How Aon Makes its Money: Revenue Breakdown
A breakdown of Aon (AON) financials. See how Aon makes money from Commercial Risk Solutions, Reinsurance Solutions, Health Solutions, and more using their 2024 annual report.
How Does Aon Make its Money?
Aon plc is a global professional services firm and one of the world’s two largest insurance brokers (alongside Marsh McLennan). The company provides risk management, insurance and reinsurance brokerage, human resources consulting, and retirement solutions. Aon acts as an intermediary between companies seeking insurance and the insurers who provide it, earning commissions and fees. The company combined its risk and human capital businesses into an integrated model, allowing it to advise clients holistically on risk, people, and capital. Aon’s 2024 acquisition of NFP expanded its reach into the mid-market insurance brokerage space.
The insurance brokerage business is one of the best economic models in financial services. Aon doesn’t bear insurance risk (it doesn’t pay claims) — it earns fees and commissions for placing coverage and advising clients. This means Aon captures revenue from the massive global insurance market without the catastrophe loss volatility that hits insurers. As insurance premiums rise (a hard market), Aon’s commissions rise proportionally. Combined with high client retention, recurring fee structures, and minimal capital requirements, the brokerage model generates exceptional returns on invested capital.
Aon (AON) Business Model
Aon Competitors
Aon’s key competitors and comparable public companies in the financial services sector include Marsh McLennan, Progressive, Chubb, and BlackRock. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Aon stacks up by comparing their revenue breakdown, margins, and growth metrics.
Revenue Breakdown
| Segment | 2024 | 2023 | YoY Growth |
|---|---|---|---|
| Commercial Risk Solutions | $7,200 | $6,500 | +10.8% |
| Reinsurance Solutions | $3,100 | $2,700 | +14.8% |
| Health Solutions | $3,400 | $2,800 | +21.4% |
| Wealth Solutions | $1,900 | $1,700 | +11.8% |
| Total Revenue | $16,000 | $14,000 | +14.3% |
Commercial Risk Solutions — 45% of Revenue
The largest segment provides insurance brokerage, risk consulting, and claims management services to commercial enterprises worldwide. Aon brokers place property, casualty, professional liability, cyber, marine, aviation, and specialty insurance on behalf of corporate clients — negotiating coverage terms and pricing with insurance carriers, then earning commissions (typically 10-15% of the premium placed). The segment also provides risk consulting services, helping companies assess and quantify their exposures.
Revenue grew 10.8% in 2024, driven by the continued hard pricing environment in commercial insurance (rising premiums mean higher commissions) and strong new business production. The NFP acquisition, which added a network of mid-market insurance agencies, significantly expanded the segment’s revenue base. Client retention rates remain above 90%, and the segment benefits from the structural trend of increasing corporate risk complexity — cyber risk, ESG liability, supply chain disruption — that drives demand for sophisticated brokerage advice.
Reinsurance Solutions — 19% of Revenue
Aon’s reinsurance brokerage places reinsurance coverage (insurance that insurance companies buy to protect themselves against large losses or catastrophic events) and provides capital advisory services to insurers. Aon is one of the “Big Three” reinsurance brokers alongside Guy Carpenter (part of Marsh McLennan) and Gallagher. Revenue grew 14.8% in 2024, the second-fastest growth rate across segments, reflecting favorable reinsurance pricing after several years of elevated natural catastrophe losses that tightened reinsurance capital.
The reinsurance brokerage is a concentrated, relationship-driven market where expertise matters enormously — cedants (insurance companies buying reinsurance) rely on their broker’s market knowledge and carrier relationships to structure complex programs. Switching brokers is rare because of the depth of analytical and actuarial work embedded in long-term reinsurance relationships.
Health Solutions — 21% of Revenue
This segment advises employers on employee health benefits design, enrollment, and administration. Services include medical plan consulting, pharmacy benefit management advisory, voluntary benefits placement, health exchanges, and wellbeing programs. Revenue surged 21.4% in 2024 — the fastest growth across all segments — driven by the NFP acquisition (which added significant health benefits consulting revenue) and strong organic growth as healthcare cost inflation drives employers to seek expert consulting on benefits strategy.
Rising healthcare costs are a powerful tailwind for this segment: as employers face 7-10% annual medical cost increases, they increasingly turn to consultants like Aon to design cost-effective benefits programs, implement health exchanges, and negotiate better pharmacy contracts. The shift toward defined contribution health benefits (where employers give workers a fixed dollar amount to shop for their own coverage) also drives consulting demand.
Wealth Solutions — 12% of Revenue
Wealth Solutions encompasses retirement consulting (pension plan design, funding, and de-risking), investment consulting (advising institutional investors on asset allocation and manager selection), and Aon Investments (a delegated investment management platform). Revenue grew 11.8% in 2024, benefiting from increased pension de-risking activity (companies buying annuities to offload defined benefit pension obligations) and strong demand for investment advisory services from pension funds, endowments, and sovereign wealth funds.
The pension de-risking trend has been a significant multi-year driver: as interest rates rose, pension funded status improved, enabling corporations to transfer pension obligations to insurance companies. Aon advises on these complex transactions and earns fees on both the consulting and the placement of annuity contracts.
Aon (AON) Income Statement
| Metric | 2024 | 2023 |
|---|---|---|
| Total Revenue | $16,000 | $14,000 |
| Cost of Revenue | $8,400 | $7,300 |
| Gross Profit | $7,600 | $6,700 |
| Operating Expenses | $3,200 | $2,800 |
| Operating Income | $4,400 | $3,900 |
| Net Income | $2,700 | $2,700 |
All values in millions USD unless otherwise stated.
Financial data sourced from Aon SEC Filings.
Aon (AON) Key Financial Metrics
- Gross Margin: 47.5%
- Operating Margin: 27.5%
- Revenue Growth: 14.3%
Is Aon Profitable?
Yes, and Aon’s profitability profile highlights the capital-light nature of the brokerage model. The 27.5% operating margin is strong for a professional services firm and reflects the inherent leverage in insurance brokerage — Aon’s costs are primarily people (brokers, consultants) rather than capital-intensive infrastructure or insurance reserves. Net income was flat at $2.7 billion despite 14.3% revenue growth, as one-time costs associated with the $13.4 billion NFP acquisition (integration charges, debt financing costs, amortization of acquired intangibles) temporarily suppressed margins. Excluding acquisition-related items, the underlying margin profile improved. The brokerage model requires minimal capital and generates substantial free cash flow, which Aon deploys into aggressive share repurchases (the company has reduced its diluted share count significantly over the past decade) and dividends.
Aon (AON): What to Watch
- NFP integration and mid-market expansion — The $13.4 billion NFP acquisition is Aon’s largest deal ever and extends its reach into the mid-market insurance brokerage space. Successful integration and revenue synergies are critical to justifying the premium paid and expanding Aon’s addressable market.
- Insurance pricing cycle — Commercial insurance rates drive Aon’s brokerage commissions. The current hard market has been a tailwind, but a softening cycle would slow organic revenue growth in Commercial Risk Solutions.
- Healthcare cost inflation — Rising medical costs drive demand for Health Solutions consulting, but also create pressure as employers may simplify benefits programs or reduce consulting spend during economic downturns.
- Margin expansion post-NFP — Management has targeted 30%+ adjusted operating margins as NFP integration costs roll off and the Aon Business Services shared-service platform drives efficiencies. Achieving this target would validate the transformation strategy.
- Pension de-risking activity — The Wealth Solutions segment benefits when corporations transfer pension obligations. As more companies complete these transactions, the pipeline of remaining deals will shrink over time, potentially slowing this revenue stream.
Aon (AON) Financial Summary
Aon is one of the world’s two dominant insurance brokers, earning fees and commissions by placing coverage and advising clients — without bearing insurance risk. Revenue grew 14.3% to $16 billion in 2024, with Health Solutions leading at 21.4% growth (driven by the NFP acquisition and healthcare cost inflation), Reinsurance Solutions up 14.8% on favorable catastrophe reinsurance pricing, and Commercial Risk Solutions up 10.8% from the hard commercial insurance market. The 27.5% operating margin reflects temporary NFP acquisition costs; underlying profitability is trending toward management’s 30%+ adjusted target. Net income of $2.7 billion was flat year-over-year as integration charges offset revenue gains, but the capital-light brokerage model continues to generate strong free cash flow for share repurchases and dividends.
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