Aon Corporation Q3 2009 Earnings Call Transcript

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2009-10-30 10:28:10.0

Tags: Aon Corp., Call Transcript, Reinsurance, Earnings, Insurance, Business Operations, Corporate Insurance, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Keith Walsh – Citi.

Keith Walsh – Citi

Greg, just on organic revenue starting with reinsurance, how do I reconcile the reinsurance decline that you guys are looking at when your peers, more specifically Willis reporting stronger results and Guy Carpenter talking about very strong new business generation and we know pricing is better year-over-year, especially in light of your commentary last quarter and I think you might have said it today as well that reinsurance revenue attention was actually up.

Greg Case

Keith, as you think about reflecting on Benfield, particularly as we get Aon Benfield fully up and online, there are a couple of things that really impacted the quarter, which I'll go through in detail. I alluded to but to your question I'll spend a bit more time on. But for us, we're putting together two of the leading reassurance brokerage firms in the world.

We're doing the integration of that and so that's why from our standpoint, the way you've got to look at Aon Benfield certainly for 2009 has got to be in context of sort of how we've done year-to-date and looking at 2009 overall, because there's going to be some back and forth quarterly lumpiness we believe as we get this aligned.

And that's where I would come back to if you literally said take a step back, look at year-to-date in 2009 and say we are going to bring together two of the leading reinsurance brokers in the world. We are going to be able to net-net grow the business, offset inevitable leakage and everything else that you would expect as you put these two groups together. We'd be able to retain our clients.

As I said in the commentary, Keith, we haven't lost a single client in the top 30 and we had a net gain in three business won. We'd keep all of our people 95% of the top 150 and we'd exceed expectations on the time schedule and the amount of the synergies. In the end basically be fully on track to have an unparallel platform in the industry and substantially really as we think about exceed the assumptions that underpin the deal economics.

For us that's why we feel so good about where we are. And really as we think about sort of what we're seeing having gotten back from Monte Carlo and the other industry events, our clients are really truly beginning to see the power of this combination, which is why we are just so excited it. The platform is extraordinary. It's more than we could have ever asked for and the team has done just an extraordinary job. So if you take a step back and the question how are we feeling and how should you gauge as an investor or writer about it, we feel very, very good about it.

 

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