Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 29, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-7933 | |
Entity Registrant Name | Aon plc | |
Entity Incorporation, State or Country Code | L2 | |
Entity Tax Identification Number | 98-1539969 | |
Entity Address, Address Line One | Metropolitan Building, James Joyce Street | |
Entity Address, City or Town | Dublin 1 | |
Entity Address, Country | IE | |
Entity Address, Postal Zip Code | D01 K0Y8 | |
City Area Code | 1 | |
Local Phone Number | 266 6000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 225,647,250 | |
Entity Central Index Key | 0000315293 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Class A Ordinary Shares $0.01 nominal value | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class A Ordinary Shares $0.01 nominal value | |
Trading Symbol | AON | |
Security Exchange Name | NYSE | |
Guarantees of Aon plc’s 4.00% Senior Notes due 2023 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Guarantees of Aon plc’s 4.00% Senior Notes due 2023 | |
Trading Symbol | AON23 | |
Security Exchange Name | NYSE | |
Guarantees of Aon plc’s 3.50% Senior Notes due 2024 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Guarantees of Aon plc’s 3.50% Senior Notes due 2024 | |
Trading Symbol | AON24 | |
Security Exchange Name | NYSE | |
Guarantees of Aon plc’s 3.875% Senior Notes due 2025 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Guarantees of Aon plc’s 3.875% Senior Notes due 2025 | |
Trading Symbol | AON25 | |
Security Exchange Name | NYSE | |
Guarantees of Aon plc’s 2.875% Senior Notes due 2026 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Guarantees of Aon plc’s 2.875% Senior Notes due 2026 | |
Trading Symbol | AON26 | |
Security Exchange Name | NYSE | |
Guarantees of Aon plc’s 4.25% Senior Notes due 2042 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Guarantees of Aon plc’s 4.25% Senior Notes due 2042 | |
Trading Symbol | AON42 | |
Security Exchange Name | NYSE | |
Guarantees of Aon plc’s 4.45% Senior Notes due 2043 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Guarantees of Aon plc’s 4.45% Senior Notes due 2043 | |
Trading Symbol | AON43 | |
Security Exchange Name | NYSE | |
Guarantees of Aon plc’s 4.60% Senior Notes due 2044 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Guarantees of Aon plc’s 4.60% Senior Notes due 2044 | |
Trading Symbol | AON44 | |
Security Exchange Name | NYSE | |
Guarantees of Aon plc’s 4.75% Senior Notes due 2045 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Guarantees of Aon plc’s 4.75% Senior Notes due 2045 | |
Trading Symbol | AON45 | |
Security Exchange Name | NYSE |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue | ||
Total revenue | $ 3,525 | $ 3,219 |
Expenses | ||
Compensation and benefits | 1,719 | 1,522 |
Information technology | 114 | 111 |
Premises | 77 | 73 |
Depreciation of fixed assets | 41 | 41 |
Amortization of intangible assets | 40 | 97 |
Other general expense | 289 | 342 |
Total operating expenses | 2,280 | 2,186 |
Operating income | 1,245 | 1,033 |
Interest income | 3 | 2 |
Interest expense | (79) | (83) |
Other income (expense) | (2) | 28 |
Income before income taxes | 1,167 | 980 |
Income tax expense | 234 | 189 |
Net income | 933 | 791 |
Less: Net income attributable to noncontrolling interests | 20 | 19 |
Net income attributable to Aon shareholders | $ 913 | $ 772 |
Basic net income per share attributable to Aon shareholders (in dollars per share) | $ 4.02 | $ 3.31 |
Diluted net income per share attributable to Aon shareholders (in dollars per share) | $ 4 | $ 3.29 |
Weighted average ordinary shares outstanding - basic (in shares) | 227.1 | 233.2 |
Weighted average ordinary shares outstanding - diluted (in shares) | 228.1 | 234.5 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 933 | $ 791 |
Less: Net income attributable to noncontrolling interests | 20 | 19 |
Net income (loss) attributable to Aon shareholders | 913 | 772 |
Other comprehensive income (loss), net of tax: | ||
Change in fair value of financial instruments | 11 | (5) |
Foreign currency translation adjustments | (70) | (397) |
Postretirement benefit obligation | 29 | 24 |
Total other comprehensive income (loss) | (30) | (378) |
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 0 | (2) |
Total other comprehensive income (loss) attributable to Aon shareholders | (30) | (376) |
Comprehensive income attributable to Aon shareholders | $ 883 | $ 396 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Financial Position - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 822 | $ 884 |
Short-term investments | 171 | 308 |
Receivables, net | 3,526 | 3,070 |
Fiduciary assets | 13,894 | 13,798 |
Other current assets | 492 | 624 |
Total current assets | 18,905 | 18,684 |
Goodwill | 8,587 | 8,666 |
Intangible assets, net | 594 | 640 |
Fixed assets, net | 584 | 599 |
Operating lease right-of-use assets | 867 | 911 |
Deferred tax assets | 721 | 724 |
Prepaid pension | 1,321 | 1,280 |
Other non-current assets | 596 | 610 |
Total assets | 32,175 | 32,114 |
Current liabilities | ||
Accounts payable and accrued liabilities | 1,628 | 2,016 |
Short-term debt and current portion of long-term debt | 0 | 448 |
Fiduciary liabilities | 13,894 | 13,798 |
Other current liabilities | 1,301 | 1,171 |
Total current liabilities | 16,823 | 17,433 |
Long-term debt | 7,263 | 7,281 |
Non-current operating lease liabilities | 849 | 897 |
Deferred tax liabilities | 293 | 262 |
Pension, other postretirement, and postemployment liabilities | 1,681 | 1,763 |
Other non-current liabilities | 905 | 895 |
Total liabilities | 27,814 | 28,531 |
Equity | ||
Ordinary shares - $0.01 nominal value Authorized: 500 shares (issued: 2021 - 226.2; 2020 - 225.5) | 2 | 2 |
Additional paid-in capital | 6,348 | 6,312 |
Retained earnings | 1,801 | 1,042 |
Accumulated other comprehensive loss | (3,891) | (3,861) |
Total Aon shareholders' equity | 4,260 | 3,495 |
Noncontrolling interests | 101 | 88 |
Total equity | 4,361 | 3,583 |
Total liabilities and equity | $ 32,175 | $ 32,114 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Financial Position (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, nominal or par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued shares (in shares) | 226,200,000 | 225,500,000 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Ordinary Shares and Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss, Net of Tax | Non- controlling Interests |
Beginning Balance (in shares) at Dec. 31, 2019 | 232.1 | ||||
Beginning Balance at Dec. 31, 2019 | $ 3,443 | $ 6,154 | $ 1,248 | $ (4,033) | $ 74 |
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 791 | 772 | 19 | ||
Shares issued - employee stock compensation plans (in shares) | 1.2 | ||||
Shares issued - employee stock compensation plans | (112) | $ (112) | |||
Shares purchased (in shares) | (2.2) | ||||
Shares purchased | (463) | (463) | |||
Share-based compensation expense | 81 | $ 81 | |||
Dividends to shareholders | (102) | (102) | |||
Net change in fair value of financial instruments | (5) | (5) | |||
Net foreign currency translation adjustments | (397) | (395) | (2) | ||
Net postretirement benefit obligation | 24 | 24 | |||
Ending Balance (in shares) at Mar. 31, 2020 | 231.1 | ||||
Ending Balance at Mar. 31, 2020 | $ 3,260 | $ 6,123 | 1,455 | (4,409) | 91 |
Beginning Balance (in shares) at Dec. 31, 2020 | 225.5 | 225.5 | |||
Beginning Balance at Dec. 31, 2020 | $ 3,583 | $ 6,314 | 1,042 | (3,861) | 88 |
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 933 | 913 | 20 | ||
Shares issued - employee stock compensation plans (in shares) | 0.9 | ||||
Shares issued - employee stock compensation plans | (87) | $ (87) | |||
Shares purchased (in shares) | (0.2) | ||||
Shares purchased | (50) | (50) | |||
Share-based compensation expense | 131 | $ 131 | |||
Dividends to shareholders | (104) | (104) | |||
Net change in fair value of financial instruments | 11 | 11 | |||
Net foreign currency translation adjustments | (70) | (70) | |||
Net postretirement benefit obligation | 29 | 29 | |||
Purchases of subsidiary shares from noncontrolling interests | (14) | $ (8) | (6) | ||
Dividends paid to noncontrolling interests on subsidiary common stock | $ (1) | (1) | |||
Ending Balance (in shares) at Mar. 31, 2021 | 226.2 | 226.2 | |||
Ending Balance at Mar. 31, 2021 | $ 4,361 | $ 6,350 | $ 1,801 | $ (3,891) | $ 101 |
Condensed Consolidated Statem_6
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends (in dollars per share) | $ 0.46 | $ 0.44 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities | ||
Net income | $ 933 | $ 791 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
(Gain) from sales of businesses, net | 0 | (25) |
Depreciation of fixed assets | 41 | 41 |
Amortization and impairment of intangible assets | 40 | 97 |
Share-based compensation expense | 131 | 76 |
Deferred income taxes | 19 | (6) |
Change in assets and liabilities: | ||
Fiduciary receivables | (166) | (808) |
Short-term investments — funds held on behalf of clients | (28) | (237) |
Fiduciary liabilities | 194 | 1,045 |
Receivables, net | (485) | (543) |
Accounts payable and accrued liabilities | (356) | (275) |
Current income taxes | 142 | 141 |
Pension, other postretirement and postemployment liabilities | (59) | (41) |
Other assets and liabilities | 155 | 82 |
Cash provided by operating activities | 561 | 338 |
Cash flows from investing activities | ||
Proceeds from investments | 11 | 6 |
Payments for investments | (18) | (43) |
Net sales (purchases) of short-term investments — non-fiduciary | 138 | (38) |
Acquisition of businesses, net of cash acquired | 0 | (334) |
Sale of businesses, net of cash sold | 0 | 30 |
Capital expenditures | (29) | (59) |
Cash provided by (used for) investing activities | 102 | (438) |
Cash flows from financing activities | ||
Share repurchase | (50) | (463) |
Issuance of shares for employee benefit plans | (87) | (112) |
Issuance of debt | 250 | 2,060 |
Repayment of debt | (650) | (1,341) |
Cash dividends to shareholders | (104) | (102) |
Noncontrolling interests and other financing activities | (68) | 40 |
Cash provided by (used for) financing activities | (709) | 82 |
Effect of exchange rates on cash and cash equivalents | (16) | (82) |
Net (decrease) in cash and cash equivalents | (62) | (100) |
Cash and cash equivalents at beginning of period | 884 | 790 |
Cash and cash equivalents at end of period | 822 | 690 |
Supplemental disclosures: | ||
Interest paid | 36 | 51 |
Income taxes paid, net of refunds | $ 74 | $ 53 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements and Notes thereto (the “Financial Statements”) have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The Financial Statements include the accounts of Aon plc, an Irish public limited company, and all of its controlled subsidiaries. Intercompany accounts and transactions have been eliminated. The Financial Statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Company’s consolidated financial position, results of operations, and cash flows for all periods presented. Certain information and disclosures normally included in the Financial Statements prepared in accordance with U.S. GAAP have been condensed or omitted. The Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The results for the three months ended March 31, 2021 are not necessarily indicative of operating results that may be expected for the full year ending December 31, 2021, particularly in light of the continuing effect of the COVID-19 pandemic. Reclassification Certain amounts in the prior year's Condensed Consolidated Financial Statements have been reclassified to conform to the current year’s presentation. For the quarter ended March 31, 2020, a $1 million loss from discontinued operations and its related tax expense was recognized in Net income (loss) from discontinued operations in the Condensed Consolidated Statement of Income and Condensed Consolidated Statement of Cash Flows. This amount is now included in Other income (expense) in the Condensed Consolidated Statement of Income and Other assets and liabilities in the Condensed Consolidated Statement of Cash Flows. There was no earnings per share impact. Additionally, for the quarter ended March 31, 2020, a $60 million cash outflow was classified as an adjustment to Net income from Restructuring reserves in the Condensed Consolidated Statement of Cash Flows. This amount is now included in Other assets and liabilities in the Condensed Consolidated Statement of Cash Flows. There was no impact on Cash provided by operating activities. Use of Estimates The preparation of the Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the Financial Statements, and the reported amounts of reserves and expenses. These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes its estimates to be reasonable given the current facts available. Aon adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, foreign currency exchange rate movements, and, recently, impacts from the COVID-19 pandemic increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment would, if applicable, be reflected in the Financial Statements in future periods. |
Accounting Principles and Pract
Accounting Principles and Practices | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Accounting Principles and Practices | Accounting Principles and PracticesAll issued, but not yet effective guidance, has been deemed not applicable or not significant to the Financial Statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Disaggregation of Revenue The following table summarizes revenue from contracts with customers by principal service line (in millions): Three Months Ended March 31, 2021 2020 Commercial Risk Solutions $ 1,289 $ 1,146 Reinsurance Solutions 922 848 Retirement Solutions 434 397 Health Solutions 536 502 Data & Analytic Services 351 331 Elimination (7) (5) Total revenue $ 3,525 $ 3,219 Consolidated revenue from contracts with customers by geographic area, which is attributed on the basis of where the services are performed, is as follows (in millions): Three Months Ended March 31, 2021 2020 United States $ 1,308 $ 1,227 Americas other than United States 250 228 United Kingdom 530 500 Ireland 33 23 Europe, Middle East, & Africa other than United Kingdom and Ireland 1,091 955 Asia Pacific 313 286 Total revenue $ 3,525 $ 3,219 Contract Costs An analysis of the changes in the net carrying amount of costs to fulfill contracts with customers are as follows (in millions): Three Months Ended March 31, 2021 2020 Balance at beginning of period $ 339 $ 335 Additions 346 318 Amortization (443) (416) Impairment — — Foreign currency translation and other (1) (8) Balance at end of period $ 241 $ 229 An analysis of the changes in the net carrying amount of costs to obtain contracts with customers are as follows (in millions): Three Months Ended March 31, 2021 2020 Balance at beginning of period $ 184 $ 171 Additions 13 12 Amortization (12) (12) Impairment — — Foreign currency translation and other — (4) Balance at end of period $ 185 $ 167 |
Cash and Cash Equivalents and S
Cash and Cash Equivalents and Short-term Investments | 3 Months Ended |
Mar. 31, 2021 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Cash and Cash Equivalents and Short-term Investments | Cash and Cash Equivalents and Short-Term Investments Cash and cash equivalents include cash balances and all highly liquid instruments with initial maturities of three months or less. Short-term investments consist of money market funds. The estimated fair value of Cash and cash equivalents and Short-term investments approximates their carrying values. At March 31, 2021, Cash and cash equivalents and Short-term investments were $993 million compared to $1,192 million at December 31, 2020, a decrease of $199 million. Of the total balances, $102 million was restricted as to their use at both March 31, 2021 and December 31, 2020. Included within Short-term investments as of March 31, 2021 and December 31, 2020, respectively, were £44.9 million ($61.9 million at March 31, 2021 exchange rates) and £44.4 million ($60.2 million at December 31, 2020 exchange rates) of operating funds required to be held by the Company in the U.K. by the Financial Conduct Authority (the “FCA”), a U.K.-based regulator. |
Other Financial Data
Other Financial Data | 3 Months Ended |
Mar. 31, 2021 | |
Other Financial Data [Abstract] | |
Other Financial Data | Other Financial Data Condensed Consolidated Statements of Income Information Other Income (Expense) Other income (expense) consists of the following (in millions): Three Months Ended March 31, 2021 2020 (1) Foreign currency remeasurement $ 4 $ 42 Financial instruments (13) (44) Pension and other postretirement 6 4 Equity earnings 1 1 Disposal of businesses — 25 Total $ (2) $ 28 (1) For the three months ended March 31, 2020 the Company has included $1 million of expense that was previously classified as Net loss from discontinued operations. Refer to Note 1 “Basis of Presentation” for further information. Condensed Consolidated Statements of Financial Position Information Allowance for Doubtful Accounts An analysis of the allowance for doubtful accounts is as follows (in millions): Three Months Ended March 31, 2021 2020 Balance at beginning of period 98 77 Provision 6 9 Accounts written off, net of recoveries (4) (8) Foreign currency translation and other 1 3 Balance at end of period $ 101 $ 81 Other Current Assets The components of Other current assets are as follows (in millions): As of March 31, December 31, Costs to fulfill contracts with customers (1) $ 241 $ 339 Prepaid expenses 118 111 Taxes receivable 45 95 Other 88 79 Total $ 492 $ 624 (1) Refer to Note 3 “Revenue from Contracts with Customers” for further information. Other Non-Current Assets The components of Other non-current assets are as follows (in millions): As of March 31, December 31, Costs to obtain contracts with customers (1) $ 185 $ 184 Taxes receivable 124 125 Leases 82 89 Investments 74 74 Other 131 138 Total $ 596 $ 610 (1) Refer to Note 3 “Revenue from Contracts with Customers” for further information. Other Current Liabilities The components of Other current liabilities are as follows (in millions): As of March 31, December 31, Deferred revenue (1) $ 340 $ 296 Taxes payable 137 80 Leases 222 234 Other 602 561 Total $ 1,301 $ 1,171 (1) During the three months ended March 31, 2021, $171 million was recognized in the Condensed Consolidated Statements of Income. During the three months ended March 31, 2020, $117 million and was recognized in the Condensed Consolidated Statements of Income. Other Non-Current Liabilities The components of Other non-current liabilities are as follows (in millions): As of March 31, December 31, Taxes payable (1) $ 589 $ 561 Leases 64 65 Deferred revenue 66 76 Compensation and benefits 53 53 Other 133 140 Total $ 905 $ 895 (1) Includes $145 million for the non-current portion of the one-time mandatory transition tax on accumulated foreign earnings as of March 31, 2021 and December 31, 2020. |
Acquisitions and Dispositions o
Acquisitions and Dispositions of Businesses | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions of Businesses | Acquisitions and Dispositions of Businesses Completed Acquisitions The Company completed no acquisitions during the three months ended March 31, 2021 and five acquisitions during the three months ended March 31, 2020. 2020 Acquisitions On April 6, 2020, the Company completed the acquisition of 100% share capital of Farmington Administrative Services LLC, a U.S.-based national provider of enrollment solutions and voluntary benefits, and certain assets of other Farmington companies. On January 31, 2020, the Company completed the acquisition of 100% share capital of Cytelligence Inc., a Canadian-based cyber security firm that provides incident response advisory, digital forensic expertise, security consulting services, and cyber security training for employees to help organizations respond to cyber security threats and strengthen their security position. On January 3, 2020, the Company completed the acquisition of 100% share capital of CoverWallet, Inc., a U.S.-based digital insurance platform for small- and medium-sized businesses. On January 1, 2020, the Company completed the acquisition of 100% share capital of TRIUM GmbH Insurance Broker, an insurance broker based in Germany. On January 1, 2020, the Company completed the acquisition of 100% share capital of Assimedia SA, an insurance broker based in Switzerland. On January 1, 2020, the Company completed the acquisition of 100% share capital of Apollo Conseil et Courtage, an insurance broker based in France. Completed Dispositions The Company completed no dispositions during the three months ended March 31, 2021. The Company completed one disposition during the three months ended March 31, 2020. Total pretax gains recognized for the three months ended March 31, 2020 were $25 million. Gains and losses recognized as a result of a disposition are included in Other income (expense) in the Condensed Consolidated Statements of Income. Other Significant Activity On March 9, 2020, Aon and Willis Towers Watson Public Limited Company, an Irish public limited company (“WTW”), entered into a business combination agreement (the “Business Combination Agreement”) with respect to a combination of the parties (the “Combination”). Refer to “Business Combination Agreement” within Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations for further information. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The changes in the net carrying amount of goodwill for the three months ended March 31, 2021 are as follows (in millions): Balance as of December 31, 2020 $ 8,666 Foreign currency translation and other (79) Balance as of March 31, 2021 $ 8,587 Other intangible assets by asset class are as follows (in millions): March 31, 2021 December 31, 2020 Gross Carrying Amount Accumulated Net Carrying Amount Gross Carrying Amount Accumulated Net Carrying Amount Customer-related and contract-based $ 2,316 $ 1,793 $ 523 $ 2,337 $ 1,775 $ 562 Tradenames 14 13 1 14 13 1 Technology and other 431 361 70 435 358 77 Total $ 2,761 $ 2,167 $ 594 $ 2,786 $ 2,146 $ 640 The estimated future amortization for finite-lived intangible assets as of March 31, 2021 is as follows (in millions): Remainder of 2021 $ 106 2022 100 2023 89 2024 72 2025 57 2026 36 Thereafter 134 Total $ 594 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Notes On January 13, 2021, Aon Global Limited, a limited company organized under the laws of England and Wales and a wholly owned subsidiary of Aon plc, issued an irrevocable notice of redemption to holders of its 2.80% Senior Notes for the redemption of all $400 million outstanding aggregate principal amount of the notes, which were set to mature in March 2021 and classified as Short-term debt and current portion of long-term debt as of December 31, 2020. The redemption date was on February 16, 2021 and resulted in an insignificant loss due to extinguishment. On May 29, 2020, Aon Corporation, a Delaware corporation and a wholly owned subsidiary of the Company (“Aon Corporation”), issued an irrevocable notice of redemption to holders of its 5.00% Senior Notes, which were set to mature on September 30, 2020, for the redemption of all $600 million outstanding aggregate principal amount of the notes. The redemption date was on June 30, 2020 and resulted in a loss of $7 million due to extinguishment. On May 12, 2020, Aon Corporation issued $1 billion of its 2.80% Senior Notes due May 2030. Aon Corporation used a portion of the net proceeds on June 30, 2020 to repay its outstanding 5.00% Senior Notes, which were set to mature on September 30, 2020. The Company intends to use the remainder to repay other borrowings and for general corporate purposes. Revolving Credit Facilities As of March 31, 2021, Aon plc has two primary committed credit facilities outstanding: its $900 million multi-currency U.S. credit facility expiring in February 2022 and its $750 million multi-currency U.S. credit facility expiring in October 2023. In aggregate, these two facilities provide $1.65 billion in available credit. Each of these primary committed credit facilities includes customary representations, warranties, and covenants, including financial covenants that require Aon to maintain specified ratios of adjusted consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”) to consolidated interest expense and consolidated debt to adjusted consolidated EBITDA, in each case, tested quarterly. At March 31, 2021, Aon did not have borrowings under either of these primary committed credit facilities, and was in compliance with the financial covenants and all other covenants contained therein during the rolling 12 months ended March 31, 2021. Commercial Paper Aon Corporation has established a U.S. commercial paper program (the “U.S. Program”) and Aon Global Holdings plc has established a European multi-currency commercial paper program (the “European Program” and, together with the U.S. Program, the “Commercial Paper Programs”). Commercial paper may be issued in aggregate principal amounts of up to $900 million under the U.S. Program and €625 million under the European Program, not to exceed the amount of the Company’s committed credit facilities, which was $1.65 billion at March 31, 2021. The U.S. Program is fully and unconditionally guaranteed by Aon plc, Aon Global Limited, and Aon Global Holdings plc and the European Program is fully and unconditionally guaranteed by Aon plc, Aon Global Limited, and Aon Corporation. There was no commercial paper outstanding as of March 31, 2021 and December 31, 2020. The weighted average commercial paper outstanding and its related interest rates are as follows (in millions, except percentages): Three Months Ended March 31, 2021 2020 Weighted average commercial paper outstanding $ 17 $ 456 Weighted average interest rate of commercial paper outstanding 0.19 % 0.96 % |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe effective tax rate on Net income was 20.1% for the three months ended March 31, 2021. The effective tax rate on Net income was 19.3% for the three months ended March 31, 2020.For the three months ended March 31, 2021 and March 31, 2020, the tax rate was primarily driven by the geographical distribution of income and certain discrete items, primarily the favorable impact of share-based payments. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Ordinary Shares Aon has a share repurchase program authorized by the Company’s Board of Directors (the “Repurchase Program”). The Repurchase Program was established in April 2012 with $5.0 billion in authorized repurchases, and was increased by $5.0 billion in authorized repurchases in each of November 2014, June 2017, and November 2020 for a total of $20.0 billion in repurchase authorizations. Under the Repurchase Program, the Company’s Class A Ordinary Shares may be repurchased through the open market or in privately negotiated transactions, from time to time, based on prevailing market conditions, and will be funded from available capital. The following table summarizes the Company’s share repurchase activity (in millions, except per share data): Three Months Ended March 31, 2021 2020 Shares repurchased 0.2 2.2 Average price per share $ 217.70 $ 212.78 Costs recorded to retained earnings Total repurchase cost $ 50 $ 461 Additional associated costs — 2 Total costs recorded to retained earnings $ 50 $ 463 At March 31, 2021, the remaining authorized amount for share repurchases under the Repurchase Program was $5.2 billion. Under the Repurchase Program, the Company has repurchased a total of 137.5 million shares for an aggregate cost of approximately $14.8 billion. Net Income Per Share Weighted average ordinary shares outstanding are as follows (in millions): Three Months Ended March 31, 2021 2020 Basic weighted average ordinary shares outstanding 227.1 233.2 Dilutive effect of potentially issuable shares 1.0 1.3 Diluted weighted average ordinary shares outstanding 228.1 234.5 Potentially issuable shares are not included in the computation of Diluted net income per share attributable to Aon shareholders if their inclusion would be antidilutive. There were 0.1 million shares and no shares excluded from the calculation for the three months ended March 31, 2021 and March 31, 2020, respectively. Accumulated Other Comprehensive Loss Changes in Accumulated other comprehensive loss by component, net of related tax, are as follows (in millions): Change in Fair Value of Financial Instruments (1) Foreign Currency Translation Adjustments Postretirement Benefit Obligation (2) Total Balance at December 31, 2020 $ 1 $ (1,045) $ (2,817) $ (3,861) Other comprehensive income (loss) before reclassifications, net 10 (70) 2 (58) Amounts reclassified from accumulated other comprehensive income Amounts reclassified from accumulated other comprehensive income 1 — 36 37 Tax expense — — (9) (9) Amounts reclassified from accumulated other comprehensive income, net (3) 1 — 27 28 Net current period other comprehensive income (loss) 11 (70) 29 (30) Balance at March 31, 2021 $ 12 $ (1,115) $ (2,788) $ (3,891) Change in Fair Value of Financial Instruments (1) Foreign Currency Translation Adjustments Postretirement Benefit Obligation (2) Total Balance at December 31, 2019 $ (12) $ (1,305) $ (2,716) $ (4,033) Other comprehensive income (loss) before reclassifications, net (9) (395) 1 (403) Amounts reclassified from accumulated other comprehensive income Amounts reclassified from accumulated other comprehensive income 5 — 30 35 Tax expense (1) — (7) (8) Amounts reclassified from accumulated other comprehensive income, net (3) 4 — 23 27 Net current period other comprehensive income (loss) (5) (395) 24 (376) Balance at March 31, 2020 $ (17) $ (1,700) $ (2,692) $ (4,409) (1) Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Total revenue, Interest expense, and Compensation and benefits in the Condensed Consolidated Statements of Income. Refer to Note 13 “Derivatives and Hedging” for further information regarding the Company’s derivative and hedging activity. (2) Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense) in the Condensed Consolidated Statements of Income. (3) It is the Company’s policy to release income tax effects from Accumulated other comprehensive loss using the portfolio approach. |
Employee Benefits
Employee Benefits | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits The following table provides the components of the net periodic (benefit) cost recognized in the Condensed Consolidated Statements of Income for Aon’s significant U.K., U.S., and other major pension plans, which are located in the Netherlands and Canada. Service cost is reported in Compensation and benefits and all other components are reported in Other income (expense) as follows (in millions): Three Months Ended March 31, U.K. U.S. Other 2021 2020 2021 2020 2021 2020 Service cost $ — $ — $ — $ — $ — $ — Interest cost 16 22 14 21 3 4 Expected return on plan assets, net of administration expenses (34) (39) (32) (33) (8) (8) Amortization of prior-service cost 1 — — — — — Amortization of net actuarial loss 8 7 19 17 4 3 Total net periodic (benefit) cost $ (9) $ (10) $ 1 $ 5 $ (1) $ (1) Contributions Assuming no additional contributions are agreed to with, or required by, the pension plan trustees, the Company expects to make total cash contributions of approximately $8 million, $73 million, and $19 million, (at December 31, 2020 exchange rates) to its significant U.K., U.S., and other major pension plans, respectively, during 2021. In the first quarter, the Company revised its full year expected pension contributions in the U.S. following the enactment of the American Rescue Plan Act of 2021. The following table summarizes contributions made to the Company’s significant pension plans (in millions): Three Months Ended March 31, 2021 2020 Contributions to U.K. pension plans $ 4 $ 2 Contributions to U.S. pension plans 38 31 Contributions to other major pension plans 8 2 Total contributions $ 50 $ 35 |
Share-Based Compensation Plans
Share-Based Compensation Plans | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation Plans | Share-Based Compensation Plans The following table summarizes share-based compensation expense recognized in the Condensed Consolidated Statements of Income in Compensation and benefits (in millions): Three Months Ended March 31, 2021 2020 Restricted share units (“RSUs”) $ 66 $ 58 Performance share awards (“PSAs”) 61 14 Employee share purchase plans 4 4 Total share-based compensation expense $ 131 $ 76 Restricted Share Units RSUs generally vest between three The following table summarizes the status of the Company’s RSUs (shares in thousands, except fair value): Three Months Ended March 31, 2021 2020 Shares Fair Value (1) Shares Fair Value (1) Non-vested at beginning of period 3,309 $ 163 3,634 $ 143 Granted 372 $ 226 432 $ 179 Vested (452) $ 160 (583) $ 141 Forfeited (70) $ 166 (79) $ 146 Non-vested at end of period 3,159 $ 171 3,404 $ 147 (1) Represents per share weighted average fair value of award at date of grant. Unamortized deferred compensation expense amounted to $384 million as of March 31, 2021, with a remaining weighted average amortization period of approximately 2.0 years. Performance Share Awards The vesting of PSAs is contingent upon meeting a cumulative level of earnings per share related performance over a three-year period. The actual issuance of shares may range from 0-200% of the target number of PSAs granted, based on the terms of the plan and level of achievement of the related performance target. The grant date fair value of PSAs is based upon the market price of the Company’s Class A ordinary shares at the date of grant. The performance conditions are not considered in the determination of the grant date fair value for these awards. Compensation expense is recognized over the performance period based on management’s estimate of the number of units expected to vest. Management evaluates its estimate of the actual number of shares expected to be issued at the end of the programs on a quarterly basis. The cumulative effect of the change in estimate is recognized in the period of change as an adjustment to Compensation and benefits in the Condensed Consolidated Statements of Income, if necessary. Dividend equivalents are not paid on PSAs. The following table summarizes the Company’s target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the three months ended March 31, 2021 and the years ended December 31, 2020 and 2019, respectively (shares in thousands and dollars in millions, except fair value): March 31, December 31, December 31, Target PSAs granted during period 331 500 467 Weighted average fair value per share at date of grant $ 220 $ 161 $ 165 Number of shares that would be issued based on current performance levels 331 988 895 Unamortized expense, based on current performance levels $ 72 $ 101 $ 35 |
Derivatives and Hedging
Derivatives and Hedging | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | Derivatives and Hedging The Company is exposed to market risks, including changes in foreign currency exchange rates and interest rates. To manage the risk related to these exposures, the Company enters into various derivative instruments that reduce these risks by creating offsetting exposures. The Company does not enter into derivative transactions for trading or speculative purposes. Foreign Exchange Risk Management The Company is exposed to foreign exchange risk when it earns revenues, pays expenses, enters into monetary intercompany transfers or other transactions denominated in a currency that differs from its functional currency. The Company uses foreign exchange derivatives, typically forward contracts, options and cross currency swaps, to reduce its overall exposure to the effects of currency fluctuations on cash flows. These exposures are hedged, on average, for less than two years. These derivatives are accounted for as hedges, and changes in fair value are recorded each period in Other comprehensive income (loss) in the Condensed Consolidated Statements of Comprehensive Income. The Company also uses foreign exchange derivatives, typically forward contracts and options, to economically hedge the currency exposure of the Company’s global liquidity profile, including monetary assets or liabilities that are denominated in a non-functional currency of an entity, typically on a rolling 90-day basis, but may be for up to one year in the future. These derivatives are not accounted for as hedges, and changes in fair value are recorded each period in Other income (expense) in the Condensed Consolidated Statements of Income. The notional and fair values of derivative instruments are as follows (in millions): Notional Amount Net Amount of Derivative Assets Presented in the Statements of Financial Position (1) Net Amount of Derivative Liabilities Presented in the Statements of Financial Position (2) March 31, December 31, March 31, December 31, March 31, December 31, Foreign exchange contracts Accounted for as hedges $ 619 $ 633 $ 45 $ 33 $ — $ — Not accounted for as hedges (3) 453 367 — 1 1 1 Total $ 1,072 $ 1,000 $ 45 $ 34 $ 1 $ 1 (1) Included within Other current assets ($20 million at March 31, 2021 and $11 million at December 31, 2020) or Other non-current assets ($25 million at March 31, 2021 and $23 million at December 31, 2020). (2) Included within Other current liabilities ($1 million at March 31, 2021 and $1 million at December 31, 2020). (3) These contracts typically are for 90-day durations and executed close to the last day of the most recent reporting month, thereby resulting in nominal fair values at the balance sheet date. The amounts of derivative gains (losses) recognized in the Condensed Consolidated Financial Statements are as follows (in millions): Three Months Ended March 31, 2021 2020 Gain (Loss) recognized in Accumulated other comprehensive loss $ 13 $ (11) The amounts of derivative gains (losses) reclassified from Accumulated other comprehensive loss to the Condensed Consolidated Statements of Income are as follows (in millions): Three Months Ended March 31, 2021 2020 Total revenue $ (1) $ (4) Interest expense — (1) Total $ (1) $ (5) The Company estimates that approximately $3 million of pretax gains currently included within Accumulated other comprehensive loss will be reclassified into earnings in the next twelve months. During the three months ended March 31, 2021 and March 31, 2020, the Company recorded a loss of $7 million and $35 million, respectively, in Other income (expense) for foreign exchange derivatives not designated or qualifying as hedges. Net Investments in Foreign Operations Risk Management The Company uses non-derivative financial instruments to protect the value of its investments in a number of foreign subsidiaries. The Company has designated a portion of its euro-denominated commercial paper issuances as a non-derivative hedge of the foreign currency exposure of a net investment in its European operations. The change in fair value of the designated portion of the euro-denominated commercial paper due to changes in foreign currency exchange rates is recorded in Foreign currency translation adjustment, a component of Accumulated other comprehensive loss, to the extent it is effective as a hedge. The foreign currency translation adjustment of the hedged net investments is also recorded in Accumulated other comprehensive loss. Ineffective portions of net investment hedges, if any, are reclassified from Accumulated other comprehensive loss into earnings during the period of change. The Company had no outstanding euro-denominated commercial paper at March 31, 2021 and December 31, 2020 designated as a hedge of the foreign currency exposure of its net investment in its European operations. The unrealized gain recognized in Accumulated other comprehensive loss related to the net investment non-derivative hedging instrument was $29 million, as of March 31, 2021 and December 31, 2020. |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments Accounting standards establish a three tier fair value hierarchy that prioritizes the inputs used in measuring fair values as follows: • Level 1 — observable inputs such as quoted prices for identical assets in active markets; • Level 2 — inputs other than quoted prices for identical assets in active markets, that are observable either directly or indirectly; and • Level 3 — unobservable inputs in which there is little or no market data which requires the use of valuation techniques and the development of assumptions. The following methods and assumptions are used to estimate the fair values of the Company’s financial instruments: Money market funds consist of institutional prime, treasury, and government money market funds. The Company reviews treasury and government money market funds to obtain reasonable assurance that the fund net asset value is $1 per share, and reviews the floating net asset value of institutional prime money market funds for reasonableness. Equity investments consist of equity securities and equity derivatives valued using the closing stock price on a national securities exchange. Over-the-counter equity derivatives are valued using observable inputs such as underlying prices of the underlying security and volatility. On a sample basis, the Company reviews the listing of Level 1 equity securities in the portfolio, agrees the closing stock prices to a national securities exchange, and independently verifies the observable inputs for Level 2 equity derivatives and securities. Fixed income investments consist of certain categories of bonds and derivatives. Corporate, government, and agency bonds are valued by pricing vendors who estimate fair value using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves, and credit risk. Asset-backed securities are valued by pricing vendors who estimate fair value using discounted cash flow models utilizing observable inputs based on trade and quote activity of securities with similar features. Fixed income derivatives are valued by pricing vendors using observable inputs such as interest rates and yield curves. The Company obtains an understanding of the models, inputs, and assumptions used in developing prices provided by its vendors through discussions with the fund managers. The Company independently verifies the observable inputs, as well as assesses assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on internal Company guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates used in the Financial Statements. Derivatives are carried at fair value, based upon industry standard valuation techniques that use, where possible, current market-based or independently sourced pricing inputs, such as interest rates, currency exchange rates, or implied volatility. Debt is carried at outstanding principal balance, less any unamortized issuance costs, discount or premium. Fair value is based on quoted market prices or estimates using discounted cash flow analyses based on current borrowing rates for similar types of borrowing arrangements. The following tables present the categorization of the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2021 and December 31, 2020 (in millions): Fair Value Measurements Using Balance at March 31, 2021 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Money market funds (1) $ 2,850 $ 2,850 $ — $ — Other investments Government bonds $ 1 $ — $ 1 $ — Equity investments $ 1 $ — $ 1 $ — Derivatives (2) Gross foreign exchange contracts $ 51 $ — $ 51 $ — Liabilities Derivatives (2) Gross foreign exchange contracts $ 7 $ — $ 7 $ — Fair Value Measurements Using Balance at December 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Money market funds (1) $ 2,781 $ 2,781 $ — $ — Other investments Government bonds $ 1 $ — $ 1 $ — Equity investments $ 3 $ — $ 3 $ — Derivatives (2) Gross foreign exchange contracts $ 38 $ — $ 38 $ — Liabilities 0 Derivatives (2) Gross foreign exchange contracts $ 5 $ — $ 5 $ — (1) Included within Fiduciary assets or Short-term investments in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity. (2) Refer to Note 13 “Derivatives and Hedging” for additional information regarding the Company’s derivatives and hedging activity. There were no transfers of assets or liabilities between fair value hierarchy levels in the three months ended March 31, 2021 or 2020. The Company recognized no realized or unrealized gains or losses in the Condensed Consolidated Statements of Income during the three months ended March 31, 2021 or 2020 related to assets and liabilities measured at fair value using unobservable inputs. The fair value of debt is classified as Level 2 of the fair value hierarchy. The following table provides the carrying value and fair value for the Company’s term debt (in millions): March 31, 2021 December 31, 2020 Carrying Value Fair Value Carrying Value Fair Value Current portion of long-term debt $ — $ — $ 400 $ 401 Long-term debt $ 7,263 $ 8,244 $ 7,281 $ 8,752 |
Claims, Lawsuits, and Other Con
Claims, Lawsuits, and Other Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Claims, Lawsuits, and Other Contingencies | Claims, Lawsuits, and Other Contingencies Legal Aon and its subsidiaries are subject to numerous claims, tax assessments, lawsuits, and proceedings that arise in the ordinary course of business, which frequently include errors and omissions (“E&O”) claims. The damages claimed in these matters are or may be substantial, including, in many instances, claims for punitive, treble, or extraordinary damages. While Aon maintains meaningful E&O insurance and other insurance programs to provide protection against certain losses that arise in such matters, Aon has exhausted or materially depleted its coverage under some of the policies that protect the Company and, consequently, is self-insured or materially self-insured for some claims. Accruals for these exposures, and related insurance receivables, when applicable, are included in the Condensed Consolidated Statements of Financial Position and have been recognized in Other general expense in the Condensed Consolidated Statements of Income to the extent that losses are deemed probable and are reasonably estimable. These amounts are adjusted from time to time as developments warrant. Matters that are not probable and reasonably estimable are not accrued for in the financial statements. The Company has included in the current matters described below certain matters in which (1) loss is probable, (2) loss is reasonably possible (that is, more than remote but not probable), or (3) there exists the reasonable possibility of loss greater than the accrued amount. In addition, the Company may from time to time disclose matters for which the probability of loss could be remote but the claim amounts associated with such matters are potentially significant. The reasonably possible range of loss for the matters described below for which loss is estimable, in excess of amounts that are deemed probable and estimable and therefore already accrued, is estimated to be between $0 and $0.8 billion, exclusive of any insurance coverage. These estimates are based on available information as of the date of this filing. As available information changes, the matters for which Aon is able to estimate, and the estimates themselves, may change. In addition, many estimates involve significant judgment and uncertainty. For example, at the time of making an estimate, Aon may only have limited information about the facts underlying the claim, and predictions and assumptions about future court rulings and outcomes may prove to be inaccurate. Although management at present believes that the ultimate outcome of all matters described below, individually or in the aggregate, will not have a material adverse effect on the consolidated financial position of Aon, legal proceedings are subject to inherent uncertainties and unfavorable rulings or other events. Unfavorable resolutions could include substantial monetary or punitive damages imposed on Aon or its subsidiaries. If unfavorable outcomes of these matters were to occur, future results of operations or cash flows for any particular quarterly or annual period could be materially adversely affected. Current Matters On October 3, 2017, Christchurch City Council (“CCC”) invoked arbitration to pursue a claim that it asserts against Aon New Zealand. Aon provided insurance broking services to CCC in relation to CCC’s 2010-2011 material damage and business interruption program. In December 2015, CCC settled its property and business interruption claim for its losses arising from the 2010-2011 Canterbury earthquakes against the underwriter of its material damage and business interruption program and the reinsurers of that underwriter. CCC contends that acts and omissions by Aon caused CCC to recover less in that settlement than it otherwise would have. CCC claims damages of approximately NZD 528 million ($370 million at March 31, 2021 exchange rates) plus interest and costs. Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims. Aon Hewitt Investment Consulting, Inc, now known as Aon Investments USA, Inc. (“Aon Investments”), Lowe’s Companies, Inc. and the Administrative Committee of Lowe’s Companies, Inc. (collectively “Lowe’s”) were sued on April 27, 2018 in the U.S. District Court for the Western District of North Carolina in a class action lawsuit brought on behalf of participants in the Lowe’s 401(k) Plan (the “Plan”). Aon Investments provided investment consulting services to Lowe’s under the Employee Retirement Income Security Act of 1974 (“ERISA”). The plaintiffs contend that in 2015 Lowe’s imprudently placed the Hewitt Growth Fund in the Plan’s lineup of investments, the Hewitt Growth Fund underperformed its benchmarks, and that Aon had a conflict of interest in recommending the proprietary fund for the Plan. The plaintiffs allege the Plan suffered over $100 million in investment losses when compared to the eight funds it replaced. The plaintiffs allege that Aon Investments breached its duties of loyalty and prudence pursuant to the ERISA statute. Aon believes it has meritorious defenses and intends to vigorously defend itself against these claims. A retail insurance brokerage subsidiary of Aon was sued on September 6, 2018 in the United States District Court for the Southern District of New York by a client, Pilkington North America, Inc., that sustained damage from a tornado to its Ottawa, Illinois property. The lawsuit seeks between $45 million and $85 million in property and business interruption damages from either its insurer or Aon. The insurer contends that insurance proceeds were limited to $15 million in coverage by a windstorm sub-limit purportedly contained in the policy procured by Aon for Pilkington. The insurer therefore has tendered $15 million to Pilkington and denied coverage for the remainder of the loss. Pilkington sued the insurer and Aon seeking full coverage for the loss from the insurer or, in the alternative, seeking the same damages against Aon on various theories of professional liability if the court finds that the $15 million sub-limit applies to the claim. Aon believes it has meritorious defenses and intends to vigorously defend itself against these claims. Aon faces legal action arising out of a fatal plane crash in November 2016. Aon UK Limited placed an aviation civil liability reinsurance policy for the Bolivian insurer of the airline. After the crash, the insurer determined that there was no coverage under the airline’s insurance policy due to the airline’s breach of various policy conditions. In November 2018, the owner of the aircraft filed a claim in Bolivia against Aon, the airline, the insurer and the insurance broker. The claim is for $15.5 million plus any liability the owner has to third parties. In November 2019, a federal prosecutor in Brazil filed a public civil action naming three Aon entities as defendants, along with the airline, the insurer and the lead reinsurer. That claim seeks pecuniary damages for families affected by the crash in the sum of $300 million; or, in the alternative, $50 million; or, in the alternative, $25 million; plus “moral damages” of an equivalent sum. Separately, in March 2020, the Brazilian Federal Senate invited Aon to give evidence to a Parliamentary Commission of Inquiry in an investigation into the accident. Aon is cooperating with that inquiry. Finally, in August 2020, 43 individuals (surviving passengers and estates of the deceased) filed a motion in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida, seeking permission to commence proceedings against Aon (and the insurer and reinsurers) for claims totaling $844 million. Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims. Aon Investments and Allianz Global Investors U.S. LLC (“AGI”) were sued on September 16, 2020, in the U.S. District Court for the Southern District of New York by the Blue Cross and Blue Shield Association National Employee Benefits Committee (the “NEBC”). Aon Investments and its predecessors provided investment advisory services to NEBC since 2009. The NEBC contends that it suffered investment losses exceeding $2 billion in several Structured Alpha funds managed by AGI and recommended by Aon. The NEBC is pursuing claims against Aon Investments for breach of fiduciary duty and breach of cofiduciary duty. The NEBC alleges that Aon Investments and AGI are jointly and severally liable for damages, which include the restoration of investment losses, disgorgement of fees and profits, and attorneys’ fees. Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims. In April 2017, the FCA announced an investigation relating to suspected competition law breaches in the aviation and aerospace broking industry, which, for Aon in 2016, represented less than $100 million in global revenue. The European Commission assumed jurisdiction over the investigation in place of the FCA, and the European Commission has now closed its investigation. Other antitrust agencies outside the E.U. are conducting formal or informal investigations regarding these matters. Aon intends to work diligently with all antitrust agencies concerned to ensure they can carry out their work as efficiently as possible. At this time, in light of the uncertainties and many variables involved, Aon cannot estimate the ultimate impact on our company from these investigations or any related private litigation, nor any damages, penalties, or fines related to them. Guarantees and Indemnifications The Company provides a variety of guarantees and indemnifications to its customers and others. The maximum potential amount of future payments represents the notional amounts that could become payable under the guarantees and indemnifications if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or other methods. These amounts may bear no relationship to the expected future payments, if any, for these guarantees and indemnifications. Any anticipated amounts payable are included in the Financial Statements, and are recorded at fair value. The Company expects that, as prudent business interests dictate, additional guarantees and indemnifications may be issued from time to time. Guarantee of Registered Securities In connection with the Company’s 2012 redomestication to the U.K. (the “2012 Redomestication”), the Company on April 2, 2012 entered into various agreements pursuant to which it agreed to guarantee the obligations of its subsidiaries arising under issued and outstanding debt securities. Those agreements included the: (1) Amended and Restated Indenture, dated April 2, 2012, among Aon Corporation, Aon Global Limited, and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) (amending and restating the Indenture, dated September 10, 2010, between Aon Corporation and the Trustee); (2) Amended and Restated Indenture, dated April 2, 2012, among Aon Corporation, Aon Global Limited and the Trustee (amending and restating the Indenture, dated December 16, 2002, between Aon Corporation and the Trustee); and (3) Amended and Restated Indenture, dated April 2, 2012, among Aon Corporation, Aon Global Limited and the Trustee (amending and restating the Indenture, dated January 13, 1997, between Aon Corporation and the Trustee, as supplemented by the First Supplemental Indenture, dated January 13, 1997). On April 1, 2020, a scheme of arrangement under English law was completed, as described in the proxy statement filed with the SEC on December 20, 2019 (the “Ireland Reorganization”). In connection with the Ireland Reorganization, Aon plc and Aon Global Holdings plc entered into various agreements pursuant to which they agreed to guarantee the obligations of Aon Corporation arising under issued and outstanding debt securities, which were previously guaranteed solely by Aon Global Limited, and the obligations of Aon Global Limited arising under issued and outstanding debt securities, which were previously guaranteed solely by Aon Corporation. Those agreements include: (1) Second Amended and Restated Indenture, dated April 1, 2020, among Aon Corporation, Aon Global Limited, Aon plc, and Aon Global Holdings plc and the Trustee (amending and restating the Amended and Restated Indenture, dated April 2, 2012, among Aon Corporation, Aon Global Limited and the Trustee); (2) Amended and Restated Indenture, dated April 1, 2020, among Aon Corporation, Aon Global Limited, Aon plc, Aon Global Holdings plc and the Trustee (amending and restating the Indenture, dated December 12, 2012, among Aon Corporation, Aon Global Limited plc and the Trustee); (3) Second Amended and Restated Indenture, dated April 1, 2020, among Aon Corporation, Aon Global Limited, Aon plc, Aon Global Holdings plc and the Trustee (amending and restating the Amended and Restated Indenture, dated May 20, 2015, among Aon Corporation, Aon Global Limited and the Trustee); (4) Amended and Restated Indenture, dated April 1, 2020, among Aon Corporation, Aon Global Limited, Aon plc, Aon Global Holdings plc and the Trustee (amending and restating the Indenture, dated November 13, 2015, among Aon Corporation, Aon Global Limited and the Trustee); and (5) Amended and Restated Indenture, dated April 1, 2020, among Aon Corporation, Aon Global Limited, Aon plc, Aon Global Holdings plc and the Trustee (amending and restating the Indenture, dated December 3, 2018, among Aon Corporation, Aon Global Limited and the Trustee). Sale of the Divested Business In 2017, Aon executed a sale of its benefits administration and business process outsourcing business (the “Divested Business”). In connection with the sale of the Divested Business, the Company guaranteed future operating lease commitments related to certain facilities assumed by the buyer. The Company is obligated to perform under the guarantees if the Divested Business defaults on such leases at any time during the remainder of the lease agreements, which expire on various dates through 2025. As of March 31, 2021, the undiscounted maximum potential future payments under the lease guarantee is $51 million, with an estimated fair value of $7 million. No cash payments were made in connection to the lease commitments during the three months ended March 31, 2021. Additionally, the Company is subject to performance guarantee requirements under certain client arrangements that were assumed by the buyer. Should the Divested Business fail to perform as required by the terms of the arrangements, the Company would be required to fulfill the remaining contract terms, which expire on various dates through 2023. As of March 31, 2021, the undiscounted maximum potential future payments under the performance guarantees were $91 million, with an estimated fair value of $1 million. No cash payments were made in connection to the performance guarantees during the three months ended March 31, 2021. Letters of Credit Aon has entered into a number of arrangements whereby the Company’s performance on certain obligations is guaranteed by a third party through the issuance of letters of credit (“LOCs”). The Company had total LOCs outstanding of approximately $76 million at March 31, 2021, and $79 million at December 31, 2020. These LOCs cover the beneficiaries related to certain of Aon’s U.S. and Canadian non-qualified pension plan schemes and secure deductible retentions for Aon’s own workers compensation program. The Company has also obtained LOCs to cover contingent payments for taxes and other business obligations to third parties, and other guarantees for miscellaneous purposes at its international subsidiaries. Premium Payments The Company has certain contractual contingent guarantees for premium payments owed by clients to certain insurance companies. The maximum exposure with respect to such contractual contingent guarantees was approximately $67 million at March 31, 2021 compared to $113 million at December 31, 2020. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates as one segment that includes all of Aon’s operations, which as a global professional services firm provides advice and solutions to clients focused on risk, retirement, and health through five revenue lines which make up its principal products and services. The Chief Operating Decision Maker (the “CODM”) assesses the performance of the Company and allocates resources based on one segment: Aon United. The Company’s reportable operating segment has been determined using a management approach, which is consistent with the basis and manner in which the CODM uses financial information for the purposes of allocating resources and evaluating performance. The CODM assesses performance and allocates resources based on total Aon results against its key four metrics, including organic revenue growth (decline), expense discipline, and collaborative behaviors, that maximize value for Aon and its shareholders, regardless of which revenue line it benefits. As Aon operates as one segment, segment profit or loss is consistent with consolidated reporting as disclosed in the Condensed Consolidated Statements of Income. Refer to Note 3 “Revenue from Contracts with Customers” for further information on revenue by principal service line. |
Accounting Principles and Pra_2
Accounting Principles and Practices (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited Condensed Consolidated Financial Statements and Notes thereto (the “Financial Statements”) have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The Financial Statements include the accounts of Aon plc, an Irish public limited company, and all of its controlled subsidiaries. Intercompany accounts and transactions have been eliminated. The Financial Statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Company’s consolidated financial position, results of operations, and cash flows for all periods presented.Certain information and disclosures normally included in the Financial Statements prepared in accordance with U.S. GAAP have been condensed or omitted. |
Use of Estimates | Use of Estimates The preparation of the Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the Financial Statements, and the reported amounts of reserves and expenses. These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes its estimates to be reasonable given the current facts available. Aon adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, foreign currency exchange rate movements, and, recently, impacts from the COVID-19 pandemic increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment would, if applicable, be reflected in the Financial Statements in future periods. |
Derivatives | The Company is exposed to market risks, including changes in foreign currency exchange rates and interest rates. To manage the risk related to these exposures, the Company enters into various derivative instruments that reduce these risks by creating offsetting exposures. The Company does not enter into derivative transactions for trading or speculative purposes. Foreign Exchange Risk Management The Company is exposed to foreign exchange risk when it earns revenues, pays expenses, enters into monetary intercompany transfers or other transactions denominated in a currency that differs from its functional currency. The Company uses foreign exchange derivatives, typically forward contracts, options and cross currency swaps, to reduce its overall exposure to the effects of currency fluctuations on cash flows. These exposures are hedged, on average, for less than two years. These derivatives are accounted for as hedges, and changes in fair value are recorded each period in Other comprehensive income (loss) in the Condensed Consolidated Statements of Comprehensive Income. The Company also uses foreign exchange derivatives, typically forward contracts and options, to economically hedge the currency exposure of the Company’s global liquidity profile, including monetary assets or liabilities that are denominated in a non-functional currency of an entity, typically on a rolling 90-day basis, but may be for up to one year in the future. These derivatives are not accounted for as hedges, and changes in fair value are recorded each period in Other income (expense) in the Condensed Consolidated Statements of Income. |
Fair Value Measurement | The following methods and assumptions are used to estimate the fair values of the Company’s financial instruments: Money market funds consist of institutional prime, treasury, and government money market funds. The Company reviews treasury and government money market funds to obtain reasonable assurance that the fund net asset value is $1 per share, and reviews the floating net asset value of institutional prime money market funds for reasonableness. Equity investments consist of equity securities and equity derivatives valued using the closing stock price on a national securities exchange. Over-the-counter equity derivatives are valued using observable inputs such as underlying prices of the underlying security and volatility. On a sample basis, the Company reviews the listing of Level 1 equity securities in the portfolio, agrees the closing stock prices to a national securities exchange, and independently verifies the observable inputs for Level 2 equity derivatives and securities. Fixed income investments consist of certain categories of bonds and derivatives. Corporate, government, and agency bonds are valued by pricing vendors who estimate fair value using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves, and credit risk. Asset-backed securities are valued by pricing vendors who estimate fair value using discounted cash flow models utilizing observable inputs based on trade and quote activity of securities with similar features. Fixed income derivatives are valued by pricing vendors using observable inputs such as interest rates and yield curves. The Company obtains an understanding of the models, inputs, and assumptions used in developing prices provided by its vendors through discussions with the fund managers. The Company independently verifies the observable inputs, as well as assesses assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on internal Company guidelines, it is then reviewed by management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and historically are not material to the fair value estimates used in the Financial Statements. Derivatives are carried at fair value, based upon industry standard valuation techniques that use, where possible, current market-based or independently sourced pricing inputs, such as interest rates, currency exchange rates, or implied volatility. Debt is carried at outstanding principal balance, less any unamortized issuance costs, discount or premium. Fair value is based on quoted market prices or estimates using discounted cash flow analyses based on current borrowing rates for similar types of borrowing arrangements. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table summarizes revenue from contracts with customers by principal service line (in millions): Three Months Ended March 31, 2021 2020 Commercial Risk Solutions $ 1,289 $ 1,146 Reinsurance Solutions 922 848 Retirement Solutions 434 397 Health Solutions 536 502 Data & Analytic Services 351 331 Elimination (7) (5) Total revenue $ 3,525 $ 3,219 Consolidated revenue from contracts with customers by geographic area, which is attributed on the basis of where the services are performed, is as follows (in millions): Three Months Ended March 31, 2021 2020 United States $ 1,308 $ 1,227 Americas other than United States 250 228 United Kingdom 530 500 Ireland 33 23 Europe, Middle East, & Africa other than United Kingdom and Ireland 1,091 955 Asia Pacific 313 286 Total revenue $ 3,525 $ 3,219 |
Schedule of Capitalized Contract Cost | An analysis of the changes in the net carrying amount of costs to fulfill contracts with customers are as follows (in millions): Three Months Ended March 31, 2021 2020 Balance at beginning of period $ 339 $ 335 Additions 346 318 Amortization (443) (416) Impairment — — Foreign currency translation and other (1) (8) Balance at end of period $ 241 $ 229 An analysis of the changes in the net carrying amount of costs to obtain contracts with customers are as follows (in millions): Three Months Ended March 31, 2021 2020 Balance at beginning of period $ 184 $ 171 Additions 13 12 Amortization (12) (12) Impairment — — Foreign currency translation and other — (4) Balance at end of period $ 185 $ 167 |
Other Financial Data (Tables)
Other Financial Data (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Other Financial Data [Abstract] | |
Schedule of Other Income (Expense) | Other income (expense) consists of the following (in millions): Three Months Ended March 31, 2021 2020 (1) Foreign currency remeasurement $ 4 $ 42 Financial instruments (13) (44) Pension and other postretirement 6 4 Equity earnings 1 1 Disposal of businesses — 25 Total $ (2) $ 28 |
Schedule of Allowance for Doubtful Accounts | An analysis of the allowance for doubtful accounts is as follows (in millions): Three Months Ended March 31, 2021 2020 Balance at beginning of period 98 77 Provision 6 9 Accounts written off, net of recoveries (4) (8) Foreign currency translation and other 1 3 Balance at end of period $ 101 $ 81 |
Schedule of Other Current Assets | The components of Other current assets are as follows (in millions): As of March 31, December 31, Costs to fulfill contracts with customers (1) $ 241 $ 339 Prepaid expenses 118 111 Taxes receivable 45 95 Other 88 79 Total $ 492 $ 624 (1) Refer to Note 3 “Revenue from Contracts with Customers” for further information. |
Schedule of Other Non-current Assets | The components of Other non-current assets are as follows (in millions): As of March 31, December 31, Costs to obtain contracts with customers (1) $ 185 $ 184 Taxes receivable 124 125 Leases 82 89 Investments 74 74 Other 131 138 Total $ 596 $ 610 (1) Refer to Note 3 “Revenue from Contracts with Customers” for further information. |
Schedule of Other Current Liabilities | The components of Other current liabilities are as follows (in millions): As of March 31, December 31, Deferred revenue (1) $ 340 $ 296 Taxes payable 137 80 Leases 222 234 Other 602 561 Total $ 1,301 $ 1,171 (1) During the three months ended March 31, 2021, $171 million was recognized in the Condensed Consolidated Statements of Income. During the three months ended March 31, 2020, $117 million and was recognized in the Condensed Consolidated Statements of Income. |
Schedule of Other Non-current Liabilities | The components of Other non-current liabilities are as follows (in millions): As of March 31, December 31, Taxes payable (1) $ 589 $ 561 Leases 64 65 Deferred revenue 66 76 Compensation and benefits 53 53 Other 133 140 Total $ 905 $ 895 (1) Includes $145 million for the non-current portion of the one-time mandatory transition tax on accumulated foreign earnings as of March 31, 2021 and December 31, 2020. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Net Carrying Amount of Goodwill by Operating Segment | The changes in the net carrying amount of goodwill for the three months ended March 31, 2021 are as follows (in millions): Balance as of December 31, 2020 $ 8,666 Foreign currency translation and other (79) Balance as of March 31, 2021 $ 8,587 |
Schedule of Finite-Lived Intangible Assets | Other intangible assets by asset class are as follows (in millions): March 31, 2021 December 31, 2020 Gross Carrying Amount Accumulated Net Carrying Amount Gross Carrying Amount Accumulated Net Carrying Amount Customer-related and contract-based $ 2,316 $ 1,793 $ 523 $ 2,337 $ 1,775 $ 562 Tradenames 14 13 1 14 13 1 Technology and other 431 361 70 435 358 77 Total $ 2,761 $ 2,167 $ 594 $ 2,786 $ 2,146 $ 640 |
Schedule of Estimated Future Amortization Expense on Intangible Assets | The estimated future amortization for finite-lived intangible assets as of March 31, 2021 is as follows (in millions): Remainder of 2021 $ 106 2022 100 2023 89 2024 72 2025 57 2026 36 Thereafter 134 Total $ 594 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The weighted average commercial paper outstanding and its related interest rates are as follows (in millions, except percentages): Three Months Ended March 31, 2021 2020 Weighted average commercial paper outstanding $ 17 $ 456 Weighted average interest rate of commercial paper outstanding 0.19 % 0.96 % |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Share Repurchase Agreements | The following table summarizes the Company’s share repurchase activity (in millions, except per share data): Three Months Ended March 31, 2021 2020 Shares repurchased 0.2 2.2 Average price per share $ 217.70 $ 212.78 Costs recorded to retained earnings Total repurchase cost $ 50 $ 461 Additional associated costs — 2 Total costs recorded to retained earnings $ 50 $ 463 |
Schedule of Components of Weighted Average Number of Shares | Weighted average ordinary shares outstanding are as follows (in millions): Three Months Ended March 31, 2021 2020 Basic weighted average ordinary shares outstanding 227.1 233.2 Dilutive effect of potentially issuable shares 1.0 1.3 Diluted weighted average ordinary shares outstanding 228.1 234.5 |
Components of Accumulated Other Comprehensive Loss, Net of Related Tax | Changes in Accumulated other comprehensive loss by component, net of related tax, are as follows (in millions): Change in Fair Value of Financial Instruments (1) Foreign Currency Translation Adjustments Postretirement Benefit Obligation (2) Total Balance at December 31, 2020 $ 1 $ (1,045) $ (2,817) $ (3,861) Other comprehensive income (loss) before reclassifications, net 10 (70) 2 (58) Amounts reclassified from accumulated other comprehensive income Amounts reclassified from accumulated other comprehensive income 1 — 36 37 Tax expense — — (9) (9) Amounts reclassified from accumulated other comprehensive income, net (3) 1 — 27 28 Net current period other comprehensive income (loss) 11 (70) 29 (30) Balance at March 31, 2021 $ 12 $ (1,115) $ (2,788) $ (3,891) Change in Fair Value of Financial Instruments (1) Foreign Currency Translation Adjustments Postretirement Benefit Obligation (2) Total Balance at December 31, 2019 $ (12) $ (1,305) $ (2,716) $ (4,033) Other comprehensive income (loss) before reclassifications, net (9) (395) 1 (403) Amounts reclassified from accumulated other comprehensive income Amounts reclassified from accumulated other comprehensive income 5 — 30 35 Tax expense (1) — (7) (8) Amounts reclassified from accumulated other comprehensive income, net (3) 4 — 23 27 Net current period other comprehensive income (loss) (5) (395) 24 (376) Balance at March 31, 2020 $ (17) $ (1,700) $ (2,692) $ (4,409) (1) Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Total revenue, Interest expense, and Compensation and benefits in the Condensed Consolidated Statements of Income. Refer to Note 13 “Derivatives and Hedging” for further information regarding the Company’s derivative and hedging activity. (2) Reclassifications from this category included in Accumulated other comprehensive loss are recorded in Other income (expense) in the Condensed Consolidated Statements of Income. (3) It is the Company’s policy to release income tax effects from Accumulated other comprehensive loss using the portfolio approach. |
Employee Benefits (Tables)
Employee Benefits (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost for the Pension Plans | The following table provides the components of the net periodic (benefit) cost recognized in the Condensed Consolidated Statements of Income for Aon’s significant U.K., U.S., and other major pension plans, which are located in the Netherlands and Canada. Service cost is reported in Compensation and benefits and all other components are reported in Other income (expense) as follows (in millions): Three Months Ended March 31, U.K. U.S. Other 2021 2020 2021 2020 2021 2020 Service cost $ — $ — $ — $ — $ — $ — Interest cost 16 22 14 21 3 4 Expected return on plan assets, net of administration expenses (34) (39) (32) (33) (8) (8) Amortization of prior-service cost 1 — — — — — Amortization of net actuarial loss 8 7 19 17 4 3 Total net periodic (benefit) cost $ (9) $ (10) $ 1 $ 5 $ (1) $ (1) |
Schedule of Employer's Contributions | The following table summarizes contributions made to the Company’s significant pension plans (in millions): Three Months Ended March 31, 2021 2020 Contributions to U.K. pension plans $ 4 $ 2 Contributions to U.S. pension plans 38 31 Contributions to other major pension plans 8 2 Total contributions $ 50 $ 35 |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-Based Compensation Expense Recognized in Continuing Operations | The following table summarizes share-based compensation expense recognized in the Condensed Consolidated Statements of Income in Compensation and benefits (in millions): Three Months Ended March 31, 2021 2020 Restricted share units (“RSUs”) $ 66 $ 58 Performance share awards (“PSAs”) 61 14 Employee share purchase plans 4 4 Total share-based compensation expense $ 131 $ 76 |
Schedule of Restricted Share Unit Activity | The following table summarizes the status of the Company’s RSUs (shares in thousands, except fair value): Three Months Ended March 31, 2021 2020 Shares Fair Value (1) Shares Fair Value (1) Non-vested at beginning of period 3,309 $ 163 3,634 $ 143 Granted 372 $ 226 432 $ 179 Vested (452) $ 160 (583) $ 141 Forfeited (70) $ 166 (79) $ 146 Non-vested at end of period 3,159 $ 171 3,404 $ 147 (1) Represents per share weighted average fair value of award at date of grant. |
Schedule of Performance Share Awards | The following table summarizes the Company’s target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the three months ended March 31, 2021 and the years ended December 31, 2020 and 2019, respectively (shares in thousands and dollars in millions, except fair value): March 31, December 31, December 31, Target PSAs granted during period 331 500 467 Weighted average fair value per share at date of grant $ 220 $ 161 $ 165 Number of shares that would be issued based on current performance levels 331 988 895 Unamortized expense, based on current performance levels $ 72 $ 101 $ 35 |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional and Fair Values of Derivative Instruments | The notional and fair values of derivative instruments are as follows (in millions): Notional Amount Net Amount of Derivative Assets Presented in the Statements of Financial Position (1) Net Amount of Derivative Liabilities Presented in the Statements of Financial Position (2) March 31, December 31, March 31, December 31, March 31, December 31, Foreign exchange contracts Accounted for as hedges $ 619 $ 633 $ 45 $ 33 $ — $ — Not accounted for as hedges (3) 453 367 — 1 1 1 Total $ 1,072 $ 1,000 $ 45 $ 34 $ 1 $ 1 (1) Included within Other current assets ($20 million at March 31, 2021 and $11 million at December 31, 2020) or Other non-current assets ($25 million at March 31, 2021 and $23 million at December 31, 2020). (2) Included within Other current liabilities ($1 million at March 31, 2021 and $1 million at December 31, 2020). (3) These contracts typically are for 90-day durations and executed close to the last day of the most recent reporting month, thereby resulting in nominal fair values at the balance sheet date. |
Schedule of Derivative Gains (Losses) | The amounts of derivative gains (losses) recognized in the Condensed Consolidated Financial Statements are as follows (in millions): Three Months Ended March 31, 2021 2020 Gain (Loss) recognized in Accumulated other comprehensive loss $ 13 $ (11) The amounts of derivative gains (losses) reclassified from Accumulated other comprehensive loss to the Condensed Consolidated Statements of Income are as follows (in millions): Three Months Ended March 31, 2021 2020 Total revenue $ (1) $ (4) Interest expense — (1) Total $ (1) $ (5) |
Fair Value Measurements and F_2
Fair Value Measurements and Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities That are Measured at Fair Value on a Recurring Basis | The following tables present the categorization of the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2021 and December 31, 2020 (in millions): Fair Value Measurements Using Balance at March 31, 2021 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Money market funds (1) $ 2,850 $ 2,850 $ — $ — Other investments Government bonds $ 1 $ — $ 1 $ — Equity investments $ 1 $ — $ 1 $ — Derivatives (2) Gross foreign exchange contracts $ 51 $ — $ 51 $ — Liabilities Derivatives (2) Gross foreign exchange contracts $ 7 $ — $ 7 $ — Fair Value Measurements Using Balance at December 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Money market funds (1) $ 2,781 $ 2,781 $ — $ — Other investments Government bonds $ 1 $ — $ 1 $ — Equity investments $ 3 $ — $ 3 $ — Derivatives (2) Gross foreign exchange contracts $ 38 $ — $ 38 $ — Liabilities 0 Derivatives (2) Gross foreign exchange contracts $ 5 $ — $ 5 $ — (1) Included within Fiduciary assets or Short-term investments in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity. |
Schedule of Financial Instruments Where the Carrying Amounts and Fair Values Differ | The fair value of debt is classified as Level 2 of the fair value hierarchy. The following table provides the carrying value and fair value for the Company’s term debt (in millions): March 31, 2021 December 31, 2020 Carrying Value Fair Value Carrying Value Fair Value Current portion of long-term debt $ — $ — $ 400 $ 401 Long-term debt $ 7,263 $ 8,244 $ 7,281 $ 8,752 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Increase of other expense | $ 2 | $ (28) |
Restructuring reserves | 60 | |
Reclassification adjustment | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Decrease of net loss from discontinued operations | 1 | |
Increase of other expense | $ 1 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 3,525 | $ 3,219 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,308 | 1,227 |
Americas other than United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 250 | 228 |
United Kingdom | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 530 | 500 |
Ireland | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 33 | 23 |
Europe, Middle East, & Africa other than United Kingdom and Ireland | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,091 | 955 |
Asia Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 313 | 286 |
Elimination | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | (7) | (5) |
Commercial Risk Solutions | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,289 | 1,146 |
Reinsurance Solutions | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 922 | 848 |
Retirement Solutions | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 434 | 397 |
Health Solutions | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 536 | 502 |
Data & Analytic Services | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 351 | $ 331 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Contract Assets Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Capitalized Cost To Fulfill Customer Contracts | ||
Change in Capitalized Contract Costs | ||
Balance at beginning of period | $ 339 | $ 335 |
Additions | 346 | 318 |
Amortization | (443) | (416) |
Impairment | 0 | 0 |
Foreign currency translation and other | (1) | (8) |
Balance at end of period | 241 | 229 |
Capitalized Cost To Obtain Customer Contracts | ||
Change in Capitalized Contract Costs | ||
Balance at beginning of period | 184 | 171 |
Additions | 13 | 12 |
Amortization | (12) | (12) |
Impairment | 0 | 0 |
Foreign currency translation and other | 0 | (4) |
Balance at end of period | $ 185 | $ 167 |
Cash and Cash Equivalents and_2
Cash and Cash Equivalents and Short-term Investments (Details) £ in Millions, $ in Millions | 3 Months Ended | |||
Mar. 31, 2021USD ($) | Mar. 31, 2021GBP (£) | Dec. 31, 2020USD ($) | Dec. 31, 2020GBP (£) | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | ||||
Cash and cash equivalents and short-term investments | $ 993 | $ 1,192 | ||
Cash and cash equivalents and short term investments, period increase (decrease) | (199) | |||
Restricted cash and investments | 102 | 102 | ||
Operating funds in U.K. | $ 61.9 | £ 44.9 | $ 60.2 | £ 44.4 |
Other Financial Data - Schedule
Other Financial Data - Schedule of Other Income (Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other (Expense) Income | ||
Foreign currency remeasurement | $ 4 | $ 42 |
Financial instruments | (13) | (44) |
Pension and other postretirement | 6 | 4 |
Equity earnings | 1 | 1 |
Disposal of businesses | 0 | 25 |
Other income (expense) | $ (2) | 28 |
Reclassification adjustment | ||
Other (Expense) Income | ||
Other income (expense) | (1) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Decrease of net loss from discontinued operations | $ 1 |
Other Financial Data - Schedu_2
Other Financial Data - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Provision | $ 6 | $ 9 | ||
Accounts written off, net of recoveries | (4) | (8) | ||
Foreign currency translation and other | 1 | 3 | ||
Balance at end of period | 101 | 81 | ||
Cumulative adjustment amount to decrease retained earnings | (4,361) | (3,260) | $ (3,583) | $ (3,443) |
Retained Earnings | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Cumulative adjustment amount to decrease retained earnings | (1,801) | (1,455) | $ (1,042) | $ (1,248) |
Cumulative Effect, Period Of Adoption, Adjusted Balance | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at beginning of period | $ 98 | $ 77 |
Other Financial Data - Schedu_3
Other Financial Data - Schedule of Other Current Assets (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Other Financial Data [Abstract] | ||
Cost to fulfill contracts with customers | $ 241 | $ 339 |
Prepaid expenses | 118 | 111 |
Taxes receivable | 45 | 95 |
Other | 88 | 79 |
Total | $ 492 | $ 624 |
Other Financial Data - Schedu_4
Other Financial Data - Schedule of Other Non-current Assets (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Other Financial Data [Abstract] | ||
Cost to obtain contracts with customers | $ 185 | $ 184 |
Taxes receivable | 124 | 125 |
Leases | 82 | 89 |
Investments | 74 | 74 |
Other | 131 | 138 |
Total | $ 596 | $ 610 |
Other Financial Data - Schedu_5
Other Financial Data - Schedule of Other Current Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Other Financial Data [Abstract] | |||
Deferred revenue | $ 340 | $ 296 | |
Taxes payable | 137 | 80 | |
Leases | 222 | 234 | |
Other | 602 | 561 | |
Total | 1,301 | $ 1,171 | |
Revenue recognized from deferred revenue | $ 171 | $ 117 |
Other Financial Data - Schedu_6
Other Financial Data - Schedule of Other Non-current Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Other Financial Data [Abstract] | ||
Taxes payable | $ 589 | $ 561 |
Leases | 64 | 65 |
Deferred revenue | 66 | 76 |
Compensation and benefits | 53 | 53 |
Other | 133 | 140 |
Total | 905 | 895 |
Noncurrent portion of transition tax | $ 145 | $ 145 |
Acquisitions and Dispositions_2
Acquisitions and Dispositions of Businesses - Completed Acquisitions Narrative (Details) - acquisition | 3 Months Ended | |||||
Mar. 31, 2021 | Mar. 31, 2020 | Apr. 06, 2020 | Jan. 31, 2020 | Jan. 03, 2020 | Jan. 01, 2020 | |
Business Acquisition [Line Items] | ||||||
Number of business acquired under business combination | 0 | 5 | ||||
Farmington Administrative Services LLC | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of capital acquired | 100.00% | |||||
Cytelligence Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of capital acquired | 100.00% | |||||
Cover Wallet Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of capital acquired | 100.00% | |||||
TRIUM GmbH Insurance Broker | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of capital acquired | 100.00% | |||||
Assimedia SA | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of capital acquired | 100.00% | |||||
Apollo Conseil et Courtage | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of capital acquired | 100.00% |
Acquisitions and Dispositions_3
Acquisitions and Dispositions of Businesses - Dispositions (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2021USD ($)disposition | Mar. 31, 2020USD ($)disposition | |
Dispositions | ||
Pretax gains (losses) recognized on disposal of businesses | $ | $ 0 | $ 25 |
Disposal Group, Not Discontinued Operations | ||
Dispositions | ||
Number of dispositions | disposition | 0 | 1 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Goodwill Rollforward (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Changes in the net carrying amount of goodwill by operating segment | |
Beginning balance | $ 8,666 |
Foreign currency translation and other | (79) |
Ending balance | $ 8,587 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 2,761 | $ 2,786 |
Accumulated Amortization and Impairment | 2,167 | 2,146 |
Total | 594 | 640 |
Estimated amortization for intangible assets | ||
Remainder of 2021 | 106 | |
2022 | 100 | |
2023 | 89 | |
2024 | 72 | |
2025 | 57 | |
2026 | 36 | |
Thereafter | 134 | |
Total | 594 | 640 |
Customer-related and contract-based | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,316 | 2,337 |
Accumulated Amortization and Impairment | 1,793 | 1,775 |
Total | 523 | 562 |
Estimated amortization for intangible assets | ||
Total | 523 | 562 |
Tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 14 | 14 |
Accumulated Amortization and Impairment | 13 | 13 |
Total | 1 | 1 |
Estimated amortization for intangible assets | ||
Total | 1 | 1 |
Technology and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 431 | 435 |
Accumulated Amortization and Impairment | 361 | 358 |
Total | 70 | 77 |
Estimated amortization for intangible assets | ||
Total | $ 70 | $ 77 |
Debt - Narrative (Details)
Debt - Narrative (Details) | May 29, 2020USD ($) | Mar. 31, 2021USD ($)credit_facility | Mar. 31, 2021EUR (€)credit_facility | Jan. 13, 2021USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2020 | May 12, 2020USD ($) |
Debt Instrument [Line Items] | |||||||
Number of credit facilities | credit_facility | 2 | 2 | |||||
Borrowings under credit facilities | $ 0 | ||||||
Commercial paper | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | 1,650,000,000 | ||||||
Commercial paper outstanding | 0 | $ 0 | |||||
Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, available credit | 1,650,000,000 | ||||||
Line of Credit | Credit Facility Expiring February 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | 900,000,000 | ||||||
Line of Credit | Credit Facility Expiring October 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | 750,000,000 | ||||||
2.80% Senior Notes Due March 2021 | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt interest rate percentage (as a percent) | 2.80% | ||||||
Debt face value | $ 400,000,000 | ||||||
5.00% Senior Notes Due September 2020 | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt interest rate percentage (as a percent) | 5.00% | 5.00% | |||||
Debt face value | $ 600,000,000 | ||||||
Loss on extinguishment of debt | $ 7,000,000 | ||||||
2.80% Senior Notes Due May 2030 | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt interest rate percentage (as a percent) | 2.80% | ||||||
Debt face value | $ 1,000,000,000 | ||||||
U.S. Program | Commercial paper | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 900,000,000 | ||||||
European Program | Commercial paper | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | € | € 625,000,000 |
Debt - Schedule of Commercial P
Debt - Schedule of Commercial Paper (Details) - Commercial paper - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||
Weighted average commercial paper outstanding | $ 17 | $ 456 |
Weighted average interest rate of commercial paper outstanding | 0.19% | 0.96% |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 20.10% | 19.30% |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) - USD ($) | 3 Months Ended | 102 Months Ended | 108 Months Ended | |||||
Mar. 31, 2021 | Mar. 31, 2020 | Sep. 30, 2020 | Mar. 31, 2021 | Nov. 30, 2020 | Jun. 30, 2017 | Nov. 30, 2014 | Apr. 30, 2012 | |
Equity, Class of Treasury Stock [Line Items] | ||||||||
Total cost of shares purchased | $ 50,000,000 | $ 463,000,000 | ||||||
Number of shares excluded from the calculation of diluted earnings per share (in shares) | 100,000 | 0 | ||||||
2012 - Share Repurchase Program | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Share repurchase authorization limit (up to) | $ 20,000,000,000 | $ 20,000,000,000 | $ 5,000,000,000 | $ 5,000,000,000 | $ 5,000,000,000 | $ 5,000,000,000 | ||
Share repurchase, remaining authorized repurchase amount | $ 5,200,000,000 | $ 5,200,000,000 | ||||||
Shares purchased (in shares) | 200,000 | 2,200,000 | 137,500,000 | |||||
Total cost of shares purchased | $ 50,000,000 | $ 461,000,000 | $ 14,800,000,000 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Stock Repurchases (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 102 Months Ended | 108 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Sep. 30, 2020 | Mar. 31, 2021 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Total repurchase cost | $ 50 | $ 463 | ||
2012 - Share Repurchase Program | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Shares purchased (in shares) | 0.2 | 2.2 | 137.5 | |
Average price per share (in dollars per share) | $ 217.70 | $ 212.78 | ||
Total repurchase cost | $ 50 | $ 461 | $ 14,800 | |
Additional associated costs | 0 | 2 | ||
Total costs recorded to retained earnings | $ 50 | $ 463 |
Shareholders' Equity - Weighted
Shareholders' Equity - Weighted Average Ordinary Shares Outstanding (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Weighted average shares outstanding | ||
Basic weighted average ordinary shares outstanding (in shares) | 227.1 | 233.2 |
Dilutive effect of potentially issuable shares (in shares) | 1 | 1.3 |
Diluted weighted average ordinary shares outstanding (in shares) | 228.1 | 234.5 |
Shareholders' Equity - Accumula
Shareholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | $ 3,583 | $ 3,443 |
Other comprehensive income (loss) before reclassifications, net | (58) | (403) |
Amounts reclassified from accumulated other comprehensive income | ||
Amounts reclassified from accumulated other comprehensive income | 37 | 35 |
Tax expense | (9) | (8) |
Amounts reclassified from accumulated other comprehensive income, net | 28 | 27 |
Total other comprehensive income (loss) attributable to Aon shareholders | (30) | (376) |
Ending Balance | 4,361 | 3,260 |
Change in Fair Value of Financial Instruments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | 1 | (12) |
Other comprehensive income (loss) before reclassifications, net | 10 | (9) |
Amounts reclassified from accumulated other comprehensive income | ||
Amounts reclassified from accumulated other comprehensive income | 1 | 5 |
Tax expense | 0 | (1) |
Amounts reclassified from accumulated other comprehensive income, net | 1 | 4 |
Total other comprehensive income (loss) attributable to Aon shareholders | 11 | (5) |
Ending Balance | 12 | (17) |
Foreign Currency Translation Adjustments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (1,045) | (1,305) |
Other comprehensive income (loss) before reclassifications, net | (70) | (395) |
Amounts reclassified from accumulated other comprehensive income | ||
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Tax expense | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income, net | 0 | 0 |
Total other comprehensive income (loss) attributable to Aon shareholders | (70) | (395) |
Ending Balance | (1,115) | (1,700) |
Postretirement Benefit Obligation | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (2,817) | (2,716) |
Other comprehensive income (loss) before reclassifications, net | 2 | 1 |
Amounts reclassified from accumulated other comprehensive income | ||
Amounts reclassified from accumulated other comprehensive income | 36 | 30 |
Tax expense | (9) | (7) |
Amounts reclassified from accumulated other comprehensive income, net | 27 | 23 |
Total other comprehensive income (loss) attributable to Aon shareholders | 29 | 24 |
Ending Balance | (2,788) | (2,692) |
AOCI Attributable to Parent | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (3,861) | (4,033) |
Amounts reclassified from accumulated other comprehensive income | ||
Ending Balance | $ (3,891) | $ (4,409) |
Employee Benefits - Components
Employee Benefits - Components of Net Periodic (Benefit) Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
U.K. | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 0 | $ 0 |
Interest cost | 16 | 22 |
Expected return on plan assets, net of administration expenses | (34) | (39) |
Amortization of prior-service cost | 1 | 0 |
Amortization of net actuarial loss | 8 | 7 |
Total net periodic (benefit) cost | (9) | (10) |
Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0 | 0 |
Interest cost | 3 | 4 |
Expected return on plan assets, net of administration expenses | (8) | (8) |
Amortization of prior-service cost | 0 | 0 |
Amortization of net actuarial loss | 4 | 3 |
Total net periodic (benefit) cost | (1) | (1) |
U.S. | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0 | 0 |
Interest cost | 14 | 21 |
Expected return on plan assets, net of administration expenses | (32) | (33) |
Amortization of prior-service cost | 0 | 0 |
Amortization of net actuarial loss | 19 | 17 |
Total net periodic (benefit) cost | $ 1 | $ 5 |
Employee Benefits - Additional
Employee Benefits - Additional Information (Details) $ in Millions | Mar. 31, 2021USD ($) |
U.K. | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected future employer cash contribution | $ 8 |
Other | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected future employer cash contribution | 19 |
U.S. | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected future employer cash contribution | $ 73 |
Employee Benefits - Summary of
Employee Benefits - Summary of Employer Contributions (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Company’s benefit pension plans | $ 50 | $ 35 |
U.K. | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Company’s benefit pension plans | 4 | 2 |
Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Company’s benefit pension plans | 8 | 2 |
U.S. | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Company’s benefit pension plans | $ 38 | $ 31 |
Share-Based Compensation Plan_2
Share-Based Compensation Plans - Share-based compensation expenses recognized (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | $ 131 | $ 76 |
Restricted share units (“RSUs”) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 66 | 58 |
Performance share awards (“PSAs”) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 61 | 14 |
Employee share purchase plans | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | $ 4 | $ 4 |
Share-Based Compensation Plan_3
Share-Based Compensation Plans - Restricted share unit activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Weighted Average Fair value | |||
Unamortized deferred compensation expense | $ 384 | ||
Restricted share units (“RSUs”) | |||
Non-vested share awards (in shares) | |||
Non-vested at beginning of period (in shares) | 3,309 | 3,634 | 3,634 |
Granted (in shares) | 372 | 432 | |
Vested (in shares) | (452) | (583) | |
Forfeited (in shares) | (70) | (79) | |
Non-vested at end of period (in shares) | 3,159 | 3,404 | 3,309 |
Weighted Average Fair value | |||
Non-vested at beginning of period (in dollars per share) | $ 163 | $ 143 | $ 143 |
Granted (in dollars per share) | 226 | 179 | |
Vested (in dollars per share) | 160 | 141 | |
Forfeited (in dollars per share) | 166 | 146 | |
Non-vested at end of period (in dollars per share) | $ 171 | $ 147 | $ 163 |
Remaining weighted-average amortization period (in years) | 2 years | ||
Minimum | Restricted share units (“RSUs”) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Maximum | Restricted share units (“RSUs”) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 5 years |
Share-Based Compensation Plan_4
Share-Based Compensation Plans - Performance Share Awards Narrative (Details) - Performance Shares | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 3 years |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares issued, percent | 0.00% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares issued, percent | 200.00% |
Share-Based Compensation Plan_5
Share-Based Compensation Plans - Schedule of Performance-based plans (Details) - Performance Shares - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Target PSAs granted during period (in shares) | 331 | 500 | 467 |
Weighted average fair value per share at date of grant (in dollars per share) | $ 220 | $ 161 | $ 165 |
Number of shares that would be issued based on current performance levels (in shares) | 331 | 988 | 895 |
Unamortized expense, based on current performance levels | $ 72 | $ 101 | $ 35 |
Derivatives and Hedging - Forei
Derivatives and Hedging - Foreign Exchange Risk Management Narrative (Details) - Foreign exchange contracts | 3 Months Ended |
Mar. 31, 2021 | |
Derivative [Line Items] | |
Term of derivative contract | 90 days |
Not designated as hedging instrument | |
Derivative [Line Items] | |
Foreign currency exposures, maximum hedging period (up to) | 1 year |
Cash Flow Hedging | |
Derivative [Line Items] | |
Foreign currency exposures, maximum average hedging period (less than) | 2 years |
Derivatives and Hedging - Notio
Derivatives and Hedging - Notional and Fair Values of Derivative Instruments (Details) - Foreign exchange contracts - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Derivatives, Fair Value | ||
Notional Amount | $ 1,072 | $ 1,000 |
Derivative Assets | 45 | 34 |
Derivative Liabilities | $ 1 | 1 |
Term of derivative contract | 90 days | |
Other current assets | ||
Derivatives, Fair Value | ||
Derivative Assets | $ 20 | 11 |
Other non-current assets | ||
Derivatives, Fair Value | ||
Derivative Assets | 25 | 23 |
Other current liabilities | ||
Derivatives, Fair Value | ||
Derivative Liabilities | 1 | 1 |
Accounted for as hedges | ||
Derivatives, Fair Value | ||
Notional Amount | 619 | 633 |
Derivative Assets | 45 | 33 |
Derivative Liabilities | 0 | 0 |
Not designated as hedging instrument | ||
Derivatives, Fair Value | ||
Notional Amount | 453 | 367 |
Derivative Assets | 0 | 1 |
Derivative Liabilities | $ 1 | $ 1 |
Derivatives and Hedging - Sched
Derivatives and Hedging - Schedule of Derivative Gains (Losses) Recognized in the Consolidated Financial Statements (Details) - Foreign exchange contracts - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative [Line Items] | ||
Gain (Loss) recognized in Accumulated other comprehensive loss | $ 13 | $ (11) |
Derivative gains (losses) reclassified from accumulated other comprehensive loss | (1) | (5) |
Total revenue | ||
Derivative [Line Items] | ||
Derivative gains (losses) reclassified from accumulated other comprehensive loss | (1) | (4) |
Interest expense | ||
Derivative [Line Items] | ||
Derivative gains (losses) reclassified from accumulated other comprehensive loss | $ 0 | $ (1) |
Derivatives and Hedging - Inter
Derivatives and Hedging - Interest Rate Management Risk Narrative (Details) - Foreign exchange contracts - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative [Line Items] | ||
Pretax gains that will be reclassified into earnings in the next twelve months | $ 3 | |
Not designated as hedging instrument | ||
Derivative [Line Items] | ||
Derivative loss | $ 7 | $ 35 |
Derivatives and Hedging - Net I
Derivatives and Hedging - Net Investments in Foreign Operations Risk Management Narrative (Details) - Net Investment Hedging $ in Millions | 3 Months Ended | ||
Mar. 31, 2021EUR (€) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Derivatives, Fair Value | |||
European denominated commercial paper | € | € 0 | ||
Non-derivative hedging instrument, unrealized gain | $ | $ 29 | $ 29 |
Fair Value Measurements and F_3
Fair Value Measurements and Financial Instruments - Schedule of Assets and Liabilities that are Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Money market funds | ||
Assets | ||
Money market funds | $ 2,850 | $ 2,781 |
Government bonds | ||
Assets | ||
Other investments | 1 | 1 |
Equity investments | ||
Assets | ||
Other investments | 1 | 3 |
Gross foreign exchange contracts | ||
Assets | ||
Derivatives | 51 | 38 |
Liabilities | ||
Derivatives | 7 | 5 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Assets | ||
Money market funds | 2,850 | 2,781 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Government bonds | ||
Assets | ||
Other investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity investments | ||
Assets | ||
Other investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Gross foreign exchange contracts | ||
Assets | ||
Derivatives | 0 | 0 |
Liabilities | ||
Derivatives | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Money market funds | ||
Assets | ||
Money market funds | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Government bonds | ||
Assets | ||
Other investments | 1 | 1 |
Significant Other Observable Inputs (Level 2) | Equity investments | ||
Assets | ||
Other investments | 1 | 3 |
Significant Other Observable Inputs (Level 2) | Gross foreign exchange contracts | ||
Assets | ||
Derivatives | 51 | 38 |
Liabilities | ||
Derivatives | 7 | 5 |
Significant Unobservable Inputs (Level 3) | Money market funds | ||
Assets | ||
Money market funds | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Government bonds | ||
Assets | ||
Other investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Equity investments | ||
Assets | ||
Other investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Gross foreign exchange contracts | ||
Assets | ||
Derivatives | 0 | 0 |
Liabilities | ||
Derivatives | $ 0 | $ 0 |
Fair Value Measurements and F_4
Fair Value Measurements and Financial Instruments - Schedule of Financial Instruments where the Carrying Amounts and Fair Values Differ (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Carrying Value | ||
Fair value of financial instrument | ||
Current portion of long-term debt | $ 0 | $ 400 |
Long-term debt | 7,263 | 7,281 |
Fair Value | Fair Value, Inputs, Level 2 | ||
Fair value of financial instrument | ||
Current portion of long-term debt | 0 | 401 |
Long-term debt | $ 8,244 | $ 8,752 |
Claims, Lawsuits, and Other C_2
Claims, Lawsuits, and Other Contingencies (Details) $ in Millions | Mar. 31, 2021USD ($) | Sep. 06, 2018USD ($) | Oct. 03, 2017NZD ($) | Aug. 31, 2020USD ($)plaintiff | Nov. 30, 2019USD ($)defendant | Nov. 30, 2018USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2020USD ($) | Sep. 16, 2020USD ($) | Apr. 27, 2018USD ($) |
Legal, Guarantees and Indemnifications | |||||||||||
Maximum potential funding under commitments | $ 67,000,000 | $ 67,000,000 | $ 113,000,000 | ||||||||
Letters of credit outstanding | 76,000,000 | 76,000,000 | $ 79,000,000 | ||||||||
Aviation and Aerospace Broking Industry | |||||||||||
Legal, Guarantees and Indemnifications | |||||||||||
Revenue | $ 100,000,000 | ||||||||||
Discontinued Operations, Disposed of by Sale | Property Lease Guarantee | Tempo Business | |||||||||||
Legal, Guarantees and Indemnifications | |||||||||||
Maximum potential funding under commitments | 51,000,000 | 51,000,000 | |||||||||
Guarantor obligations, current carrying value | 7,000,000 | 7,000,000 | |||||||||
Loss contingency accrual payments | 0 | ||||||||||
Discontinued Operations, Disposed of by Sale | Performance Guarantee | Tempo Business | |||||||||||
Legal, Guarantees and Indemnifications | |||||||||||
Maximum potential funding under commitments | 91,000,000 | 91,000,000 | |||||||||
Guarantor obligations, current carrying value | 1,000,000 | 1,000,000 | |||||||||
Loss contingency accrual payments | 0 | ||||||||||
Christchurch City Council | Pending Litigation | |||||||||||
Legal, Guarantees and Indemnifications | |||||||||||
Damages sought | 370,000,000 | $ 528 | |||||||||
Aon Hewitt Investment Consulting Inc | |||||||||||
Legal, Guarantees and Indemnifications | |||||||||||
Investment losses suffered by plaintiff (minimum) | $ 100,000,000 | ||||||||||
Fatal Plain Crash In November 2016 | Pending Litigation | |||||||||||
Legal, Guarantees and Indemnifications | |||||||||||
Damages sought | $ 844,000,000 | $ 15,500,000 | |||||||||
Number of defendants | defendant | 3 | ||||||||||
Damages sought option 1 | $ 300,000,000 | ||||||||||
Damages sought option 2 | 50,000,000 | ||||||||||
Damages sought option 3 | $ 25,000,000 | ||||||||||
Loss contingency, number of plaintiffs | plaintiff | 43 | ||||||||||
NEBC | Pending Litigation | |||||||||||
Legal, Guarantees and Indemnifications | |||||||||||
Investment losses suffered by plaintiff (minimum) | $ 2,000,000,000 | ||||||||||
Minimum | |||||||||||
Legal, Guarantees and Indemnifications | |||||||||||
Estimate of possible loss | 0 | 0 | |||||||||
Minimum | Pilkington North America, Inc. | |||||||||||
Legal, Guarantees and Indemnifications | |||||||||||
Damages sought | $ 45,000,000 | ||||||||||
Maximum | |||||||||||
Legal, Guarantees and Indemnifications | |||||||||||
Estimate of possible loss | $ 800,000,000 | $ 800,000,000 | |||||||||
Maximum | Pilkington North America, Inc. | |||||||||||
Legal, Guarantees and Indemnifications | |||||||||||
Damages sought | 85,000,000 | ||||||||||
Damages awarded | $ 15,000,000 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended |
Mar. 31, 2021segmentrevenue_lineperformance_metric | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Number of revenue lines | revenue_line | 5 |
Number of performance metrics | performance_metric | 4 |
Number of operating segments | 1 |