Aon PLC Friday outlined a restructuring program, including job cuts and technology investments, it expects will result in $350 million in annual cost savings as it announced its third-quarter results.
The brokerage will incur $900 million in costs related to the program, which will primarily be spent on technology and “workforce optimization,” said Christa Davies, Aon’s chief financial officer, on a conference call with analysts.
Cumulatively, Aon expects the program to result in expense cuts of $100 million in 2024 and $250 million in 2025 before reaching $350 million in 2026, which will represent about a 4% reduction of its total costs.
The restructuring will include accelerating efforts to standardize operations, integrate operating platforms and increase “product innovation and development,” Ms. Davies said.
Meanwhile, Aon reported revenue of $2.95 billion for the third quarter, a 9.5% increase over the same period last year and up 6% on an organic basis. Net income rose 11.7% to $467 million.
Fiduciary investment income, which is not included in organic revenue, rose 3%, Ms. Davies said.
Commercial risk solutions, Aon’s main insurance brokerage unit, reported $1.59 billion in revenue, up 7% increase overall and 4% on an organic basis. The business was affected by a reduction in demand for insurance products related to mergers and acquisitions and initial public offerings, such as representations and warranties insurance, Aon CEO Greg Case said.
Its reinsurance brokerage business reported $465 million in revenue, up 17.4% overall and 11% on an organic basis.
Health solutions reported $552 million in revenue, up 11.7%, and its wealth solutions division reported $352 million in revenue, up 8%.