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AON Forms STG to Better Serve Insurance, Reinsurance Clients

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Aon plc (AON - Free Report) recently set up a Strategy and Technology Group (STG), which will function under the leadership of Colin Forrest. It aims to benefit property & casualty, life insurance and reinsurance clients by offering various insight and software solutions.

Shares of Aon gained 0.8% on Sep 8.

The formation of STG took a year and was built through integrating Aon’s strategic consulting capabilities comprising claims efficiency, performance benchmarking, market share trends and actuarial analysis with its strong technology portfolio encompassing the digital platforms of Tyche, ReMetrica and PathWise. In fact, the buyout of the financial modeling platform of Tyche by Aon in March 2022 created a landmark in the development of STG.

The combined prowess empowers STG to devise tailored solutions that will guide clients to pursue effective capital deployment and subsequently, search for profitable opportunities. It will also serve the purpose of shielding a client’s business from prevailing and possible risks and construct a resistant business model.

As a result, companies that otherwise encounter severe regulatory and operational hurdles while deploying capital will be able to take informed decisions and boost their financial standing with the help of AON’s newly-formed STG.

Additional purposes served by STG include helping clients tap newer regions, roll out products, boost share price of companies and streamline organizational structures. The insights and the software suite of the newly-formed group are well-equipped to carry out re/insurance transactions via practical and implementable solutions to clients, if need be.

The establishment of STG is a notable endeavor by Aon to cater to the insurance space. The latest move also reflects AON’s in-depth insurance industry expertise and superior global network. A dire need from re/insurers for a reliable advisor equipped with adequate sector knowledge and the ability to offer capital-enhancing transactions lays the perfect ground for AON to capitalize on.  

Aon operates as a global professional services firm, generating revenues from commissions and drawing compensation from insurance and reinsurance companies in return for extending advice and solutions. STG is expected to bring in more clients and bolster AON’s top line.  

Shares of Aon have lost 3.2% year to date compared with the industry’s decline of 3.6%.

Zacks Investment Research
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Zacks Rank & Key Picks

Aon currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the insurance space are MGIC Investment Corporation (MTG - Free Report) , The Hartford Financial Services Group, Inc. (HIG - Free Report) and Radian Group Inc. (RDN - Free Report) . While Radian Group sports a Zacks Rank #1 (Strong Buy), MGIC Investment and Hartford Financial carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The bottom line of MGIC Investment outpaced estimates in three of the last four quarters and matched the mark once, the average surprise being 22.25%. The Zacks Consensus Estimate for MTG’s 2022 earnings suggests an improvement of 33%, while the same for revenues indicates growth of 3.6% from the corresponding year-ago reported figures. The consensus mark for MTG’s 2022 earnings has moved 4.5% north in the past 30 days.

Hartford Financial’s bottom line outpaced estimates in each of the trailing four quarters, the average being 34.08%. The Zacks Consensus Estimate for HIG’s 2022 earnings indicates a 17.2% rise, while the same for revenues suggests 5.3% growth from the respective prior-year reported figures. The consensus mark for HIG’s 2022 earnings has moved 0.3% north in the past 30 days.

The bottom line of Radian Group outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark once, the average surprise being 29.51%. The Zacks Consensus Estimate for RDN’s 2022 earnings suggests a 32.7% improvement from the prior-year reported figure. The consensus mark for RDN’s 2022 earnings has moved 16.1% north in the past 60 days.

Shares of MGIC Investment, Hartford Financial and Radian Group have lost 0.1%, 2.6% and 0.5%, respectively, year to date.

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