Skip to content
    AON
    Earnings call· Jun 2026(Q2 FY26)

    Aon Q2 FY26 earnings call AON

    Jul 29, 2026 Source

    Executive summary

    Aon plc Q2 FY26 — Strong Organic Growth Across All Segments Driven by Aon United Strategy and AI Investments

    Aon delivered strong Q2 FY26 results, with broad-based organic revenue growth and margin expansion, driven by its Aon United strategy and strategic AI investments. The company demonstrated resilient performance through a transitioning pricing cycle and accelerated technological change, leveraging its scalable ABS platform and disciplined capital allocation to generate significant free cash flow and shareholder returns. Management expressed confidence in achieving full-year guidance, emphasizing the durability of its business model.

    Highlights

    5

    • Achieved 5% organic revenue growth across all solution lines.

    • Expanded adjusted operating margin by 70 basis points to 28.9%.

    • Reported adjusted EPS of $3.81, up 9% year-over-year.

    • Generated $483 million in free cash flow, with double-digit growth expected for FY26.

    • Executed $1.1 billion in share repurchases in H1 FY26, exceeding the $1 billion annual objective.

    Concerns

    4

    • M&A services revenue was lower year-over-year in Q2 FY26, tempering overall commercial risk growth.

    • Experienced meaningful rate pressure in the reinsurance market, with 15% to 20% lower rates in treaty business.

    • Fiduciary investment income decreased 12% year-over-year to $58 million due to lower interest rates.

    • Navigating a competitive talent market, impacting the pace of revenue-generating headcount growth.

    Guidance & targets

    9
    CategoryTargetConfidence
    Organic revenue growth
    mid-single-digit or greater
    high materiality
    High
    Adjusted operating margin expansion
    70 to 80 basis points
    high materiality
    High
    Free cash flow growth
    double-digit growth
    high materiality
    High
    Effective tax rate
    19.5% to 20.5%
    medium materiality
    High
    Interest expense
    approximately 185 million
    low materiality
    High
    Other expense
    range between 15 million and 20 million
    low materiality
    High
    Restructuring savings
    100 million
    medium materiality
    High
    Total restructuring savings
    450 million
    medium materiality
    High
    Revenue-generating headcount expansion
    4% to 8%
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Commercial Risk
    Reflected continued strength in core P&C business, with new business generation and higher retention driving meaningful contribution from EMEA and North America. Construction delivered a fifth consecutive quarter of double-digit growth, driven by data center pipeline. MGA and MGU platforms benefited from client demand for specialized underwriting solutions. M&A services were lower year-over-year against an elevated Q2 '25 comparison, tempering overall growth, but a stronger second half pipeline is expected.
    New business contribution: 9-11 points (9 consecutive quarters)Retention: up 40 bpsConstruction growth: double-digit (fifth consecutive quarter)
    		—5%——
    Reinsurance
    Achieved 5% organic revenue growth despite meaningful rate pressure in the market, with 15% to 20% lower rates in treaty business. Strong new business activity, including new logos, more than offset rate pressure. Facultative placements performed well globally. Growth was further supported by double-digit performance in the Strategy and Technology group. Data center development efforts also contributed. Strong visibility into full year outlook given typical revenue seasonality.
    Treaty rates: 15% to 20% lowerStrategy and Technology group growth: double-digit
    		—5%——
    Health Solutions
    Driven by continued strength in core health and benefits business, particularly in EMEA where demand for global benefits remains strong. Growth also benefited from improved performance in talent solutions, converting a strong pipeline, and contribution from NFP, particularly in executive benefits. Demand is fueled by rising healthcare costs, evolving workforce needs, and increasing benefits complexity.
    		—5%——
    Wealth
    Reflected sustained demand for regulatory and valuation work across the U.K. and EMEA. Additionally, demand for increased pension risk transfer solutions in the U.S. contributed, as plan sponsors resume evaluating derisking opportunities and seek to improve balance sheet efficiency.
    		—5%——

    Operational metrics

    16
    Adjusted operating margin
    28.9%up 70 bps
    Q2 FY26

    Reflects impact of lower rates on investment income from fiduciary balances, benefit from AAU restructuring program, and continued operating leverage from scalable ABS platform.

    Adjusted EPS
    $3.81up 9% year-over-year
    Q2 FY26

    Reported for the second quarter.

    Fiduciary investment income
    $58 milliondown 12% from prior year
    Q2 FY26

    Higher average balances were more than offset by lower interest rates.

    Restructuring savings
    $25 million
    Q2 FY26

    Savings from the AAU restructuring program.

    Interest expense
    $179 million33 million lower than last year
    Q2 FY26

    Primarily due to lower average debt balances.

    Other expense reduction
    $15 millionlower than last year
    Q2 FY26

    Driven by remeasurements of balance sheet currency exposures to lower noncash pension expense.

    Effective tax rate
    20.1%up 360 basis points over Q2 '25
    Q2 FY26

    Q2 '25 benefited from a favorable discrete tax item.

    Capital allocated to tuck-in acquisitions
    $29 million
    Q2 FY26

    Targeted tuck-in acquisitions in middle market to align with strategic priorities and return thresholds.

    Total capital returned to shareholders
    $775 million
    Q2 FY26

    Represents the largest use of capital in Q2.

    Share repurchases
    $600 million
    Q2 FY26

    Part of total capital returned to shareholders.

    Share repurchases
    $1.1 billion
    H1 FY26

    Opportunistically accelerated repurchases during the first half of the year, exceeding the $1 billion annual objective.

    Revenue-generating headcount growth
    3%
    YTD

    Growth in revenue-generating headcount year-to-date.

    New business contribution to organic revenue growth
    10 points
    Q2 FY26

    Supported by a balanced mix of new client wins and expanding share of wallet with existing clients. Has contributed 9 to 11 points for 9 consecutive quarters.

    Net market impact to organic revenue growth
    modestly positive
    Q2 FY26

    Captures the impact of rate and exposure, despite a softer pricing environment in P&C and reinsurance.

    Data center life cycle insurance program capacity
    $5 billion
    current

    Increased capacity, broadening integrated risk solutions for digital infrastructure assets.

    Capital deployed in middle market tuck-in strategy
    over $350 million
    YTD

    Deployed year-to-date, including opportunities that enhance MGU and MGA capabilities.

    Industry KPIs

    4
    MetricValueDetails
    Capital returns$775 millionUSD
    Net investment income$58 millionUSD
    Retention persistencymid-90s%
    Broker specific when present5%%

    Product announcements

    2
    ProductTypeDetails
    Aon Claims CoPilotexpansion
    Data Center Life Cycle Insurance Programexpansion

    Deals & partnerships

    1
    NFPSale of MFP Wealth

    The sale of MFP Wealth generated proceeds, which had a tax impact on free cash flow in the second quarter.

    Risks & headwinds

    6
    Geopolitical uncertaintyongoing

    elevated

    Mitigation: Aon's integrated solutions help clients navigate complexity and operate confidently amid uncertainty.

    Uneven economic growthongoing

    uneven

    Mitigation: Aon's diversified business mix and client-centric model provide resilience.

    Increasing cyber threatsongoing

    increase in frequency and sophistication

    Mitigation: Aon's capabilities in risk management and technology help clients address complex cyber risks.

    Climate-related risksongoing

    challenge traditional underwriting and capital allocation models

    Mitigation: Aon helps clients with insight, advice, and execution on capital allocation and risk strategies.

    Transitioning pricing cycleQ2 FY26 and ongoing

    meaningful rate pressure in reinsurance (15% to 20% lower treaty rates); softer pricing environment in P&C

    Mitigation: Focus on new business generation, retention, and value-based solutions; diversified business model less correlated to pricing cycles; net market impact expected to remain modestly positive (0-2 points).

    Competitive talent marketongoing

    revenue-generating headcount growth at 3% YTD, below desired pace for full year target of 4-8%

    Mitigation: Aon's attractive value proposition (content, capability, client momentum) helps attract and retain high-quality talent, focusing on quality over quantity.

    What to watch in Q3 FY26

    5

    M&A services contribution to Commercial Risk

    H2 FY26
    CurrentMuted Q2 growth
    TargetTailwind for H2 FY26

    Why it matters

    M&A services are a significant component of Commercial Risk, and its recovery is expected to boost segment growth.

    M&A becomes a tailwind for the rest of the year, given our leadership role within PME.

    Q&A highlights

    6

    How did M&A services impact Commercial Risk growth in Q2, and what is the outlook for its contribution in the second half?

    M&A services muted Q2 growth due to a strong prior-year comparison, but announced transactions are up over 60%, indicating M&A will be a tailwind for the second half of the year. Other Commercial Risk components showed mid-single-digit or greater growth.

    “M&A becomes a tailwind for the rest of the year, given our leadership role within PME.”

    asked by David Motemaden · answered by Edmund Reese

    2 min read6 chapters

    Detailed Narrative

    01

    Client Demand and Market Complexity

    Clients are navigating an increasingly complex environment marked by elevated geopolitical uncertainty🌐, uneven economic growth, rising cyber threats, and challenging climate-related risks. This complexity drives demand for Aon's integrated solutions across risk, capital, and human capital, as organizations seek clarity and trusted partners to manage critical decisions. Aon's capabilities, such as the expanded Claims CoPilot, are designed to meet this growing need for insight and execution.

    02

    AI-Enabled Technology and Innovation

    Aon is leveraging AI-enabled technology to enhance client value and differentiate its offerings. The global expansion of Aon Claims CoPilot across North America, Asia Pacific, and EMEA integrates claims management onto a single platform, improving consistency and generating insights for risk strategies. This builds on Aon's track record of recovering over $10 billion in overturned declinations, demonstrating how technology combined with expertise drives better client outcomes.

    03

    Expanding Addressable Market and Capital Solutions

    Aon is actively expanding its addressable market by engaging with private equity firms and other capital providers to connect institutional funds with risk-bearing capacity. This strategy creates new sources of capital for clients and provides investors access to uncorrelated risk and return streams. A key example is the increase in capacity for its data center life cycle insurance program to $5 billion, broadening integrated risk solutions for digital infrastructure assets.

    04

    Middle Market Platform Growth and Tuck-in Strategy

    The company is strengthening its middle market platform through a programmatic tuck-in acquisition strategy, deploying over $350 million in capital year-to-date. These investments include enhancing MGU and MGA capabilities and leveraging the Aon Business Services (ABS) platform to accelerate NFP's growth. This approach reinforces Aon's confidence in expanding and strengthening its middle market presence over time⏳.

    05

    Performance Through the Cycle and Business Model Durability

    Aon's Q2 FY26 results reflect its ability to deliver consistent, strong performance through various market cycles, including a transitioning pricing environment and rapid technological change. The durability is attributed to the Aon United strategy, established over 15 years, and early, continuous investments in data and AI-enabled analytical capabilities. These structural advantages enhance competitive positioning and support sustained, compounding growth.

    06

    Disciplined Capital Allocation and Shareholder Returns

    Aon maintains a disciplined capital allocation model, balancing investments for growth with significant capital returns to shareholders. In Q2, the company returned $775 million to shareholders, including $600 million in share repurchases. For the first half of 2026, share repurchases totaled $1.1 billion, exceeding the annual objective and reflecting management's conviction in the firm's intrinsic value and strategic flexibility.

    AI-generated summary of the company’s earnings call. Not investment advice.