Slide 1: Aon Corporation May 2009
Aon Corporation (NYSE: AOC) May 2009
Slide 2: Presenters
GREG CASE Chief Executive Officer JOHN CULLEN Chief Financial Officer, Aon Risk Services - Retail SCOTT MALCHOW Vice President, Investor Relations
Slide 3: Safe Harbor Statement
Safe Harbor Statement This presentation contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These
Slide 4: Agenda
Agenda Section 1: Who Aon is, and how we differentiate Industry Leader in Risk and Human Capital Advisory Risk is Growing in Size and Complexity Largest Globally Owned Network of Resources and Capabilities Deep Management Team focused on delivering against 3 commitments Section 2: What we have achie
Slide 5: Aon: Industry Leader in Risk and Human Capital Solutions
Aon: Industry Leader in Risk and Human Capital Solutions #1 ADVISOR ON RISK GLOBALLY LEADING PROVIDER OF HUMAN CAPITAL SOLUTIONS 2008 REVENUE - $7.6 billion #1 Primary Insurance Brokerage #1 Reinsurance Brokerage #1 Captive Management Leader in Affinity Programs Human Capital Health & Benefits Broke
Slide 6: Complexity of risk is increasing
Complexity of risk is increasing Operating in Market Growing Source: AXCO Insurance Information Services BRAZIL CHINA GLOBAL Risk is both opportunity and downside protection Scrutiny of risk is increasing U.S. . And Complexity In Size Non-Life Written Premiums ($ billions) Magnitude of risk is incre
Slide 7: Largest Global Network of Industry-leading Resources and Capabilities
Largest Global Network of Industry-leading Resources and Capabilities GLOBALLY DIVERSIFIED REVENUE Total Revenue - 2008, $7.6 billion GLOBAL NETWORK Aon presence in 120 countries Unmatched retail brokerage network and capabilities Largest Global Network Unparalleled market insight and data Strongest
Slide 8: Agenda
Agenda Section 1: Who Aon is, and how we differentiate Section 2: What we have achieved over the last 3 years Improved Operationally, Delivering on our 3 Commitments to Shareholders Delivered Significant Progress Towards 20%+ Brokerage Margin Goal Transformed Portfolio and Focused Capital Towards Hi
Slide 9: Delivering on Our Commitments to Shareholders
Delivering on Our 3 Commitments to Shareholders 1. 2. * See Appendix for non–GAAP reconciliation 3. 380 bps 3% 2% 2% 12.3% 15.1% 16.1% 15% 43% 24% ORGANIC REVENUE GROWTH ADJUSTED PRETAX MARGIN* ADJUSTED EPS GROWTH FROM CONTINUING OPS* 2006 2007 2008 2006 2007 2008 2006 2007 2008
Slide 10: Brokerage Margin Improvement Towards Target of 20%+
Brokerage Margin Improvement Towards Target of 20%+ + +270 bps ADJUSTED PRETAX MARGIN Risk and Insurance Brokerage Services * See Appendix for non–GAAP reconciliation 16.1% 18.2% 20.0% 18.8% 2006 2007 2008 Target
Slide 11: Transformed Aon's Business to Focus on Risk and Human Capital
Transformed Aon’s Business to Focus on Risk and Human Capital REVENUE (percent) Divested $3 billion of lower margin Underwriting revenue (CICA, Sterling, Warranty and Construction Program Group) Grew Brokerage by $700 million and Consulting by $100 million Acquired $600+ million of higher margin rei
Slide 12: Agenda
Agenda Section 1: Who Aon is, and how we differentiate Section 2: What we have achieved over the last 3 years Section 3: What we will do over the next 3 years Drive revenue growth through platform investment and global alignment Continue to deliver substantial cost savings Effectively allocate capit
Slide 13: Drive Revenue Growth via Global Platform Investments
Drive Revenue Growth via Global Platform Investments AON Built from 400+ acquisitions Industry leading content and capabilities FROM 2006 » SALESFORCE.COM One revenue platform REVENUE ENGINE Market planning, customer feedback MARKET ANALYTICS Global premium flow insights CLIENT PROMISE One approach
Slide 14: Restructuring Programs will Continue to Deliver Substantial Cost Savings
Restructuring Programs will Continue to Deliver Substantial Cost Savings TOTAL RESTRUCTURING SAVINGS* (US$ millions) 78 273-306 454-464 492 CONTINUED DELIVERY OF COST SAVINGS VIA: * Restructuring charge for 2007 Program is $550M by 2010. Restructuring charge for Aon Benfield Program is $185M by 2011
Slide 15: Investing in People and Markets with Excess Capital Primarily Returned to Shareholders
Investing in People and Markets with Excess Capital Primarily Returned to Shareholders » » NEW MARKETS and TALENT ACQUISITIONS Construction Environmental Reinsurance – Benfield, Gallagher Re, Facultative Marine Aviation Life Sciences Affinity Programs – Footman James, Latin America Leadership in Key
Slide 16: Summary
Summary Greater client demands and needs Magnitude and complexity of risk is increasing globally Cost of volatility higher Aon well positioned #1 intermediary of both primary risk insurance and reinsurance Industry-leading network of global resources and capabilities A culture that is held accountab
Slide 17: Appendix
Appendix
Slide 18: Reconciliation of Revenue & Operating Income
Appendix – Page 1 Reconciliation of Revenue & Operating Income (millions except per share data) Risk and Insurance Brokerage Services Consulting Unallocated Income & Expense Total Revenue as reported 1,550 $ 309 $ (5) $ 1,854 $ Income (loss) from continuing operations before provision for income tax
Slide 19: Reconciliation of Revenue & Operating Income
Appendix – Page 2 Reconciliation of Revenue & Operating Income (millions except per share data) Risk and Insurance Brokerage Services Consulting Unallocated Income & Expense Total Revenue as reported 1,566 $ 343 $ (4) $ 1,905 $ Income (loss) from continuing operations before provision for income tax
Slide 20: Reconciliation of Revenue & Operating Income
Appendix – Page 3 Reconciliation of Revenue & Operating Income (millions except per share data) Risk and Insurance Brokerage Services Consulting Unallocated Income & Expense Total Revenue as reported 6,230 $ 1,358 $ 43 $ 7,631 $ Income (loss) from continuing operations before provision for income ta
Slide 21: Reconciliation of Revenue & Operating Income
Appendix – Page 4 Reconciliation of Revenue & Operating Income (millions except per share data) Risk and Insurance Brokerage Services Consulting Unallocated Income & Expense Total Revenue as reported 5,957 $ 1,352 $ 50 $ 7,359 $ Income (loss) from continuing operations before provision for income ta
Slide 22: Reconciliation of Revenue & Operating Income
Appendix – Page 5 Reconciliation of Revenue & Operating Income (millions) Risk and Insurance Brokerage Services Consulting Unallocated Income & Expense Total Revenue as reported 5,530 $ 1,282 $ (42) $ 6,770 $ Gain on Cambridge preferred stock investment (35) - - (35) Contingent commissions (15) - -
Slide 23: Primary Operating Segment Background Information
Primary Operating Segment Background Information Risk and Insurance Brokerage Services Human Capital Consulting
Slide 24: Risk & Insurance Brokerage Services
Risk & Insurance Brokerage Services #1 Primary Insurance #1 Reinsurance #1 Captive Management Leader in Affinity Programs Integrate merger with Benfield Group Roll-out Aon Client Promise and Global Risk Insight Platform (GRIP) Reduce non-client facing activities and expense Drive commission and fee
Slide 25: Human Capital Consulting
Human Capital Consulting Rollout worldwide brand strategy Drive global service delivery strategy Complete rollout of centralized global revenue platform Drive local market planning Manage pipeline and productivity $ in millions HOW DOES CONSULTING FIT WITH BROKERAGE? KEY INITIATIVES ADJUSTED PRETAX