Aon plc Class A Q2 2026 Earnings Call

Good morning, and thank you for holding. Welcome to Aon plc's second quarter 2026 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 an objection, you may disconnect your line at any 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 Litigation 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.

For information concerning these risk factors, please refer to our earnings release for this quarter and to our most recently quarterly or annual SEC filings, all of which are available on our website. It is my pleasure to turn the call over to Greg Case, President and Chief Executive Officer of Aon plc.

Thanks, Dylan, and good morning, everyone. Thank you for joining our second quarter earnings call. I'm here today with Edmund Reese, our CFO, and as always, the financial presentation, which Edmund will reference, is available on our website. Consistent execution, the strength of our Aon United strategy accelerated through the 3x3 Plan, and the resilience of our business model produced second quarter and first half results in line with objectives. In addition, our investments in talent, technology, and innovative capital solutions continue to strengthen the value we deliver, expand our addressable market, and drive sustainable growth. As we enter the second half of 2026, we're well-positioned to deliver on our strategic and financial commitments and continue generating long-term shareholder value. My remarks today focus on three areas. First, how client demand continues to grow as organizations navigate increasingly interconnected risk and workforce challenges.

Second, our organizational structure, which brings together Risk Capital and Human Capital and is supported by Aon Business Services and our substantial investments, drive our ability to meet client demand and differentiate Aon in the marketplace. Third, how our investments are translating into strong client impact, durable growth, and confidence in our ability to deliver through-the-cycle performance. Let's start with the external landscape. The environment facing our clients continues to evolve rapidly. Geopolitical uncertainty remains elevated. Economic growth remains uneven. Cyber threats continue to increase in frequency and sophistication. Climate-related risks continue to challenge traditional underwriting and capital allocation models. At the same time, organizations are adapting to profound workforce changes. The common thread across these developments is increasing complexity. As complexity rises, decision-making becomes more difficult, and the cost of being wrong is more consequential. Clients are seeking greater clarity around risk exposure, capital allocation, and workforce strategy.

They need integrated solutions and trusted partners who can help them navigate uncertainty rather than simply react to it. This is creating growing demand for the capabilities that distinguish Aon in the marketplace. Our expansion of Aon Claims Copilot during the quarter is one example. Building on our successful launch in November, our expansion across North America, Asia Pacific, and EMEA brings a substantial portion of our global claims management information onto a single technology platform. Claims Copilot, recently recognized by Business Insurance as the Innovation of the Year, enables delivery of a globally consistent claims experience for clients while strengthening our ability to generate insights that inform placement, negotiation, and broader risk strategies. This expansion underscores our continued investment in AI-enabled technology and innovation to help clients navigate the current environment. Importantly, Claims Copilot enhances our strong track record of claims performance.

Over the past decade, we've helped clients recover more than $10 billion in financial value from overturned declinations through our advocacy. By combining that expertise with Claims Copilot, we're helping clients achieve better outcomes. The same dynamics that increase demand for our capabilities are also driving demand, both within the segments where Aon is historically strong and in areas where we see opportunities to expand our addressable market. Our enterprise, large, and middle-market clients have complex needs. They're seeking insight, advice, and execution, not just transactions. Their decisions depend on combining data, analytics, expertise, and judgment. Organizations are increasingly seeking access to new sources of capital to fund growth and managing volatility. Aon is creating opportunities to engage with private equity firms and other capital providers, helping clients access the risk-bearing capacity necessary to support their strategic objectives.

The opportunities we see today are the result of deliberate decisions we've made over the years. Aon United remains at the center of our strategy and underpins our competitive advantage. The concept is simple, yet powerful. By bringing together expertise across Risk Capital and Human Capital, we create more value for clients, expand access to capital, and drive growth. Aon Business Services is foundational to this strategy. Over the last several years, we've accelerated investment to improve our ability to diagnose risk, access capital, and deliver better outcomes for clients. Our advantage has never been rooted in technology alone. It always comes from combining deep expertise, trusted relationships, and proprietary insights to help clients navigate important decisions. That is particularly evident in areas where we've developed substantial proprietary data and expertise. Within Talent Solutions, for example, we're helping clients understand how AI will reshape workforce strategies.

Our ongoing investments and capabilities, such as the Radford McLagan Compensation Database and our proprietary AI sensitivity tool, are enhancing insight we bring to clients as they assess the impact of AI on their organizations and make informed talent decisions. As clients reskill and redeploy talent, we're helping them strengthen the employee experience. For example, through Aon Activate, our data-led, AI-powered total rewards and benefits platform, organizations can deliver a more connected, personalized experience across benefits, well-being, pensions, and rewards. These capabilities are helping clients address both sides of the workforce transformation, enabling employees to adapt to the changing nature of work while enhancing the experience that supports them. Across the firm, we see growing evidence that our technology investments are enabling our strategy and enhancing value for clients.

Organizations increasingly turn to us to help them navigate some of their most important strategic decisions around digital infrastructure and data centers. A recent engagement with one of the world's largest technology companies demonstrates the value of our integrated approach. As the client accelerated its investment in large-scale digital infrastructure, traditional risk solutions were no longer sufficient. We brought together expertise across Commercial Risk and Reinsurance to help redesign the client's risk financing strategy, expand available capacity, and improve operational efficiency. Importantly, the client was looking for a strategic partner that could help reimagine the process using technology, integrate more effectively with its own sophisticated systems, and create a more data-driven approach to managing risk and capital.

This is not a one-off example, but reflects a broader opportunity as companies across the tech industry are turning to Aon to help address their complex risk, resilience, and capital challenges through coordinated solutions. The scale of this opportunity and the value we bring to clients is further reflected in the continued expansion of our Data Center Lifecycle Insurance Program. Last week, we announced an increase in program capacity to $5 billion, while broadening the integrated risk solutions we provide to support digital infrastructure assets throughout their lifecycle. We're also seeing increasing demand from private equity and other capital providers as they seek differentiated insights and capability to deploy capital more effectively. As we deepen our relationships with these firms, we're creating and helping connect institutional funds with opportunity while creating new sources of capital for clients and providing investors with access to uncorrelated risk and return streams.

In doing so, we're expanding the addressable market, strengthening resilience, and reducing the protection gap for clients. Demand for our integrated capabilities is proving equally powerful in the middle market, where we continue to see increased adoption of data-driven analytics and greater collaboration across solution lines. We're expanding our middle market platform through our programmatic tuck-in strategy and have deployed more than $350 million in capital year to date, including opportunities that enhance our MGU and MGA capabilities. At the same time, we continue to draw on our ABS platform to accelerate NFP's growth. The success we're seeing today reinforces our confidence in continuing to invest behind these opportunities to further expand and strengthen our middle market platform over time. Taken together, these examples demonstrate how we connect risk, capital, and people solutions to drive stronger client outcomes and expand the opportunities.

The continued demand for our capabilities reinforces the power of what we've created by integrating Risk Capital and Human Capital and is translating into strong financial performance and momentum. Turning briefly to our second quarter results. We delivered 5% organic revenue growth, achieving mid-single digit or greater organic growth across all solution lines. 70 basis points of adjusted operating margin expansion, 9% adjusted EPS growth, and $483 million of free cash flow. Edmund will discuss our financial performance and capital allocation strategy in greater detail, but I'll note that our balance sheet remains strong and flexible, supporting our disciplined approach to capital allocation. Looking ahead, we're confident in the trajectory of the business. The environment will continue to evolve. Pricing conditions will change. New technologies will emerge. Capital and client needs will continue to become more complex and interconnected. However, these dynamics increase the relevance of Aon's capabilities.

Organizations increasingly need insight, expertise, and execution that span risk, capital, and workforce decisions. They need partners capable of helping them operate confidently amid uncertainty. Now more than ever, we're exceptionally well-positioned to meet that need. Our organizational alignment around Risk Capital and Human Capital, supported by Aon Business Services, further strengthens our ability to bring together distinctive capabilities on behalf of clients. As our capabilities expand and client relationships deepen, we continue to see growing opportunities to create value. For our 3x3 Plan, we're focused on continuing to execute with discipline and build on capabilities that support growth well beyond the plan. Finally, to our more than 60,000 colleagues around the world, thank you. Thank you for your commitment to our clients, each other, and our Aon United strategy. Your dedication continues to drive our success and position us for long-term growth.

Let me turn the call over to Edmund. Edmund? Thank you, Greg, and good morning, everyone.

Before turning to the details of our second quarter results, I want to frame today's discussion on the continuation of a consistent theme through the cycle performance. Over the past several quarters, disciplined execution across our business and financial model has translated into consistently strong performance in line with or above industry across the key financial metrics, including organic revenue growth. As we move into the second half of 2026, our underlying business and financial model, the foundation of that performance, remains unchanged. What has evolved is the environment in which we are executing. We are operating in a period characterized by both a transitioning pricing cycle and an accelerated pace of technological change. Periods like this increase the dispersion across outcomes and bring in the sharper focus to business models that are structurally advantaged and built to perform through the cycle.

Against that backdrop, our results continue to reflect differentiated performance. We are delivering top-line growth, expanding margins, and generating strong free cash flow. Our consistency, particularly in a changing environment, is an important signal. It reflects not just execution in a single period or given quarter, but the durability and persistence we expect from our underlying model. That durability is grounded in structural decisions we've made over time. Our client-centric organizational model, Aon United, now established over more than 15 years, aligns how we deliver solutions, invest in talent, and allocate capital. Combined with our early and continued investment in data and increasingly AI-enabled analytical capabilities, we are enhancing the quality, speed, and relevance of the insights we deliver to clients. As value continues to shift toward insight-led decision-making that drives client outcomes, that advantage becomes even more pronounced.

We also recognize that the current pace of technological change broadens the range of potential long-term outcomes. Importantly, our disciplined approach remains consistent. We continue to make deliberate high-conviction investments, many of which generate value today and build strategic advantage over time. Regardless of how the technology landscape evolves, these investments act as catalysts to strengthen our competitive advantage and support sustained growth that compounds. Periods like this tend to further differentiate strong businesses. As we look at our performance and our positioning, we believe that is exactly what is occurring. In the changing environment, consistent performance is the clearest signal, and that is what our results continue to demonstrate. With that framing, let's turn to our second quarter results. On slide five, you see the second quarter results. Organic revenue growth was 5%, and total revenue increased 2% year-over-year to $4.2 billion.

Adjusted operating margin expanded by 70 basis points for the quarter and reached 28.9%. Adjusted EPS was up $3.81, up 9% year-over-year. Finally, we generated $483 million in free cash flow. Let's get into the details of these results, starting with organic revenue growth on slide six. Organic revenue growth was 5% in the quarter, in line with our mid-single digit for better guidance. Growth was broad-based, with all four solution lines delivering 5% organic revenue growth, reflecting the strength of our diversified business mix and the consistency of the growth drivers underpinning our performance. That consistency is most evident in new business, which has contributed 9-11 points for nine consecutive quarters, providing a durable foundation for sustainable growth through varying market conditions.

In Commercial Risk, organic revenue growth was 5%, reflecting continued strength in our core P&C business, where new business generation and higher retention drove meaningful contribution from EMEA and North America. Construction delivered a fifth consecutive quarter of double-digit growth as we continue to convert our record data center pipeline. Additionally, our MGA and MGU platforms benefited from ongoing client demand for specialized underwriting solutions. M&A services were lower year-over-year against the Q2 2025 comparison that benefited from elevated closed deal activity. While this tempered overall Commercial Risk growth in the quarter, announced transaction volumes are up over 60%, which is reflected in a stronger second-half pipeline. Reinsurance delivered 5% organic revenue growth despite meaningful rate pressure in the market.

Treaty growth reflected continued strong new business activity, including the addition of new logos, which more than offset 15%-20% lower rates, while facultative placements continued to perform well globally. Growth was further supported by double-digit performance in our Strategy and Technology Group, underscoring the increasing value clients place on analytics and access to alternative capital solutions. Finally, as part of our Risk Capital structure, Reinsurance performance reflects continued contribution from our data center development efforts. Given that we typically deliver approximately three-quarters of annual treaty revenue during the first half of the year, we have strong visibility into our full-year outlook. The strength of our results through six months, combined with the continued momentum in international facultative placements. Strong demand for our Strategy and Technology Group solutions reinforces our confidence in delivering full-year organic revenue growth consistent with our mid-single digit or greater objective.

Health Solutions grew 5% in the quarter, driven by continued strength in our core health and benefits business, particularly in EMEA, where demand for global benefits remains strong. Growth also benefited from improved performance in Talent Solutions as we converted a strong pipeline. Along with contribution from NFP, particularly in executive benefits. Employers continue to face rising healthcare costs, evolving workforce needs, and increasing benefits complexity, all of which drive demand for our health analytics. Finally, Wealth Solutions generated 5% organic revenue growth, reflecting sustained demand for regulatory and valuation work across the U.K. and EMEA. In addition, the demand for increased pension risk transfer solutions in the U.S. as plan sponsors resume evaluating de-risking opportunities and seek to improve balance sheet efficiency. Turning to the key components of our Q2 organic revenue growth on slide seven.

A key driver of predictability in our revenue profile is the consistency of our new business performance. In Q2, new business contributed 10 points to organic revenue growth, supported by a balanced mix of new client wins and expanding our share of wallet with existing clients. Our sustained investment in revenue-generating talent is a meaningful driver of the consistent new business contribution. The 2024 and 2025 cohorts contributed approximately 100 basis points to organic revenue growth in the quarter, with their impact increasing as productivity ramps. Revenue-generating head count is up 3% year to date, and given the opportunities we continue to see across priority growth areas, including construction, energy, and health, we remain on track to expand this population by 4% to 8% despite the competitive talent market. Retention remains strong at a mid-90s level.

Continued improvement in Commercial Risk up 40 basis points and Reinsurance up 20 basis points reflect increased engagement through our Enterprise Client Group, enhanced service delivery from ABS, and our ability to provide differentiated access to both traditional and alternative forms of capital. Net new business contributed five points to organic revenue growth in the quarter. Net market impact, which captures the impact of rate and exposure, was modestly positive and within our expected zero to two-point range, despite a softer pricing environment in P&C and Reinsurance. Importantly, these results reflect the durability of our business model across market cycles, with growth driven by business investment and client demand rather than pricing cycles. One final point on revenue, second quarter fiduciary investment income was $58 million, down 12% from the prior year as higher average balances were more than offset by lower interest rates.

On slide eight, Q2 adjusted operating income was up 5% to $1.2 billion and adjusted operating margin expanded 70 basis points to 28.9%. This margin expansion reflects the impact of lower rates on investment income from fiduciary balances, benefit from the AAU restructuring program, and most importantly, continued operating leverage enabled by our scalable ABS platform, all of which were in line with our expectations. The scale advantages created through ABS, including AI-enabled productivity improvements and disciplined expense management, continue to lower unit costs across our operations while increasing our capacity to invest. This is the power of the ABS growth engine, generating operating leverage that funds growth investments and enabling us to broaden the addressable market and deliver sustainable top-line growth while continuing to expand margins. Restructuring savings were $25 million in the quarter, contributing approximately 60 basis points to our adjusted operating margin.

We remain on track to deliver $100 million of savings in 2026, advancing toward our goal of $450 million in total savings by 2027, with 2026 marking the final year of our restructuring investment. Moving to interest, other income and taxes on slide nine. Interest income was $5 million in the second quarter, driven by interest earned on the proceeds from the sale of NFP Wealth. Interest expense came in at $179 million, $33 million lower than last year, primarily due to lower average debt balances. We expect Q3 2026 interest expense to be approximately $185 million. Other expense was $15 million lower than last year, driven by remeasurements of balance sheet currency exposures and lower non-cash pension expense. We estimate Q3 2026 other expense to range between $15 million-$20 million.

The Q2 effective tax rate was 20.1%, up 360 basis points over Q2 2025, which benefited from a favorable discrete tax item. We continue to expect a full-year tax rate of 19.5%-20.5%. Turning now to free cash flow and capital allocation on Slide 10. We generated $483 million of free cash flow in the second quarter. As expected, Q2 2026 free cash flow included $267 million of tax impact from the NFP Wealth sale proceeds. Strong operating income growth offset that headwind, highlighting the strength of our cash generation. Through the first six months of the year, free cash flow is up 4%, and we remain confident in our ability to deliver double-digit free cash flow growth in 2026.

Turning to capital on the right-hand side of the page, our strong free cash flow growth generation enables us to continue to execute our disciplined capital allocation model, balancing investment for growth with capital return to shareholders. We remained active on M&A and allocated $29 million to targeted tuck-in acquisitions in middle market to the line with our strategic priorities and return thresholds. Consistent with last quarter, shareholder return represented the largest use of capital in Q2. We returned $775 million to shareholders, including $600 million in share repurchases. Given the dislocation in the market, we opportunistically accelerated repurchases during the first half of the year, reflecting our conviction that Aon's share price remains well below the firm's intrinsic value. Our objective is disciplined capital allocation that maximizes long-term shareholder value.

We have exceeded our objective of at least $1 billion in share repurchases for the year, and we have continued strategic flexibility. We remain well-positioned to allocate capital towards the highest return opportunities available, whether through high return accretive M&A or incremental shareholder return. I'll conclude my prepared remarks on Slide 11 with a few thoughts on our financial objectives in 2026 guidance. Our second quarter results and our results through the first half of 2026 reflect the strength of our business and financial model, the disciplined execution of the 3x3 Plan, and the durability of our through the cycle performance. The underlying drivers of growth remain firmly in place. We are generating sustainable organic revenue growth through consistent new business generation and high retention, translating that growth into strong earnings through operating leverage, and converting those earnings into double-digit free cash flow growth.

As a result, we are reaffirming our 2026 full year guidance, including mid-single digit or greater organic revenue growth, 70 to 80 basis points of margin expansion, strong adjusted earnings growth, and double-digit free cash flow growth. Before we move to Q&A, I want to leave you with one final thought. The structural advantage we have built through our Aon United strategy, operationalized through Risk Capital, Human Capital and ABS, and our investment in AI-embedded technology within ABS, are increasingly differentiating our performance and serving as a catalyst for durable growth. We enter the second half of the year with greater visibility, significant financial flexibility, and confidence in our ability to continue creating value for clients that fuels sustainable growth and long-term shareholder value creation. With that, let's open the line for questions. Dylan, back to you. Thank you.

We will now be conducting a question and answer session. We ask that you please limit yourself to one question and one follow-up. If you'd like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from David Motemaden with Evercore. Please go ahead. Hey, good morning.

Just had a question on Commercial Risk. Edmund, you had called out M&A services as something that tempered the growth this quarter. I'm just wondering if you could maybe size that, and you also mentioned a stronger second half pipeline, how we should think about that contributing to the rest of the year.

Sorry, David. Good morning, and thanks for the questions. I was on mute there for a moment. I think the first thing I'd say about Commercial Risk is that the momentum continues to build here. Remember, we're in a lower rate environment, Commercial Risk was 5% of the quarter, 6% through the first six months, well within our mid-single digit or greater results. You are right that I highlighted M&A services muted the growth for the quarter. Remember, it was growing over an elevated Q2. The important point is that announced transactions are up over 60%. That's reflected in our pipeline. We recognize the revenue on M&A as the deals close. I will say that M&A becomes a tailwind for the rest of the year, given our leadership role within P&C.

The important thing here is that every other significant component of revenue within Commercial Risk was mid-single digit or greater. The growth was broad-based across the regions. I talked about strength in EMEA, talked about strength in North America in our core P&C business. I also emphasized the growth in the priority areas. You saw a fifth consecutive double-digit quarter in construction. That's data center, but I'd also highlight defense builds and pharmaceutical builds as well. We're progressing in the specialty business, especially as we combine NFP with our legacy platforms and integrate some of the companies that we just acquired. For us, the key is the consistency of the growth drivers here. New business was up over 10 point contribution. That's the thing to focus on. That's very much supported by the priority hires that we have. Retention was up another quarter, 40 basis points.

That's our analyzers helping us win RFPs, and we're rolling that out across our different geographies. The net market contribution was still positive. M&A will be a tailwind as we move forward. We'll continue to focus on our investments, the drivers of growth, talent, and technology. That's what gives us confidence in the guidance moving forward. Greg, anything you want to add on this?

I think that was a terrific summary. I'm going to say, David, let's step back for a second. Edmund talked about 5% with a little bit of headwind from one of our strongest businesses on M&A services with the strong second half. What I would just add is just the reflection on the observation on Risk Capital. You see it in Commercial Risk. We may talk about it in Reinsurance as well. Risk Capital, this construct where you're bringing an integrated view to a client in a very unique way, bringing content, capability, and expertise, our colleagues showing up together in the most important environments. This is a source of great strength, and it really is cutting across the entire business, as Edmund described.

I think about some of the work we've done on the data center front with some of the biggest balance sheets in the world, and our ability to bring new insight around how they understand exposure, how they transact risk, how they execute it, how they access capital well including traditional, but well beyond, is just really a proof point around the strength of Risk Capital. You saw that show up in quarter as well, along with all the details that Edmund described.

Great. No, thank you for that. Maybe just following up just on the pricing environment within Commercial Risk as well. Noted the modestly positive market impact. What's your outlook on that as we go forward throughout the rest of the year? The pricing environment is obviously changing. It sounds like casualty pricing is moderating around the edges. Do you guys think that you can continue to offset some of the moderating pricing and market impact with net new business?

Let me start, and then Edmund, feel free to add as well here. Listen, I'll start. You'll probably finish as well. We're absolutely committed to mid-single digit or greater under any pricing cycle. This is not about pricing cycle for us. This is about client need and client response. For us, we are going to drive mid-single digit or greater irrespective. The commentary, though, if you step back, think about it from a macro view versus quarter to quarter, demand continues to outpace supply as you think about the complexity of risks. We're talking about that. Risks are going up in all the different traditional areas. We talk about the four mega trends in trade, technology, weather, workforce. The new areas, data centers, all these are sources of demand.

As that demand continues to increase for all these reasons, that's going to work its way through pricing conditions over time, in our view, over the long term. We're seeing a number of different things that are happening in the micro markets, and you're right on property is down. Casualty is still going up, just lower, and we're seeing flattening in different areas. Net net, the real punchline here for us is we support clients in different pricing environments, unit pricing environments. It changes the way we change the way they think about their overall structure. Again, that's back to the power of what Risk Capital is all about, helping them understand, measure, and mitigate risk, some through insurance, some through retention, a whole range of different approaches. That's the power of client leadership with what we're doing in the 3x3.

David, to Greg's point, this is one of the most important questions to emphasize on the call here. It was the key theme in our prepared remarks, which was performance through the cycle. Q2 is a heavy property quarter, and Reinsurance, as you know, is weighted towards the first half of the year. Those are two biggest areas of pricing impact, and we are still performing despite the rate pressure there. That reiterates the point that we've been making, that our organic growth is more correlated to business investment in property and equipment, so nominal GDP, much less correlated to pricing. Greg's point is exactly right, that we look at these as micro markets. Property has been down. To Greg's point, casualty is still growing, but maybe growing at a lower rate.

There's a different dynamic on D&O, a different dynamic on cyber, which are probably flat to low single digit, and we see differences by client segment as well. It's more muted declines in the middle market, for instance. When you think about that, we still expect the net market impact to be in line with our expectations of zero to two points. It's been positive throughout this, and we expect that to continue here. Back to Greg's final point, that has us confident in our mid-single digit guidance or greater moving forward.

Awesome. Thank you. Our next question comes from Rob Cox from Goldman Sachs.

Please go ahead. Hey, good morning.

Just a question on the Reinsurance business. The 5% organic growth, which I think is impressive, particularly compared to any period with this level of P&C pricing declines. Maybe the answer relates to some of your prepared remarks, but my question is: If you think there is something that has structurally changed within Aon's Reinsurance business to make it more resilient here, or is there something unique about this timeframe from a cyclical standpoint with facultative or cat bonds that's supporting the growth?

Well, Rob, Edmund just described the prior question as one of the most important on performance through the cycle. Your question around is structure changing and making a difference to our ability to serve clients? We'll spend all day long on that if you want to. The answer is a resounding yes. It has been 15 years of investment around connecting the firm, operationalizing through Risk Capital and Human Capital, and then creating this massive engine called Aon Business Services, which coordinates data and content such that we can bring it together on behalf of clients. To us, Q2 in Reinsurance is just another example of exceptional performance in the quarter. Really, this is a series of great performance quarters and real momentum in the first half of the year and going forward.

For all the reasons that Edmund described in his remarks, in the pricing cycle, et cetera, all you described, by the way, I would just highlight as well, we are disproportionately privileged to have the share we've got on the property side. We're glad to have it. This is maximum pressure from that standpoint, and what we've done against that is just continue to grow the business. This, again, reflects the power of Risk Capital. This is, if you think about it, integrated capability. The ability to help clients calibrate exposure, not just insurers, but clients around the world. Think about the biggest technology. The technology example I provide in my remarks was a very large, sophisticated client, massive balance sheet, trying to think about data center investment, digital infrastructure investment. How do they calibrate exposure? How do they think about their risk strategy?

Seriously, having done that requires a level of analytics that is not just Commercial Risk analytics, it's Reinsurance analytics. It is what Aon Business Services gives us that no one's ever had before. With the data source and data set we've got, the way that it's been curated, the way that the fidelity of that content is just different. If you show up not just with the content, but with a group of colleagues who are together acting on behalf of a client, you're going beyond somebody's P&L, you're going beyond who gets credit. You're just serving a client. We're seeing that show through, and you see that in Reinsurance, where there's just a disproportionate amount of content that actually provides tremendous value across our entire portfolio beyond the Reinsurance piece. In addition to just basic raw horsepower in treaty fact.

ILS, it's a record first half, we're near half the business on the ILS front. It is absolutely core in the key areas, capital advisory. Really this construct of Risk Capital, the organization of Risk Capital and Human Capital and how they fit together, that is different. That exists nowhere else. For us, the client response to that's been tremendous, and you see it in Q2 and Reinsurance.

Thank you. Just to follow up, I wanted to ask on AI adoption. It seems like from the outside, there's somewhat of a divergence between large insurance brokers with respect to partnering with external firms or building internally to achieve their AI strategy. I was just hoping you could talk about Aon's approach with respect to that and your confidence that that's the right move for Aon.

Listen, I would build off Rob, the history here. We didn't start with an AI strategy. That to us doesn't exist. AI accelerates what we've been working on. Actually, in many respects, the track we laid down over the last 15 years to connect our firm, and again, how we operationalize this through Risk Capital, Human Capital, and Aon Business Services means we have already been doing multiple years of work connecting the dots such that we can actually bring together a data lake different than anyone else could do. We could curate it in great fidelity around that data in a way no one else could do. By the way, that's not enough. It's not just about the analytics. It's about how you get it in the hands of the great practitioners, the trusted advisors who sit across the table from clients.

That's, again, the organization of Risk Capital and Human Capital and how we deliver it. All those things, Rob, are in place. All of a sudden we get an acceleration opportunity, that's AI. We've been doing artificial intelligence for quite some time and engineering of our business for quite some time, machine learning. Really, it is the generative AI which is an accelerant for us. For Aon, this is a massive opportunity to actually accelerate what we've already been working on. It's not a new strategy, an accelerator. We're working with all the partners, and we're happy to chat with them. By the way, one of the things we bring to the table that's fundamentally different is it isn't just productivity orientation. We orient around revenue. We orient around growth.

If you think about the analyzers that we've got, the risk analyzers, the health analyzers, think about what we've done in Aon Client Treaty. We just announced what we're doing on the overall global exchange in terms of how we're thinking about our business. These are things that are revenue-generating engines on behalf of clients that are driven and reinforced through our ABS strategy with AI. For us, it isn't about coming up with something new and hoping we have the right strategy. We tap into the best partners in the world and everywhere we can to accelerate our proven strategy. Edmund, I think, described it very well at the end of his remarks.

This is what's making a difference for us, and it's making a difference for us with clients in terms of how many we win, how we retain them, and what we do with them. It's just a very integrated approach, data-driven, analytic-driven through our colleagues that really is responding to very specific client need. That's how we think about it.

Got it. Thanks for all the color. Our next question comes from Tracy Benguigui with Wolfe Research. Please go ahead. Morning. You've linked Commercial Risk organic revenue to nominal GDP rather than pricing, but it's worth noting that hyperscaler CapEx is roughly $750 billion.

It probably counts to two points of nominal GDP. Let's say ex-hyperscaler, it's closer to 3.5%. On that note, I'm curious, what is the largest known limit or shared underwriting capacity available for data center development? Since I think individual projects could reach $20 billion-$50 billion. Given hyperscalers' balance sheet dwarfs the entire insurance industry, is this mostly risk self-insured with more fee bias rather than commission-based?

It's a great question. We actually just had one of our leaders leading this actually write an article on that particular, or actually respond to an article on that particular item. First, for us, you know that we've now increased our facility itself to $5 billion, over 30 carriers participating in that. We think because of the point that you're raising, we'll actually need non-traditional capital in this as well, and we've been working with it. To answer your specific question, we started out doing sort of single billion-dollar types of data centers. We now, I think in that article you saw, can do for a single facility up $13 billion, $15 billion for a single facility. The point is, these facilities are costing the amount that you just talked about. You mentioned $15 billion, $20 billion.

We think some are $40 billion, $50 billion, and that's going to require capital that goes beyond traditional insurance capital, and that's back to the remarks Greg was making at the beginning. The key for us is that we have a leadership position here. We've talked about a pipeline being up over three times what it was last year. We're seeing that flow through our revenue. We've been advising on data centers. We have engineering expertise. Our facility is one of the largest out there. It's a driver of growth for us moving forward, we think there's an opportunity for all to grow thinking about the size of these facilities. Greg. Yeah, you summarized it perfectly, Edmund.

Tracy, this is it. I mean, this is the whole gig. If you think about the next big frontier and what we can do together as an industry, this is the fight for relevance. How do we bring it? You're 100% correct. On a $4 trillion capital pool, which is the insurance world, which we love, wonderful partners every day, it's not big enough. By the way, tremendous expertise, tremendous insight. What we have to do is draw capital into our industry in a way in which they see the opportunity for meaningful return, and they come in and serve. Against that pool, Tracy, it's not the $4 trillion, it's a $250 trillion pool. This is accessing pension, sovereign funds, private equity, et cetera. Look what Aon is doing. We are doing traditional in the way Edmund described.

In addition, the content that we have is drawing capital from outside the industry into this category. Ask yourself, what is the engine that does that? It's not our goodwill. It is our content. It is our analytics. When we can do the work and show them exactly how to come into our industry, how and where they're going to make a return, and have it durable enough that they'll bet their balance sheet, a pension fund, a sovereign fund, a private equity firm, then we've increased capacity. The TAM is always there in the insurance world, the addressable market. We just can't access it because we can't actually bring capital in until Aon came along with this construct called Risk Capital and the data and the analytics to pull it in. For us, we love your challenge.

By the way, the knife edge here is if we bring it in, we are becoming more and more relevant. If you don't, we'll do fine work, but we won't actually make a meaningful difference as an industry and what the potential is here. We like our chances because we think the return opportunity is tremendous. Frankly, the way to think about risk management in a data center goes way beyond just the build of the ongoing performance. If you get the risk management right, and you get the risk dispersed in the right way and understood in the right way, you frankly can change the operating cost of a data center. You can change the volatility. By the way, remember, business interruption here is going to be measured in $ millions a minute.

You change the game. That's our aspiration. That's what we're trying to do with risk capital. It's a massive opportunity. We think it is unique in our industry's history.

I'm really enthused on this topic. I appreciate the response. Can you just clarify, is this more fee-based business?

It's value-based business. You show up with a client and you provide value, they provide compensation. It's all the different angles. We don't discriminate in either way. We provide value, we do fine. If we don't provide value, we're not relevant, we don't get compensated. From our standpoint, we think the opportunity for value creation in so many different angles, the build, the operations. By the way, not just the hyperscalers, it's also the money being raised to fund the hyperscalers. It's the builders who frankly can't get in the game. I mean, there are 50 builders, 100 builders trying to do this. Many of them have never really done this before. They can't get financing unless they get the risk capital, the risk management right.

In our view is there's opportunities here all along the value chain. All of which, by the way, if you add value and help them succeed, we're going to do very fine from a payment standpoint.

Great. My follow-up is, I believe at a RIMS conference, Joe Kaiser spoken about a pricing correction over 18 months rather than a traditional soft cycle. Is that correction included in your organic revenue outlook?

Look, again, you hit on it at the beginning of your first question. We think the correlation and explanation of variance between pricing and our organic revenue growth is low. We've continued to emphasize sort of the nominal GDP point that you just raised. We do think, listening to Joe's comments, I think they're indicative. We do think this pricing cycle and environment is more nuanced than a single cycle. We view these, as Greg said earlier, as a collection of micro markets across geography, across product, and segment. Some of those products are going in different directions right now. The key point, and I think the point that Joe was raising, is that structural risk trends, primarily loss severity, argue against an extended, prolonged softness, so the duration is likely measured.

We're also beginning to see sort of underwriting focus limiting some of the aggressive price competition as you look at the carriers here. For us, our focus is going to continue to be client-centric. We're hyper-focused on helping our clients in this environment expand their coverage, increase the limits. Greg's point is the right one, the point that he just made, that value capture is not in the rate, it's in our placement complexity in the solution design. Zero to 2 points is what's showing in our results today. As of now, we continue to expect that moving forward. That has us strongly in line with the guidance that we've set.

Thank you so much. Our next question comes from Bob Huang with Morgan Stanley.

Please go ahead. Hi. Good morning.

My first question is around capital. Edmund, I know you kind of addressed the buyback, and maybe just if you can help us unpack a little bit, right? First half, like you said, over $1 billion of buyback already. Just given the strong earnings and the cash flow generation going forward, is there a reason not to think that you cannot maintain the current buyback momentum? Or in other words, is there a reason to believe the current level of capital return cannot be maintained?

It can absolutely be maintained. We talked about coming into 2026 with over $7 billion in capacity. What we're playing for here is the strategic flexibility, given the position that we're in right now. The first point I'd make is that share repurchases, that's a key part of the balanced capital allocation model. The $1.1 billion in the first half, we've clearly hit that objective to the point that you've made. I am very pleased to say 79% of the capital deployment in the first half has been shareholder return, with buybacks representing the majority of that. We are very excited about the position of strength we're in and the strategic flexibility. That means that we're evaluating the pipeline opportunities. We determine that they fit our strategic objectives. We determine that they fit our financial criteria, which I've talked about before.

I'd be happy to go into detail about that. If we don't see those objectives being met, we won't let any excess cash sit on the balance sheet. We'll return that via more share repurchases here. This is, Bob, just a continuation of our capital allocation model. We are looking at investment for growth because that's what helps the medium and the long term with capital return to shareholders, and we continue to be in a good position of strength with flexibility moving forward here.

Got it. Really appreciate that. Second question is on the international. EMEA business was one of the call-outs you had on Commercial Risk solutions. Can you maybe talk about the durability of growth in the EMEA segment? Intuitively, it feels like EMEA may be seeing the similar pricing pressure as U.S., GDP growth kind of really varies depending on jurisdiction. Just curious about your thoughts on the EMEA side related to Commercial Risk solutions.

Yeah. The GDP growth is more uneven in the international markets, not disruptive is what I would say. When you think about the regulatory environment and the geopolitical environment, that increases demand for our business. You think about our global footprint, we have a very diversified portfolio and a moderate sensitivity to any particular international region. You're seeing strong growth across these markets that I've been calling out in EMEA, I'd also throw LATAM in that mix, where solid GDP growth is actually seeing more foreign direct investment that's actually higher than that GDP growth and helping us in those markets. Commercial Risk, our efforts on the new business side and now in specialty and in Health Solutions on global benefits, plus the regulatory environment.

I just read an article this morning that I think will actually drive more demand on the regulatory front in the U.K. and EMEA. Those things are helping to drive that business. For us, it's really this diversified portfolio. You might see uneven levels of growth in individual markets, this diversified portfolio gives us resilient growth, and the international locations continue to be strong contributors for us.

Got it. Really appreciate that. Thank you. Our next question comes from Katie Sykes with Autonomous Research.

Please go ahead. Thanks. Good morning.

I guess I want to circle back to the discussion of growth and revenue-generating producers. I think the 3% year-to-date is a little bit below the full-year guide there. Could you help us understand if that was subject to any impacts from timing and when hires are made? Could you also help us understand what's driving your confidence in being able to accelerate that pace of growth back up to the 4%-8% range?

Wow. Through six months. We're quite excited by 3% growth, through the first six months. Our recruiting efforts and the recruiting efforts of other firms, I would say, are intense right now. The competition is intense, and we're not immune to that. We're up 3% through the first six months. Our 2024 and 2025 cohorts are contributing over 100 basis points. We're seeing the contribution from them show up in the areas that we've been focused on, construction, energy, health. Because 3% through six months, we're maintaining that 4%-8% objective. We've always said we'd like to be at the higher end of that objective. We've sort of built our plans upon achieving that. The competitive environment is intense. We do think that the capabilities that we have that allow us to help and retain clients, those things are helping us attract and retain folks.

For us, it's not about the quantity, it's about the quality of folks in areas that are growing higher than GDP. We feel good about the 4%-8%, this is going to be hand-to-hand combat for the rest of the year for us to get to where we want to be. Greg, I know that you're very impassioned about this topic and our efforts, please speak up.

Listen, Edmund, you covered it very well. I would just highlight one thing, Katie. We're fortunate. We have a lot of momentum on the client front, Risk Capital, Human Capital, we talked a lot about on the call. Think about it. If you're a colleague, a practitioner in our world, the opportunity to come in, no matter how good you are, it really is not just number and percentage, but really quality leaders. If you can be better professionally, if you get more content capability, more stuff to do your business, to do your work, it makes us more attractive. We have lots of folks seeking us out, we've been very fortunate. We'll take this at a very measured pace to accomplish what Edmund's described.

In the end, we've got great momentum here as well, it will contribute, not just number but really capability as they come in.

Certainly, I appreciate the very competitive environment. I'm just trying to understand the bridge, from 3% year-to-date to 4% on the full year guide versus getting all the way up to 6% or better than the midpoint of the full year guide. Do you think that your relative value proposition to new hires will help you win additional producers in the back half of the year here? Is that enough to set you apart from your competitors?

Listen, the history over the last number of years would say the answer to that is absolutely yes. Again, the highest quality 4% is better than a lower quality 7% or 8%. What we're going for is true leaders who come in, practitioners who can make a difference. Our aspiration is we help them even be better, our colleagues lead the way with the content capability we've got. From our standpoint, we are quite enthusiastic about the momentum we have on bringing colleagues into the firm, the right colleagues. We're even more enthusiastic about the momentum as they come in together and working with our colleagues in the Risk Capital, Human Capital construct we've described. Bringing, frankly, opportunities to wow clients in ways that other people can't do. For us, we're very optimistic, we've made great progress.

I just want to reinforce Edmund's point. 3% for the first half, great progress, and we'll continue to drive it. Sometimes it'll be higher, sometimes it'll be lower, but the momentum is exceptionally strong.

Thank you. I appreciate the color.

Thank you. I would now like to turn the call back over to Greg Case for closing remarks. Please go ahead. Thanks, Dylan.

Listen, just wanted to say on behalf of Edmund and I, thanks, everyone, for joining. We appreciate it, and look forward to catching up next quarter. Take care. This concludes today's teleconference.

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