Aon plc (AON) Earnings Call Transcript

Good morning, and thank you for holding. Welcome to Aon plc's Third Quarter 2026 Conference Call. [Operator Instructions]. 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 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. For information concerning these risk factors, please refer to our earnings release for this quarter and to our most recent quarterly or annual SEC filings, all of which are available on our website. Now it is my pleasure to turn the call over to Greg Case, President and CEO of Aon plc. Please go ahead.

Good morning, and thank you for attending our third quarter earnings call. I'm joined today by Nadin Virani, Interim CFO; Andy Marcell, Deputy CEO, with responsibility for Risk Capital and Human Capital; and Anne Corona, CEO of North America. The presentation, which Nadin will reference during his remarks is available on our website. Our outstanding third quarter results reflect continued momentum across the firm and reinforce high confidence in our Aon United strategy. We delivered 6% overall organic growth with 7% in risk capital and 5% in human capital. demonstrating broad-based strength across our solution lines. As we progress through the final year of our 3x3 plan, our execution and ongoing investments in talent and technology by delivering differentiated value for clients, expanding our opportunity set and creating long-term value for our shareholders. Today, we want to emphasize 3 important drivers of our performance this past quarter and as we look to the future. First, the force is shaping client demand. Second, our Aon United operating structure with integrated risk capital and human capital capabilities. And third, our recently announced pending acquisition of USI, which together with NFP and Aon, establishes the premier U.S. middle market platform for clients. Let's start with the landscape for business decision makers and what we're hearing from clients. Today's macroeconomic environment continues to be defined by volatility and complexity. Geopolitical uncertainty remains elevated, Economic conditions are uneven and cyber threats continue to evolve. All while rapid technology innovation is creating new opportunities, reshaping business models and workforce strategies. These forces don't exist in isolation. They're deeply interconnected making it more complicated than ever for businesses to understand their risks, build resilience and grow. An uncertain and challenging times, clients turn to Aon as a trusted partner to help them diagnose risk and people issues, design to [ spoke ] programs and access capital solutions. And with rapid technology change, the catalyst to deliver sustained client impact and greater value over the long term, will be at the intersection of human expertise, proprietary data and technology. Cases will not approve solely to AI models or to individuals, but rather to organizations with the technology and talent to build trusted lasting client relationships. This is exactly where Aon is positioned, and it links directly to my second topic, how Aon continues to strengthen our capabilities to help clients make better decisions for their businesses and employees. Our Aon United strategy remains the foundation upon which we capture these opportunities. By bringing together risk capital and human capital supported by Aon Business Services, we connect data, analytics, expertise and access to capital across our firm. This integrated approach is a key differentiator, allowing us to address client needs more comprehensively and deliver better advice and superior solutions. And our strategy is further accelerated by AI as our analyzers and diagnostics lead to better insights that help us win more business, retain more clients and create new revenue opportunities. We're also capturing productivity gains as we leverage our shared services platform and domain expertise to deliver faster, more relevant and more actionable insights for clients. Importantly, this work continues to reinforce our Aon United advantage, which translates into stronger client results. A few examples highlight how this advantage is powering our momentum. During the quarter, we were appointed as the lead broker for the returns program of a new natural catastrophe program introduced by the Thai government. To reduce the protection gap for natural disasters, particularly plug, a significant barrel in Thailand. The program is executed by a consortium of local insurers through the Thailand General Insurance Association and provides broad risk coverage, including flood, earthquake and windstorm to 30 million households in Thailand, the vast majority of which currently have no insurance. This work and impact demonstrates the relevance and strength of risk capital, connecting insurance and reinsurance, along with the national government to reduce the production gap in a region for natural perils have profound impact for millions of people. Another example highlights our ability to broaden capital access and attract new capital pools. Our partnership with a leading alternative asset manager shows how Aon combines proprietary data, analytics and structuring expertise to deliver innovative capital solutions. Traditional insurance capital remains critically important but the scale of emerging client needs increasingly requires us to connect risk with capital beyond the traditional insurance market. We have spoken previously about the $250 trillion of capital globally, and this is a clear, tangible example of our work to selectively bring these sources of capital to bear on behalf of clients. Our ability to quantify risk exposure and provide investors with the insight required to deploy capital with confidence will create additional capacity for clients and expand the universe of insurable risks, which brings me to the third driver of our performance, especially as we look to the future. USI and the U.S. middle market opportunity. Post close, we could not be more excited about the opportunity to bring together USI team members and our colleagues at NFP and Aon to set a new standard of capability, expertise and client service for the middle market. This important growing segment includes more than 200,000 companies and 48 million employees, representing an addressable market of more than $40 billion across commercial risk, held and wealth. These businesses face the same interconnected forces of our large clients, and they need full access to analytics, insights and capital solutions required to protect and build our companies. Against this backdrop, our acquisition of USI, which we expect to close in the fourth quarter of 2026, represents an important step in the development of our global middle market strategy and builds directly on the successful foundation we established with NFP. USI also gives us direct access to the fast-growing E&S market, expanding our ability to match capital with client need and provide greater capital access across all markets. And with the addition of approximately $11 billion of P&C premium flow, we continue to enhance our middle market data footprint, further improving our Aon United advantage. Together, Aon, NFP and USI will create the premier $6.5 billion U.S. middle market platform, combining deep local relationships and distribution with the full capabilities of USI, NFP and AI. Fundamentally, this strategy is all about being better and giving our colleagues greater content capability and market access to serve clients with increasing levels of distinction. In addition, we also outlined key initiatives that will capture $395 million of expected synergies, including connecting producers and client leaders to broader content and capability, optimizing premium placement for clients expanding market access and simplifying technology and operations. Since the acquisition announcement planning is well underway for the implementation of these initiatives with integration planning teams in place and clear work streams to bring USI, NFP and Aon together at closing as one middle market platform. We look forward to opening Mike Sicard and the incredible team at USI to Aon as we build out this terrific growth opportunity. Overall, we have emphasized a few points. Taken together, our Q3 results and the progress we continue to make across our firm reinforce our confidence in the trajectory of our business and our ability to deliver on our strategic and financial commitments and prior stand-alone guidance. As the environment continues to evolve and the underlying drivers of client demand remains strong, organizations need better insights in their interconnected risk and people challenges. They need broader and more innovative access to capital, and they need trusted partners who can combine data analytics capabilities and frontline expertise across markets and geographies. Aon United positions us to meet these needs. Our alignment across risk capital and human capital enabled by ABS is creating greater value for clients and accelerating momentum across the firm. Our investments in technology and AI are amplifying our expertise and strengthening how we serve clients, and the announced acquisition of USI advances important growth pillars across the middle market and E&S. As we progress through the final year of the 3x3 plan, we remain focused on disciplined execution and our overall growth agenda to our more than 60,000 colleagues around the world. Thank you. Thank you for your continued commitment to our clients, each other and our Aon United strategy. Your dedication drives our momentum and gives us confidence to continue to deliver for our clients, colleagues and shareholders. Now let me turn the call over to Nadin. Nadin?

Thank you, Greg, and good morning, everyone. Our third quarter results once again demonstrate the strength and durability of a business built to deliver through the cycle. We achieved our highest organic revenue growth of the year so far, continued strong adjusted margin expansion and double-digit adjusted EPS growth, clear evidence of broad-based momentum across our solution lines and disciplined execution of our long-term strategy. Our client-centric organizational structure, Aon United combined with continued investments in talent, data, analytics and AI position us well to create more value, [ innovates ] our clients and deliver strong growth despite what might be described as a challenging pricing environment. That consistency is most evident in new business, which have contributed 9 to 11 points of growth now for 10 consecutive quarters. As we've announced, we plan to extend the Aon United advantage to the premier middle market platform that we're establishing with the pending acquisition of USI and building on the success of NFP. This acquisition leverages the operating model behind our strong performance and enhances our ability to serve the growing middle market segment with broader capabilities, deeper client relationships and greater distribution reach. With that framing, let's turn to the financials. Starting with our third quarter results on Slide 5, organic revenue growth was 6%. Total revenue increased 3% to $4.1 billion, adjusted operating income increased 5% to $1.1 million. Adjusted operating margin expanded by 70 basis points to 27% and adjusted EPS grew 10% to $3.36. Finally, we generated $1.1 billion in free cash flow. Let's get into the details of these results, starting with organic revenue growth on Slide 6. Organic revenue growth was 6% in the quarter, Growth was broad-based with all 4 solution lines delivering mid-single digit or greater organic revenue growth, reflecting the strength of our diversified business mix. In commercial risk, organic revenue growth accelerated to 7%, driven by meaningful contributions across North America and EMEA, and reflects continued strength in our core P&C business. M&A activity accelerated during the quarter, demonstrating double-digit growth and provided an incremental lift to our results. Strong client demand for specialized underwriting solutions also continue to support growth across our MGA and [ MGU ] platforms. Finally, growth in construction was fueled by our record pipeline of data center projects. Reinsurance delivered 7% organic revenue growth on top of 8% in Q3 last year. The strength of the reinsurance business, despite soft market conditions reflects the differentiated value we deliver through risk capital and our ability to innovate and broaden access to capital. Strength in the quarter was driven by treaty growth, reflecting continued strong new business activity and client retention, which together more than offset lower rates. Looking ahead to Q4, we continue to expect strong organic growth driven by strong demand for our strategy and technology group solutions and momentum in international facultative placements. Health Solutions grew 6% in the quarter, driven by continued strength in our core health and benefits business internationally as we help employers navigate rising health care costs and benefits complexity. [indiscernible] also benefited from data analytics driven sales in our talent business as we continue to leverage analytics and advisory to address evolving workforce themes. Finally, Wealth generated 4% organic revenue growth reflecting sustained demand from regulatory and valuation-related work across the U.K. and EMEA. Growth also came from our core retirement business as well as NFP's asset-based revenues. Turning to the components of our Q3 organic revenue growth on Slide 7. In Q3, new business contributed 11 points to organic revenue growth, supported by a balanced mix of new client wins and the expansion of our wallet share with existing clients. Our investments in revenue-generating talent continues to be a meaningful driver of growth. The 2024 and 2025 cohorts contributed approximately 115 basis points to organic revenue growth in the quarter, and we expect that impact to continue to increase as productivity ramps. Revenue-generating head count is up 4% year-to-date, and we remain on track to expand the population of priority growth hive by 4% to 8% this year. Retention remains strong in the mid-90s, supported by increased engagement from our enterprise client group as well as enhanced delivery of analytics and advisory powered by ABS. Net market impact, which captures both rate and exposure was slightly positive and within our expected 0 to 2-point range despite a softer pricing environment in P&C and reinsurance. Importantly, these results reflect the durability and differentiation of our business model across market cycles with organic growth continuing to be driven by business investments and client demand. As a final point on revenue, third quarter fiduciary investment income was $69 million, down 8% from prior year as higher average balances were more than offset by lower interest rates. On Slide 8, Q3 adjusted operating income increased 5% to $1.1 billion, and adjusted operating margin expanded 70 basis points to 27%. Adjusted margins expanded despite the impact of lower rates on investment income from fiduciary balances. This was offset by the benefit from the [ AEU ] restructuring program and most importantly, continued operating leverage enabled by our scalable ABS platform. ABS continues to generate scale benefits through disciplined expense management and AI-enabled productivity gains, thereby lowering unit costs and creating operating leverage that fund growth investments and enables margin expansion. Restructuring savings were $20 million in the quarter, contributing approximately 50 basis points to adjusted operating margin, and we remain on track to deliver $100 million of savings in 2026, advancing towards our goal of $450 million program savings with 2026, representing the final year of our restructuring investment. Moving to interest, other income and taxes on Slide 9. Interest income was $24 million in the third quarter, driven by interest earned on the proceeds from debt raised to fund the pending USI acquisition. Interest expense of $206 million was flat versus prior year and $27 million higher than Q2, primarily due to a partial quarter of interest expense on debt raised to fund the pending USI acquisition. We expect Q4 interest expense to be approximately $410 million, driven by higher SI-related debt. Adjusted other expense was $2 million higher than last year, driven by remeasurement of balance sheet currency exposures, we estimate Q4 item expense to range between $12 million and $15 million. Our Q3 adjusted effective tax rate was 20.2%, and we continue to expect a full year adjusted effective tax rate between 19.5% to 20.5%. Finally, adjusted EPS grew 10% year-over-year to $3.36. Turning now to free cash flow and capital allocation on Slide 10. We generated $1.1 billion of free cash flow in the third quarter, up 2% year-over-year with growth partially offset by working capital movements and USI related transaction costs. Q4 is historically a seasonally higher quarter of free cash flow growth. And excluding the impact of USI related cash expenses, we continue to expect double-digit free cash flow growth on a stand-alone basis for 2026. As a reminder, the pending USI acquisition is expected to result in approximately $160 million of transaction costs, largely recognized in the third and fourth quarter of '26. Turning to capital allocation on the right-hand side of the page, the principles of our balanced capital allocation model remains the same: deleveraging our balance sheet, funding a stable and growing dividend, followed by balancing investments for growth with the return of excess capital to our shareholders. I'll conclude my prepared remarks with a few thoughts on our full year financial objectives. The underlying drivers of our growth are evident in another quarter of differentiated results. We are generating sustainable organic revenue growth through consistent new business generation and high retention, translating back growth into strong earnings through operating leverage and converting those earnings into free cash flow. On a stand-alone basis, excluding cash and other transaction expenses from the impact of the USI acquisition, we remain confident in our ability to deliver our previously communicated full year '26 guidance, across organic revenue, margin expansion, EPS and free cash flow growth. We continue to make progress towards the close of the USI acquisition in the fourth quarter and will provide more details on the combined financials after closing. As Greg mentioned, integration planning is well underway with the establishment of the integration management office with myself, the executive sponsor and alongside leaders from AON, NFP and USI. We are focused on planning for the next-generation client experience, building on a unified culture maintaining clear accountability and driving value creation objectives. Before we move to Q&A, let me underscore the Aon United advantage. Brought to life through risk capital, human capital, Aon client leadership and ABS. This strategy is delivering strong results today and positions us well for sustainable growth in the future, creating differentiated value for our clients, colleagues and shareholders. So with that, let's open the line for questions.

[Operator Instructions] Our first question comes from the line of Andrew Kligerman with TD Cowen.

As I think about Aon's exceptional organic growth for the -- another consecutive quarter, ,broker facilities come to mind. I hear about and doing a $10 billion data center facility, a $2.5 billion energy facility, something with Blackstone and Reinsurance. It just continues on. So my question is what's the runway for data centers -- not just data center, but facilities in general, do you see that having a long runway at Aon and industry-wide for brokers? And then the second part of it is with Aon's history of innovation, more broadly, I know you touched on a few specifics in your opening remarks, Greg. But more broadly, are there other innovations that are having the kind of impact at Aon like broker facilities?

Well, first of all, Andrew, thanks for the question. I appreciate it. And listen, a lot to unpack there in terms of sort of the overall line. First, let me this whole area around the data centers and the evolution and bringing the capital in the industry, all these innovations are here. And before it's Andrew because of client need. And we spent a huge amount of time understanding client ease old and essentially structured the firm so we could respond to that. You're seeing that. I do want to emphasize, though, before I get into the detail, and I want to also say it's just been -- it's awesome to have Andy and Anne on the call with Nadin and I, you're going to get a chance to get even more frontline color, so I'm going to go to both of them in a second to get their response. But I would start with foundationally, Andrew. This is another strong quarter of growth. As you highlighted, across -- really, you think about the consensus from Q3 '25 on top of a strong period. So this is growth on growth. And it really is -- our team is excited about it, not because of the performance, really, it's really about what you're describing its client momentum, and it really is client momentum that continues to build and it's beyond a single area. These innovation pieces are just steps their components. They're not the overall answer. They're important, but they're real the fundamentals of our progress and the momentum has really been much more broad-based. It reflects really this response to client need I described. And at a foundational level, it comes back to the work of the 3x3. Again, we listen to clients in years, now for 3 years, broke down our firm and rebuilt it around alignment. We changed the organizational structure, risk capital and human capital and Aon Business Services connected it in an aligned way and then, frankly, have amplified it with AI and this has really brought us to a place where we can respond. I mean you think about being able to sit across the table from a financial sponsor of operating capital and you've got risk capital, I mean you've got commercial risk and reinsurance at the table or a data center, at the table at cyber risk capital at the table. So all these things sort of contribute to these pieces, our view, fundamentally, Andrew, is demand is going up, more volatility, more complexity and our ability to respond and meet client need is the opportunity. That's why we did Aon Business Services. That's why we did risk capital and human capital. That's why we invested [indiscernible] 3x3. But I think, Andy, provide some thoughts would use as you think about sort of the specifics on a couple of these areas. We'll cover some more in detail. And then at the frontline field response has also been exciting to see because our colleagues are excited about this level of innovation. But Andy, maybe over to you.

Yes. Thanks, Greg. I mean, our performance in Commercial Risk and Reinsurance has been pretty broad-based, particularly our core P&C business, has exceptional results. And in part, that's driven by the further development and utilization of our analyzers globally and our risk diagnostics. In fact, in the third quarter, 5,600 clients used our risk analytics and utilization was up year-on-year 30%. So we're excited about that. That's driving new business and retention in positive ways. When we think about facilities and data centers as an example, we've created new capacity to meet the client needs, whether it's operational programs, whether it's what we did with our power life cycle program and even leading into surety for U.S.-based power contracts to meet the collateral requirements there. So we're responding to client needs, in that regard in the pipeline and development in the digital infrastructure is improving all the time. So we're excited about that. M&A services was a double-digit growth for us in the quarter. The pipeline remains strong. And so that was broad-based to both geography, rental warrants in tax and across corporates and PE. But Anne, what are you seeing in the geography there?

Thanks, Andy. And as you mentioned, the commercial risk organic growth has been broad based on top of a very strong comp from the prior year period. The full year delivered 7% organic growth on top of 7% last year. In North America, the 7% organic growth, over 10% last year. The fact is we're doing more, we're winning more and we're keeping our clients for longer around the world. Our clients are sharing how our talent and technology are driving better outcomes for them. Just last month, we held our North American client council. This is a gathering of 50 of the largest global companies that are headquartered in the U.S., and the client shared direct feedback, exceptionally positive direct feedback that our analyzers and diagnostic tools are enabling them to make different and more effective risk transfer decisions. In fact, one client explained how they moved their cyber programs to Aon because of our team and capabilities and then had the confidence to restructure their program. Our AI-enabled tools are differentiated because they're built by Aon Business Services along with our colleagues in the business. And then we can continue to iterate that based on that direct client feedback. Bottom line is it's working.

Got it. My follow-up question is around potential for divestitures. I understand -- just to confirm, Greg, you said USI was going to close in the fourth quarter. It sounds like everything's on track. But I think about NFP Wealth and you raised $2.7 billion from that divestiture. I wonder, are there places inside of Aon where -- and obviously, you're not going to point to anything specific on this question on the call. But are there areas where Aon could divest or would want to divest? Like what do you think about on that front?

Well, Andrew, I appreciate the question. As you step back and think about how we orient ourselves, again, we're looking across our company around the deployment of capital between this -- this is sacred for us. And the approach we take is a pooled approach, and we're looking for return on invested capital. And we're looking across our firm at all aspects of the firm, and we'll always be doing this. So we've made many, many acquisitions, many divestitures to optimize return on capital overall. So anticipate we're doing that. You're exactly right on USI. Everything is proceeding exactly as planned. Fully anticipate closing in Q4 as we described, and fully anticipate sort of deploying capital in the most optimal way over time as we pay down the debt that is out there and sort of move forward, and we'll continue to look for these opportunities. But Nadin, anything else you'd add on that on the capital allocation side.

Yes. I would say that just as you mentioned, we're always looking at opportunities to optimize the portfolio. But when it comes back to capital allocation, our objectives and our methodology stays the same. We are focused on deleveraging our balance sheet, funding a stable and growing dividend, investing in growth opportunities and then returning excess capital to shareholders. So that's how we thought about it in the past, and we'll continue to do so. We have to exercise discipline, enable for us to be able to get to the leverage ratios that we've talked about, and we did that just with NFP, and we expect to do so again in this transaction.

[Operator Instructions]. Our next question comes from the line of Elyse Greenspan with Wells Fargo.

My question is on the USI transaction. I just was hoping now that it's been a little bit since you announced the deal, could you just provide us hopefully more color on just the drivers of the revenue synergies? I know we previously touched on just the USI and like the wholesale component there and how that could be -- could help drive the revenue synergies that you outlined. Can you just update on us since you announced the deal, the work that you've done, the confidence that you potentially have in the revenue synergies and the wholesale piece as well as anything else that you want to highlight that's going to drive the revenue synergies you're expecting with the transaction.

Absolutely, Elyse. Really appreciate it. Listen, I have to start with the foundation though. We're here around with USI and the middle market opportunity, at least because the foundation has been set by the 3x3 by risk capital, human capital, ABS and now acceleration with AI. That success and momentum has been tremendous, and you see it in the results today. But in addition to that, we saw the opportunity in the middle market that literally deliver a premier U.S. middle market platform and this is building on, really building on the USI capability, NFP capability, Aon capability, and it's frankly about greater value for clients through our frontline leaders, through our producers, through our client leaders and we saw it, we could see it. We proved it with NFP. It was so clear. And now with USI in that combination where we -- others 59 days ago, for those who are keeping track, we had high expectations then when we announced candidly, at least they're stronger now. We brought the team together. We've got the planning in place, fully in place for action on day 1 once we close and really I want to get Nadin to talk about the synergy capture overall, but specifically around revenue. But listen, this opportunity for us builds on this foundational platform with another area of incremental substantial growth in the middle market and in [ ES ] and with the data footprint we've got now sort of in the middle market. So the expectation we have sold is high and you should have high expectations on us as well. But let's talk about synergy capture, Nadin, and then we'll get some reactions from and Andy as we see it out in the field.

Right. Yes. So let's take a step back, and let me just explain. We've identified $395 million in EBITDA run rate synergies and these come for 33 specific work streams that we've identified, 23 revenue work streams and 10 cost [indiscernible] streams. If I start with the cost that represents $280 million, 71% of the total synergies. And we are really high confidence in being able to achieve these because 90% of these are expected to be completed by 2028. And these are through our global capability centers, technology savings and other efficiency actions that we plan to take as well. This is a proven playbook for us. This is part of what we've been doing with the 3x3 strategy and the ABS platform that we've developed over the years. And NFP, the NFP integration provides a muscle memory and a recency effect for our confidence in being able to achieve these. Now if I move to the revenue synergies, those actually represent $115 million or 29% of the total, and that comes from placement optimization of wholesale flow E&S segment opportunity, direct placement opportunity of USI premium volume, all with the client in mind, producing the best service. And other areas of high retention and producer productivity, and this is enabled by additional tools and capabilities that we've been developing. And then the third area is risk capital and human capital cross-sell which build on a 3x3 strategy that we've had in place for many years now. So these work streams then many of them are tried and true strategies that we've been working on and have good experiencing over the years. What we will be doing because we have such high confidence is that we'll provide quarterly updates on an annual net EBITDA synergies and the total program synergies as well. And we have the integration management office in place now. So again, a lot the planning is taking place, and we're excited to get started. And I'm going to hand you to Anne for some additional thoughts.

Thanks, Nadin. The business is highly confident that we will deliver to the synergies that Nadin described, and we see potential for more. We've proven our ability to deliver on targeted synergies with the NFP combination, and we're excited to build on the success the NFP Foundation and to learn from the USI team members. And we are truly thrilled to deliver better outcomes for our clients and our colleagues. It's about creating the premier middle market platform and bringing new content and capabilities to companies in the growing middle market.

Andy, do you want to comment on some of the broken pieces?

Sure. Actually, we were [indiscernible] carriers and the revenue opportunities that we identified are actually magnified from the feedback that we got from the carriers. We have real clear alignment [indiscernible] on what we're going to do and how to benefit in the U.S. clients first and foremost and how we can avail ourselves of the global broking network, which we're excited about. So our degree of confidence, whether it's around total specialty, our MGA platform, our sort of broking infrastructure is much stronger than it was. We went into it. So we're highly confident.

Is that helpful, Elyse?

That is. And then my second question, I wanted to pivot to reinsurance. You guys have seen strong growth there. We've seen a little bit of a dispersion across the industry and just the organic growth trends. Even -- I know there was perhaps some onetime-ish revenue in the quarter, but even excluding that, there is still positive in excess of the mid-single-digit target. So can you just give us a sense of what's been driving the reinsurance organic and how we should think about that trending into 2027. What it seems like, right, we'll probably see another round of double-digit price declines on the property cat side at 1.1?

Absolutely. I appreciate the question. Listen, we have an incredible team with a long record of performance really over time and I admire about the team, this absolutely relentless pursuit of client impact, but they also are constantly looking around on innovation and new ideas and solutions to bring to market. And so I want to get Andy to just talk a little bit about sort of this history, but this idea around diversification and all the ways we can support and help clients really have sort of played a significant role. Also, I just want to highlight the commercial risk result and the reinsurance result, both really are adjustment to risk capital. We're literally putting content in the room that was different than it was before. Analytics that are different and people that are different, reinforcing and supporting each other, fully aligned. That means a different set of solutions for clients, better set of solutions. That shows up the reinsurance capability shows up in reinsurance, and you're seeing it. It also shows up in commercial risk. When you see it sort of in some of the bigger, more complex items that our clients are facing, think data centers, et cetera. So it really is a unique combination that's come out of this alignment that we worked so hard to create with risk capital, and you're again seeing it in Reinsurance with a great group of leaders. And this is 7% on top of, I think, 8% in the prior year period, Andy. So this is pretty good momentum, as we talked about before, but your thoughts on sort of what's happening under the [ whole ] year.

Yes. Thanks, Greg. I think the Reinsurance story is it's a risk capital story and it's a diversification story of these, which we spoke about at Investor Day. And from a risk capital standpoint, highlight two things. One would be our global platform in partnership with commercial risk driving double-digit growth internationally, which has been a super success of long lasting, and we see a great future in that. And then I think about digital infrastructure, partnering with the carriers or [indiscernible] capital to bring solutions to clients on the commercial risk side. And so that's been tremendously exciting. But it's on the diversification, Reinsurance at Aon means, what it -- always been leaning into innovation. I'm sure we have great success with bringing teams with our [ treaty ] business, a lot of new wins, particularly in the MGA space. But it's a story about diversification. We've been leading with capital advisory and Aon securities the capital formation Deloitte with the reshare deals or the side [indiscernible] that we've been involved in, that's accelerating our capital business remains the leading capital business globally, and we're having tremendous success there. But we also knew that we have to diversify away from a straight up transactional business, and we sort of lent into the formation of the Strategy and Technology Group. And we're leading there with sort of advised to P&C insurers strategy and analytics and actuarial services, but also broadening out with our proprietary pathway to leaning into the life space, which is a growing part of our business. And that's really differentiating mark competitors in the [ live ] advisory space, what we do in the back book deal, what we do with actuarial advisory. So that's exciting for us. So overall, it's a diversification thing that's driving, and it sets us up through the cycle, you have the marketing staff. But I think we have set us up for a single mid-digit growth or greater through the cycle.

Our next question comes from the line of Rob Cox with Goldman Sachs.

When I think about the outcomes of Aon's strategy and all the innovative work in recent periods, a couple of those outcomes are this 100 basis points plus of organic contribution from talent and the really consistent 70 basis points plus of margin expansion, which goes back to the 2025 Investor Day, I believe. As we look through to 2027 and beyond, should we be thinking about those underlying drivers as sustainable underneath any impacts from USI and all the integration involved?