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1. Company Snapshot

1.a. Company Description

Aon plc, a professional services firm, provides advice and solutions to clients focused on risk, retirement, and health worldwide.It offers commercial risk solutions, including retail brokerage, cyber, and global risk consulting solutions, as well as acts as a captives management; and health solutions, such as health and benefits brokerages, and health care exchanges.The company also provides treaty and facultative reinsurance, as well as insurance-linked securities, capital raising, strategic advice, restructuring, and mergers and acquisitions services; and corporate finance advisory services and capital markets solutions products.


In addition, it offers strategic design consulting services on their retirement programs, actuarial services, and risk management services; advice services on developing and maintaining investment programs across a range of plan types, including defined benefit plans, defined contribution plans, endowments, and foundations for public and private companies, and other institutions; and advice and solutions that help clients in risk, health, and wealth through commercial risk, reinsurance, health, and wealth solutions.Further, the company offers CoverWallet; Affinity; Aon Inpoint; CoverWallet; and ReView services.Aon plc was founded in 1919 and is headquartered in Dublin, Ireland.

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1.b. Last Insights on AON

Negative drivers behind Aon plc's recent 3 months performance include escalating compensation and benefits costs, partly offset by new business growth in Commercial Risk Solutions and Health Solutions businesses. The company's Q2 results were impacted by rising costs, which may pressure its margins. Additionally, Aon's strategic investment in eMed to scale its GLP-1 population health platform may divert resources and attention away from other areas of the business.

1.c. Company Highlights

2. Aon Delivers Strong Q4 2025 Results with 5% Organic Revenue Growth

Aon reported a robust Q4 2025, with organic revenue growth of 5%, total revenue of $4.3 billion, and adjusted operating margin expansion of 220 basis points to 35.5%. Adjusted EPS came in at $4.85, beating estimates of $4.75, representing a 10% year-over-year increase. For the full-year 2025, Aon achieved 6% organic revenue growth, total revenue of $17 billion, and adjusted operating margin of 32.4%. The company's strong financial performance was driven by its commercial risk and reinsurance businesses, which delivered 6% or better growth in Q4 2025.

Publication Date: Feb -02

📋 Highlights
  • 2025 Financial Performance:: Organic revenue growth of 6%, adjusted operating margin of 32.4%, and adjusted EPS of $17.07 (+9% YoY), with $3.2 billion in free cash flow (+14% YoY).
  • Q4 2025 Highlights:: Organic revenue growth of 5%, 35.5% adjusted operating margin (+220 bps YoY), and adjusted EPS of $4.85 (+10% YoY), alongside $1.3 billion in Q4 free cash flow.
  • Capital Deployment & Leverage:: $1.9 billion in debt reduction, leverage ratio down to 2.9x, $1 billion returned to shareholders via buybacks, and $7 billion in available capital for 2026.
  • 2026 Guidance:: Mid-single-digit organic revenue growth, 70-80 bps margin expansion, $4.3 billion free cash flow, and $1 billion in share repurchases, supported by a $7 billion capital runway.
  • Strategic Priorities:: Technology investments (e.g., Aon Broker/Claims Copilot), $450 million AAU savings target, and a focus on high-margin M&A opportunities, particularly in data centers and AI-driven markets.

Segment Performance

Aon's commercial risk business saw 6% growth for the year and 6% or better for the last three quarters, driven by global strength in core P&C, net new business retention, and priority growth areas like construction, including data center contributions. The company's reinsurance business also performed well, contributing to the overall growth.

Guidance and Outlook

For 2026, Aon expects mid-single-digit or greater organic revenue growth, supported by investments in revenue-generating talent, Aon client leadership, and the middle market strategy. The company forecasts operating margin expansion of 70 to 80 basis points, strong adjusted EPS growth, and double-digit free cash flow growth. Aon is confident in its ability to deliver on its growth expectations, driven by its investments in talent and technology.

Valuation and Return Metrics

With a P/E Ratio of 20.35 and an EV/EBITDA of 15.94, Aon's valuation appears reasonable, considering its strong financial performance and growth prospects. The company's ROIC of 13.18% and ROE of 45.99% indicate a high level of profitability. Aon's Free Cash Flow Yield of 4.28% is also attractive, driven by its expected double-digit free cash flow growth in 2026.

Capital Management

Aon generated $1.3 billion of free cash flow in Q4 2025, bringing the full-year total to $3.2 billion, a 14% increase from 2024. The company returned $1 billion in capital to shareholders, including $1 billion in share repurchases, and has $7 billion of available capital, providing strategic flexibility for investments and capital return.

3. NewsRoom

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Aon plc $AON Position Lowered by Mawer Investment Management Ltd.

Feb -02

Source: defenseworld.net

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AON Q4 Earnings Call Highlights

Feb -01

Source: defenseworld.net

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Mirae Asset Global Investments Co. Ltd. Purchases 3,100 Shares of Aon plc $AON

Jan -31

Source: defenseworld.net

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Aon Earnings Review: Solid Results Underscore Long-Term Investment Case

Jan -31

Source: seekingalpha.com

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Aon PLC (AON) Q4 2025 Earnings Call Highlights: Strong Revenue Growth and Strategic Innovations Propel Performance

Jan -30

Source: gurufocus.com

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Aon plc (AON) Q4 2025 Earnings Call Transcript

Jan -30

Source: seekingalpha.com

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Aon Q4 Earnings Top Estimates on New Business Growth, Strong Retention

Jan -30

Source: zacks.com

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Aon (AON) Q4 Earnings: How Key Metrics Compare to Wall Street Estimates

Jan -30

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.83%)

6. Segments

Risk Capital

Expected Growth: 6.5%

Risk Capital's 6.5% growth is driven by Aon's robust broking capabilities, expanded product offerings, and strategic acquisitions. The segment benefits from increased demand for risk management solutions, particularly in emerging markets. Aon's data analytics and digital platforms also enhance client engagement, driving organic growth.

Human Capital

Expected Growth: 7.5%

Aon's Human Capital segment growth of 7.5% is driven by increasing demand for data-driven HR solutions, expansion of its health and benefits business, and strategic acquisitions. The segment's strong performance is also attributed to its robust technology platform and growing adoption of its Workday and ADP integrations.

Corporate/Eliminations

Expected Growth: 5.0%

The 5.0% growth in Corporate/Eliminations at Aon plc is driven by organic growth, pricing strategies, and favorable market conditions. The segment benefits from a strong global presence, diversified product offerings, and efficient cost management. Additionally, Aon's investments in digital transformation and innovation contribute to revenue expansion and improved profitability.

7. Detailed Products

Commercial Risk Solutions

Aon provides commercial risk solutions to help clients manage and mitigate risks associated with their businesses, including property, casualty, and liability risks.

Reinsurance Solutions

Aon's reinsurance solutions help clients manage and transfer risk to capital market investors, providing an alternative to traditional reinsurance.

Retirement and Health Solutions

Aon provides retirement and health solutions to help clients manage their employee benefits and pension plans, including actuarial services, health consulting, and retirement plan design.

Cyber Risk Solutions

Aon's cyber risk solutions help clients manage and mitigate cyber risks, including cyber threat assessment, incident response planning, and cyber insurance.

Data and Analytics

Aon's data and analytics solutions provide clients with insights and intelligence to inform their risk management and business decisions, including data analysis, modeling, and benchmarking.

Outsourcing and Administration

Aon provides outsourcing and administration services to help clients manage their HR and benefits functions, including benefits administration, payroll processing, and HR consulting.

8. Aon plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Aon plc operates in the insurance and reinsurance industry, where substitutes such as captive insurance, self-insurance, and alternative risk transfer (ART) solutions exist. However, these substitutes are not perfect and have limitations, which maintains a moderate threat level.

Bargaining Power Of Customers

Aon plc's customers are typically large corporations and individuals seeking insurance and reinsurance services. These customers have limited bargaining power due to the complexity of insurance products and the company's strong market position.

Bargaining Power Of Suppliers

Aon plc's suppliers are primarily insurance and reinsurance companies, which are numerous and competitive. This competition limits the bargaining power of individual suppliers.

Threat Of New Entrants

The insurance and reinsurance industry has high barriers to entry, including regulatory requirements, capital requirements, and established relationships with clients. This limits the threat of new entrants.

Intensity Of Rivalry

The insurance and reinsurance industry is highly competitive, with many established players competing for market share. Aon plc competes with other major brokers and insurers, leading to a high level of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 74.51%
Debt Cost 5.61%
Equity Weight 25.49%
Equity Cost 8.71%
WACC 6.40%
Leverage 292.31%

11. Quality Control: Aon plc passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
KBC

A-Score: 7.2/10

Value: 5.3

Growth: 6.8

Quality: 6.0

Yield: 7.5

Momentum: 9.0

Volatility: 8.3

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Allianz

A-Score: 7.0/10

Value: 5.9

Growth: 4.8

Quality: 7.0

Yield: 8.1

Momentum: 7.0

Volatility: 9.3

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Deutsche Bank

A-Score: 5.7/10

Value: 6.7

Growth: 4.9

Quality: 5.1

Yield: 3.1

Momentum: 9.5

Volatility: 4.7

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Deutsche Börse

A-Score: 5.6/10

Value: 3.2

Growth: 7.9

Quality: 6.7

Yield: 3.8

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

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Willis Towers Watson

A-Score: 5.1/10

Value: 3.6

Growth: 4.0

Quality: 8.1

Yield: 1.9

Momentum: 4.0

Volatility: 9.0

1-Year Total Return ->

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Aon

A-Score: 4.7/10

Value: 1.8

Growth: 6.8

Quality: 6.3

Yield: 1.2

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

349.61$

Current Price

349.61$

Potential

-0.00%

Expected Cash-Flows