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Aon plc AON reported fourth-quarter 2025 adjusted earnings of $4.85 per share, which surpassed the Zacks Consensus Estimate by 1.9%. The bottom line advanced 10% year over year.
Total revenues of $4.3 billion grew 4% year over year. However, the top line fell short of the consensus mark by 1.7%. Organic revenue growth was 5%.
The quarterly results gained from solid organic revenue growth, robust new business and high retention across key solution lines like Commercial Risk and Reinsurance Solutions. Growth in insurance-linked securities and advisory demand in Retirement services also contributed, along with net restructuring savings that supported a margin expansion. However, the upside was partially offset by increased operating expenses linked to the Accelerating Aon United Program and unfavorable foreign currency translation.
Aon plc price-consensus-eps-surprise-chart | Aon plc Quote
Total operating expenses inched up 1% year over year to $3.1 billion due to higher expenses related to organic revenue growth, unfavorable foreign currency translation and elevated Accelerating Aon United Program costs. The metric came marginally lower than our estimate of $3.12 billion.
Adjusted operating income came in at $1.53 billion, which improved 11% year over year in the quarter under review but missed our estimate of $1.55 billion. The metric gained as a result of organic revenue growth and net restructuring savings. Adjusted operating margin improved 220 basis points year over year to 35.5%.
Commercial Risk Solutions: Organic revenues rose 6% year over year in the fourth quarter on the back of new business and strong retention rates across North America, EMEA and Latin America. Revenues in this solution line advanced 7% year over year to $2.3 billion, marginally beating the Zacks Consensus Estimate.
Reinsurance Solutions: Organic revenues grew 8% year over year, attributable to strong growth in insurance-linked securities and the Strategy and Technology Group. Revenues amounted to $379 million, which improved 8% year over year and outpaced the consensus mark of $372 million.
Health Solutions: Organic revenues inched up 2% year over year in the quarter under review as a result of new business growth and strong retention rates. The solution line’s revenues increased 3% year over year to $1.1 billion, which missed the Zacks Consensus Estimate of $1.15 billion.
Wealth Solutions: Organic revenues grew 2% year over year on the back of a strong Retirement business, which received an impetus from sustained advisory demand in the UK and EMEA related to the impact of regulatory changes. Revenues totaled $490 million, down 10% year over year. The metric lagged the consensus mark of $537 million.
Aon exited the fourth quarter with cash and cash equivalents of $1.2 billion, which improved 10.1% from the 2024-end level. Total assets of $50.8 billion increased 3.7% from the figure at 2024-end.
Long-term debt amounted to $14.7 billion, down 9.9% from the figure as of Dec. 31, 2024. Short-term debt and the current portion of long-term debt totaled $589 million.
Aon generated cash flow from operations of $1.4 billion in the fourth quarter, which advanced 16% year over year. Adjusted free cash flows rose 16% year over year to $1.3 billion.
Aon bought back 2.7 million class A ordinary shares for roughly $1 billion in 2025. A leftover capacity of around $1.3 billion remained under its repurchase authorization as of Dec. 31, 2025. It paid out cash dividends of $629 million to shareholders in 2025.
Total revenues advanced 9% year over year to $17.2 billion. Adjusted earnings of $17.07 per share improved 9% year over year. Adjusted operating income increased 13% year over year to $5.6 billion in 2025. The adjusted margin of 32.4% improved 90 bps year over year.
Revenues are expected to register mid-single-digit or higher organic growth for 2026. The company expects the adjusted operating margin to expand within 70-80 bps. It also estimates adjusted EPS to witness strong growth this year. Free cash flow is projected to witness double-digit growth. Tax rate is estimated within 19.5-20.5%.
Aon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Of the insurance industry players that have reported fourth-quarter 2025 results so far, the bottom-line results of AXIS Capital Holdings Limited AXS, RLI Corp. RLI and Brown & Brown, Inc. BRO beat the respective Zacks Consensus Estimate.
AXIS Capital reported fourth-quarter 2025 operating income of $3.25 per share, which outpaced the Zacks Consensus Estimate by 9.4% and rose 9.4% year over year. Total operating revenues of $1.7 billion beat the Zacks Consensus Estimate by 5.2%. The top line rose nearly 9% year over year.
Net premiums written rose 13% to $1.4 billion, with an increase of 14% in the Insurance segment and growth of 5% in the Reinsurance segment. Net investment income decreased 4.5% year over year to $187 million. AXIS Capital’s underwriting income of $184 million increased 42% year over year. The combined ratio improved to 90.4 in the quarter from 94.2 a year ago,
RLI’s fourth-quarter 2025 operating earnings of 94 cents per share beat the Zacks Consensus Estimate by 23.6%. The bottom line increased 80.8% from the prior-year quarter. Operating revenues for the reported quarter were $449 million, up 3% year over year. The top line missed the Zacks Consensus Estimate by 0.4%.
Gross premiums written decreased 2.1% year over year to $463.2 million. This uptick can be attributed to the solid performance of the Casualty segment (up 2.4%). Net investment income increased 9.2% year over year to $42.3 million. The investment portfolio’s total return was 1.5% in the quarter. Underwriting income of $70.8 million surged more than threefold year over year. The combined ratio improved 1,180 basis points (bps) year over year to 82.6.
Brown & Brown reported fourth-quarter 2025 adjusted earnings of 93 cents per share, which beat the Zacks Consensus Estimate by 2.1%. The bottom line increased 8.1% year over year. Total revenues of $1.6 billion missed the Zacks Consensus Estimate by 2.1%. The top line improved 35.7% year over year. The upside can be primarily attributed to commission and fees, which grew 36% year over year to $1.6 billion and improved investment and other income.
Organic revenues declined 2.8% to $1 billion in the quarter under review. Investment income and other income increased 17.3% year over year to $27 million. Adjusted EBITDAC was $529 million, up 35.6% year over year. EBITDAC margin remained unchanged year over year to 32.9%.
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This article originally published on Zacks Investment Research (zacks.com).
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