Good morning and thank you for holding. Welcome to Aon plc's Second Quarter 2024 Conference Call. At this time, all parties will be in a listen-only mode until the question-and-answer portion of today's call. I would also like to remind all parties that this call is being recorded. If anyone has any objection, you may disconnect your line at this time. It is important to note that some of the comments in today's call may constitute certain statements that are forward-looking in nature as defined by the Private Securities Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. Information concerning risk factors that could cause such differences are described in the press release covering our first quarter 2024 results as well as having been posted on our website. Now it is my pleasure to turn the call over to Greg Case, CEO of Aon plc.

Good morning, everyone. Welcome to our second quarter conference call. I'm joined by Christa Davies, our CFO; and Eric Andersen, our President. Additionally, we're delighted to be joined by Edmund Reese, who will succeed Christa as CFO on July 29. On our call today, Christa and I will provide our usual prepared remarks, and Edmund will highlight a few initial observations before he officially steps in to report Q3. As in previous quarters, we posted a detailed financial presentation on our website. We begin by thanking our colleagues around the world, including the 7,700 colleagues we welcome from NFP for the great work they do to deliver for clients, on each of the three pillars of our 3x3 plan, delivering Risk Capital and Human Capital solutions through our Aon Client Leadership Model scaled by the Aon Business Services platform. Let's now turn to Edmund. Edmund, on behalf of Global Aon, we're thrilled to have you on our team and your first day on Investor Call as you officially step into the CFO role on Monday. Welcome.

Thank you, Greg, and good morning, everyone. I'm incredibly excited to be here. First, I want to start by thanking my Aon colleagues for their very warm welcome. I've connected with literally hundreds of colleagues over the last month. And it's been great to meet everyone and really experience the energy and enthusiasm of Aon, and the commitment to deliver on our plans. What's been most exciting for me is seeing firsthand the investment in the corresponding growth opportunity for our clients, colleagues and shareholders as we deliver on a 3x3 plan over 2024, '25 and '26. And I have to say that with the 3x3 fully in place in '26 and the building momentum, equally compelling is the significant opportunity that will deliver value creation beyond '26 and over the long-term. Finally, the financial model is strong, and the company is performing and well positioned to continue to deliver long-term double-digit free cash flow growth. I also want to add that I'm looking forward to meeting investors and the sell-side in talking through how we will deliver on our guidance and continue to allocate and invest their capital with discipline, focused on high-return investments and capital return and, of course, reporting our third quarter results and fielding questions at that time. So Greg back to you.

Thanks, Edmund, and we're very excited to have you here. Before speaking to results in detail, we want to highlight a great example of the power of a united firm to deliver solutions where they're needed greatly. In Ukraine, until last month, there was no functioning war risk insurance market because carriers couldn't get reinsurance coverage due to standing war exclusions. Working with the US and Ukrainian governments, we created a solution that provides insurance and reinsurance capital to Ukrainian insurers, which has already brought in $350 million of new capital, encompassing a first-of-its-kind structure that facilitates new investments and economic recovery. This structure enables rebuilding and economic activity during the war and much more rapid investment in reconstruction and resilience longer term. This product couldn't have been created without global connectivity, expertise, data and analytics, on-the-ground relationships and local market knowledge and our proven ability to match risk and capital across private and public sectors. This innovative structure helps protect and grow the economy and helps the people of Ukraine recover and rebuild. It's a compelling example of the positive impact that our industry can have in addressing major challenges in the global economy. Turning now to current quarter results. In Q2, our team delivered 6% total organic revenue growth with all solution lines at 6% or greater, and both Aon and NFP delivering mid-single-digit organic revenue growth. For clarification and transparency, the 6% organic performance for Aon is 6% without NFP. With this organic growth, in the addition of NFP, we delivered 18% total revenue growth, 19% adjusted operating income growth and margins of 27.4%, an increase of 10 basis points year-over-year and 60 basis points from our combined 2023 margin baseline, including only two months of NFP. Year-to-date, we delivered 5% organic revenue growth, 11% total revenue growth and adjusted operating margin expansion, contributing to 12% adjusted operating income growth and 7% growth in earnings per share. Turning to our solution lines. In Commercial Risk, organic revenue growth of 6% reflects double-digit growth in EMEA and LatAm, with strong growth in North America, driven by net new business growth and strong retention. On average, we saw growth in exposures and generally flat pricing, resulting in moderately positive market impact. And while we're starting to see the turnaround in external capital markets, our M&A services business had modest positive impact in the quarter, although the available pipeline remains strong and growing. For NFP, growth for the two months was consistent with our North American business. Overall, a strong result. Finally, we're making great progress on priority talent acquisitions with continuing focus in this area and expect these new colleagues to contribute to further growth over time. Turning to Reinsurance. 7% organic revenue growth in Q2 reflects strong growth in treaty, with strength internationally in LatAm, EMEA and APAC. We saw increased capacity in the US property CAT space, which provides ongoing opportunity for our clients to increase and optimize their coverage supported by our team's leading expertise, data analytics and insight. Health Solutions delivered 6% organic revenue growth with high-single-digit growth globally in core health and benefits and real strength in consumer-facing and executive benefits, driven by new business wins. The market environment reflects an increased health care cost trend and positive impact from enrollment levels. NFP's contribution was consistent with Aon's performance, an impressive result in the midst of the closing. And finally, Wealth Solutions organic revenue growth was 9%, an outstanding result, reflecting ongoing strength in pension derisking and core retirement. NFP also delivered strong growth, driven by asset inflows and market performance. Overall, we're pleased with both the top and bottom line growth in the quarter as we continue to deliver against our 3x3 plan on all fronts. Further, after only two months of NFP, early progress is fully on track or ahead of expectations. Four key growth and value creation opportunities highlight this strong start. First, on independent and connected, outlining how we're bringing NFP into Aon. Our teams are coming together with a shared vision and client-first mindset, and they're building connectivity across Aon and NFP. Our early close is increasing momentum as we work together to deliver wins and bring the best from Aon and NFP to our clients. Second, top line growth. We're seeing strong organic revenue growth from NFP. And though early, we're on track to deliver our revenue synergy commitments, noting that we modeled zero net impact in 2024 and have seen strong client and colleague retention. Third, NFP's M&A engine is operating exceptionally well and the pipeline remains very strong. We've completed 14 deals so far in 2024 at attractive multiples weighted toward commercial risk and health. And we're finding that our independent and connected value proposition is distinctive and highly attractive. And fourth, bottom line growth. We're on track to fully deliver in line with guidance on all aspects of the combination through efficiencies, cost synergies and free cash flow impact, leveraging operational best practices from Aon Business Services. In summary, our Q2 and year-to-date results demonstrate progress against our financial guidance and our 3x3 plan, which will deliver superior content and capability across Risk Capital and Human Capital through Aon Client Leadership, ensuring we bring relevant client solutions all the time, all enabled through Aon Business Services. This performance will deliver compelling long-term value creation for clients, colleagues and shareholders. Before I turn to Christa for one final time, I want to take a moment to thank her again for a great partnership, leadership and friendship, and for her inspiring and invaluable commitment to building our firm. Christa, over to you for your thoughts on our financial results and long-term outlook.

Thank you so much, Greg, and thank you so much for the partnership. My time at Aon was and will continue to be the highlight of my career. I remain incredibly excited about the value creation potential we have ahead of us through the 3x3 plan. I'm thrilled to welcome Edmund, and I look forward to serving as an advisor to the team to support and ensure a smooth transition. Turning now to the quarter. As Greg highlighted, we delivered exceptional results in the second quarter, with 6% organic revenue growth highlighted by 9% in Wealth and 7% in Reinsurance. Our overall organic revenue growth does include the impact of NFP, beginning from April '25 when we closed the acquisition. So we only had two months performance, NFP's Q2 performance was in line with the business case as it delivered mid-single-digit organic revenue growth. NFP also contributed to the 18% total revenue growth in the quarter, which translated into a 19% adjusted operating income growth, margins of 27.4% and 6% adjusted per share earnings per share growth. These results position us well to drive progress against all elements of the 3x3 plan, driving results in 2024 and over the long-term. As I reflect on our performance for the first half of the year, as Greg noted, organic revenue growth was 6% in Q2, driven by net new business generation and ongoing strong retention. We continue to expect mid-single-digit or greater organic revenue growth for the full year 2024 and over the long-term. As Greg described, we're making excellent progress with NFP. We continue to expect that NFP will contribute to the firm's overall revenue growth through organic revenue growth, including $175 million of net revenue synergies by 2026 and inorganic growth from ongoing M&A. While it's early, we're on track to achieve deal synergies, with no net impact in 2024 from cost and revenue synergies and positive impact in 2025 and 2026. This is exactly in line with the guidance we gave when we announced the deal. It's also worth noting that voluntary colleague attrition at NFP is down year-over-year. Moving to operating performance. We delivered strong operational improvement with adjusted operating margins of 33.8% in the first half, an increase of 20 basis points, driven by revenue growth, portfolio mix shift, efficiencies from Aon Business Services and restructuring savings, overcoming expense growth, including investments in colleagues and technology to drive long-term growth. If we consider the combined historic margin profile of Aon and NFP, including two-thirds of NFP's results from the second quarter of 2023, adjusted operating margins expanded 60 basis points in Q2 and 80 basis points year-to-date, which is how we think about ongoing margin expansion. We're making meaningful progress on our Aon Business Services strategy, including through our restructuring program, which helps to accelerate our 3x3 plan and contributes to margin expansion through net savings. We continue to streamline and improve operational processes, moving work to the best locations and enhancing colleague and client experience with powerful new tools such as our property, casualty, D&O, cyber and health risk analyzers. Restructuring savings in the second quarter were $25 million, resulting in $45 million of restructuring savings year-to-date and 60 basis points of contribution to adjusted operating margin year-to-date. Restructuring actions completed so far are expected to generate $95 million of savings in 2024. We expect restructuring savings will fall to the bottom line. At this time, we continue to expect $100 million of realized savings in 2024 as we continue to accelerate our plans for Aon Business Services and our business. As we think about adjusted operating margins moving forward, we continue to expect to drive adjusted operating margin expansion over the full year on a combined firm basis and the long-term through ongoing revenue growth, portfolio mix shift to higher revenue growth, higher margin areas of the portfolio, and efficiencies from Aon Business Services. As we previously communicated, we think the right baseline from which to measure 2025 adjusted operating margin growth is 30.6%. Calculated out as 31.6% from 2023, less 100 basis point drag from NFP for the period from the April '25 close through the end of 2024. We also expect fiduciary investment income to be relatively flat year-over-year based on current interest rate expectations. So we expect the tailwind we've seen in the first half of the year will be reduced in the back half. So we remain committed to driving full year adjusted operating margin expansion in 2024 and over the long-term against this adjusted baseline of 30.6%. Turning to EPS. Adjusted EPS grew 6% in Q2 and 7% year-to-date, reflecting double-digit adjusted operating income growth and ongoing share buyback, partially offset by higher interest expense, the issuance of 19 million shares to fund the acquisition of NFP and a higher tax rate. Turning now to free cash flow. We generated $721 million of free cash flow year-to-date, reflecting strong operating income growth and lower CapEx, offset by payments related to NFP transaction and integration charges, legal settlement expense, restructuring and higher cash tax payments, as we've previously communicated. As we look forward, our free cash flow outlook remains strong based on our strong expected operating income growth and a $500 million long-term opportunity in working capital. We've communicated that, in the near term, free cash flow will be impacted by restructuring, higher interest expense and NFP deal and integration costs. In 2025 and 2026, NFP is expected to add $300 million and $600 million of incremental free cash flow, respectively, contributing to our overall expectation of long-term double-digit free cash flow growth. We allocate capital based on ROIC and long-term value creation, which we've done through time through core business investment, share buyback and M&A. As we look historically, we have a successful track record of balancing organic investment, acquisitions, divestitures and share buyback as we continue to optimize our portfolio against our priority investment areas on an ROIC basis. Given the very strong long-term free cash flow outlook for the firm, we expect share repurchase will remain our highest ROIC opportunity. We completed $500 million of buyback in the first half and continue to expect share buyback to be substantial at $1 billion or more in 2024 based on our current M&A expectations for the rest of the year. We also expect to continue to invest organically and inorganically in content and capabilities that we can scale to address unmet client needs. Regarding M&A, our M&A pipeline continues to be focused on our high priority areas, including the mid-market and attractive geographies that will bring scalable solutions to our clients' growing and evolving challenges, known that we closed an acquisition in France this quarter, bringing new specialist capabilities and health and benefits into Aon. We are also continuing to see success from NFP's impressive M&A engine. Since the beginning of 2024, NFP has completed 14 acquisitions at attractive multiples weighted toward commercial risk and health, representing $36 million in annualized revenue. As we previously communicated, we expect NFP to do M&A comprised of $45 million to $60 million of EBITDA per year, and they are on track for the full year 2024. We look forward to building on their established track record and executing against this strong pipeline to drive future growth in the space and value creation within our ROIC framework. Going forward, we'll continue to actively manage the portfolio and assess all capital allocation decisions on an ROIC basis, contemplating buyback, M&A and delevering. Turning now to our balance sheet and debt capacity. We remain confident in the strength of our balance sheet. As previously communicated, we expect our credit ratios to be elevated over the next 12 to 18 months, as we bring our leverage ratios back in line with levels consistent with our credit profile, driven by substantial free cash flow generation and incremental debt capacity from EBITDA growth, noting our track record of effectively managing leverage within our current ratings. In summary, our strong financial results in the quarter and year-to-date position us well to continue driving progress against all elements of our 3x3 plan and driving results in 2024 and over the long-term. We look forward to building on this momentum. With that, I'll turn the call back over to the operator, and Greg, Eric and I'd be delighted to take your questions.

Thank you. We will now begin the question-and-answer session. Our first question comes from Elyse Greenspan with Wells Fargo. Please go ahead with your question.

Hi, thanks. Good morning. Before I get into the questions, I just want to extend my congrats to Christa just on your successful career at Aon.

Thanks so much, Elyse.

Yes. Thanks, Christa. My first question is on Commercial Risk. I guess it's two parts. Maybe, Greg, you said the overall organic growth wasn't impacted by NFP. Would that statement also hold true for Commercial Risk? And then can you also just expand on what turned in the quarter? You guys went from 3% to 6%, and you saw a doubling of growth within that segment in the quarter.

Yes. Maybe I'll start, Elyse, but then important to get Eric's input and Christa's here, too. Listen, first of all, to your first question, yes, we want to be really clear about NFP has been two months. So you take NFP out completely, the 6% and all the solution line results would have been exactly the same without NFP. So that's exactly correct. And think about Commercial Risk, maybe put it in context a little bit. What we're seeing in Commercial Risk is exactly consistent with what you're seeing really across the firm. And you should expect and we expect that we're going to continue to make progress and build momentum in '24, '25 and '26 on the 3x3 plan. And again, this all starts with better understanding the client need and then taking some very specific hard steps to put Aon in a position to address this demand in a way that we think, Elyse, is going to be a better set of solutions and really distinctive and that's really the 3x3 plan, and you know what the elements of that are. And that's what delivered the 6% organic, the margin expansion and the OI growth. In Commercial Risk, specifically, again, even without NFP, 6% growth was driven by real strength in net new business generation and strong retention. And really the strong performance held across all major geographies. And we wouldn't probably get into quarter-to-quarter because the quarters are different. The mix is different between them. As we said in Q1, there were some external factors we saw last quarter that we didn't expect were ever going to repeat and they likely won't repeat, and they didn't repeat. And on average, you step back, you see growth in exposures, generally flat pricing resulting in modestly positive market impact. As we said, M&A services, we're starting to see the turnaround in external capital markets, but really M&A services really had a modest positive impact in the quarter. But our team, look, with the investments we've made and the caliber of that team and the capability are incredibly well positioned to take advantage of the growing and what is available pipeline out there now. And then again, with that said, NFP growth for the two months was consistent and that went into the overall, as Christa described. And I would also say we're making great progress on our priority hire pipeline in areas like energy and construction and expect these new colleagues to contribute to further growth over time. But really, Elyse what we're trying to highlight is Q2 is just a continuation of what we're doing with the 3x3 plan and you're starting to see that really play out and we expect it's going to continue for the rest of the year and then to '25 and '26 and beyond. But Eric, what would you add to that?

Yes, Greg. So first of all, I would say that strong retention and strong new business really are an outcome of the work that's been going on in the quarter. But just to touch a little bit on the priority hires, if I could, for a second, as you mentioned, in the key specialty areas, construction, energy, other industry areas. We're looking at those investments in people like we do any other investment. We want to bring in the best talent that is out there, support them with the best tools and analytics, whether it's the new analyzers that Christa talked about, some of the broker-led analytics, new tools like automated certificates of insurance to make sure we're providing the right colleague and client experience. But I would also say that the analyzers fit into what we've been doing around the $1 billion investment in ABS and those tools. And when you match that talent, that new talent and existing talent, right, the great talent that's already here at Aon, with those new tools, you begin to provide a different experience for our colleagues who can actually serve their clients better, but also to the clients themselves who get better insight from us really begin to unlock the analytics that we've been talking about, match that with the global broking capability, the access to the reinsurance capital, really the whole strategy around how we're bringing capital to clients, and you see a different experience. And we've seen it in client events, whether it's at RIMS or our property symposium or other client events that have been going on in the first half of the year, you really see the excitement from the clients who are starting to really understand what we're trying to give to them in the whole ecosystem of tools and talent and people. I could share stories and tell you some client wins and things. But really, the new news are these risk analyzers and you see it also on the Health side. The ability to show a client where their risks are, how they structure a program around it and then how they access global capital with a client leader who fully understands their business is actually helping us drive better, stronger retention and better net new business wins.

Thanks. For my follow-up question, the tax rate for the quarter exceeded 22%. I understand that you typically guide to around 18.5%, which reflects the five-year average. Is your tax rate structurally higher with NFP, or is there a one-time factor we should consider when assessing the ongoing tax rate?

Thanks so much for the question, Elyse. In Q2, similar to Q1, the tax rate was driven by a geographic mix of income and the impact of unfavorable discretes. I would note that discrete can be favorable or unfavorable in any one quarter, and therefore, the rate can be lumpy quarter-to-quarter. We really do think about it over the full year. And as you said, Elyse, we don't give guidance going forward, but that is a historically accurate rate going backwards.

And then one more quick question, Christa. I think you mentioned that NFP is expecting $45 million to $60 million of EBITDA in M&A, and you're on track this year, but there has been $36 million of revenue so far. So are you seeing a pipeline that is likely to be weighted more toward the second half of the year in terms of transactions?

That is exactly right, Elyse. And what we've really seen is the acquisition activities NFP slowed down a little as they were negotiating with us for obvious reasons. But the pipeline looks incredibly strong in the back half of the year, and we think they are fully on track to deliver that $45 million to $60 million of EBITDA in 2024.

Hey, good morning. And also just a congratulations to Christa on the next phase of her career. What an awesome run you've had at Aon. Just exceptional leadership operationally, technologically, I mean, unparalleled as a CFO. So we'll miss watching you in action, but congrats on the next phase.

Thank you very much, Andrew.

Sure. Returning to Commercial Risk Solutions, Greg and Eric mentioned new hires in the energy area. Could you provide more details on this? I want to note that there have been concerns about Aon's net hires being negative. Can you discuss whether net producer staffing in the second quarter was positive or negative? Did this have a significant impact on the second quarter? How do you anticipate this will develop in the second half of the year? Do you expect to see a positive net hiring trend?

Thank you, Andrew. I appreciate your insights. Firstly, I want to highlight that we are currently experiencing the highest level of engagement we've ever had. This is a positive development that continues to evolve. Our team is genuinely committed to supporting and helping our clients, which is evident in the strong example we discussed today, showcasing the real impact our firm can make. This energy contributes to our high engagement levels, and it is reflected in our low voluntary attrition rates, which are even lower than pre-pandemic levels. However, while things are going well, we have identified certain priority opportunities, particularly in construction and energy, among others. We are fortunate to have attracted talented colleagues to help drive these areas. It's crucial to recognize that our focus is not just on numbers but on enhancing our capabilities. We aim to bring in skilled professionals and equip them with advanced analytical tools. Our unique analytics capabilities, supported by our Aon Business Services platform, set us apart. Additionally, we made a strategic decision to invest $1 billion to accelerate this capability, and we are beginning to see the early results of this investment, which will continue to manifest throughout the remainder of this year and into 2025 and 2026. We are committed to maintaining this investment as it enhances our firm and our ability to serve clients. Eric, what else do you have to add?

I would like to expand the discussion about producers. Greg, you mentioned the tools, which are indeed important. However, when considering what we provide for our clients, it's more than just production. It's about whether the client manager or client executive understands the client's industry. For instance, can an energy broker discuss the risks faced by a client? Are the claims personnel or risk analytics team equipped to align that knowledge with industry expertise? Therefore, when we talk about investing in sectors like construction, energy, or life sciences and pharmaceuticals, it's significantly more comprehensive than just having a producer. You need the appropriate skill set to support the client throughout the entire risk process and increasingly on the talent, health, and wealth fronts as well. We are directing our investments toward these growth areas and intend to maintain this strategy as the year continues.

So putting it in perspective, the 6% organic revenue growth aligns with your mid-single digit or higher goal, and it shouldn't be unexpected. It fits with the strategy you've outlined.

Yes. Andrew, if you step back and think about where we were, I know everyone tends to look at the quarter-to-quarter, we look at the overall trend over time, and in particular, just great, pure, core skill in our ability to make a difference with clients. And what we're describing is with the 3x3 plan, this is not conceptual. This is a serious double down on an organization around risk capital, which means we're connecting reinsurance and commercial risk capability in a way that's never been connected in our industry before. On the human capital side, as Eric talked about, with talent, health and retirement, that combination that has then been reinforced and supported and driven by Aon Business Services, and if you think about the talent, to the talent question you raised, we brought a very unique set of talent skills in Aon Business Services from our industry, but candidly, well outside of our industry from firms like Conagra and like Walmart, and like Google, and like Accenture and they've come together and did some things that have never been done. So that, to us, is the foundation that's been set down. And all you're seeing in the second quarter is just a manifestation of as that happens. That then gets amplified when you bring in capability, as Eric has described, and we're doing that and continuing to focus on that. So that's the story. And our view is, again, it's '24, '25 and '26. It's three commitments over the next three years that we think put us in a unique position to not only succeed with clients, but to build momentum, even Edmund alluded to this as he came in, to build momentum beyond 2026. So that's exactly what we're on track to do, and you can expect continuation in the second half of the year to see that play out.

Got it. And just quickly on NFP. Christa mentioned $45 million to $60 million of EBITDA acquired each year. How about a larger middle market acquisition? Is that something being considered, or do you need to focus on integrating NFP for a year or two before thinking about that?

Listen, first of all, you always step back, as Christa described, and has always done around our ROIC, return on invested capital framework, and what we're trying to do to sort of maximize outcome for our clients but also for our shareholders. So everything is in the construct of that. Listen, we love this platform. This has been fantastic. We had very high expectations of NFP coming in and they've been exceeded. Now it's only two months, but Doug Hammond and the team have been fantastic working with Eric, absolutely fantastic. We love this platform, what this platform can do. So that's really where we're going to concentrate. We're going to focus on that and reinforce the M&A plan that Christa talked about and really bring capability of Aon Business Services into the middle market in a unique way as well. And if you think about it, we want our colleagues in NFP to understand had a great franchise and capability before, now with additional capability for Aon, wow, even more for that producer group. So this is really going to be our focal point in every way, shape or form. And what we're finding is that's absolutely true. And also NFP has capability that actually resonates across global Aon. So it really is going both ways sort of in the context of it. So look for us to focus on that, to get that right and that's going to be our mission and really our obsession as we sort of complete '24 and into 2025.

Good morning. I'm curious about your comment regarding share repurchases being the highest ROIC opportunity. Could it be that M&A on the NFP platform represents a higher ROIC opportunity? However, considering Aon's size and the volume of M&A available, it seems you can't take full advantage in the short term. Am I misunderstanding the math here, especially since a market multiple is typically paid for M&A and smaller acquisitions?

Yes. Thanks so much for the question. The first thing I'd say is if you model the free cash flow growth of Aon, which is substantial and accelerating as a result of the 3x3 plan and the investment we've made in restructuring and the return on that and NFP, the highest return on capital across Aon remains share buyback. It is a phenomenal return. It's a phenomenal return at today's price. It's a phenomenal return at our all-time highs. And so we will disproportionately allocate capital to share buyback, which is what you've seen us do, despite commitments we've got in 2024 on paying down debt and delevering and the NFP transaction costs and some other uses of cash in 2024. And we'll commit to do over $1 billion of buyback in 2024 and over the long-term because that's really driving amazing free cash flow growth, and therefore, amazing free cash flow per share growth for shareholders.

It's interesting to note that some of your peers seem to be more optimistic about the margins than what I've projected. Shifting focus to the overall market environment and organic growth, it’s encouraging to see improvements in Risk Solutions. You've mentioned that the M&A environment is gaining momentum. Would it be accurate to say that, while financial lines like cyber—where Aon is a leader—continue to be a drag, it's becoming less of a burden? If those markets start to see pricing normalize, could this be mainly a pricing issue? Is there any additional insight you can provide regarding the ongoing macroeconomic trends?

Sure. This is Eric. I'll address this one. We're observing a transitioning market across Aon's global platform, where pricing is generally flat. However, there are numerous smaller markets, including property, casualty, and specialty lines. In terms of cyber and Directors and Officers insurance, pricing is currently favorable for buyers, representing a buyer's market, but that pricing is beginning to stabilize and is not as pronounced as it was previously. Regarding transaction services, as Greg pointed out, we're seeing a reasonable share of the pipeline for ongoing activities, which gives us confidence. On average, property pricing is moving towards flat, with better risks possibly seeing price reductions, while more challenging risks may still see slight increases. Casualty, particularly post-pandemic, is drawing significant attention due to questions about pricing adequacy and reserve requirements, particularly in the auto sector, but it's still experiencing a pricing increase overall. Client behavior changes in this environment—they may find savings in some areas and choose to invest that premium in other crucial areas. Over the past five years of a tough market, clients often reduced coverage or took on higher risks, but now they have the opportunity to reconsider those choices. We expect to continue seeing market changes throughout the year, influenced by evolving client behaviors. This also highlights the advantages of our risk analyzer, which helps clients compare their existing insurance programs and make informed decisions about where to allocate new funds for better protection. It’s an excellent chance for clients to reassess their current positions and strengthen their financial safeguards moving forward.

Thank you.

Hi, good morning. I have a question regarding organic growth in Commercial Risk. This quarter seems to be the best you've had in over a year. Could you identify two or three major factors that may have contributed to this increase compared to the previous quarters? I’m curious how much of this was influenced by hiring or capital markets activity, and any insights you could provide on the reasons for the growth would be appreciated.

So Jimmy, thanks for the question. I'll start, and Eric, add additional color from the client standpoint. As we talked about, Jimmy, this is really net new business generation and strong retention. Those are the two macro pieces sort of that drive this. What causes that? What causes that is literally what we're doing at the call phase with clients, and what we put in place last year on risk capital and human capital really reinforces that. Eric just talked about the examples on the risk analyzers. These investments, Jimmy, are unique. I mean they are literally putting us in a position where we can help clients see the risk market a bit differently and make different choices. The prior question was about unit price. This isn't about unit price. This is overall about overall volatility and how you think about it across the coverage lines. We have a chance to sort of talk to clients about that. That's why you win new logos. That's why you do more with clients. That's why you keep them longer. All those things are beginning to show up. And what we've highlighted is you can expect that to continue to progress for the back half of the year and into '25 and '26. So this is really what's driving what we're doing. This is the baseline. When you add on top of that the investments we're making in capability in some of these priority areas that we see great demand, we've name checked construction and energy. There are a few others, but those are the big pieces. And that's really the overall set of drivers. Eric, anything else you want to throw in there?

Greg, maybe let me pick it up a little bit of a level. We put out a report recently around a better decisions report that focused in on these four major trends that are happening around tech, trade, workforce and weather and how business leaders feel like they're not prepared to deal with all these. And this cyber-attack or system outage that happened this week is just one example that brings it to mind. And so clients are really looking hard at their risk exposures that give us an opportunity as a connected firm globally with the right analytics to be able to help them navigate some of these topics. And so we've been seeing this building in terms of client need and strong growth in Europe, strong growth in Latin America, connected around client opportunities everywhere in the world. So a lot of the underpinnings that have been our Aon United strategy have really begun to take effect in a period where clients feel significant need.

Okay. And then maybe on the tax item, how much of the uptick in the tax rate versus last year was because of just the geographic and the product mix versus maybe some discrete items, just to get an idea on where it would have been otherwise?

Yes. Thanks for the question. We haven't actually given that detail in terms of the split, but it is consistent with Q1 in that the two things driving it really are the mix of geographic income and unfavorable discretes. And I would say discretes can be favorable or unfavorable in any one quarter, which makes the tax rate lumpy by quarter, and I would go back to saying the way we think about it is over the course of a full year.

Hey, thanks. So yes, there's been a couple of questions here on Commercial Risk, organic. But I don't think specifically on net new business in the US, which I think you guys were a little bit more cautious on last quarter. It looks like North America turned around a bit, and I don't think net new business would have necessarily been one of those things that were kind of nonrecurring last quarter. So any additional color on how that net new business trends in the US? And if it improved meaningfully, what would have driven that quarter-over-quarter?

Yes, Rob, thank you for your question. Let's take a step back. It's important to be cautious when comparing quarter-to-quarter results. If we consider Commercial Risk compared to the second quarter of 2023, we're at 6% this quarter and 5% last quarter, indicating a progression over a comparable period. The fundamentals remain as we described; we’re seeing net new business, enhanced retention across the board, and our firm's connectivity allows us to leverage human capital and risk capital effectively, resulting in increased client engagement. This progression is evident as we implement our 3x3 plan. The momentum we anticipated is starting to materialize, particularly in the second quarter where we’re seeing improvements that were less pronounced in the first quarter. We expect this trend to continue as we introduce new analyzers and service enhancements as Eric mentioned. This growth is consistent globally; all our solution lines are performing at 6% or higher, with even more strength observed outside the US compared to domestically. This positive trajectory is straightforward; it comes down to effective execution, which we are committed to, further enhanced by our hiring efforts focused on crucial capabilities.

Great, thanks. Thanks so much. I also want to congratulate Christa on never having to take another question from me except for this one. Thank you, Meyer.

My pleasure. Is it safe to say that the geographic footprint of earnings, including NFP, with regard to taxes is different than legacy Aon over the last decade?

We are definitely more US weighted, that is true, because NFP is more US weighted.

Yes. I just wanted to follow up on your comments you just made on the last question. The NFP, the legacy NFP producers, are they already using the new tools from Aon? Or is that something that's going to take a bit longer to give them access to?

In the planning process before the close and in the 90 days since closing, we have worked hard to connect them with products and capabilities, as that is the easiest starting point. We are also establishing the groundwork to provide analytics capabilities in Health, Wealth, and Risk, which will take some time as we progress through the year. We began by opening access to our broking center and introducing products related to our programs in Risk and Health to their client base. We started with the more straightforward connections and are planning for the more structural aspects of analytics.

Makes sense. And my second question is on cyber. In light of last week's CrowdStrike outage and the fact that it's unlikely to be the last time we see this given how interconnected the digital world is, on a go-forward basis, do you think your clients who already have cyber insurance, do you think they have the right amount of insurance and the right type of cyber protection in place in case their business comes to a halt due to systemic outage driven by the software glitch from the third-party or something of the like?

Sure. Listen, I think that's hard to answer that question on a macro basis in terms of what does each client have. Certainly, the focus has historically been on kind of malicious intent on a cyber-hack, but certainly a system outage not driven by a cyber-assault does create a new form of risk exposure. That's always been there, honestly, but maybe now is at the front of mind as people look to see the type of cover that they have. I think the insurance part of it, the risk taker part is certainly going to look at that from a scope of cover, price for the coverage, all that's healthy in a growing marketplace. But certainly, technology overall whether it's AI or cyber or what have you, it's certainly front of mind of our clients as we, Greg and I, both mentioned in that survey we just put out. And so I do think it will be an area where we continue to invest and want to be able to provide that capability and understanding to our clients with the cyber analyzer that we're launching. But certainly, when things like this happen, it certainly raises the profile and causes each of our clients to look pretty carefully at their own risk platform to understand it.

Just wanted to do two things. First, again, recognize and welcome Edmund. Edmund, so awesome to have you around the leadership table, and just looking forward to our work and our mission together. And will be teed up and ready to go for Q3 to lead the call. So thanks for that, Edmund. And then, of course, to Christa. Christa, you are an extraordinary leader and an even more compelling individual. And thank you. Thank you so much on behalf of global Aon for 16 years of true, true excellence. Thanks so much. Talk to you soon everyone.

And this concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.