Aon plc provides risk management services, insurance and reinsurance brokerage, and human resource consulting and outsourcing services worldwide. The company operates through two segments, Risk Solutions and HR Solutions. The Risk Solutions segment offers retail brokerage services, including affinity products, managing general underwriting, placement, captive management services, and data and analytics; risk management solutions for property liability, general liability, professional liability, directors' and officers' liability, transaction liability, cyber liability, workers' compensation, and various healthcare products; and health and benefits consulting services comprising structuring, funding, and administering employee benefit programs. This segment also provides advisory services to technology, financial services, agribusiness, aviation, construction, health care, energy, and other industries. In addition, this segment offers reinsurance brokerage services for treaty and facultative reinsurance, as well as specialty lines, such as professional liability, workers' compensation, accident, life, and health; actuarial, enterprise risk management, catastrophe management, and rating agency advisory services; and capital management transaction and advisory services for insurance and reinsurance clients. The HR Solutions segment offers human capital services in the areas of retirement, compensation, strategic human capital, investment consulting, benefits administration, exchanges, and human resource business process outsourcing. It provides products and services primarily under the Aon Hewitt brand. Aon plc was founded in 1919 and is headquartered in London, the United Kingdom.
Business Analysis of Aon
The Insurance Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Aon compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Aon to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Aon with an interactive chart.
- Revenue Growth: Aon reported a revenue growth of -0.5% year-on-year during 2016. Insurance Brokerage Industry grew at 2.3% in the same period
- COGS share of Revenues: Aon COGS share of Revenues details are not available because either company does not share the data or we do not have it
- R&D share of Revenues: Aon R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Aon spent 83.6% of its total revenues on Sales, Marketing, and General Administration (SG&A). Insurance Brokerage industry average SG&A spending in the same period was 69.0%
- Inventory share of Revenues: Aon Inventory share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Payable share of Revenues: As a percentage of revenue, Aon invested 15.5% of its total revenues on Accounts Payable (A/P) Insurance Brokerage industry average Accounts Payable investment in the same period was 22.3%
- Accounts Receivable share of Revenues: As a percentage of revenue, Aon invested 22.3% of its total revenues on Accounts Receivable (A/R). Insurance Brokerage industry average Accounts Receivable investment in the same period was 27.4%
- PP&E share of Revenues: As a percentage of revenue, Aon invested 6.6% of its total revenues on Property, Plants, and Equipments (PP&E). Insurance Brokerage industry average PPE investment in the same period was 6.6%
- Intangibles share of Revenues: As a percentage of revenue, Aon invested 94.3% of its total revenues on Intangibles. Insurance Brokerage industry average Intangibles investment in the same period was 83.2%
- Net Margins: Aon Net Margins in the year 2016 were 12.0%. Insurance Brokerage industry average Net Margins in the same period were 11.6%
Sector and Industry Association of Aon
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
Aon is associated with Financials Sector Group, Insurance Sector, and Insurance Brokerage Industry.
Insurance sector is comprised of the following industries: Life Insurance; Property & Casualty Insurance; Surety & Title Insurance; Insurance Brokerage; Diversified Insurance. The definitions for each of the industries is as follows:
- Life Insurance industry includes companies engaged principally in life insurance.
- Property & Casualty Insurance industry includes companies engaged principally in accident, fire, automotive, marine, malpractice and other classes of non-life insurance.
- Surety & Title Insurance industry includes companies providing title & surety insurance.
- Insurance Brokerage industry includes insurance brokers and agencies.
- Diversified Insurance industry includes companies with life, health, property & casualty, and reinsurance interests, none of which predominates.
Industry Ranking of Aon
With $11.6 billion revenues, Aon ranked number 2 of all the companies in the US Insurance Brokerage industry. There were a total of 8 public companies in the US Insurance Brokerage industry that had revenues greater than $50 million during 2016.
The top companies in the US Insurance Brokerage industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.