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Aon (company)

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Aon plc
Company typePublic limited company
ISINGB00B5BT0K07 Edit this on Wikidata
IndustryFinancial services
Founded1982; 42 years ago (1982)
FounderPatrick Ryan
Headquarters122 Leadenhall Street, London, United Kingdom[1]
Area served
Worldwide
Key people
Services
  • Risk consulting
  • Retirement consulting
  • Health consulting
RevenueIncrease US$13.38 billion (2023)
Increase US$3.785 billion (2023)
Increase US$2.564 billion (2023)
Total assetsIncrease US$33.96 billion (2023)
Total equityDecrease US$–826 million (2023)
Number of employees
c. 50,000 (2023)
Websitewww.aon.com Edit this at Wikidata
Footnotes / references
[2]

Aon plc (English: /ˈeɪɒn/) is a British-American[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 under W. Clement Stone. In 1987, the holding 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

[edit]

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]

Aon's corporate headquarters in Chicago at the Aon Center.

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

[edit]

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 collapsed, killing any survivors still within,[26] including Eisenberg and Kevin Cosgrove.[27]

Spitzer investigation

[edit]

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

[edit]

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

[edit]

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

[edit]

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.[42]

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.[43]

On 9 March 2020, Aon announced its merger with Willis Towers Watson[44][45] for nearly $30 billion in an all-stock deal that creates the world's largest insurance broker.[46] As of 21 May 2020, Willis board was under probe over merger agreement with Aon.[47] The deal was called off in July 2021.[48]

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.[49]

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. [50]

Operations

[edit]

Manchester United

[edit]

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.[51] 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.[51]

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.[52]

Awards

[edit]
  • Aon was awarded Investment Consultancy of the Year and Fiduciary Manager of the Year at the FT's 2014 Pension and Investment Provider Awards[53]
  • Aon received a perfect score on the Human Rights Campaign's 2013 Corporate Equality Index[54]
  • Aon was named to Working Mother's list of the 100 Best Companies for 2012[55]
  • Aon Risk Solutions was the most recommended broker in 2012 for service and expertise by middle market buyers in Business Insurance's Buyers Choice Awards[56]
  • Aon Risk Solutions was named Broker of the Year and Training Programme of the Year in 2012 by Insurance Times[57]
  • Aon Benfield was named 2012 European Reinsurance Broker of the Year, Best European Property Reinsurance Broker and Best European Casualty Reinsurance Broker at the European Intelligent Insurer Awards[58]
  • Aon Benfield was named Best Global Reinsurance Broking Company for Analytics at Reactions Global Awards 2012[59]
  • Aon Hewitt was named Top Retirement Consultant of 2012 by PLANSPONSOR Magazine2[56][60]
  • Aon Hewitt was named Actuarial and Investment Consultant of the Year for 2012 at the Professional Pensions Awards[61]

References

[edit]
  1. ^ "About". Aon. Retrieved 23 August 2022.
  2. ^ "Aon 2023 Annual Report (Form 10-K)". US Securities and Exchange Commission. 16 February 2024. Retrieved 17 February 2024.
  3. ^ "Aon names Alicia Goosen to head of Professional Services GBC, London". reinsurancene.ws.
  4. ^ "What We Do". www.aon.com. Retrieved 13 April 2023.
  5. ^ "About Aon". Aon. Archived from the original on 8 August 2017. Retrieved 7 August 2017.
  6. ^ "AON Stock Price | Aon PLC Stock Quote (U.S.: NYSE)". MarketWatch.
  7. ^ a b Wilson, Mark R. "Combined Registry". Dictionary of Leading Chicago Businesses 1820-2000.
  8. ^ "GE Capital To Acquire An Insurer". The New York Times. 27 December 1995. Archived from the original on 2 November 2014.
  9. ^ "বাবু88 কোম্পানি সম্পর্কে" (in Bengali). 11 July 2022. Retrieved 18 January 2023.
  10. ^ "Aon Korea 1st Foreign Broker Licensed in Nation". www.joc.com. Retrieved 30 May 2021.
  11. ^ Melissa Wahl (9 February 2000). "Tight Margins Help Take Toll on Aon Corp". Chicago Tribune. Retrieved 30 May 2021.
  12. ^ Brick, Michael (2 November 2000). "Aon Tumbles After Restructuring". TheStreet. Retrieved 30 May 2021.
  13. ^ "ABIR announces new officers with Pina Albo elected as new Chair - Reinsurance News". ReinsuranceNe.ws. 10 January 2023. Retrieved 18 January 2023.
  14. ^ Barr, Alistair. "Aon sells most of its Endurance stake". MarketWatch. Retrieved 30 May 2021.
  15. ^ "Aon Sells Combined to ACE for $2.4 Billion; Sterling to Munich Re". Insurance Journal. 17 December 2007. Archived from the original on 25 May 2013. Retrieved 14 March 2013.
  16. ^ "Aon sells two insurance units for $2.75B". USA Today. 17 December 2007. Retrieved 14 March 2013.
  17. ^ Jerry Geisel (22 August 2008). "Aon to Acquire Broker Benfield for $1.75 Billion". Insurance Journal. Archived from the original on 25 May 2013. Retrieved 14 March 2013.
  18. ^ "Aon completes acquisition of Hewitt". Business Insurance. 1 October 2010. Retrieved 15 March 2013.
  19. ^ "Aon Buys Hewitt in Move to Expand Its Consulting Arm". The New York Times. 12 July 2010. Archived from the original on 1 June 2013. Retrieved 15 March 2013.
  20. ^ Tadena, Nathalie; Dean, Jason; Scism, Leslie (14 January 2013). "Aon Shifts Headquarters to London". The Wall Street Journal. Archived from the original on 23 July 2015. Retrieved 10 May 2013. — Note: only first hundred or so words archived, but that is sufficient to support fact here.
  21. ^ a b Roumeliotis, Greg (9 February 2017). "Exclusive: Blackstone to acquire Aon's benefits outsourcing for..." Reuters. Archived from the original on 3 August 2017.
  22. ^ "Aon Names Andersen President, While Former Co-President O'Connor Exits". Insurance Journal. 24 February 2020. Retrieved 25 February 2020.
  23. ^ "AON to repay 20% pay cuts". Insurance Age. 30 June 2020. Retrieved 30 June 2020.
  24. ^ "WTW calls shareholder meeting on AON deal". Insurance Age. 9 July 2020. Retrieved 11 July 2020.
  25. ^ Shawn Langlois (14 September 2001). "Companies slowly add to WTC reports". CBS.MarketWatch.com. Archived from the original on 13 October 2012. Retrieved 23 February 2012.
  26. ^ Aaron Siegel (11 September 2007). "Industry honors fallen on 9/11 anniversary". InvestmentNews. Archived from the original on 15 September 2007. Retrieved 23 February 2012.
  27. ^ Kiehl, Stephen (10 September 2006). "'I think we're getting hijacked'". The Baltimore Sun. Archived from the original on 26 July 2017. Retrieved 26 July 2017.
  28. ^ "Aon Settles Case On Commissions For $190 Million". The Wall Street Journal. 7 March 2005. Retrieved 28 September 2021.
  29. ^ Scott Sinclair (8 January 2009). "Aon hit with record FSA fine". Ifaonline.co.uk. Archived from the original on 25 July 2011. Retrieved 23 February 2012.
  30. ^ The FBI (20 December 2011). "Aon Pays $1.76 Million Criminal Penalty" (Press release). The FBI. Archived from the original on 10 May 2012.
  31. ^ US Securities and Exchange Commission (20 December 2011). "SEC Files Settled FCPA Charges Against AON Corporation". US Securities and Exchange Commission. Archived from the original on 31 May 2017.
  32. ^ "Aon's Affinity Business Acquires WedSafe, Inc. Wedding Insurance and Private Event Insurance programs". Aon plc Global Media Relations. Retrieved 11 February 2019.
  33. ^ Goldstein, Steve (22 August 2008). "Aon to buy Benfield for $1.4 billion". Archived from the original on 2 January 2014. Retrieved 15 November 2019.
  34. ^ "Hewitt Associates Acquires Senior Educators Ltd". Aon. 5 March 2010. Archived from the original on 22 March 2012. Retrieved 23 February 2012.
  35. ^ Bruce Japsen and Becky Yerak (12 July 2010). "Aon agrees to buy Hewitt Associates". Chicago Breaking Business. Archived from the original on 15 July 2010. Retrieved 24 February 2012.
  36. ^ "Aon South Africa Receives Competition Commission Approval for Acquisition of Glenrand MIB". Bloomberg BusinessWeek. 7 April 2011. Archived from the original on 30 May 2013. Retrieved 18 March 2013.
  37. ^ "Aon buys Ward Financial; terms not disclosed". Bloomberg BusinessWeek. 19 July 2011. Archived from the original on 2 November 2012. Retrieved 24 February 2012.
  38. ^ "Aon Corp. to acquire OmniPoint's Workday Services company". 22 October 2012. Archived from the original on 27 April 2016.
  39. ^ "Aon to Acquire National Flood Services, Boost Flood Insurance Biz - Analyst Blog". Archived from the original on 15 July 2014.
  40. ^ "Aon Completes Acquisition of Risk Management Firm Stroz Friedberg". Archived from the original on 2 February 2017.
  41. ^ "Aon Hewitt acquires India's CoCubes". The Economic Times. 14 November 2016. Archived from the original on 21 October 2017.
  42. ^ Jamerson, Joshua (10 February 2017), Blackstone to Buy Aon's Human Resources Outsourcing Platform for $4.3 Billion, New York City: The Wall Street Journal, archived from the original on 11 February 2017
  43. ^ Roumeliotis, Greg. "Aon to buy real estate investment firm Townsend from Colony NorthStar". Reuters. No. 1 September 2017. Archived from the original on 5 September 2017. Retrieved 5 September 2017.
  44. ^ Dummett, Ben. "Insurance Broker Aon Strikes Year's Biggest M&A Deal on Tumultuous Markets Day". WSJ.
  45. ^ "Aon's $80 Billion Merger With Willis Towers Watson – Global Legal Chronicle". 11 March 2020. Retrieved 11 March 2020.
  46. ^ Bauer, Elizabeth. "Aon Buys Willis Towers Watson: Another Waypoint in the Demise of Employer Pensions". Forbes. Retrieved 27 March 2020.
  47. ^ Gangcuangco, Terry. "Willis Towers Watson board under probe over merger agreement with Aon". Insurance Business Mag. Retrieved 21 May 2020.
  48. ^ Ben Dummett; Leslie Scism; Dave Sebastian (26 July 2021). "Aon, Willis Towers Scrap $30 Billion Merger Amid Antitrust Impasse". The Wall Street Journal. Retrieved 26 July 2021.
  49. ^ Joshua, Josyana; Smith, Alison Nicole (20 December 2023). "Aon Agrees to Buy NFP for About $13.4 Billion in Cash and Stock". Bloomberg.com. Retrieved 20 December 2023.
  50. ^ Ben-Hutta, Avi (7 March 2024). "Aon acquires Humn.ai's technology assets". Coverager.com. Retrieved 7 March 2024.
  51. ^ a b "Man Utd announce new shirt deal with Aon". ESPN Soccernet. 3 June 2009. Archived from the original on 17 January 2014. Retrieved 24 February 2012.
  52. ^ Ogden, Mark (7 April 2013). "Manchester United to sign £180m Aon deal to change name of Carrington training base". The Telegraph. Archived from the original on 15 March 2014. Retrieved 29 July 2014.
  53. ^ "Pension and investment provider awards 2014". Archived from the original on 19 April 2015. Retrieved 21 April 2015.
  54. ^ "Corporate Equality Index 2013" (PDF). Human Rights Campaign. Archived from the original (PDF) on 28 July 2020. Retrieved 24 May 2013.
  55. ^ "Aon". Working Mother. Archived from the original on 6 June 2013. Retrieved 24 May 2013.
  56. ^ a b "Awards & Accolades". Aon Media Room. Archived from the original on 24 May 2013. Retrieved 24 May 2013.
  57. ^ "Aon Media Room". Aon. Archived from the original on 25 May 2013. Retrieved 24 May 2013.
  58. ^ "On Top of the World". Intelligent Insurer. Archived from the original on 14 October 2013. Retrieved 24 May 2013.
  59. ^ "Awards". Reactions. Archived from the original on 28 March 2013. Retrieved 24 May 2013.
  60. ^ "Awards for Excellence 2012". PLANSPONSOR. Archived from the original on 12 April 2012. Retrieved 2 January 2014.
  61. ^ "UK Pensions Awards 2012 – The Winners". Professional Pensions. 10 May 2012. Archived from the original on 30 August 2012. Retrieved 24 May 2013.
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