Aon (AON) 26 Oct 182018 Q3 Earnings call transcript

Company Profile

Participants

Christa Davies	Executive VP & CFO
Eric Andersen	Co-President
Gregory Case	CEO & Executive
Michael O'Connor	Co-President
Sarah DeWitt	JPMoran
Yaron Kinar	Goldman Sachs
Elyse Greenspan	Wells Fargo
Meyer Shields	KBW

Call transcript

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Operator

Good morning, and thank you for holding. Welcome to Aon plc's Third Quarter 2018 Earnings Conference Call. (Operator Instructions) I would also like to remind all parties that this call is being recorded, and that it is important to note that some of the comments in today's call may constitute certain statements that are forward-looking in nature as defined by the Private Securities Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. Information concerning risk factors that could cause such differences are described in the press release covering our third quarter 2018 results as well as having been posted on our website.

pleasure of the Aon my Greg over is CEO Case, plc. it to call turn to Now Please go ahead, Greg

Gregory Case

Thanks, and quarter third to welcome good morning, conference everyone, call. and our

Christa Joining me our CFO, today is Davies.

join have we addition, Eric Mike are to the In our today. call excited Andersen Co-Presidents, and O'Connor,

great quarter, our and long-term it's the bit. build leading our at result which our will strong little world the and United strategic Christa organic continued to our progressively growth a call metrics, growth; the expansion; greater reinforcing last momentum, intend last across longer momentum more our key financial growth direct margin on we've having to X% colleagues Also, give performance to for another firm, operational with the areas term the points into detailed to towards highlighted taken idea continued you to our strategic upon that with like this our performance, third EPS; perspective time in strengthening XX% to performance you basis this This power of a view metrics like we'd on is posted are As the each impact of delivered XXX provide around use With of of and key scale start including: be our more United. capability with another transparency presentation initiatives. We investment result by more actions quarter, website. and income year-to-date, operating thoughtful, on of approach growth; we revenue in our to that Aon leading additions across long-term in quarter, we noting that business. opening, Mike positive discuss Aon serve discussion a insight into for XX% the including a provides focus clients. on similar the examples strong will the believe Eric a bit of

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areas see you are important, from greater translating both factor XXXX. toward be which the of revenue driving growth. actions we outlook the to delivering on it'll shift Christa organic our a market, demand mid-single-digit revenue of share. in as that, thoughts faster-growing driving towards continue the for long Aon -- More year-to-date I'll can for the progress With growth, to year-to-date and Our quarter and over shareholder continued expand long-term our our growth goal term United call into and increase market creation. XXXX on over versus accelerated or the turn equals client value Christa?

Christa Davies

welcome, and Greg, much, everyone. so Thanks

both described, drove Greg As financial the strong that third taking I performance to targets. progress reinforce steps short- United and our would lead we're Aon long-term to quarter. another year-to-date our continues for note the

of X% year-to-date in acceleration organic from performance XXXX. Our X%; an third year-to-date reflects: through growth the quarter revenue

United increased operating grew Strong firmly Accelerating of divestiture. Greg initiatives tax EPS growth, capabilities a our to year-to-date, and expected accelerating basis margin and the placing to $XX offset absorption year-over-year, decade. growth than reminding of In decision reported a driving year target related organic continuing by points, this up exceed discretionary flow reflecting revenue in of restructuring impacts XX% pull to Aon to our year operational partially year divestiture, expansion, or of lastly, the growth, strong increased includes operating Adjusted to free short-term support improving our performance. half contributed outflows the investments addition to growth is including margin I more with both to income on And flow Core is strategic EPS is expansion from year-over-year underlying to acceleration payments us contribute, cash of delivering income this note XX% usage. historic for operating the be year-to-date growth $X.XX of cash that basis last in M&A Adjusting quarter. the third of of client-facing in basis reflecting into free with cash over increased margins XX the track highlighted. year-to-date. total significant average prior points that cash revenue, year-over-year near-term growth pension would XX XX the restructuring year-to-date, the points the is XX% contributions and substantially, XX% core growth XXXX. forward XXX of million you year-to-date the included X% mix combined peak to of performance

making by to greater model growth over digit Aon Aon we're United the outlook support United ongoing or growth in amplified term, long operating momentum revenue to the improvements. and mid-single organic investments productivity continued long-term portfolio Our are of our objectives the drive across and

for small the building the generation are to and operating operating of This more often Through differentiated highest delivery service cost our creating which creation continued contribute add a discussed, productivity services clients' portfolio driven is including business, process. who model, Greg just One find in talent leverage one that to digital which improvements, the Affinity expected areas of and we're As we're and invested new leverage, prefer investing and in in outsourced will inorganically, business to scalability, of unique solution a margin single their is both example program. that growth portfolio drive in our Ongoing of combined needs. are buying near-term to core and by by our example productivity help capabilities higher-margin will restructuring long-term we're continue mix the where opportunities, or effectively capital continued to from accelerating the create operating navigate productivity ways value beyond return and improvements with we model revenue global demand, client substantial on business an organically expansion across centers, greater captive application service next- businesses, designing channels the expansion. will shift reduction. businesses creating the

capital long growth importantly, on progress of confidence ability double-digit the in More goal operating free term. flow cash in continued and on initiatives growth working to increased annual an accelerating over our gives profile, deliver leverage our us

XXXX and valuation. through in by related unlock free make In accelerate before, year-to-date, and capital free the continue highest generation to restructuring shareholder cash significant be to to $XXX and This substantial for invested to share remains significant about return end we're with is the value the investments in to $X.XX As additional our Greg. usage term. that's revenue leverage is deliver expected capital the increasing over pension billion cash by capital our on Declining given long significantly are of I to the flow creation investment the over With creation free to repurchase I'll on basis. highlighted back cash substantial turn colleagues growth value we're flow return we United, call capital summary, on of all combined which Aon free flexibility allocation invest XXXX, for cash the capabilities of expected client-facing driving in growth, flow of opportunity that, year of With this uses cash strong to restructuring, flow XXXX mentioned CapEx and of expectation an initiative. cash an million expected opportunities. up peak free XXXX, diligent maximizing and

Gregory Case

Thanks, Christa.

mentioned for our creates the further and we glad Mike earlier, Aon Eric have are us value join and insight clients the help drives into for growth to provide As to United on firm. call how

Now that and pick Eric up and going the around value questions this on our back kick topic. call, want day-to-day. with to discussion call we And to from of QX several topic, a today, the creating today's around questions perspective last from from revolved very Mike on questions off line both

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Eric Andersen

It's be Christa, Thanks, with you to privilege and and Greg. here you the question. a great for thank

to we to are Before on be I working Mike I echo just begin, comments how and Greg's you tell excited together. want

foundation and we've of decade, a closely great United. As over worked for and each and that been has spirit Greg known referenced, the collaboration Aon is other really together a

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example. give me Let an you

We more that the the understand they But find in serve Those that at understand many a Reinsurance Solutions underwriting us advice-driven, type the using partner was relationship. their look book business. our were their last of were they business, assuming more to you've than we analytics support better you success market. efficiently data better know builds If you'll insurers and and we there of largest to world. become CEOs other decade, of to That Historically, transactional over appetites the more of that risks the loyalty intimacy. any have. secondary and business our transfer seen

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Michael O'Connor

-- well, see greater agree loyalty completely leading complete description, our and ultimately Listening Aon that United client I to I excites growth. we Eric. to that colleagues, Thanks, your and

a moment example fleets clients. and benefit. Across being reinforces many large this and last and take delivery. trucks that the small to both mile of demand clients there's another today, connected really from transportation describe me to around Let enormous work sector see put to geographies the complete growth middle-market We

are insurance businesses is and there client response. United spurred benefits these team has This workforce. growth challenged efficient Aon vehicle solutions effective of both the need as health need solutions, within and for for insurance truly our and However, transportation their a more

motivated team the solution vehicle together allows lastly, Aon serves assist from of our The logistics practice. United solutions without us help them providers; the our array and our together gig come of and unique that can performance. the stepped where and to towards been when value transportation becoming data services forces for client, solutions together operational practice an risk Affinity with are and Eric This an are to improve practice; relevance are profitability firm. and insights big join part and to and I not obvious from that brought more and shared, United a to and to that working firm, which excites provide capabilities to Aon back and colleagues. and efforts grow, clients from working can And to clients. analytics I transportation expertise Our an geographies operate our a And help professional business consumers; to deliver that's seeing that clients a access journey capabilities: create reduce that our right analytics from and and colleagues but clients our underpinned voluntary clients lines businesses our solution. of assess to similar benefit does approach, solutions, that talent across benefit from self-insured risk. from these small our reinsurance incredibly increase health to brought our solution driver desire team more and We opportunities across health capital Industry of example firm, team and by for deliver them global captive across grow integration what enables economy solution expertise the also just consulting is capabilities types data and business. platform the their They earn and expertise talent to a our custom support customized workforce advice this to engaged delivers

Gregory Case

the potential I a firm. lines Eric. open Aon on for else. both has and with what's and -- our And question. operator, and of appreciate up Really on to but examples Aon make Mike colleagues our insight United Thanks, as work those obviously, impact make of our clients growth to best minds colleagues. lot the easier for more please helpful with of generated help it bring the to really we everyone of clients deliver us can the next on examples, go see And let's we

Operator

coming first [Operator is from [ph]. Instructions] question Our Styblo Dave

Unidentified Analyst

good cash in maybe is a get to to Mike the a, and better. flow conversation Eric. the with continue And very Aon going wanted I is strong, position financially, obviously

next savings couple of over laid you'll out of get years. You've the million that $XXX incremental

Eric, will things you organic lenses. be growth, flexibility leaders, in coming you'd margins do improve are as guess, you, What being of able either Mike benefit that improve like savings business retention, to to see investments restructuring through your got do I you'd enable to make? the more and business would improve that that that that terms through. You've how

Gregory Case

-- as flip and So Greg. start we'll Dave, here And interact. we forth it's of sort then back of and sort I'll

the appreciate question. really First,

are it's strengths and the and flexibility at You and the to with changing underpinning capability, need how so then really have of need the client of opportunity of an firm, client the but and only one to not evolution that. financial really react look

the sort make us sort Townsend, of with the in investments cyber, with So on side of in exceptional you've ways. delegated on across-the-board side Stroz acquisition seen

Admix with et in and and ACT You've health mortgage seen us make exchanges, data in and and the analytics cetera. acquisitions

both things have driven and seeing places got we the we've firm made And an in overall is So the start yield show and the whole helm with acquisition we how it Mike in that, colleagues to not organic Mike the think think a that to to of important, of you're we've and improve I directed point pallet really you're day around that are been look could Eric out and I Eric reacting provide that. start how business. standpoint. of standpoint at And seeing just from up clients every performance, sort our you, just just really Maybe, of too. terms across

Eric Andersen

down X and insight couple opportunities to and, also be focus. business Thanks, be to drive all -- a across pie Greg. solution execute I able creating see think development then continuing data capability and the the content-driven demand And we're in talked they to in think Is consistently, critical. I big new growth essentially, And of invest growing the Certainly, areas and teams. to and The to tools really areas. provide right analytics we lines. comes that for to having major areas able obviously, insight to about clients. is our we Certainly, the investment is right of is something that have a the trying

Gregory Case

Mike, Terrific. thoughts?

Michael O'Connor

Yes.

couple and as of opportunities to said, things I with see Eric we that and I'd a think, mind. clients maybe highlight existing, come new

are Aon Reinsurance clients all we're our is more and Insurance real business continued be and the parts businesses then continued Transaction that very capabilities excited we the to to demand and analytics private unite liability, of is provide us continues Treaty. able to invest a a It's serve for effectively, by clients. see to for to out a talked to about before. grow better data-driven and That insight over to to data ability the area We distinctive deepen many to we client for benefit and that And geographic First, us we need, investors. clients both growth driven provide highlighted, able client be world. we be our of continue and example there using Client and solution behind our great insight draw about. team to to that for serve of within are equity continue and coverage, solution, to and corporates and

So about space and very opportunity excited there that investment continued see

Gregory Case

Perfect.

Unidentified Analyst

then I think flat some a savings we of that should as visibility at you on And is be next numbers that think where If start year little And forward,, pull just savings have have the realizing The quarter, may where restructuring Or point $XXX at more target again guys $XXX a nearly something that upside for of the fourth are million we you'd coming the where from? a are versus follow-up $XXX we you year? a restructuring bit, for guess in earlier? keep is just about you to the savings. be Christa. million to million quarter the for from upside the third goal. this your going

Christa Davies

Yes.

than restructuring the very invest more of thank that, deliver importantly of we're and ability in of estate, model the around not in Dave, but year-to-date, real program. for that's really leverage savings a in United investments And IT of $XXX the so that. in each in So program the updating lot the in I would to, about million its after excited terms progress guidance. say and the operating up to about much We're XXXX productivity we're and going much in gains business It's our We're model. operating excited to extremely $XXX of million to the people question. in year in Aon operating where in you XXXX, savings building

this confident about delivering say end think excited a savings savings continue restructuring we $XXX $XXX is year. that million next I very in it's year program, the the in until and about which will million we're program this XXXX. and As What X-year of can

Unidentified Analyst

Reinsurance book ways especially against a some lastly -- the seeing really And end that you an more you or strong and organic growth, was strong you some Okay. demand do that commercial comp. across some enjoying? gains and this, uptick tough think, guys then in is are just the on of Are market surprisingly in share market so comp, guys

Gregory Case

Again, driving bringing a It's and look ways the combination, the Dave, to we're bear and to behalf solutions both actually new really to actually looking client demand -- -- client as and -- in board. across need, highlighted, Eric of improve it's at we're on essence, Mike clients.

the that Mike So of market. in the again, market about we're some that candidly, bringing transaction improving clients. new of and from very share fortunate and solutions been we're to talked That's cyber et We've our bringing because, a things sort cetera, to liability, opportunities Eric standpoint, continues to better improve.

X quarter again, the particular improve strength over it in -- look to that's not in think And you're And that So really the you're us see progress. over but continue net-net, any will time. we lines. year, seeing course across going -- across of for solution to the

sort we Obviously, QX do standpoint really digit focus think coming our years about year. is the was and about, talked mid-single particularly or greater quarter of you quarters, to the us as over you're going a unique growth see As that. goal a from last

against be most that So we team's the for that's as continued pushing look going about. end progress we're excited year, to what but and our

Operator

is next JPMoran. from Sarah Our coming DeWitt, question

Sarah DeWitt

large Could this competitive how talk and your how as recently -- is scale? acquisition. dynamics announced on impact the about far competitors one you just could your important As a thoughts how of

Gregory Case

Yes.

the clear and perspective if understanding health, really And need it's starts the to look, -- you. all you very have very a client building But -- it my compare fundamentally world evolving or our how it's client about things specifically, view view success that time? come And us, our market written is view need, and in things standpoint there's it frankly, in all are and you how sort way. need all what address that, So of on -- a understanding need unique emerging traditional of and how the back is we evolves. for time. client over sort against irrelevant to from lots with always over And or when intermediary is evolving will we both is get way how that capability risk, things then the risk all retirement,

and cut-e, So and investments investments exchanges. you against of talent. Stroz, that in analytics we've In I'd health. against come et made, cyber to, mortgage about Admix, opportunity. delegated. ACT sort organically, in the think the And if data back directly the In then and In Townsend, in was made we've cetera against the in and

-- sort standpoint, to new demand our we effectively. of creating market absolutely maniacally so, focused delivering think need. in So net be more in doing and competing very has client And effectively this traditional we're from the for is on

the unique Our clients view a flexibility free with very, is, we're our is cash into not very results world, that be to that and positive effectively a set of serve approach going revenue economic only to flow, focus financial create translating think we will what for on but shareholders. partner combined also

scale matter. obviously, So our from elements of and size standpoint,

You'll the focus, is going really to it's victory. but marketplace, that continue movements think, in to we see determine

Sarah DeWitt

on then restructuring the And initiative. great. Okay,

you've savings explain there elaborate improved on about long is $XXX Can talked how You more? And bit just the above productivity potential the you expense that? opportunities that this you and Or just could are should for beyond saying million drive that a over then term. you that identified?

Christa Davies

Sara. Absolutely,

apply in in We million 'XX XXXX, million, about $XXX delivering if yes than then your is continue that think able savings more and But because much operations savings more productivity answer think when years then drive is continue we than run in automation, of your really operating and your operating to importantly machine AI, to exiting deliver leverage savings Aon X the we'll productivity are and that in learning United, to so higher built into XXXX. rate under future platform model, you So is the aggregate question. $XXX to it you 'XX. XXXX

line in And us top benefits. that growth margin so driven we're productivity. improvements about that expansion, long-term excited confidence very in revenue really the business productivity gives and And by future mix acceleration,

Gregory Case

an now, saves it, and this the approach taken. as piece time, I'd this United is and of it's Christa leadership you sort in, and productivity the unique is team the not just effort. have the just other of really One cost know, also Sarah, and throw offshoot Aon What's about improvement over orchestrated we've

going to of firm it's in effectiveness. isn't in the We cost. about just what approach going This efficiency, we're connect opportunities, we get to as and efficient continue this be believe we to and see more the about improve service on is just behalf delivering about process. As isn't clients

So and in than our how undertaken really different anything seen very we've is industry anything before. that undertaken this certainly we've is

Operator

of question Our coming is Yaron next Sachs. from Kinar Goldman

Yaron Kinar

that growth clarity like of maybe kind organic on little as some your a from would like could. first the with market, gives is bit but And kind if your confidence of what of also of positioning, late. long in in the we've long-term and you My the -- positioning more consolidation of hear perspective that we in seen seen to growth thoughts about some among the you over companies. achieve pretty and around your to maybe different others digit given that -- It over or of can period terms your your better years across just over of initiatives organic what question beyond a some we've of term, guidance you're seems your long above organic several peers time, on of guide kind seems and growth mid-single especially confident

Gregory Case

and terms playing of, see markets underpenetrated. of in, as and comment risk, that client we time. play in can of sort focused health, start need we and out those of addressing need. in with Listen, that And evolution would start a clients, with again, as Mike and And you Eric about highly who formulation how and this, it's on serves well. categories think I'll over terms we Yes. these are you retirement fragmented the in remind we us client what

So input, of the X in you XX really economy, way, only our in have risks risks really happening XX them. X think this the by client only about great overall solutions the have market top -- and what's is, based risk global insurance top against the on the world,

have So we're you an more just actually And and in up. risky, is essence, world opportunity the to keep to keep we going becoming if grow. up,

protect solution actually reduce really that? if actually provided if a did more than What balance insight to helped our Or effectively. volatility and we what provided opportunities better effectively? that Now, more more clients we cyber sheet

net and which So from more do our new better so, market we clients create over ironically, standpoint, traditional risk is we happens doing in demand serve can see an effectively we time. business. underpenetrated in what And in our

just So solutions -- reinsurance about take our as and and a retirement we area, Eric combination. some our this, Eric offer our described only of the client and strengthened from example relationship was great that a one do great reinsurance talk because things a result not

addressed by money quake some you by because So love last purchased been the The think X I back actual and in we time, risk piece. really net took given things money, we've Bank. their Chile, way was Colombia, cat and And actually When an Bank I never done that's about the government was We given know about example, a de-risking. literally, That Mexico economies. I demand. this World new that's -- Peru. countries, before. it talked World bonds, in whole that It the pension orchestrated done to investment is back the

ask off Now the or many on would a the from Then are like cover to developing, benefit category. that. I that would brand races underdeveloped you, you're economies a world actually new how around

this So organic in and after need and for to can going -- through that's go growth. about both we addressing all is so organic which in do way doing us, and client net back to current addressing M&A play new, in a and this both

-- to... thoughts Eric you pieces? just Eric, Mike, So in want or sort of terms of

Eric Andersen

was think out thought compelling. there example, to a underscore United Or also one there's business Promise but way. in insurance our say, both way their of firm I client those or firm, shared are where risk securities, and a new those the additional wildfires just leaders traditional with connections. to of able because in really but business part exist need capital uncover I just with a during to the the for and made was it you is Mike is would underscore insurer, I capability perfect, an strategy dozens for Client the where, for the at handling working or the examples, period described linked discovery Aon Greg, in West firms within that I reinsurance that look deal of bringing examples to insurance commercial risk that leader

should So given the to ability to bring to growth that all firm the lines different be we're us talking drive able about. that any solution

Yaron Kinar

market of over Or is of time? that that's over it increasing underpenetrated So the in the capability of improving addressing been underpenetration degree is been it that has your insurance time?

Gregory Case

Go Mike. ahead,

Michael O'Connor

analytics bringing highlighted insight Aon some Treaty not could Impact doing deeply in lines. serve think that happen and through of Well, is, also we're the bear opportunities to solution to tools to retail I data insurance crossing I firm, reality the more capabilities without I And it's continue by think real build it's we're about our Forecasting both. and reinsurance our investments we bringing analytics. and think clients mean, Client that's lines to you things like capabilities to bring more underpinned And into clients. where clients reinsurance capabilities. retail our we and where see And the does with data across our within clients, solution

I it's So both. think

Gregory Case

Yes.

for for on relevance life just Yaron, is around battle we've and The us, other relevance, every battle This, about in calls. And this This the day in industry we helping for really our talked the just the not the a it and answer think whole, more as us piece, -- is can it, previous you conceptual. not. has companies volatility In industry. middle are entire a I of an in a is essence, make effective way? argument, is address

kept up. not have We

kind give kind If every It as year And grows, down take. the 'XXs, a it's virtually late come 'XXs until by you X.X%. about GDP of and systematically the to the in X%, it's of at year or look of 'XXs percent X%, claims way, every back since. essentially then X.X%,

back XXs. was it's where it to So in the

of as about XXX the is market global XX%. changed where think XX% economy fundamentally of driven -- intangible has net-net, assets. another So to it That's about from cap fact, XXXX you the grown off S&P was of if the

we And that changed, kept as have so collectively world has not up.

opportunity huge as clients have them help risk. that and see We and actually reduce volatility. We a actually opportunity not to drive addressed grow for

solutions You've also to bigger our we've large the the us, these companies the sheet, them. for done by a insurers. They as capital way, their insurance companies. by create way balance don't are analysis -- with some demand done seen protect we've tech to And large tech some very than of way, need but actually some used

it in provided them demand cyber product. consumers put so from marketplace, In because product buying marketplace way protect and risk putting insurance. beyond fact, cover actually a in on they They're it's a their the are we've the to

opportunity, but -- net And these frankly drive not are things in relevance, doing insurers we're we of so to a new us, kinds economy. demand create global think just real that global for and the for the

Yaron Kinar

year. beyond? so that later XX%. Got year, and tax some With it. tax out down on just the effective effective question plays expected And second for rate to Any in around rate, the the this you're BEAT guidance thoughts 'XX the my below to guiding was how as

Christa Davies

this discretes tax given saw year question. for the will XXXX the previously the full did XX% below be XX%. Thanks for of we Yes. We guidance and of in year, QX, give impacts rate

As I approximately the our is, look would I discretes, years of exclusive any unpredictable underlying year, tax of which and back the what historically, say historical for was Yaron, be rate X in can positive last impacts negative XX%. or

not we're that you but so gives And forward guidance some sense. I going giving think

Yaron Kinar

Just clarifications asking this BEAT the tax year? are about that itself. Any expected

Christa Davies

Yes.

last for years, below think about saw in and it guess, will So rate, QX. I all-in would is if discretes it's underlying you say particular, at been we be is XX%. what Yaron, XXXX XX% the driven really And in it an the about X way the look slightly by you we just

Operator

question from next Our Kai Pan.

Unidentified Analyst

terms in about of Mike there in and for you discussion. growth. much ask And Eric conversation are to around What responsibility as United. day-to-day worried this lot terms I of risks execution under pitfalls Aon accountability? speed making has available want to you the gave could example the collaboration a or your Eric execution drive just of Thank the very up good are Mike. in work changed as and how But for potential and of operations well you any drive follow

Gregory Case

just Remember, as was our changes single by what single with Kai, start for day-to-day opco on course, they broader that and Aon we day-to-day, United. the which a brand, team, a the piece. and accelerate We built to but respond and implications, they'll about their of steps think, copresidents. about talk talked were that, We it about, beyond of P&L. Mike really catalyst sort driven talked a Eric frankly I'd has single of all to And sort their really are a foundation.

thoughts, gentlemen? So

Michael O'Connor

in, jump Greg. can I

I over together. I that think And Eric I up -- this a working have Aon years. has of life a of United. our it's of is as to And highlighted, I Eric think been leadership actually culmination history team and stepped long think to number the bring

We group. have that in intimacy

We have great connectivity.

I not great So beat, run we have confidence not miss will I can firm, through that the operating think as we and come our unite together we Eric? execution have expectations global committee, X accelerate think a capabilities. only we

Eric Andersen

just work a trying the really closer the clients, the would clients of the they're have structural client's partnership, for to builds great a to that bring they to I about fair get at Mike of that spending reinforcing do and the down we to we have at us firm. that solutions been help are work, company we colleagues time a together looking the and connectivity They're said we're pushing beginning reality to to inside problem us bring our to is think momentum firm. have around I it. just And firm I And the solve the the are and bringing our looking that the is ability barriers, degree risk that entire amount across say earlier the facing, as world the fact momentum. And and with

to risk and in then be and problems risks solve clients just firm do, quickly able don't if The we the else a someone here way solved as some well, bring they'll would now, by about I speed. to You way. together as say need to other is find them us they're the asked we and are execution for as and be

of need. the just the we fast in that us is have clients. see So we it most I get together we front can get the the the it to We how it's tools, think know drives what fact

Unidentified Analyst

and second front. That's My question great. margin

your margin If you're assuming through XX about basis core XX your $XXX mentioned would expansion, that year points. looking half margin into expansion, XXX this million if saving margin cost million like million. be basis And would points of versus XXXX, points. of be basis $XXX That year-to-date expansion, $XXX you equates line, about bottom underlying flows core

margin can right that, like, more way year-over-year points you wondering, basis XXX If forward? going is potential than expansion sustain just could XXXX. you that I'm add a into up think your Christa, to to about margin

Christa Davies

say key 'XX. year-to-date. about margins going able for growth One give excited growth X through XX% expand we of years, to revenue growth, last contributing obviously organic which is saw, accelerating very M&A's what to in forward. to But don't margin total we're to be calendar sources. and accelerate also we you of couple year revenue been we've the guidance But revenue continuing you've seen can continuing is Kai,

is mix second The shift.

the in the beyond is and inorganically. growth, XXXX. Greg and both revenue descriptions invest third great to higher continue businesses organically businesses, We higher restructuring savings margin productivity And of earlier. those gave And some ongoing

the firm. margin future expansion feel we about so the And really good potential of

Unidentified Analyst

liability Last business. I may. transaction on your Okay. cyber if also and one, It's

initiative how are competitor it and you're insurance using Is reinsurance. You on specific the about doing, wonder this of silent you balance becoming growing any clients sheet your residual not on I cyber your to the digits. big worry just said there you're relative it clients, side business been Aon? double overall risk the to had but also portfolio

Gregory Case

risk. no just there's one, -- with to sheet start There's that residual balance

know, Kai, sort of the you taking risk. As balance we're business sheet of not in

around with that. all opportunity connect alternative insurers the and connected the would capital and is trauma. to theme it that net you against pieces And to and world talked need, in billion and with say sort look, the about of Ours side, client of are the if cyber in just think we do billion premium about is pain, again to it cyber different really on that's $X of we've generally, that's is around What Incurred recurring and $XXX XXXX our it written. that -- against we $X about -- need. starts our billion loss with before. capital with was Clients, numbers around sort this of

done be and largest $X And that's billion might about team's $XXX we billion, it close billion then actually billion is a massive opportunity because and by The previous Kai, an might we're they way, cyber. Until to the think described exceptional So the in very double of be When our context digit job. excited to May it. $X growing about you to the to report really XXXX. calls wasn't I remember, help clients succeed. figure. that didn't of required. European It American is $XXX X on figure And as need North

European a those laws few So kicked just the are sort in, data months ago, and incredibly onerous. of

has cyber trillion the loss $X to the responded go going to $X connected not is So industry to -- billion. on connected dial, with and billion $X loss, the

industry for we for well as we us, this massive clients, the get So Frankly, when opportunity, if this see we opportunity. right, right. real our get and for

described, about real we again, to to do Eric Eric ways and if emerging find terms this we succeed. them as it, going opportunity. And clients a this that for other so risks substantial it can the idea in help back sort as talking see is and to it. that And were they're of We don't solve Mike

Unidentified Analyst

now portfolio? are How your big to Okay. relative they

Gregory Case

initiatives small. representative place, tiny think good we've very very, in they're kind are they These Aon potential. taken small, very, terms of very we in think but sort put have steps we've broader tremendous overall small, the Very new but of of of examples

Operator

next Elyse Fargo. Greenspan of Wells coming You're from question is

Elyse Greenspan

this Reinsurance question. first Pretty My strong growth quarter.

You just XX% you hurricanes year. guys quarter, tougher adjust QX, and last have in rev-rec, fourth in be fourth after a a ons the a kind less and because comp - offset it the underlying expansion been help organic you highlight, of step we reinstatements revenue that for like I you listen, quarter to headwind Solutions A and back fourth being Case year-to-date. line, trend the just something Well, of had and just margin of certain -- you a about quarter? coming pretty when lot think last it exceptional. headwind highlighted would that Gregory of margin at comp Reinsurance Is cap should again, -- to core through what do is How to you about guess I got obviously I XX% did colleagues or the degree it's that kind in quarter? the know business in look have high do overall, that? able going that you this does see basis sort is the you XX Reinsurance a of our such can Is And that been have or points a to you

continuing to progress side come trend on the Again, with side, I clients sort is see those actually do at seeing look overall to on exceptional, quarter. on is been years few much of sort I just Elyse, that line. the new the a in line, emphasize great If QX first win absolutely our progress. that more team's exceptional, line and year. And back ability you the -- last trend to and clients and think that's to X we the fact out of want actually treaty and trend played that, that the of always alternative you're particular we the side, and Look, just

and add, build QX, what where it's, QX A But positive. The create -- to are. very from couple treaty you've is to no the our unique. as we One, going Greg, overall smallest by As of described. very been business new terms anything in Eric, good comp way, with would But is going and the unique. doubt, you - overall clients is out things, success you'd time terms to is the business of in existing continue highlight, difficult the in the Eric core add sort history, It's headwinds expanded Yes. there's exceptionally year that? we I fourth in quarter, on last a unique clients. know doubt, sort a just We no Andersen that line was see very, in quarter the has of of comp of standpoint. the of trend

the to some and firms groups, Our do broader in of third the that, for we normal companies. entities able reinsurance insurance were that strong remit. government it's are or exceptionally facultative business little was things new think also People whether a quarter than with client new like

positive for us think I been the of year. the combination X all has

so it's to a -- X And as say major Case A good a would the QX, exceptionally trends, very - specifically, back months. Elyse led of hurdle definitely, this Gregory comparison. we -- definitely think to, sort I about goes positive.

Elyse Greenspan

pluses have we conversation we of of months you a clients, sort relatively particular, little to client sort trauma Reinsurance what Case as you've and we day-to-day But if -- a and spend say, what stable. par, to forward we January of about really As it's really the clients. encountered time of of the prices given expect with predictions sort of level with Gregory the in front view A Elyse, of first minuses look on lot guys of on you and we'd - few think our in sort on of continues the marketplace do as continues just progress what for what for as start pricing and time, us you've renewals? over overall the There's And at of pricing the at about depending could high a do being a having overall, sort months kind X don't be you market X our you kind talking when talked on of the against Overall, encountered. analytics will. year, kind sort

Elyse Greenspan

know the saves. then had questions. one And earlier a few on Okay. we I expense

and the again? guys well $XXX of not that's that you guys million, tie you you want the So for that. you we $XXX of you date? year, guys million. that guys And our Or just that, of this together end your if was all in aren't, program are Christa, kind to end that target of it won't this around get you even something understand potentially can raise ahead the to at of by year looked kind just how are I thoughts implying that is that

Christa Davies

of got program. the the and we're this about excited Sure, the is XXXX, we've end a savings Elyse. $XXX until guidance. of I guess updating year the X-year And of would progress in not the million simple made thing business savings to of on to I year. We've track say next very and we're It's deliver we're $XXX million date.

Elyse Greenspan

shares? of comes better it's during stock into kind year, repurchasing Or lighter one slow that last this Repurchase question. what Okay, that caused just of when And a a anything had great. maybe that to little the actually then quarter. down was timing, bit? the kind thoughts buyback we modeled. bit your play Did did than Was kind in quarter little of around there

Christa Davies

Yes.

Share across cash capital million on into we on of accelerate return capital return as the pension happen So contributions in from know, cash you repurchase QX. What on based returns. the on future highest we $XX capital, allocate did Elyse, quarter opportunity Aon. is did years remains

that And substantial of impacted that on capital is X why was us. so we us. Aon, a the factor internal valued long-term, for return But see valuation which highly very opportunity is so

Operator

Meyer is next coming question KBW. Shields of from Our

Meyer Shields

questions. two, I somewhat have related think, I

if beginning would we pricing, you if long-term view, of - that about Yes. it be previous as we overall what direction based insured tried the Panhandle, you either Florida catastrophes the the has changed the market around we've The that described total of talked pricing natural to Case dramatically. the impact, say, we to Japan, think structure before, a talk maybe the that about year. are world all impact that of in on the of said to as factor the is losses going what line expect forward? want come But Greg, what of you business start. some chime largely in Genoa world just of on if unchanged insured first largely back, the Mike, insurers material calls, you I calls you - and and think like this really should Gregory disaster. Again of of about we the market value those a part about over The reinsurers the is, on I've of Eric sort more influence pricing is with really, everything expected. about in the actually the hasn't the to less man-made remains A Andersen A impact think the values, And the and previous from want Even and bridge you budgets term you Eric, in? cap with sort piece. time part than highlight

there's where investments and Yes. would O'Connor the the and the provide thing for with at I beginning would So risk that's cover think try in and And by business. our the business I of - A the that's business that our unchanged. with risk, insurance and year, is data senses to there the is interesting that about this new risk. analytics, capital say I the was part growth only in demand Reinsurance bring we relatively Michael add and think that we supply though is

and Meyer, time - Aon, about X% the less analytics we this A solutions think our progress, makes spending and in is will and that Aon, a understand and really Gregory on But we can way, and -- in the business put connected We this the for is this any Listen, I And less overall the sure side. and we is, pricing, more ours is we risk anywhere into throw value of about our we marketplace cetera. in, is about do around data you less the This not client business, of sort this, them, making again, put relevant, about world for though if We -- up, Case less side, back of about right? investment literally, important, side, the the important health and pricing that. final is form context right context. shape in Less and to less of are the them what clients in want piece, our time. answer obviously to source the to to What come relevant et following. sort about think or and them quarter. these the over to in deliver ours And I are of about, broadly. obviously in in the It's even intimately retirement well how portfolio conversations is but even sense. think try and

of into put to terms portfolio, opco, context model, the single overall sort of how single in want just fits broader the I Aon So in operating single P&L. this

Meyer Shields

That's helpful, at. that's was where driving really I

So that really clarifies things.

would it world of and that's areas we come were point how us we at our And business a figured a to to they Mike changes to with on clients with, in would but And and the more respects, actually find they in and say, this also with love the come the out, risk Eric More is massive and have Gregory time? implications number risk that? in a switch back risk -- over true. you're listen, where even what mean current technology Again, of there's technology technology talking Second actually reducing actually areas bottom Will of major and understand significantly sort you tomorrow, But if a A evaporating. how cars, what - one factor a could the I this is do understand and reduce volatility guess, think think of question. question, is would they and about flip your to I have clearly, impact if think -- the them this of risk. if line time, of making, point we I us you about. example good risk profile, it of change, How I And technology changes big about profile. I Case increases be model -- autonomous think uncertainty.

risk this risk global overall the business. for is perfect there which just up. time be economy is risk changing the retirement sort in is risk By going world. so in classic world. the going it's in in It's not us, change health way, the It's of to a risk the in and on, So much

the the be we is than be isn't about solutions risk traditional about hard-pressed really or Can improve these that already, the world in actually why that and call that's performance reduce can we point clients risk of areas solutions, are I of bringing getting are it volatility we transfer you'd time, matter, of and the quality higher to So bring bigger, the our to we've is is things going say that either very described think is we getting net-net, It question capital that and today over health or changing we evolution solutions that greater end, on that the sort ever in why before. intellectual got made just All world really retirement how So be keep maintain not really to this And solutions, ours matter, up? evolution. not relevance? today can't the in the to is basket their better evolve that up. it's Can volatility? help property. clients.

Operator

from is [ph]. Klauber coming Adam question Last

Unidentified Analyst

out interesting. New flesh It sounds the you Group? very Ventures Could

that follow-ups. really it of a One, I do -- you to client. think increasing value has with So relate a couple for at

another maybe that gave more Gregory capital? with venture give area direct be X. what potential Case Could you activities mentioned this could I you -- think first. do of three, could involve be? Yes. you and equity private Does your You where acquisitions? example more X some then area more an activity or Two, A And - those and

step journey. We talked to step to Eric the an this just In the think and and we're bring another important clients. essence, innovation journey. to in just about but one, doing new Mike back. Adam, what is step solutions both another So in

manifestations to New up point one internal leadership what P&L the doing, in at they're work scaling this. and single Can is which we got is effort single more leaders. proven then of Again, faster? Eric's this we group us on time is an So it's globally? speed copresidents allowed They exceptionally doing be of really This our senior the listen, identifying well. free having Ventures matters. a and saying, gone essentially we've of on focus to opportunities opco to and be approaches. faster we them strongly Can

we're around area. the what that and and Efforts the sort John doing If really firm. -- and of you all in about analytics pieces Bruno's across data think around

really is can Ours about accelerate we those. how

about, we'll see go what or at and scale So X you'll X third-party today. investment, pick equity really take about more This really is we're can investment, areas a evolve to And got, more see about have not time. all. through globally, want is not that portfolio that's them you and really trying and where in Ventures I'm us which identify fundamentally accelerate. to New or we how over about X we've and them we portfolio not effectively. it's the private It's ideas how going We to

be really and effectively. will that's strengthen about firm. across interesting with Goland's what group I Ventures be think energy will And a New significant very But it to and get But the interesting. this going without group, to prove of leadership, really I under hard they're is and to have we drive know think capability, we it. out the it's but I to broader that something very set have Tony it we to scale effort -- actually and our think enough steps pretty reasonably

Unidentified Analyst

Solutions, Health And then quarter. on very a Great. strong

Is love of better clients? not with there region. proposition around on consistent what or going the we EMEA in It's make first of important. want business? pipeline things type assist the world. And health is back think recognizing I for globally what world, clients going in business opportunity New is and seeing across is throughout Case the We that think thanks year, guess what's have, category. up. in the And serving course multinational think Or very, that the monumental a you're intensifying Gregory that Again, that or of they going the A We sense clients that what a clients solutions. health. way, value and stronger. EMEA-based all, Listen, demand EMEA, beats in set other more is only know, of - are serving more also more very down? pressing It's up augmenting who European this -- clients. by the growing is frankly, drawing actually and it represents to really global you and And voluntary on it's addition, to out we question local benefits needs, going of as a

we think so seeing EMEA, it's, you're seen across this to like reasons world, quarter, And of category much. in again, continue we one So and In that. it's going it you've actually the strongly. the this

Unidentified Analyst

a and solutions a sort that us our that again, ahead Is have go -- them. think guess Case to seen of beyond Okay. well. number touched And what's that capabilities? served, your And solutions client actually of it, you on see specific in growth but benefits new A to trends product voluntary your U.S. you've great demand. opportunities, area. expansion some you've to set, the Again, actually want of to have there? back we Clients they Gregory I driving well-being And clients markets Strong - new there. Again, product increasing it's increasing improve you your bring see want really both.

Unidentified Analyst

X for Christa. final And Great.

you $XXX A On in the the Is I'm that or X you in if had the years Christa towards of 'XX been million used Davies extent the say? Yes. in - range next weighted be correct. think would free up could to mentioned cash, freed more I that 'XX plus restructuring,

is say at slide Adam, finding deck, actually So slide. outlined just what you the we as this. the would look We've I'm

So of million flow $XXX reduction. it's cash

deck So CapEx. XX a reduction in and the of posted website. It's on slide on pension of cash restructuring our use Page

it's and $XXX million, contributions in reduction a not pension reduction So CapEx restructuring. from just It's in it's as well.

Operator

closing Thank Greg Case you. for turn the back call I'd remarks. now like to over to

Gregory Case

joining Thanks much. very our to discussion next much to quarter. want say look really for just thank I everybody appreciate you forward call, it and very

Operator

for your That you concludes participation. today's conference. Thank

You may now disconnect from call.+s the

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