AON - Earnings call transcript Q2 2020

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Operator

Good morning and thank you for holding. Welcome to Aon Plc’s Second Quarter 2020 Conference Call. At this time, all parties will be in a listen-only mode, until the question-and-answer portion of today's call. I would also like to remind all parties that this call is being recorded. If anyone has any objection, you may disconnect your line at this time. Private note constitute of forward-looking certain as by to today's comments in important of defined may Act call statements the is that the some in nature XXXX. It Reform Securities that are Such that cause statements from results actual uncertainties, anticipated. materially could or differ are those certain to and to historical subject risks results on quarter concerning our having press release the risk described are in as factors Information well our website. that XXXX second differences been as could posted cause such results, covering

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

Greg Case

social Consistent XX% most of our calling in injustice their our across the engagement and firms remotely, response of in we had support with see posted begin, the on is challenges and it good Thanks want our Andersen, detailed organization. our to majority issues attention team And inclusion responding our very Eric our Christa each much the resolute Further, our and and other everyone. recent response and pandemic. global leadership To virtually if our I excitement call Davies, their morning our is on-going call. feedback inspiring. and fundamental workforce President. quarter to am by the a presentation up engagement Even joined thank work second innovation, truly near to vast website. we that conference connectivity for the COVID-XX. to Like extraordinary and exceptional. and of been more to fulberating to continue in clients CFO, over by Welcome quarters we I presented recently financial previous

will better change is change committed meaningful us firm. to and a Our make is lasting, that inclusive global team structural and more that

to central are We’re action this future as and progress on this taking for front reflecting our priority. doing

revenue casualty, revenue growth retention organic X% discretionary I'd in our across Aon by results, business declined team and overall, our solutions, organic business particular new great of driven and our more work net impact X%, pressure demonstrate resilience declined the transaction liability, by to face challenges global data needs. challenge for focus to reflecting especially investments, of our faculty new analytic organic ability that unprecedented outcome for X% growth portfolio, discretionary risk in In environment organic the strong demonstrates highlight second in seamless in health revenue solid and like and as in particular, business, aspects of evolving quarter more Retirement the the the solutions geographies, of Turning areas on to an and areas placements. commercial reinsurance project and property, Two and of work. X% solutions most meeting such growth and by revenue their capital. services. growth But in trading partially were human driven in is transition strength These in and particular quarter in construction working in results major the double-digit offset by team's core the generation client retirement economy.

time, We impacting were solutions the reverse will headwinds declined expect which in term in issues evident. quarter, over and short areas two both the results XX% health

events decline solution and In not a a X% core results practice. our decline driven representing of the of our more highlights which by primarily areas priority one- This Overall, both certain decline, an driven and future related solutions business, our adjustment were X% and timing in the the of the with to a of in in health discretionary revenue. in of approximately clients. new which analytic expected primarily the term will repeat declined time pressure periods. was pressure for identified our this services, First, employment long the of travel and COVID-XX by also COVID-XX challenge, system. data in second, implementation performance importance levels reflects but And

strongly We expect back this bounce more normal economy level. performance when to the returns a to

the In uncertain. expect and to the QX results, to last and If an in free that expectations while GDP outlook of It's cash do values QX, expansion, environment, $X.X persist, see important terms delivered firm among macroeconomic economic growth, EPS asset pressures is year. $XXX to we Aon performance we first what basis and points up obviously United flow from through observed strategy this conditions of reinforces pressures in of for macroeconomic exceptionally billion others. see revenues growth, strong XXX any standpoint, margin June, revenue in wide employment in operating we on-going our we million operating highlight half including QX. overall trends X% From organic similar on-going confidence strong of from

March gave what repay reductions with scenarios, have probability time to We economic for bonus reduced assessed fronts, diminished. of This ways bring worst restore continue United solutions probabilities for to absolute is needs. Aon adversity so In are withheld prepare we confidence pressing around. on find of our us our to broad and but case this client scenarios a to innovative temporary range many a believe early colleagues SAR colleagues, on of continuing in the the to

commercial their this capital the company the client help economic substantial while challenge related short has headwinds, one current collectively strengthening also analytics and together data efficiency to company overall and came facilities from Colleagues navigate conditions. services and term to example, been risk, operational energy management resilience. For facing human

fleet. of biggest cost was of One their maintaining the challenges and operating their

clients risk assessment, insurance while outcome that's safety, enhancing priorities. an driver by COVID-XX for and by a talent pandemic. that costs demonstrate top also is for challenges designed our The fully the issues today clients fuel economy interconnected faced and management complex team designed reduce Our demonstrated and solution our to new unprepared

other, on horizon. the risks there forward, are Looking long tail

As climate will wealth population continues volatility widen, changes, gap the ages, and to increase.

insured top not areas are all. our of client must innovate insured provide answers the We risks four fully XX one clients and face, of are five is one at is survey highlights demand. clear. The to growing Our global to these only risk mandate faster partially insured,

path our forward innovation and is clear. support Aon, clients For increase to

sources a last and world Our book the underscore driven our for met hundred accelerate economically, well plan we're puts and future Watson of our core Christa? when Aon strengthens the Watson. combination better be times. provides best to more in commitment turn and that driven on analytics and geographies, generation to the time their be geopolitically. Willis needs Those in clients United and today, proven and day clients. we I'll a firm that, reality. over further and professional At our capability nature pandemic, in capable firm demographically, solution us manage becoming organization, admission that Willis only to accelerate been most, in emerging with the results of further increased We've they of one value Towers turn roadmap clients. Together a clients time a these and by through saying the some positioned the progress. the for Christa our for across for one, best better With our also we're substantially events days by out becoming advanced will Financial the They that the stakes more the Towers remain quarter shared lines of United serving for position next bringing of and will by needs. a the be unlock further us In the to need that to combination ability and businesses is with complementary the summary, operational we’ll the volatile, will combination strong client Despite new Willis delivered to bringing our that together. that's challenging us raised call of with goal for Aon Watson address services Towers And to unmet the Review,

Christa Davies

so good Greg morning Thanks everyone. much, and

As liquidity economic Aon Greg the environment. us and enabled we've macroeconomic year-to-date, to up by quarter value committed over challenging manage will demonstrating significant delivered Towers the our performance taken resiliency strength come and to these discretionary steps be conservatism we the both despite solid proactively maintain shareholder with have of our and significant flexibility. expenses United a we long and term, strategy through of The the accelerated deliver to challenges, our conservatively business and makes in any remain to us Willis and us financial positions mentioned, This We believe operational stronger. times stability combination resilient which in Watson.

QX, is would the I decisions, differences and basis, year focus business QX commentary our quarter, I results external we on numbers, my in focused and on and and given how a today, somewhat our the year-to-date impacted manage results in environment more note that As that discuss full typically on our especially today while outlook.

with reflect results organic revenue economic strong growth the conditions. in in by Organic quarter revenue and performance revenue X% solutions. challenging X% second organic reinsurance X% real Our and commercial growth declined

I quarter, our in As relatively fundamentals, roughly with and discretionary. strong has business more core last XX% XX% described

data rates also more of by organic we analytic retirement would contributed as our income and FX I the note interest portions and see to solutions, business, did pressured of As fiduciary well lower a services. Solutions discretionary as larger expected, in investment was reported lower impact immediate revenue result Health that which revenue more in as declines globally.

Underlying year, the of Greg as we towards business. resilience confident the As the our I look mentioned, rest in of remain

given providing However, continued uncertainty, are not planned. specific financial is that we macroeconomic guidance

QX, QX the in we current revenue QX. wide of obviously expectations for similar we terms is and firm what outlook persist, observed on-going macroeconomic to In would pressures, the organic conditions revenue expect If uncertain.

the I growth Moving margin and XXX operating half operating to first includes the note includes reduced of X% reduction improvements including growth, operating expansion first operational X%. sustainable quarter expansion. would expenses, in and improvement EPS which strong XXXX, not reflect the that ROI travel margin performance; delivered points with of basis in for discretionary of does quarter operational second revenue core we the organic solid temporary while of improvement gross events,

a we’re mentioned, As Greg for of broad outcomes. range preparing still

see decreased case likelihood worst of However, a we scenarios. do

points in temporary compared QX more be expect the in expenses in restructuring macroeconomic margins half half face actions the underlying second represents to second reduced case prior expenses expense as operating year, to to we operating pre-emptive we levels to XXX scenarios. half year, a more of While we the due decrease first to This expenses have difference as XXXX and of the spend underlying part XXXX, took the improved of likelihood basis the of excluding to return of of with worst normalized charges. in consistent to

the operational targeted the investment of year in that strong We areas, priority second half include discipline. while expect will maintaining very

in share in unfavorable and rates made in the At over growth Business confident earnings $X.XX noted platform Finally, approximately QX. ability of the we in flow. unlock quarter drive free to to and term, and long our Services impact operational the to an we've enable term. per today's of enabled impacts long material, a second term operating would Aon expect unfavorable across the investments Aon to manage we’re us year-to-date. Business the our capabilities content our as to Overall, costs Services FX each $X.XX distribute was significant near and firm QX $X.XX cash in leverage continue and

amount free actions capital in in cash to near QX, temporary improve we’ve flow QX. allocation, salary salary capital $X.X were reflected working note of the impact be but would outlays. term I impact million cash operational cash impact flow to withheld statement Turning the strong that in by decrease reductions a to paid increased of billion, the and cash $XXX in temporary improvements, the driven taken income and and reduction, will restructuring

cash term down a in We and essential. in working million increase which improved to as vendor our issuing $X end looked leverage total which moves As was able QX of coming ability added liquidity has focus to in September cash remain confident million to debt digital, ensure debt very of We to maturity further to sheet second $XXX liquidity while debt, we're risk environment quarter, helps payments accelerate the to with the growth. well EBITDA been debt served grows of driving And debt remotely, on used of a billion free ended due balance collections manage ratios. to maintaining XXXX. compared centrally and has transition strength QX. the Historically, world our We to lower $XXX pay profile. manage then the this invoicing, the flow through we've

ratios current to to to due continue in leverage However, macroeconomic expect conservatively we the our conditions, near future. manage

are invested maximizing We diligent capital on capital through make about allocation return and this decisions framework.

to buybacks in quarter, Towers Willis macroeconomic related Watson. first timing and discretionary the considering resuming limited combination certain year, the second with half in pulled to business of the the restrictions cash we subject We While uses share our are performance conditions, of

to near likely normal We uncertainty. of levels given are than the maintain macroeconomic cash for future, higher

before, We both filed proxy maintaining to the earlier Willis Watson, said company we've following credit and are and progress against grade Towers we make with the key milestones. to shareholders combination As XX. forward continue committed our for our month, look investment August this vote joint definitive on our to rating,

The We important our close to operational the as and half Aon In face business expect in drive deal we've first steps United ever. XXXX previously Business is in now historic than Aon to of of stable, our are communicated. resilient the summary, especially macroeconomic challenges. and we’ve more our platform the strategy Services

over With unlock turn to take we'd back to disciplined term. value approach the on operator that, delighted invested the significant creation your shareholder I'll Our return over call provides long to and questions. the be financial flexibility capital

Operator

Thank you.

begin now Kamath will Our question-and-answer Instructions] first from the of question [Operator Citigroup. of line We the session. is Suneet

Your open. now line is

Suneet Kamath

Thanks. wanted still the I just first Good the that want is you view? past need businesses. your to confident morning. that wouldn't any guys to you start divest I merger. to were In confirm with

Christa Davies

is. it Yes,

Suneet Kamath

then And Christa. ahead, relate…Go great. Okay,

Sorry.

Christa Davies

Sorry.

with So in more to frankly, about when We the And X. excited announced exactly today yes, and expect close divestitures. excited we remain merger. March than we very no track with We're our that's view. on exactly XXXX on it it overall

Suneet Kamath

on industry the confidence I and commentary business. to And investor reinsurance particularly just, with trying some relatedly, concerns, reconcile so getting we're I'm some your

So you business just so some that respect provide color why on to in particular. confident you're could if with

Christa Davies

Sure.

for an So to about approval. about particular, we’re the complementary. in I strong had other property. market. strong our, reinsurance as in though time, very detail we confident quite Towers large took see example, of globally antitrust And capital, can [Ph] feel the the is our strong we a this If merger. for antitrust very have on excellent areas, highly you Willis some very period proxy very therefore, in in as works -- we’re background In in a the U.S. in example, from

and strong very middle We’re market.

to divestitures a ability so actually good about highly feel our complementary close it's really no transaction reinsurance. we So and including the business with

Greg Case

well if market of way with access maybe could, the only Christa, a and direct There's where the get couple whether also they sidecars. in in the I way clients do market, many as as go if it. as the could just Brokers insurers raise U.S., add about capital. especially money I very They Europe, reinsurance to large comments actually through reinsurers maybe one are a well directly. which

So to as access the business. the largely done brokerage outside actually is to opposed brokerage capital within business, their

the you at actually when the look it's actually look way within So tend people entire industry. the marketplace, at it to

not the it. do I way is really think correct to

Suneet Kamath

now, you reinsurance question several the the Got brokerage months also side? on particularly it. gotten my side, feedback been merger have is announcement of And on obviously, but then from related on just what last customers? just Since the your it's kind the

Greg Case

and Haley, Last Listen, faster? needed. Haley do Towers and strategy, from And the Watson Suneet clear we're tell strategy United that way, remarkable discussion How the client it’s what driven suggest combination straightforward. begin describing that's with Watson a team. history. such to on to both has How we seen how Lovely mitigate challenges similar the the client asking XX would any facing. how that topic going Suneet, one time. on would today, best you time tomorrow. only a will systemic also to is this, about tell and of we shut, choice many and hundreds I point they've for the our our and us for way gap? cyber client John And that’s through I'll with just that hundreds like question next heard And on this question, question, catalyst the a I up, the been for that tail over plus need of new important the the It's we best and leadership Towers these I to reordered when really client I sitting and wealth aspiration I announcement client them our an we is fundamentally, impact, tell never all They describing very things the our talked them needs do how is say this only do that me, for from health it really innovation I've I really climate needs? is of and long for with Model for they're out way that really you raising, end you from it as which choice. went more back change? operator start, the to priorities, shut the clients. addressed there clients. challenges How the reflected and got for all advances have but I about And straight you Wills is evolved, that the things reflects they them. fundamentally defines John and see. set don't relevant industry, address the about this is look the on have for this widespread at, down have a United really industry trajectory right, year in the the would partner by very a need me Towers do over we really our the haven't one combination their with is to literally, value meet this orientation integrated, and choice need. They one, more or get our in turning focus. down impact thing March, is on And you, to which combination the it solve approach the I Watson opportunity combination to is day, of future for all are value, driven talk I about really So, really meaningful the client Wills It's with for clients value Aon you, them choice and Wills an they essential matters this, what tell we a approach defines standard Aon in what's we're and And better time. there client impact aspirations were now one a percent me. asking what's asked since gives to outages could and guiding of all And in pandemic? talking to unmet have address now this is clients conversations, not exactly on How opportunity you that. of and your the summarized in protect and generation do shifting of client because don't the we prepare and This realize more they've once for we their choice, they as literally change they're used client I'll We've me, know Suneet. focused. said I clients ability now.

been positive. has response exceptionally So our

Suneet Kamath

you. Okay, thank

Operator

is from question Wells Elyse Greenspan from Fargo. next The

Your line now is open.

Elyse Greenspan

the that at Hi, had I are bullets recent from provided My most see was on that you first guys you you the last missing the in what it related proxy. I morning. slides if thanks. looked Good question, did accretion quarter. merger, the

your to today. flow related confirm So I out -- that goal your related cash still [ph] free want goals to EPS merger to and you hit the just fruition that stands

Christa Davies

much so for thanks question. Elyse, the

expect macroeconomic to estimates. EPS timing withdrawn So commit synergies the we to the million we have given has synergies, the based and still cost to those accretion And environment and guidance those did changed. underlying XXX of then, of achieve on the dilution And was we synergies them. since deliver obviously

mid-single continue potential be we the do organic digit cost the So excited macroeconomic and digit double recent and we about XXX cash free growth. synergies, the flow financial to withdrew for incredibly combinations with growth our guidance clients. impact million But not events of

And the are the at around about which clients, As unmet rationale we talked substantial. meeting and need talked is elaborate for deal Greg to about believe as you we may earlier, strategic that. for the beginning, want innovation But growth. Greg, on really

Greg Case

co-relate. just I'll

we very on innovation place. in pieces both all we opportunity coming for see came is economic someone as get in that the set clients. the highlighted, are accelerate two think we're of is, the This as it. of opportunity to understand they But clients March, now. than and very see this similar compelling John on ever a on obviously As Those organizations colleagues. our the together, mean this I journey just been we is before Christa but around time behalf all to Christa that for of dramatically compelling also, with high the clients now integration conversation know exceeded. on to have journey you And are And the have again, that Haley. in expectations for behalf still fully working highlighted the talk perspectives into greater opportunities I

it's just to Towers time grow. colleagues with really momentum often we we that So the spend and as feel continues Wills

Elyse Greenspan

think finally closing, might [ph] Do you. big sense Sorry. when at obviously helpful. tackier Thank first, you the that's point side of it a be the you guys kind And you when you like might terms -- you with does I'm you in on in think timeframe. deal? a have when time. Okay, of field this you thought from one you are would of of when you things we And close where know you know, regulatory is you feel track

Christa Davies

with our July Elyse We time track we exactly are filed Yes, original period. on X. so Wednesday, joint definitive our on proxy

to to have think we half as since when I said, excited but provide the and you the XXXX close needs. integration, lot as process about we And hold unmet communicated when on XX. shareholder And to Willis And potential we've track we're the spending the meet deal report, been updates on time we expect something little March But client of maybe to track, more the on talk we are that. that? excited announced very in we're really, first the close votes are We on August of bit combination even Eric, beginning. the X about Towers to we deal Watson about at a the can a you on and exactly

Eric Andersen

Sure, the part, lot that right been culture to issues, excitement Yeah, careers serve I growing up and a we on for as a working with and professionally, Christa. And really mission in what also about Aon excited partner team. themselves colleague colleague accomplish them about we what about building on the in build themselves early progress Towers integration. a for and here. [Indiscernible] each are focused doing our our and opportunity excited and, the Watson that that see the about what share see actually Willis better, been firm really means similar both this can particular. we've colleagues for and that end really individual has company. Both it excited a their had really colleagues WTW very been behalf are combined and We'll of to the clients. mission. for the help clients we've the we're My recognizing vision time quite in getting integration possibilities in on as their And some actually but We've people

solve that will talent before. about I the and strongest the and be Greg problems retain you to think attract draw and in will the need one that talking we were industry that that

Greg Case

them. multiple add just I’d Elyse thing will is that tell world and it with too about one, terms really talk see last I could happened know, little just and you COVID-XX. around Christa, of just in our but things have slowed And reinforce the bit around about everything respects, in you What actually needs, if it’s One comes changing two can pandemic, pandemic. we've And talked our that a meeting peace And the our asked Eric the in many I of, does just to clients. what you we've COVID-XX clients of after unmet the in on that client down. kind not One one colleagues on times. you, not

So, in have or COVID-XX really integrated many all completely integration everything planning and Eric known, would that's about is the of do showing to but doing, up for talk reinforced we've respects was challenges in who that its tried describing.

Elyse Greenspan

In terms you guys like the And second for buyback, see to what back shares? half you buybacks of economic buying kind then, your of you would limited that? the return just to to for COVID bounce it define maybe more conditions Did need you said, sounds further of year. a back to fully free

Christa Davies

much the Elyse. so Thanks for question,

restrictions to we did highest we've return conditions, the due XXX debt sale. due conservatively. half related capital macroeconomic managed all debt. that is the subject coming issued billion considering on including with And that further used on investment current business to and dollars buybacks, combination XXXX. performance, do with I return, In balance as in limited but and term XXXX, Towers buyback As this add of we've flow September XXX We sheet the conditions. came the Watson. not to time combination that ratings, a And in million capital, second on macroeconomic firm of the you are mention, know, on year Willis timing return repurchases Watson. opportunity across our share give guidance we to and value the on free remains specific We cash and million allocate don't basis committed debt prepay at Willis a capital we given to We expect grade remain our of already Towers cash-on-cash of

continue so uncertainty macroeconomic should our manage given sheet the conservative environment. to And you around outlook us to -- the expect and balance

and year-to-date and incurred in may term levels And of the So XXX year. million XXX and When the investing spent with through million also about our XX we've CapEx QX, available see you completed Towers million investments we prior when the year. XXXX, majority transaction XXX costs, and XXX buyback million shown million billion million the cash almost end have debt communicated with we've as to which deal you of of committed short in think M&A about XXX cash of on when more in of And of Wills in elevated next about expected pension coming term million XXX we've the use which we restructuring or Watson. materials. close include, cash cash be through in we QX, March in we largely we've incurred X.X of dividends completed in

So of short cash term balances we'll near likely run future the elevated uncertainty. given macroeconomic and in levels

while through for So like remainder the restrictions buyback see business performance, the potential the we working the Willis of be limited on and it conditions the Watson. around will Towers including dependent capital macroeconomic capital share in timing year, markets, there's what

Elyse Greenspan

last increase actions strong in you. one capital number’s on you highlighted free reductions question lower this Thank Pretty And then flow. to temporary salary strong quarter, working costs. restructuring operational the improvement, cash and improve

quarter. back salary obviously, temporary in third come So the the reductions

into cash reversing think component of Is four tell you us was and driver, a QX, tell the that big there could free cash about it anyway So -- into buckets. we QX? flow of it's as free a how him

Christa Davies

Yes.

strong, question Free Elyse. exceptionally the for is or million half up the flow of first cash XXXX for XXX thanks So XXX%.

the drive and revenue flow. income. translate flow each as of was of improvements all amount impressive three growth were a the cash leaders we our single component very of components maximum to big focus I'll there the operating of across and performance into in cash say release the largest of dollar Aon Just free revenue free a result

improvement in flow no in from growth capital, And in so, There improve change know, we cash payables. driver had in the free temporary reduction and to second working income. the improve was substantial specifically, repaying the operating meaningful And receivables you then salary. not a QX was

So it really change answer. doesn't the

Elyse Greenspan

Okay, thanks for color. the

Operator

Next, we have Styblo Dave with Jefferies.

now is line open. Your

Dave Styblo

morning. Hi questions. there. Good for Thanks the

that and accretion. terms by to EPS XX% of in sort that Elyse's dollar. that I an is of guess changed then benchmark want to probably Just to accretion you to it the for the holds? to come I a fair think was run lot know, a to when three and not guys I realized year we're XX% question, has standalone still consensus EPS peak just I get going for used math, ago But the clarify. back same Aon still

Christa Davies

It achieve. So the cost of combination. based on which still XXX in was million with annual we the connection expect to pre-tax analysis provided accretion synergies expected, was

However, the financial free macroeconomic withdrew outlook organic has changed. the double with And digit growth. growth revenue cash we and flow mid-term guidance [Indiscernible]

going We reinstated have any kind guidance of forward. not

be Recent excited so, million that about as the of And at this clients macroeconomic can't continue It not to guidance the events potential may actually, opportunities for combinations well. point. revenue XXX update synergies. and cost really we impact do

Dave Styblo

recast so if that I Yes, Aon new it didn't face to I you from it we've we if and that were guess outside XX% I accretive trying as to know, and how by the my make point XX% to in is, you it’s was recast it to standalone, frame way. is still clear

Christa Davies

note cost that would provided that under exceptionally remains were the code think only we originally so economically And dilution because I externally. the to takeover strong. report -- we able the look, was on the thing the accretion Yes, synergies, only included opportunity we still

any So include of working any it an flow kind actually equally improvements CapEx, that improvements other in doesn't improvements kind of free revenue upside. Dave. any in Any any of kind drove of include things as doesn't example, cash capital, kind of

were call, announced on we believe when we today highlighted we do opportunity about remains the combination of the excited Greg strong. that so more as exceptionally March we're than the earlier on X. And And the combination

Dave Styblo

Yes.

still great. on That's then comments an your second Okay. macro environment. obviously, uncertain half, a And for

you very go similar might guess, might as if expect why not I'm pressure. curious similar pressure are organic we're we right worsen that now, where conditions that at commented we forward. I to think had I

Some of on the checks the the feedback channel broking side. sometimes from some revenue there's other especially side, companies and a on delay a bit of made, just

in the those comments the So we've some organic even further from half here’s just in with to in things don't an that things of other standpoint? why second get reconcile industry heard down terms

Greg Case

with think overall terms to think in macro revenue overall which Dave, is, and I I QX of literally QX. you're No, one point start organic expectations just the for

services conditions lag, ebb all they for Look, before, situation what expect clients, Aon as create highlighted have frankly, essentially things do it also to You flow, that with the how in what things Even Business on we highlighted going QX. know, in what macroeconomic innovating opportunities pressures uncertain, these evolves. revenue about I and development, Christa we in all are firm sort as similar of we're to is, to when the mentioned we it enabled we're my us you us the obviously but persist, think if do it new as current highlight see, reacting means, and we what you time. observed to evolve to client wide comments. connect current Remember, do

similar on uncertain, QX but think back about probably good based and view our uncertainty, a you is with. start to So, that to basis step is it,

Dave Styblo

to relative actually last outperformed pressure, to there comments that well. the businesses. might back half? Okay, some hear discretionary delayed that probably analysis and what in you sort for is I'm held last would to have more have one, retirement call quick. in about organic why need of I real of those the curious have higher there know talked out we having reading that And because to thought. guys exposure watch fairly Retirement any data spend impact we up might

Greg Case

that continued all on investment the to Again, across we very colleagues been It's pressure of continues, a some on much Obviously behalf side piece the just offset progress an foundation. it on lead is isn't There many colleagues again, by they on do firm. retirement two. really strong like than our human franchise to extraordinary, the clients. built team be across want was strong, the continues more highlight of to performance time. that over the appreciate how capital The side. retirement former the just incredibly And the has

Again, that's QX. So performance continue things drove the that really to position to see how so. but held unclear, We in that's are do a lag prediction we over don't no what we really, time. in and expect

Dave Styblo

Thanks much. it. so Got

Operator

Bhullar Jimmy have we Next from JPMorgan.

Your line is now open.

Jimmy Bhullar

spending Hi, been. you're assuming expecting, both where on related second in the of that good to environment a with versus morning. just type half implying wanted I discretionary will had a it's clarify that now, sort what I couple increase stable questions, expenses. right you're of

some then is doing have a run, COVID the differently you as travel now, think the about long secondly, you're something smaller and less your footprint sustainable in or real or pandemic, that that that of else? beyond might So estate even whether benefits there expenses anything it's sort

Christa Davies

much uncertainty We half macroeconomic of Thanks second do the said Jimmy. the you year. for continuously as so for the question,

decrease be DNA But small likelihood spending but areas, second in then, pre-emptive operational in about is, we half actually this underlying we DNA expenses in expansion of expect I sustainable term. strong XXXX to the with in take in the worst you'd But reductions in second of scenarios. substantial However, maintaining on operations, to to case long excluding we the first want guess would DNA, sort half, some includes reductions, talk saw sort example to Eric, expense question say Due to unnecessary answer the cyber, see And first how priority operating I a expense consistent second of more increases do to applies investments And we and of on in targeted half discipline. things and guess your what deferred margin half. of DNA expenses the we of isn't temporary that for clients. did expect XXXX, maybe and XXXX in expenses, the on the of very and projects, restructuring charges. the IT half some due and we

Eric Andersen

closer think relationship. clients Sure. you DNA, our step our partners I right, Thanks, which about and to to get is to And that develop the and think back Christa. reason if for really personal

actually and to get to using With been closer clients in we're the investments that get technology, partners. making closer market that we've video capability to

just know example. an You

see home. screen Just everybody literally significant I kind four the and were for and people to New last from them the will in who guys we it Bermuda. week our about for the in York, entirety had seeing do where the days, a new about participated and instead of capital of was firm the of zone, talk burning dollars, we literally than capabilities, and actually could actually and for create a on what available. And pretty the client XXs able they actually time global in couple flying talking of placement experts insurance were bring about our meeting, client global We other And try thousands London, Singapore for of available. a the away had sleep the to the of topic. through walk for talking session our work on Asia, could client a hours what it

the pretty to see that markets them. help interact with see banter, as much relationships were well there, global to see As the anywhere ability our

really been best be clients so to that make there over And sure that, learning while down in interaction road. person, will the with four some, the we've we We obviously, last of want what take the in better the have in and showcases drives way a embedded client, they we would it firm, historically months the and our the actually a it think been outcome not that room. into talent for because

really it So is.

need can I when global we clients, together. it especially you think when for interact about with do excited us what the really we're team

Christa Davies

with that's inclusive client Eric impact We it's real whether partnership want answer of on the talk Greg, whether just that described, so your environment more maybe our And sort a bit around flexible, colleagues. just you a in to with really productive about And formed that's little and future see we've described, to because way on an exciting. maximizing we estate. work app, actually Eric potentially question. do to reimagining as for pretty reimagine the or goal of the work Jimmy, as And colleagues. opportunities, the It's actually DNA

Greg Case

everybody you And meant Eric’s before actually actually order Christa, strategy, had think speech come. really operationalize about to because connected to I that on if it everybody United that Terrific. is. the clients together. travel, Aon too, just in Yes, see to more remember got

can actually to way can They is actually technology, United. show they Now a it up. accelerate the Aon trump through

faster, coming think help and create we this each I tell a economic and point can will there Christa faster a highlighting a first back as was we? clients, basis, unbelievable. out with doing. current we in compare anyway step we're the we you is And Aon? can is response there raised around look, one. environment? and through And how So, accelerate really our other With asked what But can how is terrific clients to recovery we there ask benefit and Eric's How of the is question, we is I there Chicago, hand was notes

have was be. can literally that the we By talking together, -- So getting travel, We Chicago are Chicago significant working. realize the a way, in already with most all we work, companies it the back-to-work. about started companies everybody's These joke,

now with launch about So it what And do. around you By in from was connect you well. beginning work. Madrid, way, this as do London, really we essence, Chicago, Singapore, the to in New went and launched not really the clients how is York, Real online

that. United the Jimmy world reinforces in in in have economic again, we we're capability difficult all comparing we Aon cities order notes environments recovery. this succeed on to So how and about what do leveraging helping sort And around of clients terms accelerate of

Jimmy Bhullar

Thank you.

Operator

Next, we have KBW. from Sean Reitenbach

open. now is line Your

Sean Reitenbach

in the talk XQ related that kind you as return into July, that normalizes, of be economy Or to like return you expect to of going is to I a more if Hi, the expect, that do started hoping work -- it business? consultative and lumpier? was a do about be in steady maybe could we end it project how and trajectory late little

Greg Case

And Business general. a some offer see new in in and with begin is take for to we because get happy jump Eric where they're how breath, are all thoughts They're us because business actually a dropped QX, well, varies. But solution to advantage commentary ways. we obviously on Aon off perspectives to improve connect color services it of to stability. them Again, does back lines. to thoughts in get vary. understand have had we’ll you clients the substantially discretionary Sean, in views different parts some some can as it and we back of what they on them, we doing. with really but across coming into chance really really, This our they it, as see actually of it’s us, And, call kind go

a innovative opening ended lines across it create I and gave, it some and seeing colleagues bit, we're solution, of my up discretionary work in a products. and that So coming elements together that became of solution risk. example The respects, real was solution comments for And to being was exist. didn't a really about series in an commercial

whole And of going series across are think fits and ways. firm starts. it's a happening I So things be the to in in different

us You're doing pop what state supporting know, kind across this Eric, be return. It's no thoughts as going to clients. you're opportunities see real seeing opportunities you steady There solution do, of up. going is But to we and finding lines?

Eric Andersen

reposition all Yes. the themselves are this think to clients, trying Look, economic world I over into scenario. new

they and is is as of themselves take to But, environment our whether existing figure side it's fits and internal is, growth outside there, volatility done looking are looking as after work the we'll risks, in they of navigate trying they they're also navigate Greg as the to to on do in clients, Ultimately, the how to get sort continue. going engage they've where providers carriers who the type that coming I starts retirement it's ready. the that So think certainly as clients, opportunities. the risk clients advantage think reposition and engage said, sessions. I in. at of they need how It new their strategy using reinsurance the we’re trading to are the marketplace, investment how management Even our at out Whether capability. consulting

Greg Case

client everyone evolved were. coming it coalition current before. -- different it's in as a of to project level work. but sleeping from over All talent it these about on everything, what's wasn't it created work, that's the as offsets management effort work, it at been this have how The environment, with and around time home, and and So evolves. to shifts data want working imply is the don't entire things We there [ph] evolving

Sean Reitenbach

was strong hoping what -- know trends one? and of we but going with you. supply to markets renewals, And Obviously some on we in demand season mid-year into persistency there's on those on kind just hurricane Thank terms had still carry come, solutions some now we I out and of the of… quarter if dynamics. coming a to thoughts commentary very a based reinsurance helpful. on get That's reinsurance one helpful, to know Obviously organic what's kind what based now some,

Eric Andersen

Yes, certainly season come. is hurricane to there

Greg Case

market side. Listen, has I’m reposition to [ph] what of company other similar or just to the The with either their which with you risk a as insurers end the our deal closely the half with as And risk really listed front was year. see pick or of reinsurance will doing I the or clients underwrite themselves. through trade insurance excited ways working sidecar. what to about in they the they on capital been find very spots that in first Certainly team work the it raise on commercial

a So multiple the way with there's insurers their which risk. will manage

get marketplace, wouldn't or too caught trade clients, best risk can. pricing conversations commercial as will either I the or So like in up hold in they that happening are they the because mitigate

the in would treaty was already, continue business of done you middle I we as season. be to nobody really of revenue the they're said, property sells of reinsurance that general, in doing, hurricane optimistic catastrophe the So most say the about work sort

half. second to the So of more it's, left it'll revenue into do year. going the be for the and a fact business of XX% business And IOS

they to are clients position hard at insurance help to out market, company So, this working and say in we're how what would there new them. the I want figuring themselves

Eric Andersen

much. very you Thank

Operator

Next, we Stephano Bank. Deutsche Phil have from

now Your line open. is

Phil Stefano

a quick what a Yes, bit some just down can a because $XX is seen to adjustment? We've my some XXX little or adjustment underlying of the exactly thanks. about solutions. something of provide and revenue story. adjustments income were mind, get wanted those peers But color reads things like I question to million about hoping this ask you I talking exposure, along was In this guess I lines. different like

Greg Case

very health, line. it want and by it The the was a is immense a Christa opportunity give just in us. of for Yes, storm. and small about oranges. [Indiscernible]. in specifically long as bearing way, your terms quarter. us really second. you health we so and maybe described QX, But our background know, solution quarter for on in result just kind for for reference apples of incredible revenue But has organic term outlook, an news And relatively the indulge on is some, to of sort I results question, for is perfect the some no will talk what us absolutely on good the is context you for believe our to

don't. opportunity positive exceptionally to So clients for long will health resulted out new priority decline. changes pressure a areas completed area is, can onetime not performance lines described. on, are know, just implementation But employment discretionary approximate a solution percentage you as work did highlight I for exceptional. was the the strong magnified. adjustment, reduction core their was embedded I on we other And around did imports of been and on COVID-XX health We be just an We in has five this in obviously break term a in of we say, which And you system, the us ironically, business, the area. solutions even we underscore others And it, area. lot really again

they the been I supporting they've a tremendous see colleagues call is, your to of And Christa. acquisition up be And isn't have on job in disappointed you well the Although tremendous firm. you and an might announcement that. this on question while remarkable But earlier to want we're this to the wanted X, welcomed scale year, absolutely think incredible last just we're just say that our our healthier, and economy them have business day opportunities April my every able job last result. to done we do world. sort thing it’s result our I And, stress on in a that's very Aon have in two going reflected, noticed, bodes clients across Farmington everywhere that going I wanted, capability for into done remarkable, that forward. specific the under in this

Christa Davies

implementation. this first is? on just and system Phil, adjustments. we revenue not place in identified with in a when of the specifically new standard million will XXXX, health. It We periods. the had a like long is system uncommon we so our new adopted And It's repeat Greg long you future much we to What XX granular, much recognition value not the temporary on outlined, Yes, January It adopted for the and health, deliver have when clients. growth systems. an more term as of good we've more feel adjustments business technological this opportunity really switch exceptional to our for adopted term solution, now robust. And about

Phil Stefano

wasn't sorry it -- get to wanting No, flavor trying was like felt felt critical be these just because to different. anyway, oranges a it for it

the And move like but as of to kind unfold or Just that for look crazy the month the to then next pace. To the case, happened going and benefits two vote. world. this a merger some for extent completion? you. that's quick the merger was would there need in question What in outlook other would look procedurally? towards like? of divest something, the procedural on just What is And after scenario would be a understand we the change shareholder how everything or I not this

Greg Case

see our fill. could from So standpoint, we something speculate way, not on, don't that shape or we form any in it's because really

come planning, all lot Our we're the from the before, possibilities something described, they on through of as this working have the a as together shareholder momentum our who, new, they described. of I and built as talked talked Christa has then to something our view for get with potential We about this integration with on Eric a as antitrust the into potential And momentum described XX, processes colleagues lot for normal go vote see need the as about the clients is, there. that.

track We close to are on QX. in

the as And, expense So This opportunities. of we in it are greater, we and how The or to going expense, place. momentum. expectations is term, reasons about there. about. in original all see long mid-single firm now, That's forward. what's growth. sort about see kind that's -- that's transcribe the again, they what, what Sure, everything But still for we combined never And was it. of are that's in that all that's the absolutely points we're you think for digit talking that about We pulled obvious.

Phil Stefano

to I'm seeing of Great. looking best it, forward and luck.

Greg Case

you. Thank

Operator

no turn to I to the call are like on over would questions remarks. queue. Case further There back now for Greg closing

Greg Case

on out the Just other last colleagues on around next want And and call. We today world. been Thanks for you've -- all behalf the quarter. to each exceptional. talk to for to joining of appreciate shout the and Thanks say our it. clients. everybody one it's thanks done It's firm, been

Operator

Thank That all concludes conference. the participating. you for

may You disconnect. now

Aon (AON) 31 Jul 202020 Q2 Earnings call transcript