year, indicating widespread job dissatisfaction [2] - The study highlights a low motivation among employees to enhance their AI skills, with only about one-third feeling driven to develop new skills related to emerging technologies [2] Employee Preferences - There is a rising demand for flexibility, with work-life balance benefits ranked as the third most valued by employees, particularly among Gen Z, who prioritize it just after medical benefits [3] - A strong company culture is essential for attracting and retaining talent, with employees valuing workplaces that align with their personal values and are perceived as enjoyable [4] Trends in AI and Employment - There is a disparity in AI expectations between executives and entry-level employees, with 22% of executives believing AI will significantly replace jobs, compared to only 11% of entry-level employees [5] - Hybrid workers report feeling the most valued by their companies, while fully remote employees are significantly more likely to feel undervalued [5] Compensation and Benefits - Nearly half (47%) of employees prioritize better-than-average pay and meaningful benefits when choosing an employer, highlighting the importance of competitive compensation [5] - Personalization of benefits is crucial, as 72% of employees desire tailored benefits, yet only 41% currently have access to a choice-based benefits system [5] Communication Gaps - The study identifies significant communication gaps between employers and employees regarding benefits, with only 38% of employees who value life and disability insurance believing they have access to these benefits [5]