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Aon Q4 Earnings Top Estimates on New Business Growth, Strong Retention
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Key Takeaways
AON's Q4 EPS of $4.85 beat estimates by 1.9% and rose 10% year over year on solid organic growth.
Commercial Risk and Reinsurance Solutions drove growth through new business and strong retention rates.
2026 outlook includes EPS growth, margin expansion of 70-80 bps and double-digit free cash flow growth.
Aon plc (AON - Free Report) reported fourth-quarter 2025 adjusted earnings of $4.85 per share, which surpassed the Zacks Consensus Estimate by 1.9%. The bottom line advanced 10% year over year.
Total revenues of $4.3 billion grew 4% year over year. However, the top line fell short of the consensus mark by 1.7%. Organic revenue growth was 5%.
The quarterly results gained from solid organic revenue growth, robust new business and high retention across key solution lines like Commercial Risk and Reinsurance Solutions. Growth in insurance-linked securities and advisory demand in Retirement services also contributed, along with net restructuring savings that supported a margin expansion. However, the upside was partially offset by increased operating expenses linked to the Accelerating Aon United Program and unfavorable foreign currency translation.
Total operating expenses inched up 1% year over year to $3.1 billion due to higher expenses related to organic revenue growth, unfavorable foreign currency translation and elevated Accelerating Aon United Program costs. The metric came marginally lower than our estimate of $3.12 billion.
Adjusted operating income came in at $1.53 billion, which improved 11% year over year in the quarter under review but missed our estimate of $1.55 billion. The metric gained as a result of organic revenue growth and net restructuring savings. Adjusted operating margin improved 220 basis points year over year to 35.5%.
Q4 Segmental Performance
Risk Capital
Commercial Risk Solutions: Organic revenues rose 6% year over year in the fourth quarter on the back of new business and strong retention rates across North America, EMEA and Latin America. Revenues in this solution line advanced 7% year over year to $2.3 billion, marginally beating the Zacks Consensus Estimate.
Reinsurance Solutions: Organic revenues grew 8% year over year, attributable to strong growth in insurance-linked securities and the Strategy and Technology Group. Revenues amounted to $379 million, which improved 8% year over year and outpaced the consensus mark of $372 million.
Human Capital
Health Solutions: Organic revenues inched up 2% year over year in the quarter under review as a result of new business growth and strong retention rates. The solution line’s revenues increased 3% year over year to $1.1 billion, which missed the Zacks Consensus Estimate of $1.15 billion.
Wealth Solutions: Organic revenues grew 2% year over year on the back of a strong Retirement business, which received an impetus from sustained advisory demand in the UK and EMEA related to the impact of regulatory changes. Revenues totaled $490 million, down 10% year over year. The metric lagged the consensus mark of $537 million.
AON’s Financial Position (As of Dec. 31, 2025)
Aon exited the fourth quarter with cash and cash equivalents of $1.2 billion, which improved 10.1% from the 2024-end level. Total assets of $50.8 billion increased 3.7% from the figure at 2024-end.
Long-term debt amounted to $14.7 billion, down 9.9% from the figure as of Dec. 31, 2024. Short-term debt and the current portion of long-term debt totaled $589 million.
Aon generated cash flow from operations of $1.4 billion in the fourth quarter, which advanced 16% year over year. Adjusted free cash flows rose 16% year over year to $1.3 billion.
Aon’s Capital Deployment Update
Aon bought back 2.7 million class A ordinary shares for roughly $1 billion in 2025. A leftover capacity of around $1.3 billion remained under its repurchase authorization as of Dec. 31, 2025. It paid out cash dividends of $629 million to shareholders in 2025.
AON’s 2025 Update
Total revenues advanced 9% year over year to $17.2 billion. Adjusted earnings of $17.07 per share improved 9% year over year. Adjusted operating income increased 13% year over year to $5.6 billion in 2025. The adjusted margin of 32.4% improved 90 bps year over year.
AON’s 2026 View Unveiled
Revenues are expected to register mid-single-digit or higher organic growth for 2026. The company expects the adjusted operating margin to expand within 70-80 bps. It also estimates adjusted EPS to witness strong growth this year. Free cash flow is projected to witness double-digit growth. Tax rate is estimated within 19.5-20.5%.
Of the insurance industry players that have reported fourth-quarter 2025 results so far, the bottom-line results of AXIS Capital Holdings Limited (AXS - Free Report) , RLI Corp. (RLI - Free Report) and Brown & Brown, Inc. (BRO - Free Report) beat the respective Zacks Consensus Estimate.
AXIS Capital reported fourth-quarter 2025 operating income of $3.25 per share, which outpaced the Zacks Consensus Estimate by 9.4% and rose 9.4% year over year. Total operating revenues of $1.7 billion beat the Zacks Consensus Estimate by 5.2%. The top line rose nearly 9% year over year.
Net premiums written rose 13% to $1.4 billion, with an increase of 14% in the Insurance segment and growth of 5% in the Reinsurance segment. Net investment income decreased 4.5% year over year to $187 million. AXIS Capital’s underwriting income of $184 million increased 42% year over year. The combined ratio improved to 90.4 in the quarter from 94.2 a year ago,
RLI’s fourth-quarter 2025 operating earnings of 94 cents per share beat the Zacks Consensus Estimate by 23.6%. The bottom line increased 80.8% from the prior-year quarter. Operating revenues for the reported quarter were $449 million, up 3% year over year. The top line missed the Zacks Consensus Estimate by 0.4%.
Gross premiums written decreased 2.1% year over year to $463.2 million. This uptick can be attributed to the solid performance of the Casualty segment (up 2.4%). Net investment income increased 9.2% year over year to $42.3 million. The investment portfolio’s total return was 1.5% in the quarter. Underwriting income of $70.8 million surged more than threefold year over year. The combined ratio improved 1,180 basis points (bps) year over year to 82.6.
Brown & Brown reported fourth-quarter 2025 adjusted earnings of 93 cents per share, which beat the Zacks Consensus Estimate by 2.1%. The bottom line increased 8.1% year over year. Total revenues of $1.6 billion missed the Zacks Consensus Estimate by 2.1%. The top line improved 35.7% year over year. The upside can be primarily attributed to commission and fees, which grew 36% year over year to $1.6 billion and improved investment and other income.
Organic revenues declined 2.8% to $1 billion in the quarter under review. Investment income and other income increased 17.3% year over year to $27 million. Adjusted EBITDAC was $529 million, up 35.6% year over year. EBITDAC margin remained unchanged year over year to 32.9%.
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Aon Q4 Earnings Top Estimates on New Business Growth, Strong Retention
Key Takeaways
Aon plc (AON - Free Report) reported fourth-quarter 2025 adjusted earnings of $4.85 per share, which surpassed the Zacks Consensus Estimate by 1.9%. The bottom line advanced 10% year over year.
Total revenues of $4.3 billion grew 4% year over year. However, the top line fell short of the consensus mark by 1.7%. Organic revenue growth was 5%.
The quarterly results gained from solid organic revenue growth, robust new business and high retention across key solution lines like Commercial Risk and Reinsurance Solutions. Growth in insurance-linked securities and advisory demand in Retirement services also contributed, along with net restructuring savings that supported a margin expansion. However, the upside was partially offset by increased operating expenses linked to the Accelerating Aon United Program and unfavorable foreign currency translation.
Aon plc Price, Consensus and EPS Surprise
Aon plc price-consensus-eps-surprise-chart | Aon plc Quote
AON’s Q4 Operations
Total operating expenses inched up 1% year over year to $3.1 billion due to higher expenses related to organic revenue growth, unfavorable foreign currency translation and elevated Accelerating Aon United Program costs. The metric came marginally lower than our estimate of $3.12 billion.
Adjusted operating income came in at $1.53 billion, which improved 11% year over year in the quarter under review but missed our estimate of $1.55 billion. The metric gained as a result of organic revenue growth and net restructuring savings. Adjusted operating margin improved 220 basis points year over year to 35.5%.
Q4 Segmental Performance
Risk Capital
Commercial Risk Solutions: Organic revenues rose 6% year over year in the fourth quarter on the back of new business and strong retention rates across North America, EMEA and Latin America. Revenues in this solution line advanced 7% year over year to $2.3 billion, marginally beating the Zacks Consensus Estimate.
Reinsurance Solutions: Organic revenues grew 8% year over year, attributable to strong growth in insurance-linked securities and the Strategy and Technology Group. Revenues amounted to $379 million, which improved 8% year over year and outpaced the consensus mark of $372 million.
Human Capital
Health Solutions: Organic revenues inched up 2% year over year in the quarter under review as a result of new business growth and strong retention rates. The solution line’s revenues increased 3% year over year to $1.1 billion, which missed the Zacks Consensus Estimate of $1.15 billion.
Wealth Solutions: Organic revenues grew 2% year over year on the back of a strong Retirement business, which received an impetus from sustained advisory demand in the UK and EMEA related to the impact of regulatory changes. Revenues totaled $490 million, down 10% year over year. The metric lagged the consensus mark of $537 million.
AON’s Financial Position (As of Dec. 31, 2025)
Aon exited the fourth quarter with cash and cash equivalents of $1.2 billion, which improved 10.1% from the 2024-end level. Total assets of $50.8 billion increased 3.7% from the figure at 2024-end.
Long-term debt amounted to $14.7 billion, down 9.9% from the figure as of Dec. 31, 2024. Short-term debt and the current portion of long-term debt totaled $589 million.
Aon generated cash flow from operations of $1.4 billion in the fourth quarter, which advanced 16% year over year. Adjusted free cash flows rose 16% year over year to $1.3 billion.
Aon’s Capital Deployment Update
Aon bought back 2.7 million class A ordinary shares for roughly $1 billion in 2025. A leftover capacity of around $1.3 billion remained under its repurchase authorization as of Dec. 31, 2025. It paid out cash dividends of $629 million to shareholders in 2025.
AON’s 2025 Update
Total revenues advanced 9% year over year to $17.2 billion. Adjusted earnings of $17.07 per share improved 9% year over year. Adjusted operating income increased 13% year over year to $5.6 billion in 2025. The adjusted margin of 32.4% improved 90 bps year over year.
AON’s 2026 View Unveiled
Revenues are expected to register mid-single-digit or higher organic growth for 2026. The company expects the adjusted operating margin to expand within 70-80 bps. It also estimates adjusted EPS to witness strong growth this year. Free cash flow is projected to witness double-digit growth. Tax rate is estimated within 19.5-20.5%.
AON’s Zacks Rank
Aon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported fourth-quarter 2025 results so far, the bottom-line results of AXIS Capital Holdings Limited (AXS - Free Report) , RLI Corp. (RLI - Free Report) and Brown & Brown, Inc. (BRO - Free Report) beat the respective Zacks Consensus Estimate.
AXIS Capital reported fourth-quarter 2025 operating income of $3.25 per share, which outpaced the Zacks Consensus Estimate by 9.4% and rose 9.4% year over year. Total operating revenues of $1.7 billion beat the Zacks Consensus Estimate by 5.2%. The top line rose nearly 9% year over year.
Net premiums written rose 13% to $1.4 billion, with an increase of 14% in the Insurance segment and growth of 5% in the Reinsurance segment. Net investment income decreased 4.5% year over year to $187 million. AXIS Capital’s underwriting income of $184 million increased 42% year over year. The combined ratio improved to 90.4 in the quarter from 94.2 a year ago,
RLI’s fourth-quarter 2025 operating earnings of 94 cents per share beat the Zacks Consensus Estimate by 23.6%. The bottom line increased 80.8% from the prior-year quarter. Operating revenues for the reported quarter were $449 million, up 3% year over year. The top line missed the Zacks Consensus Estimate by 0.4%.
Gross premiums written decreased 2.1% year over year to $463.2 million. This uptick can be attributed to the solid performance of the Casualty segment (up 2.4%). Net investment income increased 9.2% year over year to $42.3 million. The investment portfolio’s total return was 1.5% in the quarter. Underwriting income of $70.8 million surged more than threefold year over year. The combined ratio improved 1,180 basis points (bps) year over year to 82.6.
Brown & Brown reported fourth-quarter 2025 adjusted earnings of 93 cents per share, which beat the Zacks Consensus Estimate by 2.1%. The bottom line increased 8.1% year over year. Total revenues of $1.6 billion missed the Zacks Consensus Estimate by 2.1%. The top line improved 35.7% year over year. The upside can be primarily attributed to commission and fees, which grew 36% year over year to $1.6 billion and improved investment and other income.
Organic revenues declined 2.8% to $1 billion in the quarter under review. Investment income and other income increased 17.3% year over year to $27 million. Adjusted EBITDAC was $529 million, up 35.6% year over year. EBITDAC margin remained unchanged year over year to 32.9%.