Aon

Through 2020, Aon generated approximately $11 billion in revenue across Risk Solutions (insurance brokerage) and Human Capital (benefits, retirement). Pricing in the insurance brokerage market was traditionally based on commission percentages (a percentage of premium placed), which meant Aon's revenue per client was tied to the insurance cycle rather than the value of advice delivered. In a soft market, client premiums declined and so did Aon's commissions — regardless of the quality or complexity of the risk advisory work performed. Organic revenue growth had averaged 4-5% annually, and operating margins sat at approximately 29-30%.

Starting in 2021, Aon executed a pricing optimization strategy centered on analytics and advisory fee structures:

• Aon Business Services platform: Invested in a centralized analytics and data platform that enabled standardized, data-driven risk assessments across the global client base. This platform allowed Aon consultants to deliver proprietary analytics (catastrophe modeling, claims prediction, benchmarking) that justified advisory fees above standard commission structures.
• Fee-based advisory expansion: Shifted high-complexity risk consulting engagements from commission-based to fee-based pricing, where Aon charged for analytical insights and strategic advice independently of premium placement. Fee-based engagements carried higher effective rates than commission equivalents.
• Cross-solution bundling: Priced combined Risk Capital and Human Capital solutions as integrated offerings rather than standalone products, enabling premium pricing for the advisory overlay that connected insurance, reinsurance, and benefits strategy.
• Data monetization: Leveraged Aon's proprietary data assets (claims databases, benchmarking surveys) to create subscription analytics products sold alongside advisory engagements, adding recurring revenue streams at high margins.

• Organic revenue growth acceleration: Delivered 7% organic revenue growth in 2023, up from approximately 6% in 2022 and a historical average of 4-5%, reflecting higher effective rates per client.
• Revenue: Total revenue reached $13.4 billion in 2023, a 7.2% increase from $12.5 billion in 2022.
• Operating margin expansion: Adjusted operating margin expanded 80 basis points in 2023 to approximately 31.6%, building on 70 basis points of expansion in 2022 (to 30.8%) — consecutive years of margin improvement driven by better pricing and delivery efficiency.
• Revenue per professional: Improved as analytics-enabled advisory commanded higher fees per engagement without proportional headcount increases.
• EPS growth: Diluted EPS was $12.51 in 2023, up 3% from $12.14 in 2022. Adjusted EPS grew approximately 6%, lagging the 7% revenue growth — suggesting investment spending partially offset operating leverage gains from the pricing shift.
• Timeframe: 2021-2023 (ongoing).

• Aon's proprietary data assets (decades of claims, premium, and loss data across industries) provided unique analytical capabilities that justified premium advisory pricing
• Aon Business Services platform created delivery efficiency, enabling consultants to serve more clients with standardized analytics rather than bespoke analysis each time
• Hard insurance market (2020-2023) increased client demand for sophisticated risk advisory, creating an environment where fee-based pricing was accepted
• The failed Willis Towers Watson merger (abandoned in 2021) refocused management attention on organic growth and pricing optimization rather than integration