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Bloomberg Audio Studios Podcasts Radio news.
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A
You're listening to Bloomberg businessweek with Carol Massar and Tim Stanvak on Bloomberg Radio.
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C
And reported earnings this morning. EPS and adjusted operating margin beats top line revenues a little bit below expectations. Stock has been up about 2% intraday at its high today. Still stock slightly lower year to date, ended slightly lower in 2025. We've got a great guest to talk about the company's business, the outlook. We welcome back Edmund Reese. He's executive VP CFO of the nearly $75 billion market cap insurance brokerage company. We're talking of course about Aon. He joins us once again in studio. Nice to have you back.
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B
How are you? Thank you for having me, Carol.
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C
Tim, nice to have you.
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B
Very good.
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C
So tell us before we get into the quarter and talk about the business specifically, we keep asking leaders what it's like to be a member of the C suite in this environment.
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B
Well, I mean, this is a very for us and for our clients, it's a very volatile and uncertain environment. There's a ton of news today that may bring some stability to it, but for us it's requiring more of our services and demand from our clients. There's a lot going on and we have solutions that can help our clients protect their businesses and grow their businesses. So there's a lot going on. It's an exciting time to be in my seat, sitting with Aon. Ever lie there at night before you go to sleep and say to yourself, I really hope I don't wake up to a social media post from the president about the insurance industry? Well, look, I think we all have the same objectives here and that's really to help this economy be able to move and we provide solutions to help the clients with that. So volatility actually for us in many cases is a positive thing because we think we have data and insights and solutions that can help companies move like that. So when there's a post like that, it actually means more demand for our services.
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C
That's what I want to ask you though. You mentioned volatility that your clients are dealing with. What are the biggest aspects of volatility that they keep mentioning to you? What are the risks that they are most worried about in today's environment?
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B
When I last came onto this show, I used this term, the megatrends and I categorized what our clients are talking about right now in those same categories. You're going to be familiar with them. When we think about technology, they're talking about data center builds and digital infrastructure in there. That is a demand supply issue.
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C
Is that a number one?
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B
That's one of the top items right now in terms of growth. We had great results that we can get into. That was one of the drivers of growth. They're talking about trade. I just saw a headline on your newscast here that Talked about a $400 million tariff based revenue hit. They want to know how to manage their supply chains and diversify those things. They're talking about the AI impact on workforce as a result. They're talking about the storm here in New York, weather, the four megatrends. So those trends I think are still top of mind. They might change each time that I come onto this show, but they're still top of mind for our clients and that's where we're helping them. What happens to your business though if the trend unwinds, if the trade unwinds, if we don't see the productivity and we don't necessarily see the value that is promised with AI. I think we have a long Runway before we start to see right now the fact that companies are investing in AI. They're really starting to reevaluate. As an example, their workforces. What is the job architecture going to be? What's the pay structure going to be? What's the benefits going to be? We have data and analytics. We have a database, Radford McLaughlin that many of your viewers here would be familiar with with over 30 million employees in it. So we know that companies are investing because we see jobs with this Description and up 2000% over the past couple years. And we can help companies think about this workforce transition. We can help them think about how to upskill and reskill their employees so they can work alongside with AI. So it might change. But we think, we know that the investment is large. We know that this is a long, a long journey ahead before we start to see a shift. There's a lot of work and insight that we can give clients right now on it.
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C
Let's talk about earnings and unfortunately as you know, we in the business, media and journalism like to know about the outlook. You did give an outlook and I am curious how much in terms of data centers because you do talk about that a lot with us. How much of that is a tailwind in your guidance for 2026? I mean should AI investment unwind rapidly, would that be meaningful to your top line expectations for 2026?
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B
We have a broad based business. We're operating in 120 countries right now. We have broad solutions across commercial risk, across reinsurance, health and wealth. The data center, the AI, the technology is a component of it. The guidance that we gave was for mid single digit or greater growth, mid single digit or greater growth. And by the way, we're going into the third year of our third three year plan. We set three year plans here and that will be a component of it.
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C
But look, so you're not overly exposed.
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B
I'm not overly exposed to that.
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C
Like it's a quarter of the business.
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B
In fact we think it's probably a tailwind that further supports the mid single digit growth that is not baked in that extreme amounts at the moment as we think about the guidance.
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C
Interesting.
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B
You know I ran into a colleague who I haven't seen in a bit of time today and we were talking and I was just like we both agreed. I can't believe January has been like this already. You know we, things were kind of slow in the first few days of the new year and then you had whatever everything happening in Venezuela, we have everything happening at Davos. We have this, you know, quote armada on its way to Iran, the Greenland, everything there. Given what has happened in recent weeks, are you seeing clients looking to expand protection for things like trade credit, contingent Business interruption, war, terrorism, those things I'd add to it. Political insurance, cyber. So, yes, demand risk is increasing. And in fact, one of the things that you showed the slide of our company, but the industry in particular, one of the things is that maybe pricing has been coming down in recent times and clients are seeing that as an opportunity to increase their limits across the categories that you just talked about. They're seeing it as an opportunity to increase coverage. Do I have enough cyber? They're seeing it as an opportunity to expand across their overall portfolio and have better protection to grow their business. And that has been the driver of the growth that we've seen over the first two years of our plan and why we're so confident in our outlook going into 2026 as well.
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C
One of the things I wanted to ask you. We've only got about a minute or so left here. You guys put out a review and you talked about the L A Fires. And it was overall global economic losses stemming from disasters, including thunderstorms and earthquakes, totaled about 260 billion. And I think there was global insured losses of more than 127 billion from natural disasters dominated by more than 100 billion occurring in the US after the LA fires. How do you continue to address global climate change? I mean, we have done a story here at Bloomberg about so many people who haven't been able to rebuild because there's fights between the insurers and I think utilities or the city. Like, who is responsible for that, those costs. Meanwhile, people don't have homes. Forgive me, I'm only saving about 45 seconds. How do you guys address this?
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B
That is one of the four mega trends that I just talked about to the point that you just made. It has been that record highs, 25 was kind of flat, but you just said 127 billion. So it's been growing at record highs. California wildfires, maybe 40 billion itself. The storm that we're facing here is, you know, now projected to be a billion dollars. So not as much as some of the disasters that you just talked about, but. But the way that we help companies and clients work with it, deal with this is not just coverage. It's about building resiliency in California wildfires and some of those places to prepare for it. It's about preparing for it. And we have the expertise, the engineering, the insight and analytics to be able to help you take the actions to help you become more resilient and prepare for that.
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C
So glad we could get you in before January was over. Thank you. Edmund Reese, over at Aon.
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A
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