News about Aon

Aon CEO Greg Case warned in a CNBC interview that concentrating billions of dollars of AI equipment and computing capacity in a few locations creates concentration risk that could make projects harder to insure and force financing structures to change. He said data center business interruption could be measured in millions of dollars per minute. Aon reported a record data center project pipeline, 7% organic revenue growth in its commercial risk business, and adjusted EPS up 10% to $3.36 in the third quarter. Aon's pending $17 billion acquisition of USI Insurance Services, expected to close in the fourth quarter, is expected to bring $395 million in annual earnings benefits. Case believes the global insurance industry's roughly $4.5 trillion in capital must double or triple to meet growing cyber, AI and data center risks.

Marsh McLennan (MRSH) closed at $177.01 on October 13 and has returned 2% over six months, while Aon (AON) closed at $274.71 and returned -15.6% over the same period; neither beat the two benchmarks. Both firms earn fees for placing insurance rather than carrying risk, and both post high operating margins of 26.32% and 23.46%, respectively. The gap is in growth: Marsh's revenue rose 6.20% last quarter versus 2.20% for Aon, whose earnings fell 4.80%. Marsh also converts more of its profit into cash. Aon trades at 13.48 times next year's expected earnings versus 14.97 for Marsh, a discount the article links to Aon's slower growth.