With a name meaning "oneness" in Gaelic, Aon unites brokerage, risk, and HR services. The company, a top global insurance and reinsurance broker, operates in two main fields: commercial brokerage and human resource services. The company's Aon Risk Solutions brokerage unit provides retail property/casualty, liability, workers' compensation, and other insurance products for groups and businesses, as well as risk management services. Through Aon Benfield, it handles reinsurance brokerage and analysis services to protect insurers from losses on traditional and specialty property/casualty policies. Aon's HR Solutions consulting division is led by Aon Hewitt, which specializes in employee benefits administration.
Aon's largest operating segment is its risk solutions segment, which holds all of the insurance and reinsurance brokerage operations and accounts for about two-thirds of sales. The largest portion of that comes from the retail insurance brokerage business (operating as Aon Risk Solutions), which places policies on behalf of insurance companies for a commission. The unit also earns fees from its retail clients, which include small to large corporations and other professional organizations, as well as individuals. In addition, Aon Risk Solutions provides risk identification and assessment, cost-control and claims management, affinity (professional liability) programs, and other administrative services. The smaller Aon Benfield business places reinsurance policies and offers capital management and advisory services.
The Aon Hewitt division, accounting for the remaining third of revenues, specializes in structuring benefits programs to suit specific client needs and to control HR expenses, as well as to increase employee performance and productivity measurements.
Aon provides its brokerage and consulting services from more than 500 offices in about 120 countries; the US and Europe are its largest markets. To support its international growth initiatives in emerging markets and provide for greater financial flexibility, in 2012 the company converted from a US-based corporation to a UK-based public limited company. Aon moved its headquarters from Chicago to London and changed the parent entity name from Aon Corporation to Aon plc. The Chicago location continues on as the headquarters for operations in the Americas (Aon's largest geographic segment accounting for more than half of annual revenues).
Aon has worked diligently over the years to expand in its core business areas. The company primarily strengthens its retail insurance brokerage network through purchases of smaller agencies. However, Aon's brokerage acquisition strategy slowed in the recent years as the company became intent on aggressively growing its smaller human resources division.
While it continues to pursue growth through acquisitions, Aon is also taking steps to simplify its organization to focus on its core brokerage and consulting divisions. Market conditions such as fluctuating insurance rates and strong competition, as well as the financial impact of an unsteady economy on existing and potential clients, have led the company to enact ongoing restructuring and cost-cutting efforts, including an approximate 15% workforce reduction between 2007 and 2010. Following the Hewitt acquisition, Aon announced further job cuts as it integrated and streamlined the combined organization. To further focus on core operations, the company has exited noncore businesses, including its traditional insurance underwriting operations (divested in 2008 and 2009).
In 2017 Aon agreed to sell its human resources outsourcing business to private equity firm Blackstone Group for up to $4.8 billion. The business was acquired as part of the 2010 acquisition of Hewitt Associates. The deal will help Aon focus on its core professional services offerings, as well as on areas including cybersecurity and health insurance.
Mergers and Acquisitions
Aon's retail insurance brokerage unit acquired four brokerage businesses in 2011, including UK firm Glenrand MIB. The brokerage business added several more entities in 2010, including Irish firm Insure.ie and Italian broker Rasini Vigano.
In one of its largest deals yet, Aon spent $4.9 billion to acquire HR firm Hewitt Associates, which specialized in business process outsourcing (BPO) and benefits administration for large corporations, in late 2010. The deal tripled the size of the company's HR outsourcing and consulting operations, allowing it to compete with similar operations of its top brokerage rival, Marsh & McLennan, and other leading global consulting players. Hewitt Associates was combined with the existing HR business, Aon Consulting Worldwide, to form the Aon Hewitt entity.