Aon Q2 Earnings Beat Estimates On New Business Wins, Strong Retention

Aon plc AON reported second-quarter 2026 adjusted earnings of $3.81 per share, which surpassed the Zacks Consensus Estimate by 1.1%. The bottom line advanced 9% year over year.

Total revenues of $4.2 billion grew 2% year over year.  The top line missed the consensus mark by 0.4%. Organic revenue growth was 5%.

The quarterly results were supported by strong organic revenue growth, healthy client retention, operating margin expansion and disciplined execution. Solid performance across the Commercial Risk, Reinsurance and Health Solutions businesses was partly offset by weakness in Wealth Solutions.

Aon plc Price, Consensus and EPS Surprise

AON’s Q2 Operations

Total operating expenses inched up 1% year over year to $3.3 billion due to higher expenses related to organic revenue growth, investments in long-term growth and unfavorable foreign currency translation. This was partly offset by lower expenses associated with the sale of NFP Wealth. The metric was in line with our estimate.

Adjusted operating income amounted to $1.2 billion, up 5% year over year and in line with our estimate. The metric benefited from organic revenue growth, scale improvements in ABS and net restructuring savings, partially offset by growth investments. Adjusted operating margin improved 70 basis points year over year to 28.9%.

Q2 Segmental Performance

Risk Capital

Commercial Risk Solutions: Organic revenues rose 5% year over year in the second quarter on the back of new business and strong retention rates across North America and EMEA. Revenues in this solution line advanced 5% year over year to $2.3 billion, in line with the Zacks Consensus Estimate.

Reinsurance Solutions: Organic revenues grew 5% year over year, driven by increased treaty placements, new business wins and strong client retention, along with growth in facultative placements. Revenues amounted to $711 million, which improved 3% year over year but missed the consensus mark by 1%.

Human Capital

Health Solutions: Organic revenues inched up 5% year over year as a result of new business growth, strong retention rates and positive market impact. The solution line’s revenues increased 6% year over year to $818 million, which beat the Zacks Consensus Estimate by 0.4%.

Wealth Solutions: Organic revenue growth of 5% was driven by expansion in Retirement and continued demand for advisory services in the UK and EMEA amid ongoing regulatory changes. Revenues totaled $426 million, down 18% year over year. The metric lagged the consensus mark by 3.2%.

AON’s Q2 Financial Position

Aon exited the second quarter with cash and cash equivalents of $1.1 billion, which declined 11.1% from the 2025-end level. Total assets of $53.3 billion increased 5% from the 2025-end figure.

Long-term debt amounted to $12.9 billion, down 11.7% from the figure as of Dec. 31, 2025. Short-term debt and the current portion of long-term debt totaled $2 billion.

Aon generated cash flow from operations of $556 million, which decreased 30% year over year. Adjusted free cash flow decreased 34% year over year to $483 million.

Aon’s Capital Deployment Update

Aon bought back 1.9 million Class A ordinary shares for roughly $600 million in the second quarter of 2026. It also returned $175 million to shareholders through dividends. As of June 30, 2026, the company had approximately $7.7 billion remaining under its share repurchase authorization.

AON Reaffirms Its 2026 Outlook

Revenues are expected to witness mid-single-digit or higher organic growth in 2026. The company anticipates adjusted operating margin expansion of 70-80 basis points. It projects strong growth in adjusted EPS for the year. Free cash flow is likely to grow at a double-digit rate, while the tax rate is expected to be in the 19.5-20.5% range.

AON’s Zacks Rank & Key Picks

AON currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Of the insurance industry players that have reported second-quarter 2026 results so far, the bottom-line figures of RenaissanceRe Holdings Ltd. RNR, Chubb Limited CB and First American Financial Corporation FAF beat their respective Zacks Consensus Estimate.

RenaissanceRe reported second-quarter 2026 operating income of $12.92 per share, which surpassed the Zacks Consensus Estimate by 12.9%.  The bottom line also improved 5.1% year over year. Total operating revenues declined 6.7% year over year to $2.64 billion. The top line missed the consensus mark by 1%. Net premiums earned declined 8.8% year over year to $2.2 billion. Net investment income of $432.5 million advanced 4.7% year over year.  RenaissanceRe's underwriting income declined 0.4% year over year to $599.1 million. The combined ratio improved to 72.8% from 75.1% in the year-ago quarter. The Property segment’s net premiums earned of $881.6 million increased 1.6% year over year.

Chubb’s second-quarter 2026 core operating earnings of $7.26 per share beat the Zacks Consensus Estimate of $6.63 by 9.5%. The bottom line increased 18.2% year over year. Revenues rose 2.7% year over year to $15.77 billion but missed the consensus mark of $15.90 billion by 0.8%. P&C underwriting income increased 18.8% year over year to $1.94 billion. The combined ratio improved 180 basis points to 83.8%.Consolidated net premiums written increased 3.6% year over year to $14.71 billion. Pre-tax net investment income increased 12.3% to a record $1.76 billion. Chubb’s Global P&C net premiums written, excluding agriculture, advanced 2.8% to $11.99 billion. Life insurance net premiums written grew 7.5% to $1.94 billion.

First American Financial reported second-quarter 2026 operating earnings of $2.08 per share, which beat the Zacks Consensus Estimate by 15.6% and rose 35.9% year over year. Operating revenues climbed 15% to $2.1 billion. The top line surpassed the consensus estimate by 4.4%. Direct premiums and escrow fees reached $794.1 million, marking a 14.8% increase from the prior-year level. First American’s Investment income totaled $183.7 million, up 14.7% year over year. In the Title Insurance and Services unit, total revenues rose 16.9% year over year to $2 billion. Investment income increased 11% to $164 million. Adjusted pretax margin expanded 310 bps to 15.7%. Title open orders increased 0.7% to 188,200, while closed orders declined 0.7% to 137,300.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research