Aon plc (AON - Free Report) along with CoverWallet have entered into a commercial agreement to be able to serve customers in Australia. However, terms of the transaction were not disclosed.
With this tie-up, Aon gets an access to the evolving small and medium enterprise (SME) digital insurance market segment worth $100 billion. This investment by Aon will supplement the $40-million amount that CoverWallet had previously collected from investors.
Notably, CoverWallet, a leading digital insurance company for small businesses and licensed across all the 50 U.S. States and Europe, is able to boost its reach amid new channels and spread its existence via Aon’s global competence and professional network. CoverWallet will gain leverage from Aon’s enriched experience and credibility that would further enhance its growth.
A new Aon platform was introduced in Australia this month, which is powered by CoverWallet. CoverWallet is the perfect partner for Aon, as it is being able to harness the unique data science and technology capabilities of the former, which in turn, are assisting it to reinvent the insurance industry, primarily in the SME market.
The above two companies would retain their partnership in the future for technological upgrades and client opportunities. Both are also looking to penetrate other areas that include the United States.
Acquisitions and partnerships form a key growth strategy at Aon and the company has sealed a number of buyouts over the past three years. Strategic collaborations also boost Aon’s capacity, making it one of the largest insurance brokers. In 2017 and 2018, the company completed a total of 17 and eight acquisitions, respectively, to enhance its capabilities. We expect these transactions to accelerate long-term growth for Aon.
Shares of this Zacks Rank #3 (Hold) company have rallied 27% in a year, outperforming its industry’s growth of 24.9%.
Stocks to Consider
Investors interested in the insurance industry might look into some better-ranked stocks like eHealth, Inc. (EHTH - Free Report) , Brown & Brown, Inc. (BRO - Free Report) and Erie Indemnity Company (ERIE - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
eHealth offers private health insurance exchange services to individuals, families and small businesses in the United States and China. The company currently sports a Zacks Rank #1 (Strong Buy). It delivered a beat in three of the last four quarters, the average positive surprise being 127.73%.
Brown & Brown sells insurance products in the United States, England, Canada, Bermuda and the Cayman Islands. It presently has a Zacks Rank # 2 (Buy). The company pulled off average trailing four-quarter positive surprise of 4.56%.
Erie Indemnity works as a managing attorney-in-fact for subscribers at the Erie Insurance Exchange in the United States. The company has a Zacks Rank of 2. It came up with average four-quarter positive surprise of 8.97%.
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