AON - Earnings call transcript Q1 2021

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Operator

Good morning and thank you for holding. Welcome to Aon plc First Quarter 2021 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 an 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 and 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 first differences being 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

good Thank our you, Andersen, Davies, Operator, our everyone. and by CFO; call. our morning, President. conference quarter I’m Christa joined first XXXX Eric to and Welcome

website. of to tremendous I’d acknowledging the As colleagues our by like detailed previous in we our posted start work quarters, the a firm. across on financial presentation

COVID-XX. organizations translating meaningful designed rejects that leading of The better. work suboptimal group and will the and idea implications get Our are in not new of is explore and we’re solutions like ways coalitions. regional with XX world economic to and the back accepting call to than pandemic. continues started a from find societal those around accelerate just how that new to into new And normal, is travel second recovery the series The the we offer to coalitions the the a team working to of find the before continues even idea insights year and into client are better now in The new and here formed we convene There year of local normal to it the new of half and work, insights leading ahead. of better to but designated better. ongoing companies last

the part For one the instance, solution enabling. vaccine that of widespread distribution is know key we Aon and global is that

and Commercial data how to helping a falls the Risk, analytics vaccine transportation of colleagues Reinsurance centers supply reinsurance, solutions limitations maximize uses we’re potentially and partners doses the and collaborated that innovative allowing me and with insurance, solution chain outside tech efforts range, and manufacturer’s with of our temperature insure mitigation society shipment the the for of develop recognizing forward. creating alerts solutions Solutions another groundbreaking to public. current transparent the storage just the provide and industry industry describe, The vaccines. administered real-time Health from in of example Aon if sensors and to move number It’s Let to chain supply

all by solution end organization donating pandemic. also XXXX the economic revenue We’re from to the toll and help human caused international working an the to

and within Turning very global more offset of XXX retention and driven retirement of growth strength to free an our in in placements. with X% project areas Risk the in growth growth Solutions team outstanding top operating project expansion now core and others. continue driven and X% of and new overall start delivered of margin I capital. strength organic a work and double-digit growth to organic work. financial some Reinsurance X% Solutions discretionary basis revenue our delivered X% growth, we growth. transaction strength strong back each with X% and growth revenue, X% pressure would outstanding strong by including on in core, new areas was points facultative results net and related Health business net treaty flow in highlight metrics, in growth human core Retirement XX% double-digit of growth by growth growth, key business growth Commercial delivered in delivered our new in a Within coming than organic organic, strong double-digit see by with QX XX% cash to faster business generation, year strong revenue, the in EPS financials, across liability. substantial result very and XXXX,

data little of areas and continue outlook. and practice QX analytics the One bounce and QX the an seeing from prior results a pre-pandemic globally results. travel organic earnings from to quarter back, so the see pressure we’re events a X% resulting are slower in against These our call decline, improvement

macroeconomic During impacted the positively behavior. quarter, we which growth, buying saw client better-than-expected

revenue signs macroeconomic that cyber. growth XXXX. Looking driving innovative while biggest we results they’re our strong, challenges, that work impact keep address we justifiably must demonstrate full mid other year solutions greater supply or would of change, to reconfiguring also continue be forward, increasingly And seeing economic for gets how reimagining climate where the like on our growing on and Aon focused strategy move focused conditions disruption, but that clients if faster. We and QX expect single-digit gap challenges see client’s the chain and health we our wealth done, COVID-XX, is the our United organic

recent from Cyber report Risk Our of proprietary data of and us readiness. cyber organizations a maturity. XXXX a that assessment regions across are evaluation, level basic Cyber industries comprehensive findings cyber maintaining tells our quotient The highlighted Risk only

crises, security two assess only shareholder was navigate the our preparedness. XX% our and in due of recent for. significant challenges corporate value total XX event to are at XX% report represents on XX% measures and exactly that the Swan trillion analyzing These destroyed risks value we we value prepare The shareholder in in having only of and to five prepared where of report back report lost. help show XXX Specifically, lack $X.X clients impact exposures adequate and to organizations Gray place. new they’re examples of impact and years looked application In want

that space of an their client example capital business commercial teams or cyber the sciences their quantification and for done are human products. great risk realize risk Another not med-tech assessment or in life had

measures more from for ever their their across this their quantified potential related coverage, hack to assessment, increasing risks or companies analyzed change a and losses devices. volatility digitally to in and insurance their and enabled risk the or and In business security and team vendor than our clients reputation own response sciences potential products critical industry. as technology, life reducing interruption preparedness Our impacts topic future infrastructure, their prioritized business, strengthen that’s quantify

forward, innovative that accessible Looking cyber solutions solution is offering, in a a makes our more sciences this process clients to and life space.

example As looking Towers And we Watson, on drive and Watson analytics work. to the with we’re potential combination Willis is will their thousands teams out the with capabilities pending pending insight. and and to to just for Towers of look catalyst our Aon be combination where compelling forward insights we Willis this a based see this one innovation confident

together be combination, close place clearer executive the will that the brought after we’ve committee is As the potential in ever. of than the

to a clients time We opportunity when us most. an more need to they have relevant at be

client synergies vision people deal well human while quickly, together Aon merger our a is engagement very and drive that’s employee to to-date, day moving as a on advising balancing analytics, complex and transaction from harmonizing their example, to capital Another shared objectives retirement, a currently client team came one. largest health our and from benefits global the data their programs, on advise of colleagues integration retention, and as

combination their greatest like of record on our client drive and quarter position our improvement accelerate on past will us and Watson to help them year, with best XXXX progress around bring success of the the addressed and enable delivered for which of with biggest company’s together demand capabilities our client decade. course summary, key as ability their the retirement asset, growing Willis know United we’ve relying that by is to and momentum Our insight projects know clients. are improve to engagement track our Towers events us demonstrate over clients protect combined the strategy of and continue need will We each around on people. that these our our unmet one deliver The continued health, the their we results over metrics to strategy. an In the first to highlight building challenges, from firm Aon

client continues address our to the excitement combination and Towers the to needs and will increase pending Willis better commitment get potential accelerate Watson, ability firm. innovation with which in Our combined our of only to

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

Christa Davies

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

first translated into that mentioned, operational strong performance a As cash delivered growth the earnings financial operating growth start the to year, revenue in we quarter in double-digit income, flow. Greg X% and organic by free share highlighted per

key this momentum Aon Our Willis metrics. combination rest Towers enabled look of then to our through United growth strategy on pending We building the XXXX across continued forward and with has our Watson. financial

would also a favorable an was X%, by our further weaker changes uneven growth that I driven the reported reflect impact in total revenue organic quarter, from dollar FX recovery including business, our areas. the by the we delivered up discretionary driven I more primarily core in XX%, U.S. As with of euro. ongoing versus strength in revenue note on

can quarter-to-quarter margin delivered investment is expenses In over goal our sustainable expansion full including we of tiny to business improvement margin with deliver and points a back, of course operating long-term and our XXX operating growth. factors. operational the the Second, be year, expansion as margin XX% of growth two and XX.X%. helped income QX, by volatility was there to strong given Stepping of operating seasonality expansion basis

polite due macroeconomic to revenue and organic of QX First, our buying outlook growth exceeded behavior. the impact factors

T&E like investments for XXXX. XXXX expectations in the QX and Second, areas of comparable rest the an in for business, compared easier made higher had when to our which expenses

anticipate resumption and Looking later to the rest of XXXX, T&E business of in some year. the investment in the potential we

$XXX XXXX, approximately of way, expense to onset expenses In any to QX highlighted move them then increasing somewhat expense the stabilized. expenses year, cost described annual the XXXX from uncertainty and compensation base we spend comparing QX, we This the macroeconomic year XXXX spreads last in expectations in move back shift we have primarily actions fourth Looking margins will million growth the of outlook to and recognized for $XX and shift normalized the half X% $XXX significant another more expense $XX QX. quarters, pandemic, of occurring. the given QX, expenses of XXXX, took XXXX. as results an representing in including forward balance quarter, offset prior to and as and conditions QX discretionary to improved expense QX so the to to approximately the at passing and prior when change closely reducing QX in less of expect to we remainder expense macroeconomic our for QX. due of the reduced in last This lumpiness returned year, evenly of compared occasional to million QX million is our also still from Put more be year, the the reduction and the certain in of $XXX across to do about the by of we levels expense to more expect in of million million impact including base our margins on and expenses. variability and This expect QX QX variable of more in quarterly discretionary we

change it for expectation year of expansion not However, does our XXXX-XXXX. full margin

live solution. over previously, as we our on blockchain Overtime, the other higher experience resolved. the each and to January, a opportunity clearinghouse our goal The the platform. of deliver group expansion We as well to with this a Recently been growth Services carrier which arrows industry. the join higher improve at partners Aon a expect an standard develop and growth, worked over to shift setting see major and premium driven Business and has insurance of focused reduce improve the course executed. as and year, stated our Aon XXXX effectiveness. Xst full to for are is Business the since XX,XXX Business the client already quality we Services improving This and innovation, significant saw businesses team As is to transactions opportunity margin design accelerating identified leverage transactions. premium and portfolio revenue with from mix industry accounting team sustainable Aon by higher carrier a to across It’s has partner speed Services. process as brokers inefficiencies margin

process value-added on clients improvements, new Services other enable process with high with colleagues Business Aon to spend time this blockchain our in activities. and more efficiencies As

translation per impact If share share expect favorable to a favorable performance in growth the impact XX%, currency to $X.XX was in in of at operational we of quarter. in as FX favorable remain share strong earnings translated the stable of we per our $X.XX favorable QX. per back quarter, Turning a rates, into QX, a would and today’s material, shown the impact EPS results approximately QX $X.XX a impact $X.XX in

$XXX Free a Finally, technology for XX% moving outlays decrease expect note driven modestly and cash we that cash the to capital million, we full to in CapEx. flow as cash a increase business growth. to improvements, primarily would increased to I drive restructuring do by and operational decrease strong allocation. in in CapEx invest year

quarter. a XXXX. long-term XX pending cash combination. Looking our expect XX% growth first capital incredibly building drive cash XX% our decisions to growth of cash free billion in CAGR forward, flow $X.X the make on ROIC million including potential We purchase highlighted we over the by cash on allocation remain record excited to to and We of growth framework the track long-term, the based flow, flow free XX-year free in flow share

quarter primarily cash smallest incentive compensation As seasonally a is to our free payments. for due reminder, flow, QX

$XXX February. also of debt We term repaid million in

expect Looking successfully Willis then focused on combination to remain integrating Watson. highly with forward, and closing our we Towers

conservatively continue of sheet Following our innovative capabilities balance organically debt inorganically over through practice We risk expect content we manage our very the past remain growing to service unmet EBITDA manage In continue and in areas we ratios to as expect needs. the our that, and to and debt liquidity well-laddered strength long-term. near-term, invest to to the grows maturity our clients return profile. of in confident priority in to the leverage a and

solutions incredibly for Watson, towards shareholder potential excited and with look growth clients creation innovative value our we combination opportunity. for the I in Willis As the about pending remain Towers

to to remedies. are the continuing approvals and gain work We regulators collaboratively we’ve appropriate with offered

investment. $XXX to allocate million share anticipate to our continues into to continued return synergies our offered. be the any proceeds according We of framework taking expect remedies in cost to highest We account divestiture buyback ROIC would which

momentum, platform. the first regulatory half excited Business on decade We Aon are our summary, a of In working our reflect in approval. to underpinned towards close first and results of subject operational the building by by XXXX Aon strategy United progress quarter the our continued Services driven the, shareholder turn incredibly pending With about call be integration I’ll which and remain to process beginning enable take your Towers we’d out Willis to value We questions. Watson, to back with delighted will creation. the closing that, continue Operator, combination and long-term over

Operator

Suneet Citi. Kamath And first Okay. question Thank you. [Operator comes our Instructions] from from

is line Your open. now

Suneet Kamath

morning. good and Thanks

pulled you’ve merger? guidance you your the re-established So last for year you expectations guys for standalone standalone basis, Aon pulled guidance. your a the guidance for that But you provide merger on now when your on can some guidance thoughts

Greg Case

So, Suneet, appreciate it.

what about that we we’ve to started As today I about before forward. we what everybody single-digit overall, we certainly and obviously is But were said the talked we’re we we you remember as together where about talking to we single-digit conditions combination combined we so we Aon, said the complete with macroeconomic the greater we will think process. greater continue. -- when pandemic a and back continue when remind do expect we guidance when need or as -- mid are before or mid obviously, pandemic we planned going pulled got as we

Suneet Kamath

just quarter-to-quarter, about think Okay. of guess, year? a on XXXX of focusing from out rate us growth a if are is Christa, what think, as can And the growth you of things And Aon guidance, said, basis. you so, give for expenses, expense is? versus there in kind we then an on but moving couple underlying that rate assumed last sense I you’ve standalone a call that I

Christa Davies

Yeah.

and Suneet, question for thank is a So, you this great asking.

growth come and you record of of would of, a rate. last million top XX margin QX over it’s $XX really goes track the for points you growth and given of basis so haven’t I growth then of and a Suneet seeing that basis goes full should as and QX. over that before year. what last just And is say years that the $XXX on context XXX But XXXX QX the of that top so million you’re years in Suneet, of so into approximately XX into points year on out XX $XXX assume is million is what expansion we know, is, built

Suneet Kamath

And to just for strong or quite mentioned XQ this just as want is pulled you the unusual in then timing was cash on growth anything color something from a maybe forward lowest one your me some flow, was the last Got is the it. quarter, there free get and quarter. that? Was typically of sort on but XQ perspective

Christa Davies

long-term Yeah. the the years. free I growth, strong XX% I income to cash flow by over was the QX of last quarter. record exceptionally operating mean growth driven strong drive flow cash we our over in growth CAGR mean annually very income on do building track expect XX free operating

Willis combination excited with million Towers impact for we’re of long-term combination. Watson But potential of pending pending at for providing cash we the to the free our and this guidance do achieving Given especially $XXX not relating the time. flow cash flow incredibly Aon standalone remain cost synergies, of the

Suneet Kamath

Okay. Thanks.

Operator

Thank Greenspan Fargo. comes question from Wells from next our Elyse you. And

Your line is now open.

Elyse Greenspan

that you Hi. understood question, that Christa? morning. you -- Thanks. of that with to essentially Is that the or offered that sure make even million said what have been divestitures, the you deals, reaffirming $XXX for I Good expenses My up I you’re guess, want said, some just I regulators. $XXX remedies to correctly first

Christa Davies

Elyse. correct, is That

Elyse Greenspan

cap sense level out go read in have go above and certain how what be you way Is and included speak laid within amount that I could that can up? reference Okay. willing in $X.X Great. us much the to was any color know might then into you of second or my you divestiture would not at to trillion there a divestitures there of with And was a merger? detail in offered give press kind obviously whether terms been guys question, want any a sure I’m billion of the you that you $X.X give us merger. that to the

Christa Davies

So, remedies. Elyse, to on not speculate going we’re

we’ll confirmed put have We that remedies.

continue divestiture our We’re allocate and we to framework be to continuing offered. anticipate, expect according with cost collaboratively $XXX regulators I share considering activity. And the remedies in our which synergies to to ROIC any work of to continues we’d return the as million buyback highest proceeds mentioned,

Elyse Greenspan

how impacted also in the then And was impact on was And side has tax rate your the tax guilty tax the the of have on on then last [ph] and guilty tangible Okay. couple years? a doubling interested I rate, Biden your tax as else beat the equal? all by rate proposed

Christa Davies

XX%. we’re discrete not giving I can -- four items historical exclusively our positive of Elyse, would over But in be a negative going look would quarter, forward. be guidance has we tax or been as impact back say underlying the historically, guidance So, there years last rate which

Elyse Greenspan

And you the or like the last the that one, better obviously, comp four feel we then QX QX, quarters environment that of improved, you then, to tough guys you just it greater organic one impacting we does to think through have the mid three given said quarter. greater, improve When about economy should get and [ph] that than had would as exited assuming organic single-digit X% the outlook for macroeconomic the the economy have go a perhaps, we year? continued be

Greg Case

a underscores of just last start X% lot back we would you embedded that Elyse go just which there is really is, year, pandemic the observing wasn’t the have. really it year, really against and great really in momentum we as to I really is a Yeah. QX pre-pandemic, were highlight,

obviously, Health that’s but guidance proceed against strongly year Risk Retirement described the analytics going at within continue back at to with to was Commercial Reinsurance would we the we in assuming and very, it quarter does. travel as a X% X%. data X% as pre-pandemic But some year, the Christa observe the the other single-digit direction. when and And conditions events, strong a through come It We’re the piece, and really right organic to just at pressure going trend obviously around than not momentum. before, give start to with X% at macroeconomic mid very and

-- are comfortable are we we So conditions mid macroeconomic hold, or with greater. single-digit

Elyse Greenspan

the for Thanks Great. color.

Operator

you. Thank

Jimmy from from Our next JPMorgan. question comes Bhullar

is line now Your open.

Jimmy Bhullar

morning. Good Hi.

I So, the just first, your potential of the from view Willis overall question had deal. a accretion on

going your publicly I think when assumed savings. talked on do million you’ve expense dispositions, the business to you hit and think no the dispositions able be How be and have accretion target and do you’ll to proceeds or assumptions, you’ll there do with think seems able you have previously previous you’re do some from $XXX you about your dispositions, deal unchanged obviously, that to the do you given something from still the think is… to overall

Christa Davies

Yeah.

Jimmy Bhullar

numbers? initial the to downside …

Christa Davies

that close base needs pre-pandemic obviously math So, certainly million of originally last million expenses we the thing got Jimmy, And a to still and smaller about basis clients, say at perhaps, strategic remains the want this? EPS entire of math was guidance grow, remedies. But, the so note Once this revenue not $XXX terms what is very what in positive we is regardless we forward say that any it’s it. assumed the of And on But transaction. none I’d to is, of talk to growth on updated would we say an the that providing meeting a Greg, rationale when clearly, will really would million upside then we’ll which savings on unmet that expense do is, updating that and was outcome. of we’re of look $XXX $XXX you it’s the guidance of going we time.

Greg Case

announced years, described the about with having really a ago opportunity an shareholders. opportunity $XXX think from our our for standpoint, Christa the a in delivered we as ever standpoint, we as opportunity, seen take next creation anyway five is obviously, value little to years. as strong almost XXXX the but you opportunity XX invested colleagues, think a it as by we opportunity, clients, we back basis for that million, XX had if just and Jimmy, of grounded on the combination, points described described, plus opportunity a And about And was was margin. and literally, about that capital if includes in that that for improvement circa close step we X,XXX on flow think improvement basis what year free way over were March X,XXX cash years points return we really on you if from

about So, we’re a Watson from a Christa about year we everything doesn’t shareholder conviction we’re going you value to this. really ago, plays looking around are how excited year, kind And and a thinking has begun impact. integration very we’ve I time in see quite, really that momentum of talked terms you real we’ve exciting. would just over I mean is the as course And having this accelerating about spent shareholder out, -- that’s the this and standpoint, forward high tell colleagues, really lot aspects, the well, -- include all externally, been grown. our just Towers that innovation. only colleagues of we’re with the as has with how it quite it’s been there’s client, it’s on and colleagues described of Willis building

Jimmy Bhullar

But seems bit some what less underwriters. pricing the as in one then and can talk subdued change you little your than like Greg about, well? of And for Eric, for are terms pricing Reinsurance you’re on seeing then comments of in or maybe either a it or upbeat Commercial

Eric Andersen

organizations, the the before see Certainly around if make of on the level lower. can possible excitement when comment their that combination question really the But things, their teams securitization been has, that. climate a maybe side, what I just earlier we’re take that really your I’ll the those provide what’s identifying climate I maybe starting of see building on Those have Willis’s across do, and to to experience things Greg, possibilities Sure. process process, beginning we’re and cat so for go a we clients. in there’s the begin go things a and from we client and see integration you the put on it’s whether a capabilities unlock they type. around value our do Resilience together, and as really types they for culture see we’re all planning risk Hub the the to standpoint, on experience some excitement them both revenue teams working as and a it’s the into Aon lot modeling to the deeper like can excitement those innovation, things through really organization as of

they to the the now right? clients on so dynamic maybe But the it We the marketplace to this at pricing, it’s budget they’re it’s a a analysis why. this, then capacity, options with give pricing you strategies, get on identification. them We finance straightforward I and right? make to I’ll do transfer your they can their if market. do among engage own third-party, appetite, they these themselves? as the moderately And it’s with We so context risk say coming work always in the some ever ultimately, risk transfer question decide mitigating a get that don’t before And answer, even to with -- their own the risk. the would to How as of And say, you positive. we steps couple marketplace, in never of

choices of ultimately, role in the a make in retentions, this clients it’s capability ultimately, its own of people right about using product right? So different that can terms variety out broader it marine, the to talking We’re series our market. And claim no to each evaluate Whether is they micro make. our when demand, that. trade-offs. -- things. dynamics, there a how make D&O, product, of get help own marketplace, risk, property, supply Each can But, all I It’s conditions, talk help markets. you’re a trends, them of make they to their is claims, manage always kick the has

but see needs. clients say, it’s So market that it’s their ultimately, make we -- every help it, we positive, them own meet as choices in as moderate moderately

Jimmy Bhullar

Thanks.

Operator

Thank you. And Phil Stefano our Bank. next question comes from from Deutsche

Your now open. is line

Phil Stefano

Good acquisition I follow-up just guess, Willis on the Towers a of on the Thanks. quick congrats and Watson. Yeah. morning pending quarter.

revenue on this sand billion line be need in there a which approvals? marker we came flavor So, to a give that me was is to the pretty about $X.X this To in you can that number, number might any the agreement. was the how question get and earlier back specific the go that

Greg Case

just step We Yeah. again, that in and evolved away answered to you that would a work year asked want stronger we value we pandemic. that’s we we the is possibilities, and time. year question did opportunity shareholder the it’s ago. the take opportunity ago together back, Eric August. now see and come we saw If is, than What come By all we over described seeing have back also and that’s relatively the the teams was saw way really not how how a as the

pandemic for outcomes assets, of amplification across ways than C cyber the both an company there’s intangible the suite literally than into every One really awareness a globe, in ever the it bigger more Also world, has before. before. things pandemic, the awareness in up of across permeated is climate, like in that

last brought saw opportunity as a so us, we the and we tremendous see We continuing. discussion around for the we March together in that So, opportunity. see combination it

the and way making described our we’re the through making standpoint, from very and process about beginning, outcome. good Christa our at excited as we’re progress the So

Phil Stefano

I what and of compare -- some to back T&E actual shot. that, of business If just mentioned how we versus you’re gave Worth can it? for how you’re specifics, expected moving normal activities the how opening thinking was how about, any could Okay. up like to to out this you that resumption want people thinking hoping an year. flush I forward, guidance Christa, I right? I has appreciate that later about about in you and generally thinking a expense you -- without had that, world back kind of you the that are kind look just getting whatever potential run

Christa Davies

Yeah.

So, I decade margin guess, for approximately start expansion XX-year track We’ve got record points I’d with. a every XX year. basis a of

of XXXX. and guidance say should investment expansion of not to some the and specific really we you might But XXXX, I’d margin how the to about perspective for all in thinking you year rest We a anticipate and but to for this potential about XXXX the -- the want that’s margin expansion client and we’re expect in the from we’re year T&E you for clients. some resumption of XXXX. margin if context look giving talk obviously and business delivering full But for later if Greg of expansion in T&E overall

Greg Case

a make remote it largest amount But world. with relative to have can Yeah. has from New ability effective our in to business environments it’s virtual work, the and Phil, we really cities in obviously kidding, away around actually new to the are the and et net evolves a better, and London, in in is they huge how coalitions literally think idea many an how be around And we’ve comparing in face-to-face the we be be just we engage And from back respects continue with in to not of new key. when companies client in answer in question notes actually opportunities. clients world, a major we and about are way to clients an XX These existing together come with proven be We’ll will leadership literally amplify the difference that. colleagues to The bringing what and world business, it’s Chicago, been new a clients unbelievably excellent how cetera. key both us amazing. Tokyo in obviously, we’re the the means York, travel on United taken where Madrid, Singapore, being on clients process. this to it

So led a Maybe you bit you -- you as overall. think about world. can you’ve led work very, about because T&E Eric important talk this, the around very it’s very this it. -- compel

Eric Andersen

value and on efficiency to but the and source future we else. look going up of lot, do global And enormous time. we someone how we’re value there’s now we think, Greg. Historically, importantly, that the that business client interact. And call plan about if getting open right? talking cost be in smart the client learned the to an an country, trip. and we a right about can occurring getting talk the up step to immediate I country, in-person advantages we a the go even wanted home leader away, was that right? in right or to As real issue to can and what of view and T&E Certainly, actually we’ve we’ve conference it, They’re interpretation we their WebEx that we there’s the And have in do as in positive a the but Greg, it’s more to recovery the Sure, that country and and they’re that a a in situation ultimately WebEx a solve said bit is deeper. past it expertise unlock leader Yeah. way where issue example, opens a just in meetings -- through not little outside try using

So, what to I we’re going we’re ultimately we’ve to going use mean, learned.

learned where But met. We’re apply a think to they meet we’re going want and the to to clients I be it. going lot we’ve

Greg Case

add One situations. actually it’s decade. a worked it really put put because as other. it’s we there. when decade and taken each WebEx clearly on AND thing, That’s just reacting colleagues faces through. But solution a client described Obviously, up for they’re I’ll That’s other, from us the supporting anybody because different you to to on that final know lines They’re this together work piece they right? not the each different around -- to Eric duplicatable, world us, important can it’s really open

only IT seen The described, same room, amplifies the vaccine which didn’t and behalf on I the so faces us, the upfront people have together clients out work has together have could that. commented gotten united clients probably gave together we conference It was WebEx protection is it the a And addressing there see, of that I That commentary means that’s in around exactly meant they people but interacting Eric XX before. the But to really they’ve XX put wow, issues. their which way really is, of on example turns we’re screen to it pretty going never before. what totally in and on cool. do, as would was what a group firm to on way understand this one it, XX the as what are and --

T&E So thinking we we’re broader than want much, understand just our to that. don’t you comes back, we how as much business but -- it’s about

Phil Stefano

I’ll expenses, in I Okay. first for take all underlying the, color. Thanks. operating swing revenue at Thanks a look the this call income one less adjusted would operating more. the what I -- that growth When at call that makes quarter to first growth XXXX Is rate. anything a this? the saw or quarter rate anything the We think abnormal you’d about quarter? first there not way out in XXXX versus the good

Christa Davies

investment a Phil, expenses what talking in expenses, XXXX lot have is noticed So, G&A you about less less the QX and XXXX. to compared business have a I’ve if in lot you’re you in

in business. investment margin expansion. might So in We comp the but -- to the expansion did you benefits might do year. margin due year the than an much full in to increase expect we is FX, due then And that you QX get more pronounced full and in see also

note the in probably two so sort that And QX. unusual guess I’d I things of

Phil Stefano

Great. it. All you. right. I appreciate Thank

Operator

question next Evercore our Motemaden David from comes from ISI. And you. Thank

Your line open. is now

David Motemaden

to organic strong quarter. wanted about morning. the this Good of Hi. I growth level talk just Thanks.

this expect was result So, of there why growth anything reason acceleration I about this guess, just years, think we from the I inorganic just these there rest the any an quarter? is wondering, And levels? one-off in is as I shouldn’t

Greg Case

our the doubt. listen, we view no is David, described, as we year, began great As momentum

and real about assuming confidence First standouts with first single-digit macroeconomic strong macroeconomic as are confidence conditions. in for see us all year. we aspects obviously, as real And some mid think across greater single-digit conditions the macroeconomic or that greater or the we evolve growing conditions gave where quarter evolve, board quarter we on the mid --

David Motemaden

you, nothing that leave Got it. that… think, would result in I one-off that And

Greg Case

No.

David Motemaden

come should off the sets. we down … of

That’s Okay. helpful.

Greg Case

in in Retirement was lines. of and It Reinsurance, growth around the of project world the with Risk, sort which the back work by really came a Yeah. growth of new all across terms Board aspects, work across the real Board on particularly Health related some teams the business Commercial different the search and bit in great

David Motemaden

had to maybe back that what Christa, just bit said Got it. Willis, on just synergies just would you $XXX can of like dig sort to $XXX you wanted concessions. maybe Thanks. in would just peel that you saves. achieve -- had million sort maybe tough just the the I just of is onion that think, level there a achieve make to a of And of level to little I that talk that the you about, But I -- confidence million effect to something then combination is of the into of guess and get gave cost any that on you with sort expect

Christa Davies

Yeah.

continue expected proceeds we million and today achieved in the continues very we’ve So, to to we’d considering million cost base. expect XX% It’s confident here. and would and U.S. anticipate differences Benfold David, $XXX of remedies activity. XX% be which ROIC we we’re X.X% no And of note combined divestiture cost in combined base $XXX cost cost structural there’s today return cost the of of the buyback on our highest that synergies of framework synergies, base I our allocate offered according the to share to any achieving. the combined

achieving good about feel that million. And really so, we $XXX

David Motemaden

you if Helpful. the sneak more in you deck. Got And could maybe guys clear. then appreciate it. obviously, I just That’s in, I slide on one the guys margin, just the put

You a by margins points have the over expanded basis guys decade. XX last year

quarters? over points next basis I that any guide expect XXX to reason -- there Obviously, and guess did three the margins comps is you first in expand that But need full quarter. You you expand I the for shouldn’t the there here know year?

Christa Davies

re-patenting quarter-to-quarter expect full about first margin So, we year be David, expansion the expansion expenses. we what our of because margin expansion, margin terms is, absolutely expenses unusual will had But in XXXX we QX about a all, of say of in and for XXXX. context with year would as sort year, was the think full in of we of we comparable pre-pandemic because the talked lumpy QX

points track XXX the And so track margin of And XXXX. XX full said, we’re you year of so a XX-year year. XX full think margin again over do basis expansion to margin in we And over record expansion expansion basis years, the about last course a on I XXXX. points had the of as year

David Motemaden

Thank you.

Operator

KBW. final our Shields And from you. Meyer Thank question from comes

now open. is line Your

Meyer Shields

beginning with numbers, talked should How a don’t but the basic little expect I difference? a see I Thanks. to question, about premium you make mean clearinghouse. that that a financial, blockchain we in the guess for does where bit

Christa Davies

expansion. it’s value mean driving really errors. their activities And quality it It’s efficiency, therefore colleagues client. it’s time makes allowing because improved I driving with Yeah. difference more to and in terms high margin of a reduced on spend

mean, And experience, but operating both it’s So expansions. simple is client then utilizing errors I answer margin improved the Meyer, efficiency. and reduced

Meyer Shields

perfect. That’s disclosed there. question, number innovation. revenues I That’s exactly No. savings Same you number guidance is know the internal the was I looking never, a that still for. Okay. synergies what think, $XXX Is expected from for still of I the revenue the million same?

Greg Case

think I we bring we that. see for really How on goes think region entire on We didn’t set bringing how more we’re idea go -- it’s and than happened. of continue to very as doing zero Eric their to pandemic Towers to time ever just possibilities way in it taking -- categories where and can and what them back do clients, support. to behalf. at Meyer, like It is not we I XXXX going we accelerate about obviously, Watson potential on innovation that. as our with better before, described, but as that a volatility ways we spent hard really Willis climate. Look to but are and got Meyer clients And of at to Well, improve find matter are continue combination we disclosed, March keep help said are do the reduce had the issues you we’ve of well, this we but behalf as find pandemic solutions we the accelerate we to to actions use together, we’ve in describe colleagues carbon. the back getting

is house the intangible am play cetera. assets. to on Towers we going on going We’ve to I’m think now more I you defending about made to tangible like So with Willis and Watson the attuned how What assets. actually even and et Things clients on like greater, it this opportunity intangible are not out. But cyber, do believe like. progress areas great assets

ago. our the -- we are is around XXXX also than year drive at that now excited clients on net colleagues, for and in but a we were we saw we can what which possibilities revenue we to innovation, do new in greater and fact So for opportunity see opportunity

Operator

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

Greg Case

Brittney. to so everyone much. much wanted next discussion I quarter. Thank say We thank just and our you this appreciate it much to forward very you, very for look to Thanks quarter. joining

Operator

you Thank for in your this participation today’s All disconnect time. at conference. participants may

Aon (AON) 30 Apr 212021 Q1 Earnings call transcript