Aon edges back to attractive valuation multiples
AON
On Friday, the world's second-largest insurance broker released its Q1 results.
Kevin Smith
Published on 05/04/2026 at 03:39 am EDT
Unlike Brown & Brown, its distant rival in the rankings, Aon is weathering the contraction in the industry, posting 5% y-o-y organic growth, alongside a significant 17% increase in operating profit. Full-year forecasts are along the same lines.
Aon, which operates within an oligopoly, alongside Marsh McLennan and Willis Towers Watson, has a market capitalization of $66bn, equivalent to 18x its projected 2025 earnings. This represents an historical valuation floor for the group, which has long been an investor darling; even at the height of the subprime crisis, this multiple never fell below 16x earnings.
Over the last decade, Aon has nearly doubled its revenue, tripled its operating profit, and quadrupled its pre-tax profit before special items. A hallmark of its management has been the shrewd execution of portfolio adjustments, with the total value of divestments ultimately exceeding that of acquisitions.
The group returned $26bn to shareholders over 2016-2025, including $21bn through share buybacks. Curiously, it ramped up these buybacks when the stock was trading at multiples twice as high as today's: it now appears to be slowing down just as its valuation becomes attractive once more.
However, analysts would not be surprised to see an announcement signaling a forthcoming acceleration, especially if the valuation continues to soften.
Aon's operational performance remains very close to that of its American peer Marsh McLennan. Both groups share the top spot in the insurance brokerage sector, still far ahead of Willis Towers Watson, which Aon unsuccessfully attempted to acquire in 2021.
In a decision that some deemed highly protectionist at the time, US antitrust authorities blocked the merger, despite it having been approved by European regulators, which are typically more fastidious.