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Aon Q1 Earnings Beat Estimates on Strong Risk Capital Growth
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Key Takeaways
Aon Q1 EPS beat estimates, rising 14.3% YoY on 6% revenue growth and strong Risk Capital performance.
Aon saw growth from retention, new business, and margin expansion, offset by weak Wealth Solutions.
Aon delivered strong cash flow growth, buybacks, and reaffirmed 2026 outlook for growth and margins.
Aon plc (AON - Free Report) reported first-quarter 2026 adjusted earnings of $6.48 per share, which surpassed the Zacks Consensus Estimate by 2.4%. The bottom line advanced 14.3% year over year.
Total revenues of $5 billion grew 6% year over year. The top line beat the consensus mark by 1.5%. Organic revenue growth was 5%.
The positive quarterly results were driven by consistent execution, steady organic growth, strong retention rates, margin expansion, and improved cash generation, particularly in its core Risk Capital businesses, further supported by disciplined capital allocation. However, gains were partly offset by weakness in Wealth Solutions.
Total operating expenses inched up 2% year over year to $3.3 billion due to higher expenses related to organic revenue growth, investments in long-term growth and unfavorable foreign currency translation. This was partly offset by lower expenses associated with the sale of NFP Wealth. The metric was in line with our estimate.
Adjusted operating income amounted to $1.97 billion, which improved 8% year over year and beat our estimate of $1.93 billion. The metric gained as a result of organic revenue growth and net restructuring savings. Adjusted operating margin improved 70 basis points year over year to 39.1%.
Q1 Segmental Performance
Risk Capital
Commercial Risk Solutions: Organic revenues rose 7% year over year in the first quarter on the back of new business and strong retention rates across North America and EMEA. Revenues in this solution line advanced 11% year over year to $2.2 billion, which surpassed the Zacks Consensus Estimate by 3.4%.
Reinsurance Solutions: Organic revenues grew 4% year over year, driven by increased treaty placements, new business wins and strong client retention, along with growth in facultative placements. Revenues amounted to $1.3 billion, which improved 8% year over year and beat the consensus mark by 1.9%.
Human Capital
Health Solutions: Organic revenues inched up 4% year over year as a result of new business growth, strong retention rates and positive market impact. The solution line’s revenues increased 9% year over year to $1.1 billion, which beat the Zacks Consensus Estimate by 2.2%.
Wealth Solutions: Organic revenue growth of 1% was driven by expansion in Retirement and sustained demand for advisory services in the UK and EMEA amid ongoing regulatory changes, partly offset by weaker advisory demand in the United States. Revenues totaled $420 million, down 19% year over year. The metric lagged the consensus mark by 9.6%.
AON’s Financial Position (As of March 31, 2026)
Aon exited the first quarter with cash and cash equivalents of $1.2 billion, which declined 1.4% from the 2025-end level. Total assets of $51.4 billion increased 1.3% from the 2025-end figure.
Long-term debt amounted to $13.5 billion, down 7.6% from the figure as of Dec. 31, 2025. Short-term debt and the current portion of long-term debt totaled $1.1 billion.
Aon generated cash flow from operations of $430 million, which advanced 207% year over year. Adjusted free cash flows rose 332% year over year to $363 million.
Aon’s Capital Deployment Update
Aon bought back 1.5 million class A ordinary shares for roughly $500 million in the first quarter of 2026. There was a leftover capacity of around $0.8 billion under its repurchase authorization as of March 31, 2026. AON increased quarterly cash dividend by 10%, marking the sixth consecutive double-digit annual hike.
AON Reaffirms Its 2026 Outlook
Revenues are expected to witness mid-single-digit or higher organic growth in 2026. The company anticipates adjusted operating margin expansion of 70–80 basis points. It projects strong growth in adjusted EPS for the year. Free cash flow is likely to grow at a double-digit rate, while the tax rate is expected to be in the 19.5-20.5% range.
Companies belonging to the broader Finance space, such as American International Group, Inc. (AIG - Free Report) , AXIS Capital Holdings Limited (AXS - Free Report) and Selective Insurance Group (SIGI - Free Report) , have also posted their quarterly results. Here’s how they have performed:
American International reported first-quarter 2026 adjusted earnings per share of $2.11, which topped the Zacks Consensus Estimate of $1.90. The bottom line surged 80.3% year over year. AIG's adjusted operating revenues advanced 5.4% year over year to $6.97 billion. The top line beat the consensus mark by 1.2%. The strong quarterly performance was fueled by better underwriting, alongside lower catastrophe losses and a decline in total losses and expenses. However, the upside was partly offset by lower investment income.
AXIS Capital reported first-quarter 2026 operating income of $3.42 per share, which outpaced the Zacks Consensus Estimate of $3.23 and rose 7.9% year over year. Total operating revenues of $1.7 billion marginally beat the Zacks Consensus Estimate by 0.4%. The top line rose nearly 7.7% year over year on higher premiums earned. AXS’ quarterly results benefited from higher net premiums earned and stronger underwriting income, partly offset by lower net investment income and higher expenses.
Selective Insurance reported first-quarter 2026 operating income of $1.69 per share, which missed the Zacks Consensus Estimate by 2.3%. The bottom line decreased 11% year over year. SIGI’s operating revenues of $1.4 billion increased 6.4% from the year-ago quarter’s level, driven primarily by higher net premiums earned and net investment income. The top line missed the Zacks Consensus Estimate by 0.5%. Net premiums written decreased 1% to $1.3 billion, which matched our estimate.
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Aon Q1 Earnings Beat Estimates on Strong Risk Capital Growth
Key Takeaways
Aon plc (AON - Free Report) reported first-quarter 2026 adjusted earnings of $6.48 per share, which surpassed the Zacks Consensus Estimate by 2.4%. The bottom line advanced 14.3% year over year.
Total revenues of $5 billion grew 6% year over year. The top line beat the consensus mark by 1.5%. Organic revenue growth was 5%.
The positive quarterly results were driven by consistent execution, steady organic growth, strong retention rates, margin expansion, and improved cash generation, particularly in its core Risk Capital businesses, further supported by disciplined capital allocation. However, gains were partly offset by weakness in Wealth Solutions.
Aon plc Price, Consensus and EPS Surprise
Aon plc price-consensus-eps-surprise-chart | Aon plc Quote
AON’s Q1 Operations
Total operating expenses inched up 2% year over year to $3.3 billion due to higher expenses related to organic revenue growth, investments in long-term growth and unfavorable foreign currency translation. This was partly offset by lower expenses associated with the sale of NFP Wealth. The metric was in line with our estimate.
Adjusted operating income amounted to $1.97 billion, which improved 8% year over year and beat our estimate of $1.93 billion. The metric gained as a result of organic revenue growth and net restructuring savings. Adjusted operating margin improved 70 basis points year over year to 39.1%.
Q1 Segmental Performance
Risk Capital
Commercial Risk Solutions: Organic revenues rose 7% year over year in the first quarter on the back of new business and strong retention rates across North America and EMEA. Revenues in this solution line advanced 11% year over year to $2.2 billion, which surpassed the Zacks Consensus Estimate by 3.4%.
Reinsurance Solutions: Organic revenues grew 4% year over year, driven by increased treaty placements, new business wins and strong client retention, along with growth in facultative placements. Revenues amounted to $1.3 billion, which improved 8% year over year and beat the consensus mark by 1.9%.
Human Capital
Health Solutions: Organic revenues inched up 4% year over year as a result of new business growth, strong retention rates and positive market impact. The solution line’s revenues increased 9% year over year to $1.1 billion, which beat the Zacks Consensus Estimate by 2.2%.
Wealth Solutions: Organic revenue growth of 1% was driven by expansion in Retirement and sustained demand for advisory services in the UK and EMEA amid ongoing regulatory changes, partly offset by weaker advisory demand in the United States. Revenues totaled $420 million, down 19% year over year. The metric lagged the consensus mark by 9.6%.
AON’s Financial Position (As of March 31, 2026)
Aon exited the first quarter with cash and cash equivalents of $1.2 billion, which declined 1.4% from the 2025-end level. Total assets of $51.4 billion increased 1.3% from the 2025-end figure.
Long-term debt amounted to $13.5 billion, down 7.6% from the figure as of Dec. 31, 2025. Short-term debt and the current portion of long-term debt totaled $1.1 billion.
Aon generated cash flow from operations of $430 million, which advanced 207% year over year. Adjusted free cash flows rose 332% year over year to $363 million.
Aon’s Capital Deployment Update
Aon bought back 1.5 million class A ordinary shares for roughly $500 million in the first quarter of 2026. There was a leftover capacity of around $0.8 billion under its repurchase authorization as of March 31, 2026. AON increased quarterly cash dividend by 10%, marking the sixth consecutive double-digit annual hike.
AON Reaffirms Its 2026 Outlook
Revenues are expected to witness mid-single-digit or higher organic growth in 2026. The company anticipates adjusted operating margin expansion of 70–80 basis points. It projects strong growth in adjusted EPS for the year. Free cash flow is likely to grow at a double-digit rate, while the tax rate is expected to be in the 19.5-20.5% range.
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
Companies belonging to the broader Finance space, such as American International Group, Inc. (AIG - Free Report) , AXIS Capital Holdings Limited (AXS - Free Report) and Selective Insurance Group (SIGI - Free Report) , have also posted their quarterly results. Here’s how they have performed:
American International reported first-quarter 2026 adjusted earnings per share of $2.11, which topped the Zacks Consensus Estimate of $1.90. The bottom line surged 80.3% year over year. AIG's adjusted operating revenues advanced 5.4% year over year to $6.97 billion. The top line beat the consensus mark by 1.2%. The strong quarterly performance was fueled by better underwriting, alongside lower catastrophe losses and a decline in total losses and expenses. However, the upside was partly offset by lower investment income.
AXIS Capital reported first-quarter 2026 operating income of $3.42 per share, which outpaced the Zacks Consensus Estimate of $3.23 and rose 7.9% year over year. Total operating revenues of $1.7 billion marginally beat the Zacks Consensus Estimate by 0.4%. The top line rose nearly 7.7% year over year on higher premiums earned. AXS’ quarterly results benefited from higher net premiums earned and stronger underwriting income, partly offset by lower net investment income and higher expenses.
Selective Insurance reported first-quarter 2026 operating income of $1.69 per share, which missed the Zacks Consensus Estimate by 2.3%. The bottom line decreased 11% year over year. SIGI’s operating revenues of $1.4 billion increased 6.4% from the year-ago quarter’s level, driven primarily by higher net premiums earned and net investment income. The top line missed the Zacks Consensus Estimate by 0.5%. Net premiums written decreased 1% to $1.3 billion, which matched our estimate.