31-Jul-2015 Aon Plc15-Earnings... · 2015-10-16 · Aon Plc (AON) Q2 2015 Earnings Call Corrected...

Corrected Transcript

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31-Jul-2015

Aon Plc (AON)

Q2 2015 Earnings Call

Aon Plc (AON) Q2 2015 Earnings Call

Corrected Transcript 31-Jul-2015


2 Copyright © 2001-2015 FactSet CallStreet, LLC

CORPORATE PARTICIPANTS

Gregory C. Case President, CEO & Executive Director

Christa Davies Chief Financial Officer & Executive Vice President

......................................................................................................................................................................................................................................................

OTHER PARTICIPANTS

Adam Klauber William Blair & Co. LLC

David Anthony Styblo Jefferies LLC

Sarah E. DeWitt JPMorgan Securities LLC

Elyse B. Greenspan Wells Fargo Securities LLC

Brian Robert Meredith UBS Securities LLC

Meyer Shields Keefe, Bruyette & Woods, Inc.

Kai Pan Morgan Stanley & Co. LLC

Michael Nannizzi Goldman Sachs & Co.

Paul Newsome Sandler O'Neill & Partners LP

Jay Arman Cohen Bank of America Merrill Lynch

......................................................................................................................................................................................................................................................

MANAGEMENT DISCUSSION SECTION

Operator: Good morning, and thank you for holding. Welcome to Aon Plc's Second Quarter 2015 Earnings

Conference Call. At this time, all parties will be in a listen-only mode until the question-and-answer portion of

today's call. If anyone has an objection, you may disconnect your line at this time.

I would also like to remind all parties that this call is being recorded and that it is important to note that some of

the comments in today's call may constitute certain statements that are forward-looking in nature as defined by

the Private Securities Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could

cause actual results to differ materially from historical results or those anticipated. Information concerning risk

factors that could cause such differences are described in the press release covering our second quarter 2015 press

release, as well as having been posted on our website.

Now, it is my pleasure to turn the call over to Greg Case, President and CEO of Aon Plc. ......................................................................................................................................................................................................................................................


Thanks very much and good morning, everyone. And welcome to our second quarter 2015 conference call. Joining

me here today is our CFO, Christa Davies. And I would note that there are slides available on our website for you

to follow along with our commentary today. Consistent with previous quarters, I'd like to cover two areas before

turning the call over to Christa for further financial review. First, is our performance against key metrics we





communicate to shareholders, and second is overall organic growth performance including continued areas of

strategic investment across Aon.

On the first topic, our performance versus key metrics. Each quarter, we measure our performance against the key

metrics we focus on achieving over the course of the year: grow organically, expand margins, increase earnings per

share and deliver free cash flow growth.

Turning to slide three, in the second quarter, organic revenue growth was 2% overall, with growth across both

segments, highlighted by 4% growth in the Americas' retail brokerage business. Operating margin increased 80

basis points reflecting strong operating performance in Risk Solutions. EPS increased 5% to $1.31, including

$0.08 unfavorable impact from foreign currency translation, reflecting growth, operating improvement and

effective capital management. And finally, free cash flow increased 2% to $223 million year-to-date driven by a

10% increase in cash flow from operations, partially offset by higher capital expenditures.

Turning to slide four, on the second topic of growth and investment. I want to spend the next few minutes

discussing the quarter for both of our segments. In Risk Solutions, organic revenue growth was 2% overall,

compared to 1% in the prior year quarter, reflecting solid growth across retail brokerage partially offset by a

modest decline in Reinsurance. As we discussed previously, we're driving a set of initiatives and making strategic

investments that are strengthening underlying performance and position our Risk Solutions segment for long-

term growth and improved operating leverage, with management of our renewal book through Aon Client Promise

and retention rates of more than 90% on average across retail brokerage.

New business generation of more than $216 million across our retail business, 17 consecutive quarters of net new

business trends in core treaty reinsurance, an increased operating leverage from our investments in innovative

technology and data and analytics including the Global Risk Insight Platform which now captures over 2.8 million

trades and $135 billion of bound premium with more than 40 carriers utilizing the platform today.

Review, our reinsurer dashboard, combined with strategic consulting, tells reinsurers to be more effective markets

for ceding company clients. And our Aon Broking initiative to better match client need with insurer appetite for

risk and to indemnify structured portfolio solutions. And finally, we're expanding our content and global footprint

through tuck-in acquisitions that increase scale in emerging markets or expand capability.

Reflecting on the individual businesses within risk solutions. In the Americas, organic revenue growth was 4%

compared to 2% in the prior year quarter. Exposures continue to be positive across the region, while the impact on

pricing was modestly negative, resulting in continued stable market impact.

We saw strong growth across Latin America, reflecting both double-digit new business generation and strong

management of the renewal book portfolio. We also generated strong growth across our Affinity business. And in

U.S. Retail, we saw solid new business generation with record retention of greater than 93% for the second

consecutive quarter.

In International, organic revenue growth was 2%. Exposures continue to be stable, and the impact from pricing

was modestly negative on average, driven by fragile market conditions in many countries across Europe and

pressure in the Pacific region. We saw strong growth across Asia, with double-digit growth in many countries

including Hong Kong, China, Japan and Singapore. Results also reflect solid growth in New Zealand, driven by

both new business generation and strong management of the renewal book portfolio.

In Continental Europe, new business generation continued to be positive. And with strong leadership across the

region, we're well positioned to benefit from potential improvements in the macroeconomic environment.





In Reinsurance, organic revenue declined 1% compared to a decline of 4% in the prior year quarter. Results reflect

a significant unfavorable market impact in the quarter as excess capital in the space continues to pressure global

treaty pricing. We saw continued new business generation in treaty placements as clients take advantage of lower

pricing by purchasing more coverage and strong growth in facultative placements, partially offset by a decline in

capital markets transactions. And while the rate of price decline is decelerated compared to the previous year, a

record amount of capital continues to place pressure on the market.

And finally, new opportunities for growth combined with industry-leading data and analytics is positioning the

business for a return to growth over the next 12 months. Overall, across Risk Solutions, we are on track for low- to

mid-single digit organic growth for the full-year 2015 as we continue to drive new business generation, strong

retention and take a unified approach to serving clients across the portfolio with industry-leading data and

analytics.

Turning to HR Solutions. Organic revenue growth was 2%, similar to the prior-year quarter, with growth across

both major businesses and in high demand areas where we have invested in innovative solutions and client-

serving capability.

These investments reflect Aon Hewitt's client leadership and in-depth understanding and influence of market

trends, including continued investment to strengthen our comprehensive portfolio of health solutions, covering

the full spectrum of benefit strategies and funding choices from self-insured to fully insured. This includes our

industry-leading position in healthcare exchanges for active employees and retirees and we look forward to

updating you on our continued progress later this year.

Solutions to de-risk pension plans and support for delegated investment solutions as clients manage risks against

pension schemes that are frozen, largely underfunded and facing regulatory changes. Investment in Software-as-

a-Service models in our HR BPO business. And finally, we're expanding our international footprint to support a

global workforce at the local level, with investments in key talent and capabilities across emerging markets.

Turning to individual businesses within HR Solutions. In Consulting Services, organic revenue growth was 3%

compared to 1% in the prior-year quarter. We saw continued growth in retirement consulting driven by demand

for delegated investment consulting services. Results also reflect solid growth and compensation consulting and

modest growth in communications consulting.

In Outsourcing, organic revenue growth was 3%, similar to the prior year quarter. We saw growth in HR BPO

driven by new client wins in cloud-based solutions. Results also reflect growth in benefits administration driven

by demand for discretionary services.

Overall, for HR Solutions, we are on track for mid-single digit organic growth for the full year 2015 driven by

growth in high demand areas where we made investments as well as leadership across our core businesses.

In summary, our industry-leading platform of client-serving capabilities across Risk and HR Solutions combined

with investments in data and analytics continues to position the firm for long-term organic growth and improved

operating leverage.

With that said, I'm now pleased to turn the call over to Christa for further financial review. Christa. ......................................................................................................................................................................................................................................................





Christa Davies Chief Financial Officer & Executive Vice President

Thanks so much, Greg, and good morning everyone. As Greg noted, our second quarter results reflect double-digit

adjusted EPS growth when excluding the impact of FX, driven by organic growth in both Risk and HR Solutions,

strong operating margin improvement and effective capital management, including the repurchase of

approximately 300 million of ordinary shares in the quarter.

Now, let me turn to financial results for the quarter on page six of the presentation. Our core EPS performance

excluding certain items increased 5% to $1.31 per share for the second quarter compared to $1.25 in the prior-year

quarter. Certain items that were adjusted for in core EPS performance and highlighted in the schedules on page 12

of the press release include non-cash intangible asset amortization and legacy litigation expenses relating to

events that primarily occurred 10 or more years ago.

Further, included in the results was an $0.08 per share unfavorable impact related to foreign currency translation

due to the U.S. dollar strengthening against most major currencies. Excluding the impact of foreign currency

translation, our core earnings per share in the second quarter would have been $1.39, up 11% from the prior-year

quarter. Going forward, if currency were to remain stable at today's rates, we would expect a similar impact in Q3

and a lesser impact in Q4 as we continue to work through unfavorable year-over-year headwinds.

Now let me talk about each of the segments on the next slide. In our Risk Solutions segment, organic revenue

growth was 2%. Operating margin increased 150 basis points to 24.2%, and operating income was roughly flat to

the prior-year quarter. Operating income included a $26 million unfavorable impact from foreign currency

translation. Excluding this impact, operating income increased 6% compared to the prior-year quarter.

Strong operating margin improvement of 150 basis points reflects solid organic revenue growth, return on our

investments in data and analytics across the portfolio, and a 60 basis point favorable impact from foreign currency

translation. Excluding the favorable impact from foreign currency translation, underlying operating margin

improved 90 basis points in the quarter.

Overall in Q2, we delivered strong underlying operating performance in Risk Solutions despite continued

headwinds from an unfavorable market impact in Reinsurance, fragile market conditions in Europe and

historically low interest rates. If interest rates were to rise, we believe we have significant leverage through

improving interest rate environment, as every 100 basis point rise in global interest rates should result in

approximately $45 million of investment income.

For the first six months, operating margin improved 50 basis points with no material impact from foreign

currency translation. This places us firmly on track for further margin expansion in 2015 towards our long-term

target of 26%, driven by growth, return on investments, and expense discipline as we optimize our global cost

structure in areas such as IT, real estate and procurement.

Turning to the HR Solutions segment, organic revenue growth was 2%, operating margin was flat at 13.2% and

operating income was also roughly flat to the prior-year quarter. Solid organic revenue growth, expense discipline

and a 10 basis point favorable impact from foreign currency translation were offset by continued investments to

support future growth. For the first six months, results reflect modestly better than expected performance.

Combined with our outlook for seasonal strength in the second half of the year, we are well on track for improved

operating income performance for the full year and further margin expansion towards our long-term target of

22%.





Now, let me discuss a few of the line items outside of the operating segments on slide nine. Unallocated expenses

were flat at $41 million; interest income increased $2 million to $4 million; interest expense increased $3 million

to $68 million due to an increase in total debt outstanding. Other income of $1 million primarily includes net

gains from certain long-term investments and the sale of certain businesses.

Going forward, we expect a run rate of approximately $45 million per quarter of unallocated expense, $2 million

per quarter of interest income. Interest expense in the third quarter is expected to be approximately $72 million or

modestly higher than our run rate due to the overlap of the $600 million of notes placed in May to replace the

notes due in September. We would expect interest expense to decline to $68 million per quarter thereafter.

Turning to taxes, the adjusted effective tax rate on net income from continuing operations, excluding the

applicable tax impact associated with expenses related to legacy litigation, increased to 18% compared to the prior

year quarter at 17.5%. The prior-year quarter was favorably impacted by certain discrete tax adjustments.

Lastly, average diluted shares outstanding decreased to 286.7 million in the second quarter, compared to 301.6

million in the prior year quarter. The company repurchased 3 million Class A ordinary shares for approximately

$300 million in the second quarter. The company has $5.1 billion of remaining authorization under its share

repurchase program.

Actual shares outstanding on June 30 were 279.8 million, and there are approximately 7 million additional

dilutive equivalents. Estimated Q3 2015 beginning dilutive share count is approximately 287 million, subject to

share price movement, share issuance and share repurchase.

Now let me turn to the next slide to highlight our solid balance sheet and strong cash flow growth on slide 10. At

June 30, 2015, cash and short-term investments were $851 million. Total debt outstanding increased to

approximately $6.1 billion, and total debt-to-EBITDA on a GAAP basis increased to 2.5 times compared to 2.1

times at March 31, 2015.

Cash flow from operations increased 10%, or $32 million, to $365 million driven by decline in pension

contributions, restructuring and cash paid for taxes, partially offset by a significant increase in cash paid to settle

legacy litigation.

Free cash flow, as defined by cash flow from operations less CapEx, increased 2% or $5 million to $223 million,

reflecting higher cash flow from operations, partially offset by a $27 million increase in CapEx. The anticipated

increase in capital expenditure is associated with investment in certain real estate projects as we continue to

optimize our real estate portfolio globally.

Looking forward, we expect significant free cash flow growth in the second half of the year, leading to double digit

growth in free cash flow for the full year 2015 including the legacy litigation impact.

The increase in cash paid to settle legacy litigation in the quarter will provide a tailwind to free cash flow growth in

2016.

Turning to the next slide to discuss our significant financial flexibility and the opportunity to further increase cash

flow generation. We value the firm based on free cash flow and allocate capital to maximize free cash flow returns.

There are four primary areas that are expected to contribute to our goal of delivering $2.3 billion or more for the

full the year 2017.





From the graph in the presentation, based on current assumptions, we expect annual free cash flow to increase by

approximate $230 million from year-end 2014 to year-end 2017, based only on a reduction in cash used for

pensions, restructuring and capital expenditure. Combined with operating improvements in the business, lower

cash tax payments and working capital improvements, we have line of sight to achieve our expectations for

substantial cash flow generation.

Regarding our pension plans, we've taken significant steps to reduce volatility and liability as we've closed plans to

new entrants and frozen plans from accruing additional benefits, and continue to de-risk certain plan assets. We

currently expect contributions to decline by roughly $96 million to $220 million in 2015 and continue to decline

thereafter. These expectations assume no change in current interest rates. A rise in global interest rates could

potentially decrease contributions further.

Regarding our restructuring program, cash payments were $82 million in 2014. As all charges related to the

restructuring program have now been incurred, we expect cash payments to decline by $49 million to

approximately $33 million in 2015 and continue to decline each year thereafter.

In summary, we delivered positive performance across each of our key metrics, overcoming a significant headwind

from foreign currency translation. We delivered strong underlying earnings growth as we continue to manage

expense and create greater operating leverage from our investment in data and analytics.

Combined with strong free cash flow growth in the second half and for the full year, we are firmly on track towards

our goal of generating more than $2.3 billion of free cash flow for the full year 2017. With a strong balance sheet

and significant financial flexibility, we have positioned the firm for significant shareholder creation in 2015 and

beyond.

With that, I would like to turn the call back over to the operator for questions.





QUESTION AND ANSWER SECTION

Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] One moment

please for our first question. Our first question came from the line of Adam Klauber of William Blair. Your line is

now open. ......................................................................................................................................................................................................................................................

Adam Klauber William Blair & Co. LLC Q Thanks. Good morning, everyone. ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Hi, Adam. ......................................................................................................................................................................................................................................................

Adam Klauber William Blair & Co. LLC Q On HR Solutions, Christa, you mentioned that you expect solid margin expansion and growth in income. Can we

expect just – not exactly – but the range of incremental change we saw in 2014 to be roughly around the same in

2015 for both the margin and income? ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A We haven't given specific guidance on operating income growth for 2015. What we can say, Adam, is we believe we

will deliver mid-single digit revenue growth, operating income growth and margin expansion for the full year, and

you've seen us do that in both 2013 and 2014 in HR Solutions and we're well on track to deliver that for 2015. ......................................................................................................................................................................................................................................................

Adam Klauber William Blair & Co. LLC Q Okay. Okay. And then as far as health exchanges, selling season isn't done yet, but can you comment on, I guess,

activity in selling season in 2015 versus 2014? Is activity around the same, better or worse, just as far as the flow of

opportunities? And also, how big of a deal is the Cadillac tax in conversations this year? ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Well, Adam, let's start really with the overall topic here, is really around health solutions when you think about

what's out there, and we continue to see strong interest across-the-board, whether they're exchange solutions or

bundled solutions for that matter. And this is really across all client segments, needs, et cetera. And so from our

standpoint, there's been a lot of interest, continues to be a lot of interest in the pipeline around these sets of

discussions.

And it really gets to your second part of your question around what's driving it. It's really demand. Overall, health

continues to deteriorate a bit and per unit cost healthcare continues to go up. And against that, our clients are

struggling to try to deliver for their employees in the best way they possibly can, but also try to bend the cost curve

a bit.





Cadillac tax is out there on the horizon. One doesn't know exactly how it's going to get resolved, but it certainly

represents another piece of potential risk and challenge for them. So all these things are a bit of a catalyst to have

clients really try to address these issues and try to understand how they can bring best solutions for it.

And from our standpoint, we administer health benefits for 10 million covered lives, 1.2 million of which are on

the exchange. By the way, that's self-insured and fully insured. And we see a lot of positive activity against that,

and expect that'll continue into 2016, 2017 and 2018 as well ......................................................................................................................................................................................................................................................

Adam Klauber William Blair & Co. LLC Q Okay. And then finally, I think you mentioned that you expect strong free cash in the back half. Is that, potentially

we'll see corresponding pick-up in share repurchase in the back half also? ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A Yes. ......................................................................................................................................................................................................................................................

Adam Klauber William Blair & Co. LLC Q Okay. Thanks a lot. ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Sure. ......................................................................................................................................................................................................................................................

Operator: Thank you. Next question came from the line of Dave Styblo of Jefferies. Your line is now open. ......................................................................................................................................................................................................................................................

David Anthony Styblo Jefferies LLC Q Good morning. Thanks for taking the questions. ......................................................................................................................................................................................................................................................


David Anthony Styblo Jefferies LLC Q I want to start out just, again, kind of focusing a little bit more on the second half. I know we just talked about HR

Solutions and organic growth mid-single digits that implies an acceleration. Can you just parse back some of the

driver there? Is that some exchange-related activity or other things that you're seeing in the pipeline since the

comps are pretty tough year-over-year on that.

And then, also, on the other side of the business in Risk Solutions, can you maybe just give us a little bit more of a

range of how you're thinking about the organic growth and especially how Reinsurance fits into that? I think I





heard you say that you expect growth to improve, but I wasn't really clear if that was more imminent or something

a little bit longer term. ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A Sure. So Dave, I'll start on HR Solutions. Our HR Solutions business, the seasonality of that business is always

second half weighted and will remain that way for the foreseeable future for us, in both the consulting and the

outsourcing businesses. So, in the consulting business, you did see a change in patterning last year, particularly

around compensation consulting. And so, you'll see that happen predominantly in the second half of the year. And

then obviously, on the outsourcing side, our healthcare exchange business is a much more Q4-weighted activity.

And so the patterning you saw in 2014 and 2013 will repeat in 2015, meaning the revenue growth is much more

second half weighted. So, that definitely is why we feel very good about the growth in the second half of the year,

and we can see that in our pipeline today.

On the Risk side, I would say similarly, we feel really good about the Risk growth. And we're on track for low- to

mid-single digits in Risk Solutions overall. And as Greg said, Risk growth in the first half of 2015 was better than

Risk growth in the first half of 2014. And so, we're well on track to deliver great growth across Risk Solutions. ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A I wouldn't add much to that, David. If you think about the quarter, Christa was describing, we essentially – it's

another of quarter progress. Our view is we're going to deliver exactly – nothing has happened in the first half of

the year that changes our view for the full year, so this is a low- to mid-single-digit range.

I would say from an Aon Benfield standpoint, you'll note my comments, I said this is a sector that obviously has

been under some pressure given, frankly, our tremendous position in it and the price pressure that's been on it.

But we've talked about this segment returning to growth in 2016, and we anticipate it's going to do that, and also

see a number of the investments we've made in the business to create operating leverage, in fact, doing exactly

that. So, I'd point to the 4% organic in the Americas, and in particular, the U.S. number, around 93% retention for

the second consecutive quarter. This is actually tremendous progress and we think that's going to continue.

All these things are to just underscore and increase our confidence, and our ability to deliver the growth targets we

talked about at the beginning of the year. ......................................................................................................................................................................................................................................................

David Anthony Styblo Jefferies LLC Q Excellent. That's helpful. And then maybe just piggybacking off the Risk conversation there, maybe it's

attributable to the higher retention as well of some of the programs that have been going on and investing in, but

the margins were up very nice year-over-year, I think, 150 basis points to 90, excluding FX. Can you spike out

anything unusual one-timers either last year to remind us or this year besides the core improvement that you're

doing? And on the core side, is that more of a function of the Aon Broking initiative or the revenue engine to get a

higher share of wallet? Or are there other contributors that are helping just strictly on the operating expense side? ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A





Yeah. The key message, I think, you started with is foremost here, which is we will continue to invest in the

business, improve operating leverage, and increase margins as a result of that. And we're able to do that if – at

each incremental level of growth – and you're seeing us actually play that out. We'd highlight, by the way, this is

about a year for us. It's not about a single quarter. On a single quarter, 150 basis points is correct, but by the way,

we'd back out all the FX pieces against it and say it's closer to 90 basis points for the quarter, but really 50 basis

points for the first half.

So, our view is we're making good, solid progress on margin improvement. We are going to continue to do that

through the course of 2015. And what this quarter did was, it didn't change our expectation, just reinforced our

ability to do that on our march toward 26%. ......................................................................................................................................................................................................................................................

David Anthony Styblo Jefferies LLC Q Okay. And then lastly, just on the free cash flow. You're obviously reaffirming that for 2017, and that's in light of

the FX headwinds and the challenging macro backdrop when you initially set the guidance. I'm wondering relative

to your initial expectations, have you had material upside to what you were originally thinking? And I'm also

wondering how bad conditions might need to get for you to fall short of that free cash flow goal. In other words,

maybe you can give us a little more color about the assumptions for organic growth, FX and margin expansion

within that, for 2017. ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A Yeah. Certainly. And so we feel really confident about our ability to deliver on the $2.3 billion-plus of free cash

flow in calendar year 2017. And there are really four big drivers of that: continued organic growth and margin

expansion of the business; declining cash contributions to pension; restructuring and tax; and then improvements

in working capital. And we feel really good about the improvements we're making in the first half of 2015 with 2%

growth in free cash flow. And we're on track to do double-digit free cash flow growth in 2015 including the

litigation settlements, and we'll have extremely strong cash flow growth in 2016 and 2017. So we feel really good

about the path there. ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A And in respect – if you think about the quarter – the new news for the quarter is this continued positive sort of

progress on the cash-generating capability, as Christa's describing. So, overall, top-line revenue, exactly where we

thought it would be, same with margin but the cash flow generating engine against all the headwinds you've

highlighted, candidly, continues to strengthen, and we see that continuing through 2015 and in 2016 and 2017. ......................................................................................................................................................................................................................................................

David Anthony Styblo Jefferies LLC Q Okay. Thank you very much. ......................................................................................................................................................................................................................................................

Operator: Thank you. Our next question came from the line of Sarah Dewitt of JPMorgan. Your line is now open. ......................................................................................................................................................................................................................................................

Sarah E. DeWitt JPMorgan Securities LLC Q Hi. Good morning. ......................................................................................................................................................................................................................................................





Gregory C. Case President, CEO & Executive Director A Hi, Sarah. ......................................................................................................................................................................................................................................................

Sarah E. DeWitt JPMorgan Securities LLC Q On the share buybacks, how should we think about the pace of that for the rest of the year, and should the full year

2015 be lower than the full year 2014 given where we're running year-to-date? ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A Yes. So, full year 2015 share repurchase should be lower than 2014 because if you recall, Sarah, there were two

unusual sort of sources of cash, which contributed to higher than normal share repurchase than 2014. The first

was we had $300 million of excess cash on the balance sheet at year-end 2013, which we used in share repurchase

in the first quarter of 2014. And the second was we increased leverage during the year by $1.1 billion. And so,

share repurchase for the full year 2015 will be lower, but as I described earlier, I think our cash flow is seasonally

higher in the second half of any calendar year, and therefore we expect stronger share repurchase in the second

half of the year. ......................................................................................................................................................................................................................................................

Sarah E. DeWitt JPMorgan Securities LLC Q Okay, great. And then on the private health exchanges, could you just talk a little bit qualitatively how the selling

season is going? It sounds like we're hearing from others that maybe some large employers might be deferring, or

you might be seeing more adoption on self-insured exchanges versus fully insured. So if you could talk about any

of those trends, that'd be helpful. ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Yeah, we would say overall, Sarah, as I mentioned before, really for us this is about a comprehensive set of health

solutions – and those conversations be they fully insured exchanges, self-insured exchanges, traditional self-

insured bundles, the intensity of those discussions has remained very, very strong and continue into 2015 and we

anticipate into 2016 and 2017. And the pipeline continues to be also quite strong across the board. But again,

we're building a long-term platform here and for us it's not – it's even not as much about the selling season as it

was before because we're seeing more clients talk about off-cycle adoption and the different solutions.

What the clients are looking for is a way, a solution to try to manage against what is an increasing level of costs

and a set of promises they made to employees that they really want to keep, and we're trying to help them do that.

So the intensity of those conversations and the opportunity, candidly, for us to help them solve and address those

issues continues to be very strong. ......................................................................................................................................................................................................................................................

Sarah E. DeWitt JPMorgan Securities LLC Q Okay, great. Thank you. ......................................................................................................................................................................................................................................................

Operator: Thank you. Our next question came from the line Elyse Greenspan of Wells Fargo. Your line is now

open.





Elyse B. Greenspan Wells Fargo Securities LLC Q Hi. Good morning. My first question, I guess, going back to the HR Solutions segment. Through the first half of

the year, the earnings in that segment seems to be trending better than you planned. Was there anything kind of

seasonal or one-off in the Q2? And then, does that kind of change your outlook for where you were thinking about

that business at the start of the year, maybe expecting stronger growth in the second half? ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A Yeah. Great question, Elyse. I think we had originally guided to down in operating income in the first half of the

year and up in the second half of the year, so strong operating income growth for the full year 2015. And I think

the first half of the year was slightly better than our expectations. And I think we are still on track for exactly what

we guided for the full year, so I wouldn't change our full-year guidance at all. I think it was just slightly better and

I wouldn't point to any significant items. There was a range of smaller things that were slightly better than we

expected. ......................................................................................................................................................................................................................................................

Elyse B. Greenspan Wells Fargo Securities LLC Q Okay. And then on the tax rate, the adjusted rate was about 18% in the quarter, and when we think of – actually, it

was down from that 19% that you guys had kind of pointed to. In terms of modeling for the tax rate going forward,

would you change from the 19% or is there anything that kind of lowered that slightly in the quarter? ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A Great question, Elyse. Ongoing operational rate remains at 19%, subject to discrete tax adjustments. We did have

some positive discrete tax adjustments in Q2, which made the rate lower than that 19% guidance, but that is

exactly where we remain. ......................................................................................................................................................................................................................................................

Elyse B. Greenspan Wells Fargo Securities LLC Q Okay. And then back on Risk Solutions, in terms of you guys kind of pointed to what seems like a little bit of

improvement in organic revenue growth in the back half of the year since you did say Reinsurance has most likely

declined until we hit 2016, what type of improvement are you expecting in the retail, I guess, from the about 2%

growth we've seen in the first half of the year? ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Yeah. Elyse, we're still similar – this is similar to the HR Solutions story. We're exactly in the same place around –

an expectation for the year around low- to mid-single digit organic growth on the Risk side. And again, what we

said is what this quarter did was just reinforce our confidence in the ability to achieve that. And then I pointed the

longer term trends on the Reinsurance side, where we really see this business returning to growth in 2016. But our

2015 expectations remain exactly the same. Again, with the new news of the quarter being just a reinforcement of

the cash generating engine of Aon and how it's evolving. ......................................................................................................................................................................................................................................................

Elyse B. Greenspan Wells Fargo Securities LLC Q





Okay. And then lastly, on the private health care exchanges, we've seen an acquisition announced recently

between Willis and Towers Watson. Do you expect there to be, I guess, any impact on what you're doing on the

private health care exchange front from those two companies getting together? ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A I would say from our stand and point of view, if you think about the overall events, recent events really across the

board not just in our space but in the markets as well, again, we see them as reinforcing and in many respects

making more relevant the strategy we put in place and we've been pursuing, really, for the last 10 years. If you

think about industry consolidation, M&A, the risk markets, the health markets, consolidation and intermediaries,

as well as the challenges, frankly, our clients are facing in things like cyber globalization, all these things have puts

and takes. No doubt about it. But when you put them together, the overall sum, in our view, they reinforce our

strategy to be the preeminent firm focused on risk and people.

On the consolidating intermediaries from our standpoint, highlights the recognition by other players in our space,

they're seen exactly today what we saw 10 years ago. And we've been investing behind it for the last decade and we

believe the trends are real and make great opportunities for all of us. And on the consolidating market side, that's

out there both on the health and the risk side, we see this as a great opportunity to bring better and more relevant

solutions to our clients. So, in many respects, we see change as opportunity, and we're very well positioned to take

advantage of it. ......................................................................................................................................................................................................................................................

Elyse B. Greenspan Wells Fargo Securities LLC Q Okay. Thank you very much. ......................................................................................................................................................................................................................................................

Operator: Thank you. Next question came from the line of Brian Meredith of UBS. Your line is now open. ......................................................................................................................................................................................................................................................

Brian Robert Meredith UBS Securities LLC Q Thanks. A couple of quick questions here for you all. The first one, Christa, the cash impact of the litigation charge

in the quarter was the same as the earnings impact? ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A Not exactly. There's some timing elements of that. So, I think the cash impact, I'd think about over the course of

the full year. You've got, obviously, tax affects the expenses that we've got there. ......................................................................................................................................................................................................................................................

Brian Robert Meredith UBS Securities LLC Q Any guidance just so I know what the impact on free cash flow was in the quarter, just for modeling purposes? ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A Yeah. I mean, the way I'd think about it is, for the full year, just use the after-tax impact of the costs. ......................................................................................................................................................................................................................................................





Brian Robert Meredith UBS Securities LLC Q For the full year. Okay. Great. And then the second question, on the exchanges, just what does the consolidation

we're seeing in the healthcare insurance industry mean for your exchange? I know – because a big part of it is the

competition and them lowering the prices. ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Well, Brian, from our standpoint, as I said – just alluded to – for us, capability on the market side, the carrier side,

creates greater opportunity that we can bring on behalf of our clients. What I'll highlight on the active side, we've

got 30 national regional carriers sort of in the mix on the exchange side, and 90-plus carriers in the mix under

retiree side. So, for us it's not about that individual level of competition, we're creating that. That's going to be

there. It's really more around fundamental capability and what these institutions bring to the table, and we

anticipate it's going to be stronger.

And to the extent there are three on the health side that's greater than $100-billion-plus – I'm assuming all those

go through in the way planned – I'm sure they're going to be competing very, very strongly with greater capability.

And we think that's going to bode well for our clients and again, change and movement in the market actually

benefits us tremendously if we're capable of bringing good solutions to our clients. ......................................................................................................................................................................................................................................................

Brian Robert Meredith UBS Securities LLC Q Okay. And then Greg the last question, I'm just curious. There's always obviously competition for good talent

within the insurance brokerage industry. Are you seeing any pickup of late? I mean, we've seen some fairly

significant movements in the reinsurance brokerage area and some other companies talking about trying to invest

in the business. Is there any pickup right now do you think in the competition for talent? ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Brian, I really don't see it. This is – we always want to be the best place possible – where someone can come and

develop as a professional, support [indiscernible] (36:32) and serve clients. And we've been talking about this for a

long, long time. It's been part of our strategy for the last 10 years, and we've seen opportunity over that entire

period of time. And sometimes it intensifies, sometimes it wanes a bit, but it's really been a constant. And the

M&A activity obviously creates different opportunities, but I wouldn't overplay it. For us we're going to go after

the best talent in the world to support our clients and that's not going to change for Aon. ......................................................................................................................................................................................................................................................

Brian Robert Meredith UBS Securities LLC Q Great. Thanks for the answers. ......................................................................................................................................................................................................................................................

Operator: Thank you. Next question came from the line of Meyer Shields of KBW. Your line is now open. ......................................................................................................................................................................................................................................................

Meyer Shields Keefe, Bruyette & Woods, Inc. Q





Pardon me. Thanks. Good morning. Greg, you talked about tuck-in acquisitions being done. Can you give us an

update in terms of whether the pricing for the acquisitions that you're looking at, whether that pricing is changing

at all? ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A I would say, Meyer, for us, the overall marketplace continues to be very, very competitive. There's a lot of capital

out there looking at different opportunities. For us, as Christa well described, we remain constant here, too. Our

view is around return on invested capital. We're maniacally focused on bringing capability in Aon in a way that

improves and then strengthens our return on invested capital.

Christa talked about what we're doing with buyback. That's always a benchmark for us. We've got to be able to

beat that from a return on invested capital standpoint and that's how we think about our acquisitions. And we see

a very competitive market, but we also see opportunity, lots of different firms want to be part of a firm that can

actually, truly change the course of a client's performance and do this on a global basis. And this is, in many

respects, again, back to the destination of choice for talent, it's back to Brian's question a little bit. We can be a

very attractive place for those types of colleagues and for those types of firms. And we're seeing that as well. ......................................................................................................................................................................................................................................................

Meyer Shields Keefe, Bruyette & Woods, Inc. Q Okay. Thanks. And then real quickly in the slides, the uses of cash slide no longer refers to 2018. And I was hoping

you could take us through why – how that decision was made? ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A I think it's really just focused on 2017 because we've set a very specific goal of $2.3 billion of free cash flow. So, I

think it was just more around reinforcing that, Meyer. ......................................................................................................................................................................................................................................................

Meyer Shields Keefe, Bruyette & Woods, Inc. Q Okay. So, no change to the expectation beyond? ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A No. ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A No. ......................................................................................................................................................................................................................................................

Meyer Shields Keefe, Bruyette & Woods, Inc. Q Okay. Thanks. ......................................................................................................................................................................................................................................................

Operator: Thank you. Next question came from the line of Kai Pan of Morgan Stanley. Your line is now open. ......................................................................................................................................................................................................................................................





Kai Pan Morgan Stanley & Co. LLC Q Good morning. Thank you. So, first question to follow up on the merger acquisition. You have been, say, five years

since your large acquisition of Hewitt back in 2010. I just wonder, are you interested or open to any big or

transformative transactions that could enhance your franchise? ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A So Kai, for us, again, we – it's been the same strategy and approach – preeminent firm in the world focused on risk

and people. And we talked about categories around risk, retirement, health, talent, capital, et cetera. It's been a

strategy we've worked on very, very hard. And we continue to add content capability around it both in organic

investment, which you see us make quite substantially, exchanges, risk insight platform, review, et cetera. And

then, we add content, capability in the form of M&A when they can actually help us strengthen that platform. By

the way, back to the question before around, it's got to be – got to meet our return on invested capital

requirements.

And so, you'll see us kind of in the $200 million to $400 million, $500 million a year, bringing in capability like

that around the world, but we really like the platform we've got at this point, and that's what we're focused on. ......................................................................................................................................................................................................................................................

Kai Pan Morgan Stanley & Co. LLC Q Okay. That's great. And then in the past, I remember you talked about your private exchange platform that'

basically, you had said, multi-carrier and fully insured. But in the commentary, it looks like you also mentioned

about health insurer. Are you sort of like open – basically, is there – change your like platform philosophy with

regarding like either like self-insured or fully insured. ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Yeah. Really – Kai, there's really no change at all here. Again, step back, this has really always been about the

category of health for us. And in that category, we administer benefits for 10 million covered lives, so virtually

more than anybody else in the world. It was within that context that we brought about a fully-insured, multi-

carrier exchange. But we also have a full range and complement of self-insured exchanges, and a full range and

complement of bundled solutions for large market, middle market, small commercial companies. So for us, it's

about a range of health solutions, fully insured being one innovation in the context of that. And that's really what's

been the focal point from the beginning. ......................................................................................................................................................................................................................................................

Kai Pan Morgan Stanley & Co. LLC Q Okay. Great. And last question is, could you talk a bit more about your investments in the so-called cloud-based

solutions in Outsourcing business and what's the potential growth or maturity there? ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A Yeah. And you saw that, obviously, Kai, during the quarter, we saw great growth in our cloud-based solutions and

HR Solutions. As you know, we invested in two of the largest Workday implementation firms in the world –

OmniPoint in 2012 in the U.S. and then the largest EMEA implementation firm called Cloud in Q1 this year – and





that's enabling us to [ph] fast-forward that (41:21) growth. It's really addressing the client need around getting

better data on their people and driving analytics to help them manage their – one of their most important assets –

their people much more efficiently and much more effectively. And we're seeing clients increasingly choose cloud-

based solutions which is driving substantial growth for us. ......................................................................................................................................................................................................................................................

Kai Pan Morgan Stanley & Co. LLC Q Are those better margin business than traditional base, say, software-on-premise business? ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A Yeah. I mean, one of the efficiencies of that business model is it is much better margin for the clients and it's

better margin for us, too. ......................................................................................................................................................................................................................................................

Kai Pan Morgan Stanley & Co. LLC Q Okay. Well, thank you so much for all the answers. ......................................................................................................................................................................................................................................................


Operator: Thank you. Next question came from the line of Michael Nannizzi of Goldman Sachs. You may

proceed, sir. ......................................................................................................................................................................................................................................................

Michael Nannizzi Goldman Sachs & Co. Q Thanks. Greg, just one, just clarification. You mentioned in Reinsurance that data and analytics would help

reignite growth next year. Can you just talk a little bit about kind of what you mean underneath that and kind of

what opportunities you see for you to be able to leverage your analytics in order to kind of reassert growth despite

sort of market conditions? ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Yeah. So, a couple of things going on, Mike, just to be aware of. Again, if you think about where we are in Aon

Benfield, first, you understand the position of having – we have a very privileged position that our colleagues have

built over time – number one in treaty, substantially number one in facultative, number one in capital markets

and what we do there in alternative capital. And against that, obviously, we've addressed some substantial

headwinds in the treaty world, where particularly in cat, it's under pressure. And by the way, that's when the price

has been under most pressure.

It's against that, that, before we get to any analytics that the team with what the capability we've got, has been

positive for 17 consecutive quarters on net new business. So the underlying health of this business has actually

been strengthening over time. And so, start with that. So, as the price declines begin to decelerate, which they

have – still there, still substantial – that actually bodes very well for what the underlying impact is going to be

long-term.





Equally or more exciting is really what we're doing in terms of sort of finding new markets and new ideas to

deploy capital, and this is really where some of our analytics comes in. So, for example, we have done some very

innovative work in the mortgage arena in which we brought insurance capital, reinsurance capital into the

mortgage world. That's never have done before, and created some price transparency and some value from that

standpoint that just – it's really a net new area in many respects, by the way. The demand growth, by the way, is

about $6 billion in limit a year, which frankly, we haven't seen anything like in the industry since the 1990s.

So, for us, we're doing things that actually create net new opportunity. And then, much like we did with Risk

Insight Platform in the primary space, we've done with something called Review, which actually helps insurers

and reinsurers actually operate much better in the marketplace and understand where they can apply their capital

and create better returns.

So, for us, it's really threefold. One is just the basic core business and what we're doing to win new clients; and

then it's creating new markets, the example I just gave you in mortgage; and then it's actually helping our clients

to actually perform better on the Reinsurance side using data analytics like Review. So, a range of things we're

doing here that we think bode well for the future. ......................................................................................................................................................................................................................................................

Michael Nannizzi Goldman Sachs & Co. Q Appreciate that. That's very helpful answer. Thank you for that. And then, on these exchanges – and maybe I just

don't remember – but I had thought that most of the employers you guys had added, the large employers you've

added, had been on a fully insured basis. I wasn't aware that you had begun offering a self-insured option, and so

I'm just curious, have you been adding employers to that platform? And if so, just if we can get some idea of where

you are in terms of building out the scale there? Thanks. ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Yeah. Yeah. For us, Mike, it's always been about a range of health solutions. The confusion comes about because

we believe we brought forward the first ever fully insured multi-carrier exchange for big companies. And so, we

are the only ones adding to that because we really – no one had a solution for a period of time. In fact, many

actually were pushing against the whole exchange idea, and then when we start to do that, everyone loves the

exchange idea.

So, there's a bit of a semantics back and forth. For us, it's been about a range of solutions both fully insured, which

we're adding clients to. Depending on funding mechanism, some like the credit, creates a choice, and to create a

different funding mechanism around self-insured, we're happy to do that, too. And then others will say, no, let's

stay with the traditional bundled solution. And then I'd remind you again, that's 10 million covered lives for us.

So, most of anybody. So that's what we've been doing forever. So, for us, it's about a range of solutions, one piece

of which has been an important new innovation called fully insured multi-carrier. ......................................................................................................................................................................................................................................................

Michael Nannizzi Goldman Sachs & Co. Q Got it. But so, the most recent update you gave us on the 700,000 or so lives on active exchanges, so that's split up

between fully insured and self-insured? ......................................................................................................................................................................................................................................................





Gregory C. Case President, CEO & Executive Director A No, in this case, that was largely that we wanted to try to highlight the fully insured piece across the board, and

that was, again, 1.2 million lives across the exchanges. On the active side, approaching 1 million lives, 33 clients, et

cetera. That was really fully insured multi-carrier, so we could highlight that. In the fullness of time, we're going to

talk about a range of solutions beyond just fully insured. But, again, that was the innovation in the marketplace

that no one else had seen, which is why we wanted to highlight it and - ......................................................................................................................................................................................................................................................

Michael Nannizzi Goldman Sachs & Co. Q Got it. ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A – put a spotlight on it, so you can see what it looked like. ......................................................................................................................................................................................................................................................

Michael Nannizzi Goldman Sachs & Co. Q Makes sense. And then just last one if I could for Christa. The cash flow element, I mean, looks like, so – looks like

if you guys hit your margin targets that you've outlined in the slide – it seems pretty clear that you can get to that

sort of cash flow projection that you've talked about in 2017. Is that what we should be thinking about? And if not,

could you give us some idea in terms of magnitude, order of magnitude, what's going to drive us getting from cash

flow generation at this point to the sort of numbers, the $2.3 billion that you guys are talking about? And thank

you for all the answers. Appreciate it. ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A So, Michael, I think as we think about getting to the $2.3 billion in free cash flow by 2017, we have four big drivers

of getting there. The first is the revenue growth and margin expansion. The second is the decreased use of cash on

pension and restructuring. The third is decreased use of cash on taxes and the last is improved working capital.

And so, I think it's – there are sort of four big drivers that we've outlined in the presentation that really get us to

that $2.3 billion level. And I guess what I would say on margins is that we're going to continue to progress in

margin expansion in both segments, as you've seen historically. And so we'll continue to make progress. ......................................................................................................................................................................................................................................................

Michael Nannizzi Goldman Sachs & Co. Q And do you expect pensions and taxes to continue to contribute, or should we expect that – I mean, it looks like a

lot of that may be behind us or maybe a little bit still left, but – so is it margin and then working capital that's

going to get us from where we are to there, or is there – is it fair to think about it that way? Or is there another – ? ......................................................................................................................................................................................................................................................

Christa Davies Chief Financial Officer & Executive Vice President A I would say that pension and restructuring, we still have further upside, and you can see that in the slides in the

presentation. It was about $230 million, I think, of cash upside between year-end 2014 and year-end 2017 on just

pension and restructuring – pension restructuring and CapEx, actually. And so, there's definitely an upside there.





I think as we finish 2015, our cash tax sort of effective rate will have matched our effective tax rate. And so you

should really say that we've level set on cash taxes at that point, so that's really sort of where we are on cash taxes.

And then from there on, the primary drivers of free cash flow growth will be revenue growth and margin

expansion and working capital improvements. ......................................................................................................................................................................................................................................................

Michael Nannizzi Goldman Sachs & Co. Q Okay. Great. Thank you so much. ......................................................................................................................................................................................................................................................

Operator: Thank you. Next question came from the line of Paul Newsome of Sandler O'Neill. Your line is open. ......................................................................................................................................................................................................................................................

Paul Newsome Sandler O'Neill & Partners LP Q Good morning. I just want a follow-up question on sort of the M&A take that you have. In the reinsurance market,

in particular, do you think that there'll be a difference in demand given what's happening from the consolidations ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Well, the ebb and flow of it, Paul, in the short term, you can understand sort of how people have different views on

demand, but those will be phased in over time. Fundamental though is asking the question, what's the return on

invested capital of these institutions and can we bring solutions to them to help improve that? And for us, that's

always been the thesis, and that's why we love the space so much.

Our view is there's many, many companies here, and they have tremendous opportunity to improve return on

invested capital. And whether we're bringing them solutions that is basically treaty placement, facultative

placement, alternative capital or, frankly, more and more back to the question from earlier, data and analytics that

help them understand their business so they can make better decisions to improve operating performance,

strengthen their balance sheet or reduce their volatility, all these things for us make this highly attractive and an

area of high demand. And all the M&A does is create change as we've described before, which will have, as I

before, puts and takes, but net-net, we believe bodes very well for someone with real capability and who's made

substantial investment over time to try to come up with solutions, a la on Aon Benfield. ......................................................................................................................................................................................................................................................

Paul Newsome Sandler O'Neill & Partners LP Q Fair enough. And then, do you think there'll be any change as well in the relationship between carriers and

brokers at the high end that you're at? ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Say a little more about that. What are you thinking about? ......................................................................................................................................................................................................................................................

Paul Newsome Sandler O'Neill & Partners LP Q Well, I'm just curious if – historically, the brokers have had, frankly, the lion's share of the control over the

negotiations between carriers and – over things like relationships, commissions, whatnot. But we're seeing some





very large consolidation at the high end, and I'm just curious as you'll think – if you see the carriers in the future

trying to demand more [indiscernible] (51:23). ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Well, we don't see much change. I mean, carriers, by the way, have always been demanding and we'd expect them

to be and we want them to be on behalf of – they're actually trying to protect and support their shareholders. Our

mission and our maniacal focus is on our clients. And so, we're always looking for better solutions on behalf of our

clients. That's not going to change in any way, shape or form and we're going to continue to try to strengthen our

capabilities to deliver that.

And as I said before, we actually like the idea of some of these larger institutions with greater capability. But I love

the idea of sitting across the table from a Fortune 10 Company and talking about bringing greater than $1 billion

limits on behalf of cyber. What a great opportunity that would be, or greater limits than that.

So, for us, we see tremendous opportunity here, and think it's going to continue to evolve in this direction. And

consolidation will have, as I said before, some puts and takes but net-net, we think very positive. ......................................................................................................................................................................................................................................................

Paul Newsome Sandler O'Neill & Partners LP Q Thank you and congratulations in the quarter. ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Thanks. ......................................................................................................................................................................................................................................................

Operator: Thank you. Next question came from the line of Jay Cohen of Bank of America. Your line is now open. ......................................................................................................................................................................................................................................................

Jay Arman Cohen Bank of America Merrill Lynch Q Yeah. A question on the International side. Overall, International growth was, I guess, okay but not terribly good.

You highlighted a couple of areas where you were growing, but there must be some areas that are holding back

that growth. What are those areas that are a bit more challenged now, Greg? ......................................................................................................................................................................................................................................................

Gregory C. Case President, CEO & Executive Director A Yeah. So, Jay, from our standpoint, as we said before, really if you think about what we've produced and outcomes

on the Risk Solutions side overall, have been really in face of some headwinds as we talked about in Aon Benfield

and in International. And we've got some great, great spots I've described before really across Asia – I highlighted

them on my comments. I won't repeat them now – but really a number of different places.

But if you think about Europe, Europe really is – you've got a lot of challenges in specific countries across Europe.

And the good news is we've got incredibly strong privileged positions that go back decades – more than, literally

hundreds of years, quite literally – and we believe we're very well positioned as that, the economics, the economy

changes over time. But in the near term, they represent some challenges and that's really been the headwinds. ......................................................................................................................................................................................................................................................





Jay Arman Cohen Bank of America Merrill Lynch Q Got it. Makes sense. Thanks, Greg. ......................................................................................................................................................................................................................................................


Christa Davies Chief Financial Officer & Executive Vice President A Thanks, Jay. ......................................................................................................................................................................................................................................................

Operator: Thank you. I would now like to turn the call back over to Greg Case for closing remarks. ......................................................................................................................................................................................................................................................


I just want to say thanks to everyone for joining the call and look forward to our discussion next quarter. Thanks

very much. ......................................................................................................................................................................................................................................................

Operator: Thank you. And that concludes today's conference. Thank you for participating. You may now

disconnect.

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31-Jul-2015 Aon Plc15-Earnings... · 2015-10-16 · Aon Plc (AON) Q2 2015 Earnings Call Corrected...

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