Aon plc · NYSE:AON
Aon — Conference Presentation (January 2017)
38 slides from Aon's conference presentation, Jan 25, 2017
Slide 1: Talent Solutions for Mutual Insurers
Talent Solutions for Mutual Insurers January 25, 2017
Slide 2: Agenda
Agenda Introduction – Aon’s Integrated Approach About Aon Hewitt & Ward Group Talent, Rewards and Performance Industry Challenges and Initiatives Human Capital Strategy Survey Review Closing Summary and Q&A Additional Resources and Contacts Talent Solutions For Mutual Insurers Proprietar
Slide 3: Introduction – Aon's Integrated Approach
Introduction – Aon’s Integrated Approach Moderator: Chris Delhey Senior Managing Director, Aon Benfield Mutual Insurance Practice Group Leader +1.312.381.5566 chris.delhey@aonbenfield.com Speaker: Jeff Rieder, CPA Partner and head of Ward Group +1.513.746.2400 jeffrey.rieder@wardinc.com Speaker: Bri
Slide 4: An Overview of Talent, Rewards & Performance
An Overview of Talent, Rewards & Performance For most firms, talent Effectively determining Objectively measuring is their largest expense reward strategies are performance against and their greatest critical to motivating internal goals and the asset. and retaining a firm’s external market is
Slide 5: Industry Challenges and Initiatives
Industry Challenges and Initiatives Talent Solutions For Mutual Insurers Proprietary & Confidential 5
Slide 6: An Active Industry
An Active Industry Speed of Change Driving efficiency with new enterprise Advanced analytics systems Focus Product/Geographic Sales/Distribution expansion strategy continues to evolve Marketing and servicing efforts are changing to focus on the millennial generation Talent Solutions For Mutual Insur
Slide 7: Management Perspective
Management Perspective Senior leadership becoming less optimistic about the state of the industry. State of the Industry in 2016 Compared to 2015 Commercial Lines Personal Lines Overall Benchmark 8% Moderately better 17% 12% 59% About the same 50% 54% 33% Moderately worse 29% 32% 0% Significantly wo
Slide 8: U.S. Quarterly Year-over-Year Direct Premium Change
U.S. Quarterly Year-over-Year Direct Premium Change Total Personal Commercial 25% Post 9/11 Post Katrina 20% 15% 10% 5% 0% -5% -10% 2016 – Q3 marked the first time in 6 years total quarterly premium declined over prior year for commercial lines Source: SNL Financial Talent Solutions For Mutual Insur
Slide 9: YTD Change in Direct Premium Through Q3 2016
YTD Change in Direct Premium Through Q3 2016 (Versus YTD 2015) Fire & Allied -2.7% Med Prof Liab 0.1% Comm'l Multi Prl 0.6% Workers' Comp 1.6% Home / Farm 2.5% Fidelity & Surety 3.4% Comm'l Auto Liab 4.6% Private Auto (Est.) 7.0% Personal 5.6% Commercial 1.4% All Lines 3.6% -4% -2% 0% 2% 4% 6% 8% So
Slide 10: Direct Loss Ratio
Direct Loss Ratio Total Personal Commercial 70.2% 65.9% 65.3% 64.1% 63.4% 63.3% 62.5% 61.0% 62.3% 60.0% 59.7% 59.2% 60.1% 57.1% 56.2% 56.3% 54.4% 53.1% 52.2% 51.0% 51.0% 2010 2011 2012 2013 2014 2015 2016-YTD Source: SNL Financial Talent Solutions For Mutual Insurers Proprietary & Confidential 10
Slide 11: Key Performance Measures - US
Key Performance Measures - US Combined Ratio Net Premium Written to Surplus Total Expenses Worse 160% 140% 120% 2000 – 2015 Average 100% 100.5% 101.9% 80% 75.0% 93.2% 60% 40% 40.1% 20% 39.9% Better • Combined ratio is prior to effect of policyholder dividends • Expenses include Underwriting, Loss Ad
Slide 12: Employee Costs on the Rise
Employee Costs on the Rise Salaries & Benefits as % of Net Premiums Written Ward's 50 Total Industry 14% 13% 13.0% 12% 11% 10.8% 10% 9% 8% 7% 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Talent Solutions For Mutual Insurers Proprietary & Confidential 12
Slide 13: Hiring for Succession
Hiring for Succession The workforce is changing, 42% of workers are over 50 while millennials (those born after 1980) make up approximately 21% of the employee population. Employee Age Distribution Percent of Workforce over 50 >60 <30 42.7% 11.4% 11.6% 38.4% 36.2% 34.3% 32.6% 31-40 19.5% 51-60 31.3%
Slide 14: Hiring for Innovation
Hiring for Innovation 81% of insurance executives are looking to hire a broader range of talent with different perspectives and diverse skills. Focus on recruiting a unique mix of talent and demographics; think about “out of the industry” talent. Talent Solutions For Mutual Insurers Proprietary & Co
Slide 15: Hiring for Diversity
Hiring for Diversity 85% of organizations Diversity is key to Bringing together with a diversity- promoting innovation diverse teams has focused staffing and creativity proven to create strategy report a culture of increased adaptability performance and productivity Talent Solutions For Mutual Insur
Slide 16: Insurance Carrier Employment
Insurance Carrier Employment 1540 1520 6.67% 1500 94,700 new jobs since 1480 April 2011 In Thousands 1460 1440 1420 1400 1380 1360 Source: U.S. Bureau of Labor Statistics Talent Solutions For Mutual Insurers Proprietary & Confidential 16
Slide 17: Job Openings in Finance and Insurance
Job Openings in Finance and Insurance 300 274 253 250 224 220 In Thousands 200 176 182 162 150 121 100 50 0 2009 2010 2011 2012 2013 2014 2015 2016 Source: U.S. Bureau of Labor Statistics Talent Solutions For Mutual Insurers Proprietary & Confidential 17
Slide 18: 12-Month Staffing Plans Increase vs. Expected Revenue Growth
12-Month Staffing Plans Increase vs. Expected Revenue Growth 100% 86% 87% 85% 90% 84% 81% 79% 80% 79% 75% 77% 80% 69% 66% 65% 66% 70% 60% 56% 66% 65% 66% 66% 62% 50% 56% 58% 54% 54% 51% 40% 44% 44% 44% 30% 39% 35% 20% 10% 0% Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-1
Slide 19: Recruiting Difficulty Continues
Recruiting Difficulty Continues July 2016 July 2015 On a scale of 1 – 10 (10 being most difficult), Executives companies responded that positions are still Technology moderately difficult to fill Actuarial and recruiting is slightly more difficult in most Underwriting disciplines than it was a yea
Slide 20: Human Capital Strategy Assessment Survey
Human Capital Strategy Assessment Survey Talent Solutions For Mutual Insurers Proprietary & Confidential 20
Slide 21: Human Capital Strategy Assessment Survey
Human Capital Strategy Assessment Survey The Human Capital Strategy Assessment Survey assesses the human capital programs of insurance carriers to help determine how the talent spend is linked to business strategy Talent Solutions For Mutual Insurers Proprietary & Confidential 21
Slide 22: Profile of Participating Organizations
Profile of Participating Organizations Number of Participants 69 2015 Direct Premium Written (in Millions) Property and Casualty $523,792 Life and Health $166,573 Financial Metrics 2015 Average Revenue (in Millions) $500,368 2015 Average Premium Growth 2.5% 2015 Average Return on Equity 7.1% 2015 Av
Slide 23: Top Business Priorities
Top Business Priorities 70% of companies indicated that Human Capital/Talent Management is one of their top five business priorities over the next three years Human Capital/Talent Management 70% Technology Implementation 57% Operational Efficiency/Cost Management 57% Customer/Client Service 57% Reve
Slide 24: Effectiveness of Human Capital Programs and Processes
Effectiveness of Human Capital Programs and Processes + Strengths ̶ Opportunities 75% or more respondents consider the 52% or more respondents consider the following programs and processes to be following programs and processes to be effective, highly effective, or exceptionally ineffective or only
Slide 25: Effectiveness of Human Capital Programs and Processes
Effectiveness of Human Capital Programs and Processes Ineffective Moderately Effective Effective Highly Effective Exceptionally Effective Benefits Compensation Retention of Top Talent Organization Culture Sourcing and Recruiting Communication and Feedback Onboarding Employee Engagement Employee Asse
Slide 26: Program Support and Alignment with Strategic Business Priorities
Program Support and Alignment with Strategic Business Priorities Many organizations agree that human capital programs and processes – regardless of effectiveness – are not highly supportive of or aligned with strategic business priorities: Human Capital Programs and Process Percent of respondents ra
Slide 27: HR Function Components
HR Function Components While many organizations agree that key components of their HR Functions are effective, less than half rated their HR Functions as supportive of or aligned with strategic business priorities: Over 70% of respondents rated key components of their HR Functions as effective, hi
Slide 28: Assessment of Organizational Capabilities
Assessment of Organizational Capabilities Extent to which participants agreed or disagreed that the following organizational capabilities and skills met their organization's future business priorities. Strongly Disagree Disagree Neutral Agree Strongly Agree Policyholder understanding and intimacy Op
Slide 29: Capabilities Required to Meet Current and Future Business Priorities
Capabilities Required to Meet Current and Future Business Priorities + Strengths ̶ Opportunities Meeting Current Business Priorities: Meeting Current Business Priorities: 62-76% of respondents strongly agree or agree that they 12-18% of respondents strongly disagree or disagree that have the followi
Slide 30: My Company Has Practices Required to Meet Future Business Priorities
My Company Has Practices Required to Meet Future Business Priorities The chart demonstrates number of participant’s that agreed or strongly agreed that their organization had the practices to meet their organization's future business priorities. 64% Employee value proposition helps to attract and re
Slide 31: Practices Required to Meet Current and Future Business Priorities
Practices Required to Meet Current and Future Business Priorities + Strengths ̶ Opportunities Meeting Current Business Priorities: Meeting Current Business Priorities: 74-80% of respondents strongly agree or agree that they 19-32% of respondents strongly disagree or disagree that have the following
Slide 32: Critical Needs for the Future
Critical Needs for the Future Participants were asked what will be the most critical business needs for the future. Top 5 Most Common Themes Customer Analytics / Technology Talent Leadership Centricity Data Talent Solutions For Mutual Insurers Proprietary & Confidential 32
Slide 33: Practices to Start, Continue and Stop
Practices to Start, Continue and Stop Participants were asked what activities the human resources organizational should Start, Continue and Stop in order to meet future needs Activities to Start Activities to Continue Activities to Stop 1. Planning 1. Talent Development 1. Manual/Outdated Processes
Slide 34: Implications and Q&A
Implications and Q&A Financial results are losing steam more quickly. Expense management is becoming a greater priority with market headwinds. Finding and retaining top talent is more difficult than ever. Data analytics driving more company-wide decisions but companies indicate weakness in t
Slide 35: What questions do you have?
What questions do you have? Empower Results®
Slide 36: For more information or to schedule a one-on-one meeting
For more information or to schedule a one-on-one meeting: Visit Aon Benfield’s Mutual Insurance webpage for an overview of our offerings including: – Growth strategies – Industry leading analytics – Capital solutions – Operational consulting and benchmarking – Innovative reinsurance Aon Benfield
Slide 37: Biographies
Biographies Chris Delhey - Leader of Aon Benfield's Mutual Insurance Practice Group Chris has 30 years of industry experience including servicing a highly diverse book of business: general casualty/CMP, personal lines, national and regional property, workers’ compensation, professional liability,
Slide 38: About Aon
About Aon Aon plc (NYSE:AON) is a leading global provider of risk management, insurance brokerage and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 72,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via