Company Reports

After reassessing our assumptions, we are changing our Morningstar Capital Allocation Rating for Aon to Standard from Exemplary.

Aon has historically demonstrated modest growth and strong, stable free cash flow, and we expect much of the same going forward, though swings in the insurance market and the pandemic have created some recent ups and downs. In our view, Aon is a fundamentally attractive business, with a variety of operations that share the commonality of sticky customer relationships, limited capital requirements, and flexible cost structures.

Aon announced it will acquire middle-market broker USI for $17 billion. The market has reacted negatively to this news, with shares down 6% in trading on Aug. 31.

We think Aon's second-quarter results were solid, given current industry conditions, with overall growth holding steady and margins continuing to improve.

Aon has historically demonstrated modest growth and strong, stable free cash flow, and we expect much of the same going forward, though swings in the insurance market and the pandemic have created some recent ups and downs. In our view, Aon is a fundamentally attractive business, with a variety of operations that share the commonality of sticky customer relationships, limited capital requirements, and flexible cost structures.

Aon largely maintained its recent path in the first quarter and continues to post solid results despite a less favorable environment.

Aon has historically demonstrated modest growth and strong, stable free cash flow, and we expect much of the same going forward, though swings in the insurance market and the pandemic have created some recent ups and downs. In our view, Aon is a fundamentally attractive business, with a variety of operations that share the commonality of sticky customer relationships, limited capital requirements, and flexible cost structures.

Shares of the leading insurance brokers fell mid-to-high single digits on Monday, Feb. 9, as the market reacted to reports that OpenAI had approved its first insurance app on ChatGPT.

Aon's organic growth held up relatively well in the fourth quarter, and the company saw strong margin improvement.

While peers have seen growth slow this year, Aon saw its organic growth continue to accelerate in the third quarter.

Aon announced that it will sell a portion of the wealth business it obtained as part of its acquisition of NFP.

Aon historically has demonstrated modest growth and strong and stable free cash flow, and we expect much of the same going forward, although swings in the insurance market and the pandemic have created some recent ups and downs. In our view, Aon is a fundamentally attractive business, with a variety of operations that share the commonality of sticky customer relationships, limited capital requirements, and flexible cost structures.

We've seen declining growth from Aon and its peers recently, but the company bucked that trend in the second quarter.

Aon's first-quarter results came in a little weak, with organic growth slowing a bit and margins coming under some pressure. This sparked a negative reaction from the market.

Aon historically has demonstrated modest growth and strong and stable free cash flow, and we expect much of the same going forward, although swings in the insurance market and the pandemic have created some recent ups and downs. In our view, Aon is a fundamentally attractive business, with a variety of operations that share the commonality of sticky customer relationships, limited capital requirements, and flexible cost structures.

Aon’s fourth-quarter results showed growth slowing slightly sequentially and coming in a bit below peers. However, the differentials are minor and growth is still a bit above our long-term expectations. Overall organic revenue growth was 6% year over year in the quarter, and excluding the NFP acquisition, the company is making strides in improving margins. We will maintain our $313 fair value estimate for the narrow-moat company. We see shares as overvalued, as we believe the market is overly focused on the tailwinds the company and its insurance brokerage peers have enjoyed recently.

In the third quarter, narrow-moat Aon bucked the trend of slowing growth that we saw from its closest peer, Marsh McLennan. Year-over-year organic growth of 7% marked a modest acceleration from recent results, and Aon continues to maintain a growth rate a bit above our long-term expectations. We maintain our $313 fair value estimate and see the shares as modestly overvalued.

Aon historically has demonstrated modest growth and strong and stable free cash flow, and we expect much of the same going forward, although swings in the insurance market and the pandemic have created some recent ups and downs. In our view, Aon is a fundamentally attractive business, with a variety of operations that share the commonality of sticky customer relationships, limited capital requirements, and flexible cost structures.

Aon’s second-quarter results show the company getting back on track following a weak first quarter. Year-over-year organic revenue growth was 6%, in line with what we’ve seen from peers. This supports our view that the previous quarter was a temporary blip based on mix. However, growth is a bit above our long-term expectations, and we do expect growth to moderate over time. We will maintain our $301 fair value estimate for the narrow-moat company and see shares as about fairly valued at the moment.

Aon saw its growth slow in the first quarter, with organic revenue growth of just 5% year over year. While this lags what we've seen from peers, we expect growth to moderate for all of the brokers going forward, and Aon may just be seeing this process play out a bit more quickly. All in all, results for the quarter were roughly in line with what we expect from Aon over the long run. We will maintain our $301 fair value estimate for the narrow-moat company and see the shares as about fairly valued right now.