Aon (company) explained

Aon plc
Type:Public limited company
Founder:Patrick Ryan
Location:London, United Kingdom[1]
Area Served:Worldwide
Industry:Financial services
Operating Income: US$3.785 billion (2023)
Net Income: US$2.564 billion (2023)
Assets: US$33.96 billion (2023)
Equity: US$–826 million (2023)
Num Employees: (2023)
Footnotes:[2]

Aon plc is a global[3] professional services firm that offers a range of risk-mitigation products.[4] Aon has approximately 50,000 employees across 120 countries.[5]

Founded in Chicago by Patrick Ryan, Aon was created in 1982 when the Ryan Insurance Group merged with the Combined Insurance Company of America. In 1987, that company was renamed Aon from aon, a Gaelic word meaning "one". The company is globally headquartered in London with its North America operations based in Chicago at the Aon Center. Aon is listed on the New York Stock Exchange under AON with a market cap of $65 billion in April 2023.[6]

History

W. Clement Stone's mother bought a small Detroit insurance agency, and in 1918 brought her son into the business. Mr. Stone sold low-cost, low-benefit accident insurance, underwriting and issuing policies on-site. The next year he founded his own agency, the Combined Registry Co.[7]

As the Great Depression began, Stone reduced his workforce and improved training. Forced by his son's respiratory illness to winter in the South, Stone moved to Arkansas and Texas. In 1939 he bought American Casualty Insurance Co. of Dallas, Texas. It was consolidated with other purchases as the Combined Insurance Co. of America in 1947. The company continued through the 1950s and 1960s, continuing to sell health and accident policies. In the 1970s, Combined expanded overseas despite being hit hard by the recession.[7]

In 1982, after 10 years of stagnation under Clement Stone Jr., the elder Stone, then 79, resumed control until the completion of a merger with Ryan Insurance Co. allowed him to transfer control to Patrick Ryan. Ryan, the son of a Ford dealer in Wisconsin and a graduate of Northwestern University, had started his company as an auto credit insurer in 1964. In 1976, the company bought the insurance brokerage units of the Esmark conglomerate. Ryan focused on insurance brokering and added more upscale insurance products. He also trimmed staff and took other cost-cutting measures, and in 1987 he changed Combined's name to Aon. In 1992, he bought Dutch insurance broker Hudig-Langeveldt. In 1995, the company sold its remaining direct life insurance holdings to General Electric to focus on consulting.[8]

Aon built a global presence through purchases. In 1997, it bought The Minet Group, as well as insurance brokerage Alexander & Alexander Services, Inc. in a deal that made Aon (temporarily) the largest insurance broker worldwide. The firm made no US buys in 1998, but doubled its employee base with purchases including Spain's largest retail insurance broker, Gil y Carvajal, and the formation of Aon Korea.[9] [10]

Responding to industry demands, Aon announced its new fee disclosure policy in 1999, and the company reorganised to focus on buying personal line insurance firms and to integrate its acquisitions. That year it bought Nikols Sedgwick Group, an Italian insurance firm, and formed RiskAttack (with Zurich US), a risk analysis and financial management concern aimed at technology companies. The cost of integrating its numerous purchases, however, hammered profits in 1999.[11]

Despite its troubles, in 2000 Aon bought Reliance Group's accident and health insurance business, as well as Actuarial Sciences Associates, a compensation and employee benefits consulting company. Later in that year, however, the company decided to cut 6% of its workforce as part of a restructuring effort.[12] In 2003, the company saw revenues increase primarily because of rate hikes in the insurance industry. Also that year, Endurance Specialty, a Bermuda-based underwriting operation that Aon helped to establish in November 2001 along with other investors, went public. The next year Aon sold most of its holdings in Endurance.[13] [14]

In the late 2007, Aon announced the divestiture of its underwriting business. With this move, the firm sold off its two major underwriting subsidiaries: Combined Insurance Company of America (acquired by ACE Limited for $2.4 billion) and Sterling Life Insurance Company (purchased by Munich Re Group for $352 million). The low margin and capital-intensive nature of the underwriting industry was the primary reason for the firm's decision to divest.[15] [16]

This growth strategy manifested in November 2008 when Aon announced it had acquired reinsurance intermediary and capital advisor Benfield Group Limited for $1.75 billion. The acquisition amplified the firm's broking capabilities, positioning Aon one of the largest players in the reinsurance brokerage industry.[17]

In 2010, Aon made its most significant acquisition to date with the purchase of Hewitt Associates for $4.9 billion.[18] Aside from drastically boosting Aon's human resources consulting capacity and entering the firm into the business process outsourcing industry, the move added 23,000 colleagues and more than $3 billion in revenue.[19]

In January 2012, Aon announced that its headquarters would be moved to London, although North American operations and jobs remained in Chicago.[20]

On 10 February 2017, Aon announced that it was selling its employee benefits outsourcing business to private equity firm The Blackstone Group for US$4.8 billion (£3.8 billion).[21]

In February 2020, Aon named Eric Andersen as president of Aon after co-president Michael O'Connor departed the company to pursue new opportunities. He will be reporting to Greg Case, the firm's CEO.[22]

In June 2020, Aon announced it was planning to repay the temporary 20% pay cut from 70% of employees that was published in a statement in April 2020 regarding the COVID-19 pandemic. On 30 June 2020, Aon announced it would repay staff in full, plus 5% of the withheld amount.[23]

In June 2020, Willis Towers Watson called its shareholders to two meetings to discuss its acquisition with Aon for August 26, 2020. It was revealed that the US Department of Justice has requested more information on the deal under antitrust rules.[24]

September 11 attacks

Aon's New York offices were on the 92nd and 98th–105th floors of the South Tower of the World Trade Center at the time of the September 11 attacks. When the North Tower was struck by American Airlines Flight 11 at 8:46 a.m., an evacuation of Aon's offices was quickly initiated by executive Eric Eisenberg, and 924 of the estimated 1,100 Aon employees present at the time managed to get below the 77th floor before United Airlines Flight 175 crashed between Floors 77 and 85 at 9:03 a.m.[25]

Many, however, did not manage to get beneath in the 17 minutes they had between the two impacts. As a result, 176 employees of Aon were killed in the crash or died in the eventual collapse of the tower or from smoke inhalation. At 9:59 a.m., the tower finally collapsed, killing any survivors still within,[26] including Eisenberg and Kevin Cosgrove.[27]

Spitzer investigation

In 2004–2005, Aon, along with other brokers including Marsh & McLennan and Willis, fell under regulatory investigation under New York Attorney General Eliot Spitzer and other state attorneys general. At issue was the practice of insurance companies' payments to brokers (known as contingent commissions). The payments were thought to bring a conflict of interest, swaying broker decisions on behalf of carriers, rather than customers. In the spring of 2005, without acknowledging any wrongdoing, Aon agreed to a $190 million settlement, payable over 30 months.[28]

UK regulatory breach

In January 2009, Aon was fined £5.69 million in the UK by the Financial Services Authority, who stated that the fine related to the company's inadequate bribery and corruption controls, claiming that between 14 January 2005 and 30 September 2007 Aon had failed to properly assess the risks involved in its dealings with overseas firms and individuals. The Authority did not find that any money had actually made its way to illegal organisations. Aon qualified for a 30% discount on the fine as a result of its cooperation with the investigation. Aon said its conduct was not deliberate, adding it had since "significantly strengthened and enhanced its controls around the usage of third parties".[29]

US Foreign Corrupt Practices Act violations

In December 2011, Aon Corporation paid a $16.26 million penalty to the U.S. Securities and Exchange Commission and the U.S. Department of Justice for violations of the US Foreign Corrupt Practices Act.[30] According to the Securities and Exchange Commission, Aon's subsidiaries made improper payments of over $3.6 million to government officials and third-party facilitators in Costa Rica, Egypt, Vietnam, Indonesia, the United Arab Emirates, Myanmar and Bangladesh, between 1983 and 2007, to obtain and retain insurance contracts.[31]

Major acquisitions

On 5 January 2007, Aon announced that its Aon Affinity group had acquired the WedSafe Wedding Insurance program.[32]

On 22 August 2008, Aon announced that it had acquired London-based Benfield Group. The acquiring price was US$1.75 billion or £935 million, with US$170 million of debt.[33]

On 5 March 2010, Hewitt Associates announced that it acquired Senior Educators Ltd. The acquisition offers companies a new way to address retiree medical insurance commitments.[34]

On 12 July 2010, Aon announced that it had agreed to buy Lincolnshire, Illinois-based Hewitt Associates for $4.9 billion in cash and stock.[35]

On 7 April 2011, Aon announced that it had acquired Johannesburg, South Africa-based Glenrand MIB. Financial terms were not disclosed.[36]

On 19 July 2011, Aon announced that it bought Westfield Financial Corp., the owner of insurance-industry consulting firm Ward Financial Group, from Ohio Farmers Insurance Co. Financial terms were not disclosed.[37]

On 22 October 2012, Aon announced that it agreed to buy OmniPoint, Inc, a Workday consulting firm. Financial terms were not disclosed.[38]

On 16 June 2014, Aon announced that it agreed to buy National Flood Services, Inc., a large processor of flood insurance, from Stoneriver Group, L.P.[39]

On 31 October 2016, Aon's Aon Risk Solutions completed acquisition of Stroz Friedberg LLC, a specialised risk management firm focusing on cybersecurity.[40]

On 14 November 2016, Aon acquired CoCubes an online Indian Assessment firm, facilitating hiring of entry-level engineering graduates.[41]

On 10 February 2017, Aon plc agreed to sell its human resources outsourcing platform for US$4.8 billion (£3.8 billion)[21] to Blackstone Group L.P. (BX.N), creating a new company called Alight Solutions.

In September 2017, Aon announced its intent to purchase real estate investment management firm The Townsend Group from Colony NorthStar for $475 million, expanding Aon's property investment management portfolio.[42]

On 9 March 2020, Aon announced its merger with Willis Towers Watson[43] [44] for nearly $30 billion in an all-stock deal that creates the world's largest insurance broker.[45] As of 21 May 2020, Willis board was under probe over merger agreement with Aon.[46] The deal was called off in July 2021.[47]

In December 2023, Aon agreed to acquire NFP, a middle-market provider of risk, benefits, wealth and retirement plan advisory services company, for $13.4 billion.[48]

In March 2024, Aon plc acquired the technology assets and intellectual property of Humn.ai, an AI-powered platform. This will enhance its commercial fleet proposition. [49]

Operations

Manchester United

On 3 June 2009, it was reported that Aon had signed a four-year shirt sponsorship deal with English football giant Manchester United. On 1 June 2010, Aon replaced American insurance company AIG as the principal sponsor of the club. The Aon logo was prominently displayed on the front of the club's shirts until the 2014/2015 season when Chevrolet replaced them.[50] The deal was said to be worth £80 million over four years, replacing United's deal with AIG as the most lucrative shirt deal in history at the time.

In April 2013, Aon signed a new eight-year deal with Manchester United to rename their training ground as the Aon Training Complex and sponsor the club's training kits, reportedly worth £180 million to the club.[51]

Awards

Notes and References

  1. Web site: About. Aon. 23 August 2022.
  2. Web site: Aon 2023 Annual Report (Form 10-K) . US Securities and Exchange Commission . 16 February 2024 . 17 February 2024 .
  3. Web site: Aon names Alicia Goosen to head of Professional Services GBC, London. reinsurancene.ws.
  4. Web site: What We Do . www.aon.com . 13 April 2023.
  5. Web site: About Aon . Aon . 7 August 2017 . live . http://archive.wikiwix.com/cache/20170808011445/http://aon.com/about-aon/about-aon.jsp . 8 August 2017.
  6. Web site: AON Stock Price Aon PLC Stock Quote (U.S.: NYSE) . MarketWatch . en.
  7. Web site: Wilson. Mark R.. Combined Registry. Dictionary of Leading Chicago Businesses 1820-2000.
  8. Web site: GE Capital To Acquire An Insurer. 27 December 1995. The New York Times. live. https://web.archive.org/web/20141102220859/http://www.nytimes.com/1995/12/27/business/ge-capital-to-acquire-an-insurer.html. 2 November 2014.
  9. Web site: 2022-07-11 . বাবু88 কোম্পানি সম্পর্কে . 2023-01-18 . bn-BD.
  10. Web site: Aon Korea 1st Foreign Broker Licensed in Nation. 2021-05-30. www.joc.com.
  11. Web site: Melissa Wahl. Tight Margins Help Take Toll on Aon Corp.. 2021-05-30. Chicago Tribune. 9 February 2000 . en-US.
  12. Web site: Brick. Michael. Aon Tumbles After Restructuring. 2021-05-30. TheStreet. 2 November 2000 . en-us.
  13. Web site: 2023-01-10 . ABIR announces new officers with Pina Albo elected as new Chair - Reinsurance News . 2023-01-18 . ReinsuranceNe.ws . en.
  14. Web site: Barr. Alistair. Aon sells most of its Endurance stake. 2021-05-30. MarketWatch. EN-US.
  15. Web site: Aon Sells Combined to ACE for $2.4 Billion; Sterling to Munich Re . Insurance Journal . 17 December 2007 . 14 March 2013 . live . https://web.archive.org/web/20130525204803/http://www.insurancejournal.com/news/international/2007/12/17/85703.htm . 25 May 2013.
  16. Web site: Aon sells two insurance units for $2.75B . USA Today . 17 December 2007. 14 March 2013.
  17. Web site: Aon to Acquire Broker Benfield for $1.75 Billion. Jerry Geisel. Insurance Journal. 22 August 2008. 14 March 2013. live. https://web.archive.org/web/20130525223414/http://www.insurancejournal.com/news/international/2008/08/22/92993.htm. 25 May 2013.
  18. Web site: Aon completes acquisition of Hewitt . Business Insurance . 1 October 2010. 15 March 2013.
  19. News: Aon Buys Hewitt in Move to Expand Its Consulting Arm . The New York Times. 12 July 2010 . 15 March 2013 . live . https://web.archive.org/web/20130601015124/http://www.nytimes.com/2010/07/13/business/13insure.html?_r=0 . 1 June 2013.
  20. News: Aon Shifts Headquarters to London. Tadena. Nathalie. 14 January 2013. The Wall Street Journal. 10 May 2013. https://web.archive.org/web/20150723003546/http://www.wsj.com/news/articles/SB10001424052970204542404577158633936346056. 23 July 2015. Dean. Jason. Scism. Leslie. subscription. — Note: only first hundred or so words archived, but that is sufficient to support fact here.
  21. News: Exclusive: Blackstone to acquire Aon's benefits outsourcing for.... Greg. Roumeliotis. Reuters. 9 February 2017 . live. https://web.archive.org/web/20170803211754/https://www.reuters.com/article/us-aon-benefits-blackstone-exclusive-idUSKBN15O2TV. 3 August 2017.
  22. Web site: Aon Names Andersen President, While Former Co-President O'Connor Exits. 2020-02-24. Insurance Journal. en-US. 2020-02-25.
  23. Web site: AON to repay 20% pay cuts. 2020-06-30. Insurance Age. en-UK. 2020-06-30.
  24. Web site: WTW calls shareholder meeting on AON deal. 2020-07-09. Insurance Age. en-US. 2020-07-11.
  25. Web site: Companies slowly add to WTC reports . Shawn Langlois . CBS.MarketWatch.com . 14 September 2001 . 23 February 2012 . live . https://web.archive.org/web/20121013004109/http://www.marketwatch.com/story/update-on-dead-missing-at-world-trade-center-firms . 13 October 2012.
  26. News: Industry honors fallen on 9/11 anniversary . InvestmentNews . Aaron Siegel . https://web.archive.org/web/20070915130042/http://www.investmentnews.com/apps/pbcs.dll/article?AID=%2F20070911%2FREG%2F70911011 . 15 September 2007 . 11 September 2007 . 23 February 2012 . dead .
  27. News: Kiehl . Stephen . September 10, 2006 . . 'I think we're getting hijacked' . July 26, 2017 . https://archive.today/20170726233436/http://www.baltimoresun.com/features/bal-911story091006-story.html . July 26, 2017 . live .
  28. News: Aon Settles Case On Commissions For $190 Million. 7 March 2005. The Wall Street Journal. 28 September 2021.
  29. News: Aon hit with record FSA fine . https://web.archive.org/web/20110725195637/http://www.ifaonline.co.uk/ifaonline/news/1348483/aon-hit-record-fsa-fine?page=ifa2006_articleimport&tempPageName=833667 . dead . 25 July 2011 . Ifaonline.co.uk . Scott Sinclair . 8 January 2009 . 23 February 2012 .
  30. Aon Pays $1.76 Million Criminal Penalty. The FBI. The FBI. 20 December 2011. live. https://web.archive.org/web/20120510003229/http://www.fbi.gov/washingtondc/press-releases/2011/aon-corporation-agrees-to-pay-a-1.76-million-criminal-penalty-to-resolve-violations-of-the-foreign-corrupt-practices-act. 10 May 2012.
  31. Web site: SEC Files Settled FCPA Charges Against AON Corporation . US Securities and Exchange Commission . US Securities and Exchange Commission . 20 December 2011 . live . https://web.archive.org/web/20170531054322/https://www.sec.gov/litigation/litreleases/2011/lr22203.htm . 31 May 2017.
  32. Web site: Aon's Affinity Business Acquires WedSafe, Inc. Wedding Insurance and Private Event Insurance programs. Aon plc Global Media Relations. en. 2019-02-11.
  33. Web site: Aon to buy Benfield for $1.4 billion . https://web.archive.org/web/20140102223853/http://www.marketwatch.com/story/aon-to-buy-benfield-for-14-billion . 2 January 2014 . 22 August 2008 . Steve . Goldstein . 15 November 2019 .
  34. Web site: Hewitt Associates Acquires Senior Educators Ltd . Aon . 5 March 2010 . 23 February 2012 . dead . https://web.archive.org/web/20120322195405/http://aon.mediaroom.com/index.php?s=114&item=27 . 22 March 2012 .
  35. News: Aon agrees to buy Hewitt Associates . Chicago Breaking Business . Bruce Japsen and Becky Yerak . 12 July 2010 . 24 February 2012 . dead . https://web.archive.org/web/20100715063324/http://chicagobreakingbusiness.com/2010/07/aon-agrees-to-buy-hewitt-associates.html . 15 July 2010 .
  36. Web site: Aon South Africa Receives Competition Commission Approval for Acquisition of Glenrand MIB . Bloomberg BusinessWeek . 7 April 2011 . 18 March 2013 . live . https://web.archive.org/web/20130530171512/http://aon.mediaroom.com/index.php?s=25776&item=64193 . 30 May 2013.
  37. Web site: Aon buys Ward Financial; terms not disclosed . Bloomberg BusinessWeek . 19 July 2011 . 24 February 2012 . dead . https://web.archive.org/web/20121102082339/http://www.businessweek.com/ap/financialnews/D9OIPS5O0.htm . 2 November 2012.
  38. Web site: Aon Corp. to acquire OmniPoint's Workday Services company . 22 October 2012 . live . https://web.archive.org/web/20160427004557/http://finance.yahoo.com/news/aon-corp-acqire-omnipoints-workday-130757002.html . 27 April 2016.
  39. Web site: Aon to Acquire National Flood Services, Boost Flood Insurance Biz - Analyst Blog . live . https://web.archive.org/web/20140715124906/http://www.nasdaq.com/article/aon-to-acquire-national-flood-services-boost-flood-insurance-biz-analyst-blog-cm362192 . 15 July 2014.
  40. Web site: Aon Completes Acquisition of Risk Management Firm Stroz Friedberg . live . https://web.archive.org/web/20170202005618/https://www.strozfriedberg.com/press-release/aon-completes-acquisition-of-risk-management-firm-stroz-friedberg/ . 2 February 2017.
  41. News: Aon Hewitt acquires India's CoCubes. 14 November 2016. The Economic Times. live. https://web.archive.org/web/20171021005741/https://economictimes.indiatimes.com/small-biz/startups/aon-hewitt-acquires-indias-cocubes/articleshow/55416397.cms. 21 October 2017.
  42. News: Roumeliotis. Greg. Aon to buy real estate investment firm Townsend from Colony NorthStar. 5 September 2017. Reuters. 1 September 2017. live. https://web.archive.org/web/20170905043434/http://in.reuters.com/article/us-townsend-m-a-aon-plc/aon-to-buy-real-estate-investment-firm-townsend-from-colony-northstar-idINKCN1BC5WD. 5 September 2017.
  43. News: Insurance Broker Aon Strikes Year's Biggest M&A Deal on Tumultuous Markets Day. WSJ . Dummett . Ben .
  44. Web site: Aon's $80 Billion Merger With Willis Towers Watson – Global Legal Chronicle. 11 March 2020 . en-US. 2020-03-11.
  45. Web site: Aon Buys Willis Towers Watson: Another Waypoint in the Demise of Employer Pensions . Bauer. Elizabeth. Forbes. en. 2020-03-27.
  46. Web site: Willis Towers Watson board under probe over merger agreement with Aon. Gangcuangco. Terry. Insurance Business Mag. en. 2020-05-21.
  47. News: Ben Dummett . Leslie Scism . Dave Sebastian . Aon, Willis Towers Scrap $30 Billion Merger Amid Antitrust Impasse . 26 July 2021 . The Wall Street Journal . 26 July 2021.
  48. News: 2023-12-20 . Aon Agrees to Buy NFP for About $13.4 Billion in Cash and Stock . en . Bloomberg.com . 2023-12-20 . Joshua . Josyana . Smith . Alison Nicole . dmy-all.
  49. News: Aon acquires Humn.ai’s technology assets . en . Coverager.com. 2024-03-07 . Ben-Hutta. Avi . 7 March 2024.
  50. Web site: Man Utd announce new shirt deal with Aon . ESPN Soccernet . 3 June 2009 . 24 February 2012 . live . https://web.archive.org/web/20140117203721/http://espnfc.com/news/story?id=652383&sec=england&&cc=5901 . 17 January 2014.
  51. News: Ogden. Mark. Manchester United to sign £180m Aon deal to change name of Carrington training base. 29 July 2014. The Telegraph. 7 April 2013. live. https://web.archive.org/web/20140315215033/http://www.telegraph.co.uk/sport/football/teams/manchester-united/9977438/Manchester-United-to-sign-180m-Aon-deal-to-change-name-of-Carrington-training-base.html. 15 March 2014.
  52. Web site: Pension and investment provider awards 2014 . 21 April 2015 . live . https://web.archive.org/web/20150419121120/http://www.pensions-expert.com/Special-Features/Pension-and-Investment-Provider-Awards-2014-the-winners . 19 April 2015.
  53. Web site: Corporate Equality Index 2013 . Human Rights Campaign . 24 May 2013 . 28 July 2020 . https://web.archive.org/web/20200728060656/https://hrc.org/files/assets/resources/CEI_2013_Final_low.pdf.pdf . dead .
  54. Web site: Aon . Working Mother . 24 May 2013 . live . https://web.archive.org/web/20130606151416/http://www.workingmother.com/best-companies/aon-1 . 6 June 2013.
  55. Web site: Awards & Accolades. Aon Media Room. 24 May 2013. live. http://archive.wikiwix.com/cache/20130524013006/http://aon.mediaroom.com/index.php?s=25792. 24 May 2013.
  56. Web site: Aon Media Room . Aon . 24 May 2013 . live . http://archive.wikiwix.com/cache/20130525144814/http://aon.mediaroom.com/2012-12-5-An-award-winning-night-for-Aon-at-the-Insurance-Times-Awards . 25 May 2013.
  57. Web site: On Top of the World . Intelligent Insurer . 24 May 2013 . live . https://web.archive.org/web/20131014024256/http://www.intelligentinsurer.com/article/on-top-of-the-world . 14 October 2013.
  58. Web site: Awards . Reactions . 24 May 2013 . dead . https://web.archive.org/web/20130328113804/http://www.reactionsnet.com/Stub/Awards.html . 28 March 2013 .
  59. Web site: Awards for Excellence 2012. https://web.archive.org/web/20120412133814/http://www.plansponsor.com/event/default.aspx?id=6442482893. dead. 12 April 2012. PLANSPONSOR. 2 January 2014.
  60. Web site: UK Pensions Awards 2012 – The Winners. Professional Pensions. 10 May 2012 . 24 May 2013. live. https://web.archive.org/web/20120830085233/http://www.professionalpensions.com/professional-pensions/news/2173708/uk-pensions-awards-2012-winners. 30 August 2012.

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