01 -May -2020 Aon Plc (United Kingdom) · colleagues, we're asking them to support the firm with a...

Corrected Transcript

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01-May-2020

Aon Plc (United Kingdom) (AON)

Q1 2020 Earnings Call

Aon Plc (United Kingdom) (AON) Q1 2020 Earnings Call

Corrected Transcript 01-May-2020


2 Copyright © 2001-2020 FactSet CallStreet, LLC

CORPORATE PARTICIPANTS

Gregory C. Case Chief Executive Officer & Executive Director, Aon Plc (United Kingdom)

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom)

Eric Andersen President, Aon Plc (United Kingdom)

.....................................................................................................................................................................................................................................................................

OTHER PARTICIPANTS

Elyse Greenspan Analyst, Wells Fargo Securities LLC

Meyer Shields Analyst, Keefe, Bruyette & Woods, Inc.

Suneet Kamath Analyst, Citigroup Global Markets, Inc.

Jamminder Bhullar Analyst, JPMorgan Securities LLC

David Styblo Analyst, Jefferies LLC

Paul Newsome Analyst, Piper Sandler & Co.

Michael W. Phillips Analyst, Morgan Stanley & Co. LLC

Phil Stefano Analyst, Deutsche Bank Securities, Inc.

.....................................................................................................................................................................................................................................................................

MANAGEMENT DISCUSSION SECTION

Operator: Good morning, and thank you for holding. Welcome to Aon plc's First Quarter 2020 Conference Call.

At this time, all parties will be in a listen-only mode until a question-and-answer portion of today's call. I would also

like to remind all parties that this call is being recorded. If anyone has any objection, you may disconnect your line

at this time.

It is important to note that some of the comments in today's call may constitute certain statements that are

forward-looking in nature as defined by the Private Securities Reform Act of 1995. Such statements are subject to

certain risks and uncertainties that could cause actual results to differ materially from historical results or those

anticipated. Information concerning risk factors that could cause such differences are described in the press

release covering our first quarter 2020 results, as well as having been posted on our website.

Now, it is my pleasure to turn the call over to Greg Case, CEO of Aon plc. .....................................................................................................................................................................................................................................................................


Thanks, Elena, and good morning, everyone. Welcome to our first quarter conference call. I'm joined virtually by

Christa Davies, our CFO, and Eric Andersen our President. Like previous quarters, we posted a detailed financial

presentation on our website.





At this time of unprecedented humanitarian and economic challenge, I want to start by thanking our 50,000 Aon

colleagues around the world for their remarkable dedication, resilience, and impressive response to this crisis. It's

inspiring to see our colleagues tirelessly going to extraordinary lengths to support each other and connect the

firm, embracing, and united. Our global team is fully committed to bringing the best of our firm to clients at a time

when they need our help more than ever.

As we all know we're experiencing the humanitarian tragedy at a scale that's difficult to comprehend. Economic

consequences are likely to play out for months or even years to come. The global economy is forecast to shrink

by 3% in 2020 and unemployment is increasing around the world. Against that backdrop, I'd like to talk about how

we're responding as a firm and how we expect to emerge stronger and even more capable.

Our colleagues are the firm. And we're committed to their safety and well-being. In response to local government

guidelines, we've cancelled traveling events, and now have over 98% of our colleagues working remotely. And to

ensure our colleagues stay healthy, well and productive, we've made available to all colleagues virtual learning

tools to optimize remote work, as well as multiple tools and services around telemedicine and wellbeing.

We've also increased communication and connectivity across the firm and our leadership teams and our COVID-

19 taskforce accelerated best practice sharing, coordinate our responses, and anticipate future impacts to ensure

we can continue to deliver solutions for clients. Further, our Aon Business Services operational platform ensures

that we can work remotely with secure access to all applications with no loss of productivity, enabling our team full

access to all resources required to meet client need. And finally, we are committed that no colleague will lose their

job as a result of COVID-19.

Turning to Q1 results, our team delivered a strong quarter with positive performance across each of our key

metrics, despite some early disruption from the impact of COVID-19 at the end of the quarter. Our results include

5% organic revenue growth with particular strength from Reinsurance Solutions and Health Solutions. Substantial

operating margin expansion of 200 basis points to 35.7% and 11% year-over-year earnings per share growth.

In the quarter, we also took substantial steps to bring the full force of our firm to have clients respond to the

pandemic, and resulting economic stress, while also delivering on business as usual commitments. And we did

this while managing the transition to working remotely, which gave us even more opportunity for innovation across

the organization.

To coordinate our pandemic response for clients, our COVID-19 taskforce brings together experts from across the

firm to develop, deliver, and share solutions from around the world, both for our own firm and for clients. In one

example as the pandemic quickly escalated in Italy, our commercial risk and our solutions colleagues partnered

with carriers to address the need for COVID-19 coverage for our clients' employees. This unique and tailor-made

solution provides employees with allowances for hospitalization and the recovery expenses in the event they're

diagnosed with COVID-19. In addition, the cover provides post-hospitalization assistance including domestic

assistance childcare and more. This solution is now available in Italy and Spain and we're working to scale this

further across the globe. A great example of our Aon United team innovating on behalf of clients during a very

critical time.

In another instance, in New York, our human capital team developed an analytic tool to assess the pandemic

risks to our community's workforce and overall speed recovery. The tool they built uses Department of Labor data

and Aon analytics to analyze occupational risk by job and location based on [ph] role (0:05:06) characteristics like

proximity and exposure. The team took that model and layered on medical forecasts from our Health Solutions

team to map potential impacts by geography over time. The resulting tool helps communities plan reopening





strategies while minimizing risk and prioritizing antibody tests for the highest risk and most mission critical

workers. Currently, we're using our model in partnership with community groups in New York, but we anticipate

rolling it out to clients' communities around the world. And these are just two examples of the many ways in which

we're helping clients respond to the new demands of these challenging times.

Christa will elaborate more on our financial results and outlook. However, I would highlight that our business is

globally diversified and highly resilient, given its largely recurring and nondiscretionary business. Ad we operate in

over 120 countries and in virtually every sector and business segment. It's also important to reinforce that given

our strong historic focus on cash flow, we are fortunate to have an exceptionally strong understanding of revenue,

cost, and cash. Within our single P&L, we have the ability to assess cash and other performance by business, by

geography, by solution line, and by individual offering. This capability has been in place and been further refined

every year for well over a decade.

With this embedded capability for our business, we can compare the current economic environment to the

recession of 2008- 2009. We have considered a number of macroeconomic scenarios and their potential impacts

to our business. At this unique point in time, no one can predict the future. However, we will continue to act from a

position of strength on areas that we can control and to protect our colleagues and our clients. While we always

hope for the best, we've taken steps to prepare for virtually any economic scenario.

For Q1, we did see some early impacts of COVID-19, especially in more discretionary areas within retirement and

data analytics. Overall, the impact we see on our revenue and cash flow through April is modest. Moving forward,

we're taking steps in three areas; our top priority is to proactively support colleagues followed by our priorities to

manage expenses and conserve liquidity. First, we're reducing non-compensation expenses through an effort

which began in early March.

Second, we paused share buyback and M&A, although, we're committed to maintaining our dividend. And third,

we've committed that no colleague will lose their job as a result of COVID-19. In order to protect all 50,000

colleagues, we're asking them to support the firm with a temporary compensation reduction. And we're planning

for roughly 70% of colleagues to take a reduction of up to 20% of salary, which will be implemented in accordance

with local practices. While the remaining roughly 30% of our firm will see no reduction. This step is intended to

protect 50,000 colleagues and ensures that we are able to continue to deliver the full capability of Aon at a time

when clients need us most.

Taking these pre-emptive steps now from a position of strength ensures we're able to continue to invest in

increasing our relevance to clients as we continue to look to address their unmet needs.

One outcome of the current trauma is that we're seeing is a heightened interest by clients in understanding where

other areas of major potential risk might exist. Specifically, we see concern in areas like cyber, climate change,

and health-wealth gap, which may create future debilitating events. Up to now these risks have only been

addressed in a very limited way. For example, for one client COVID-19 highlighted that when catastrophes

happen, whether epidemics or natural catastrophes, a very key aspect of successful recovery is access to liquidity

and capital to match exposures available immediately. To create the cover and fulfill the required speed of

resolution, our team designed an innovative parametric insurance solution to address earthquake exposure. The

program quickly provides our client with a liquidity infusion in the event of a quake and gives them broad

discretion on how to use these funds. This product covers our client and the exposure to their employees who

may require financial assistance ensuring the resilience and responsiveness in a future crisis.





Driving faster innovation for clients is a key outcome of our strategy and one that we can accelerate through our

planned combination with Willis Towers Watson. As our world becomes more complex, clients need, the unique

capabilities that this combination will create. Our two firms have been on similar paths, focused on bringing the

best solutions from across their respective organizations to clients. As a combined firm, we'll be able to accelerate

progress and become even more relevant to our clients with faster innovation and better solutions.

In summary, our global team has been truly remarkable in the response to the COVID-19 crisis, supporting each

other and our clients. In addition, they delivered a strong first quarter of progress, even if the early effects of the

crisis were being experienced. We believe our Aon United Growth Strategy has positioned us very well to emerge

from the current crisis and even stronger firm position for long-term growth.

With that overview, I'd like to turn the call over to Christa for her thoughts on our financial results and outlook.

Christa? .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom)

Thanks so much, Greg, and good morning, everyone. As I talk about our results I'll also provide some thoughts on

how the macroeconomic environment impacts our outlook, and the steps we're taking to proactively and

conservatively manage our business and our balance sheet to ensure we retained stability and flexibility and

position our firm to continue to deliver shareholder value over the long term.

Our business has strong fundamentals. Our revenue base is diversified across industry, geography, and solution

line. Roughly 80% is non-discretionary and has a significant portion that renews every year with 95% retention

rates on average. However, given uncertainty around duration and magnitude of COVID-19 and the resulting

economic downturn and its impact to our clients and our firm, for the near-term, we're withdrawing our financial

guidance of mid-single digit [indiscernible] (0:10:58) organic revenue growth and double-digit free cash flow

growth.

We are also taking prudent steps to pre-emptively reduce expenses and discretionary uses of cash in order to

maintain the strength of our balance sheet and optimize financial flexibility in the event of any future declines in

revenue. We are taking these actions from position of strength and know that will position us to continue to project

our colleagues, execute our Aon United Strategy and focus on our key financial metrics in the short and long-

term.

In Q1, we delivered strong operational and financial performance to start the year. We achieved 5% organic

revenue growth that translated into solid operational improvement, [ph] over becoming (0:11:39) an unfavorable

mid-term impact from foreign currency translation. As I reflect on each of our key financial metrics. First, we

delivered organic revenue growth of 5% with strength in Reinsurance Solutions and Health Solutions offset by

some early disruption from the impact of COVID-19 and our Retirement and Data and Analytics business. I would

also note the reported revenue was pressured by FX and the ongoing impact of divestitures from efforts we've

described in prior quarters to reshape our portfolio to higher growth and higher margin areas.

Second, we delivered solid operational improvement, with operating income growth of 8%, operating margin

expansion of 200 basis points, and 11% earnings per share growth, driven by a strong organic revenue growth

and ongoing productivity improvements, and expense discipline from Aon Business Services. As we noted in our

earnings material, FX was an unfavorable impact of approximately $0.03 in the quarter. At today's rate, we would

expect a $0.03 per share unfavorable impact in Q2, $0.04 per share unfavorable impact in Q3, and $0.06 per

share unfavorable impact in Q4.





Third, free cash flow was $279 million in the quarter, and I would note Q1 is our seasonally smallest quarter to

cash flow, due primarily to incentive compensation payments. The $279 million this year is an increase from last

year's $17 million which was negatively impacted by approximately $85 million of net cash payments related to

legacy litigation. The increase in free cash flow was driven by operating income growth as well as near-term

actions, we've taken to delay certain expenses.

We did see an increase in receivables, primarily driven by the strong 9% organic revenue growth in reinsurance

solutions. As I look towards the rest of the year, we have confidence in the underlying resilience of our business

and [ph] while multiple of (0:13:39) business is non-discretionary, it is impacted by long-term macroeconomic

factors like GDP growth, employment and property values amongst other things. While we are not providing

revenue guidance, I wanted to provide a bit more insight into our business that may be helpful in understanding

how we may be impacted in various economic scenarios. We have a very stable revenue base with 80% of our

revenues in core highly recurring businesses, with retention rates of 95% on average.

In terms of our business, 80% of our business is core, core revenues tend to be highly recurring and

nondiscretionary and includes things like property and casualty, or directors and officers insurance placements,

cyber remediation, treaty reinsurance required actuarial work on pension programs, and help with benefits

brokerage. Many of these services are regulated, required or necessary costs of doing business.

20% of our business is relatively more discretionary, these more discretionary revenues include project work like

risk consulting, transaction liability, human capital consulting, travel and event cover, and health and benefits

consulting. Much of this book also recurs and renews every year, though some of it is likely to be deferred or not

renewed. In an economic downturn, we expect to see a larger, a more immediate impact in the more discretionary

portion of our book. We've already started to see some early impacts of COVID-19 in Q1 as I mentioned, and

given the overall global economic environment, we expect this could be more negatively impacted going forward.

Within our solutions lines commercial risks, reinsurance, and health include the largest core components, while

retirement solutions and data and analytic services have the largest components that are more discretionary.

More positively as Greg mentioned, we see significant opportunities in areas of our business around innovative

solutions to address the current crisis, for instance, in balance sheet and liquidity solutions for clients. Overall,

we're confident in our strong fundamental business. We did not see material impacts to revenue or collections in

Q1 or in April.

However, given global economic uncertainty, we're taking steps to manage costs prudently and defer some spend

and investment in order to proactively get in front of any negative impacts. Our business is highly resilient and our

historic investment in Aon Business Services gives us the ability to make quicker, smarter decisions across the

firm to manage expenses. The steps we've taken with our AON Business Services platform to drive operational

efficiency not only help us manage costs and improve margins but also help us continue to manage cash flow and

working capital, which further ensures our ability and flexibility.

For instance, in Q1, 82% of our outside services spend was managed centrally, allowing us to manage purchase

decisions, ensure we derive maximum supply value and optimize working capital. This allows us to take steps

now to defer pre-emptively and reduce costs.

I would note that these expense reductions will contribute to near-term margin improvement. However, some, like,

travel and entertainment do not reflect sustainable core operating margin expansion.





Overall, our AON Business Services operating platform enables us to operate effectively, while we continue to run

the firm on cash and prudently manage our cash and liquidity position. In the past, [Technical Difficulty] (0:17:03)

consistently focused and delivered on key financial metrics of organic revenue growth, operating margins, free

cash flow, and return-on-invested capital. In today's economic environment, the context is different but our

strategy and tactics to drive performance of our firm remain the same.

Our historic focus on maximizing the translation of revenue into the highest level of free cash flow serves us well

in this environment, as we are focused on preserving capital to enable future growth. These steps and others

we've taken to drive operating income growth make progress on working capital and reduce structural uses of

cash and perhaps more essential now in this economic environment than ever before.

For instance, we have daily cash flow forecasting across the lines to cash flow statement, because we run the

firm based on free cash flow for well over 10 years now. This gives us the ability to compare our free cash flow to

previous years and in particular, the financial crisis of 2008-2009. This gives us the ability to analyze and take

steps to address any challenges by country, by business, by line of the cash flow statement, and to look after

early marketable trends. For instance, from areas that may have been more hard hit by COVID-19.

I'd also highlight that structural uses of cash in pension, restructuring and CapEx selectively are expected to free

up approximately $300 million of cash in 2020, compared to 2019. While, we are maintaining our dividend, we

have paused our discretionary uses of cash for share buyback and M&A. We're very confident in the strength of

our balance sheet and how we manage liquidity. We do not take underwriting risks and we're committed to our

investment grade credit rating.

We manage liquidity risks through a well-leaded debt maturity profile, with no more than $750 million of terms that

coming due in any given year. We have $1.65 billion in committed credit from our $900 million credit facility due in

2022 and our $750 million credit facility due in 2023. We have not had a need to draw on our committed credit,

despite our seasonally lowest period of cash flow. We also continue to access commercial paper market for

working capital needs in the US and Europe. We know this prudence makes us resilient now and prepares us to

come out stronger. As Greg mentioned, we are committed and excited about our combination with Willis Towers

Watson and we expect to file our joint preliminary proxy in the coming weeks followed by a joint definitive proxy

and shareholder vote, which we expect in Q3.

In summary, our colleagues, business, Aon United Strategy, and our Aon Business Services operational platform

are strong and equip us well to react to challenging time. The steps we've taken to drive our key financial priorities

are more relevant than ever as we manage flexibility and stability in these challenging times. Our disciplined

approach to free cash flow and return-on-invested capital provide stability and flexibility to unlock significant

shareholder value creation over the long term.

With that, I'll turn the call back over to the operator and we'd be delighted to take your questions.





QUESTION AND ANSWER SECTION

Operator: Thank you. [Operator Instructions] Our first question is coming from Elyse Greenspan from Wells

Fargo. Your line is now open. .....................................................................................................................................................................................................................................................................

Elyse Greenspan Analyst, Wells Fargo Securities LLC Q Hi, thanks. Good morning. .....................................................................................................................................................................................................................................................................

Gregory C. Case Chief Executive Officer & Executive Director, Aon Plc (United Kingdom) A Hi, Elyse. .....................................................................................................................................................................................................................................................................

Elyse Greenspan Analyst, Wells Fargo Securities LLC Q Hi. My first question. I recognize and I think we all do as the fluidity of the situation and the impact of COVID-19.

And obviously, you guys wanting to remove your organic guidance for the time being. But is there any way that

you can give us a sense, to the best of your abilities right now, what the organic view is for the balance of the

year? Maybe some kind of wide range from one extreme to the other, just so we have a sense of how – is it still

going to be slightly positive, flat, slightly negative, kind of maybe some kind of range of outcomes that how COVID

might impact the business? .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A Yes. So Elyse. We're not giving guidance from revenue or margins as you described because of the uncertainty of

the macroeconomic environment. But we are managing them very closely over the course of the year. And we

would expect that if there are any reductions in revenue that we would reduce expenses proportionally to match

and very much focused on managing free cash flow to the firm to preserve flexibility and stability over the long

term. I would note if you think about the macroenvironment, Elyse, in 2008-2009 when GDP was essentially flat,

our worst year of organic revenue growth was minus 1%. So, we do have a very stable business in global

economic recession. .....................................................................................................................................................................................................................................................................

Gregory C. Case Chief Executive Officer & Executive Director, Aon Plc (United Kingdom) A And Elyse, I might add if you think about sort of just put into perspective, it is very important. Very important

question. And Christa has referenced this, the history and the facts are very helpful to set the baseline. So 2008-

2009 just as Christa described. What's different from 2008-2009 and today, we say two things are different. One

obviously, Aon is much stronger, Aon United Strategy is 10 years more mature, Aon United Blueprint and the plan

we have and how we deliver the global firm or clients in place.

Aon Business Services is a real game changer for us. We didn't have in 2008-2009, driving business

improvement, executing at scale so all these things are in place. We've also had a very substantial spend on data

as you're well aware since then $400 million a year so, call it, $3.5 billion to $4 billion. And we're seeing

opportunities around net new and new business generation and retention at all-time high. So that's different, we're

a stronger firm.





What's also different though, objectively, comparing it to then, the current economic trauma is likely more – much

worse, but we don't know, right, no one knows. Q2 is, obviously, a problem. In the US, greater than 30% reduction

in GDP, 26 million unemployment claims in the last five months. It suggests unemployment is greater than 20%.

EMEA has, obviously, got a tremendous amount, 50 million employees plus potentially affected [ph] age of same

place until duration is not known (0:23:16).

In normal course really is sort of how fast is the recovery going to happen. And you know by geography, how is it

going to play out and as Christa describe in her script in particular is we want to be in a position to perform in

every scenario. And that's what we believe we're set up to do. .....................................................................................................................................................................................................................................................................

Elyse Greenspan Analyst, Wells Fargo Securities LLC Q Okay. And then on the margin side, Christa, you said, right, you guys are focused on managing expenses. So is

the message that maybe there is some fluidity on what happens with organic, but regardless of the range and

outcomes you guys would continue – due to the expense management will continue to expect to show margin

improvement? .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A So, Elyse, we haven't given guidance on margins, nor given guidance on revenue, but we do manage margins

over the course of the year. And we would expect that we will reduce expenses proportionately with revenue

impact for the full year. And I will tell you, Elyse, what we've done is we've acted early from a position of strength.

And we are taking actions on what we can control and we're not predicting the future. We are hoping for the best,

but we are planning to every economic outcome. And so we have taken actions as Greg and I talked about in our

opening remarks, to reduce expenses ahead of any economic impact we see to ensure we come out stronger.

And we want to make sure that we are able to deliver for clients in a time of greater need for them. .....................................................................................................................................................................................................................................................................

Elyse Greenspan Analyst, Wells Fargo Securities LLC Q Okay. One last one, you guys announced the merger with, the acquisition of Willis, right at the start of March kind

of before the economic slowdown picked up, and when you announced the deal you had put forth a target of mid-

single digit or greater organic revenue growth for the combined firms. And now that deal doesn't close right till the

first half of next year. So with the long-term view of getting back to that mid-single digit or greater organic growth

when we come out of this slowdown is that still the combined view going into that acquisition. .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A It certainly is, Elyse, we would say we announced that acquisition, no we announced that combination with Willis

Towers Watson on March 9 and we are even more excited about it today than we were then, as we continue to

engage with Willis Towers Watson, we find that the DNA and strategies of the firm are remarkably similar. And we

are incredibly excited about the opportunity for clients and the upside to meet unmet client needs. And we do

believe that the combination has complementary capabilities to be able to [ph] deliver to its (0:25:55) clients. And

so we certainly see that the upside in revenue over time is very much in line with the commitment to mid-single

digit or greater over the long-term. .....................................................................................................................................................................................................................................................................





Gregory C. Case Chief Executive Officer & Executive Director, Aon Plc (United Kingdom) A And I think Elyse, as you think about the potential. And John Haley and I talked about that really from day one, the

entire thesis behind the combination of Aon and Willis Towers Watson centers on bringing the two firms together

to really set a new standard in client leadership and impact. And the combination as we described is better now

with complementary capability as Christa mentioned in solution lines and geographies and segments tremendous

opportunity. But not just better now, we think better in the future, back to your point on mid-single digit or greater.

Better in the future with analytics capability, better understanding of emerging client need, our ability to create

new market solutions et cetera.

All these things come together and really doing something for clients, which up to now, no one's been able to

really do and address sort of major risk challenges like pandemic, climate change, cyber, health-wealth. Ironically

this current trauma has just reinforced in so many ways the value of the combination and I think we would say

March 9, we had high expectations. Having spent more time with John Haley and the team, our high expectations

are exceeded and we're really looking forward to the next steps. .....................................................................................................................................................................................................................................................................

Elyse Greenspan Analyst, Wells Fargo Securities LLC Q Okay. Thanks for the color. .....................................................................................................................................................................................................................................................................

Operator: Thank you. Our next question is from Meyer Shields of KBW. Your line is now open. .....................................................................................................................................................................................................................................................................

Meyer Shields Analyst, Keefe, Bruyette & Woods, Inc. Q Thanks. One quick question on the recurring revenue stream. I think Christa, when you talk about 80% of that

being recurring, is that in a normal scenario, we don't have a lot of small businesses going out of business or is

that sort of framing the current expectation? .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A That's framing the current expectations, Meyer. We would say is 80% of our businesses core and core tends to be

highly recurring, non-discretionary things like property and casualty, D&O, cyber treaty, actuarial work on pension

plans et cetera, but 20% of our business is more discretionary and more discretionary much of this recurs and

renews each year. And so, we do have a very stable and resilient business, less than 1% of our revenue comes

from many single clients, and we operate in a 100 countries, different industries, different segments to the

economy. So we feel very good about the resilience of our business. .....................................................................................................................................................................................................................................................................

Meyer Shields Analyst, Keefe, Bruyette & Woods, Inc. Q Okay. That's helpful. Greg, can you talk on big picture perspective about the compensation reduction, and what

that could imply for employee retention? .....................................................................................................................................................................................................................................................................

Gregory C. Case Chief Executive Officer & Executive Director, Aon Plc (United Kingdom) A Well, I'll take, Meyer, from our standpoint first take a step back, you know net-net, we're really focusing on

creating value for our clients and taking care of colleagues, and really to emerge as stronger firm. And we – I





would tell you, we really reflect – we're humbly proud of the principles-based approach we've taken and the

commitments we've made, and really comes through, as we described before a lots happened in the world. And

while everyone is hoping for a bounce back, the ultimate result will be – by the way the bounce back to a major

recession, I guess, is whatever one is anticipating, but no one really knows what it's going to look like and how

long it's going to look. And we step back and say listen, we've got to be in a position in any scenario to perform on

behalf of clients and behalf of colleagues.

And for us, first I would just ask you to consider the foundation upon which we made our decisions. Christa

highlighted it, we've been managing cash flows and important metric for a better part of a decade. That coupled

with Aon Business Services, really is a very unique perspective on where we stand at any time. And this is really

all aspects of performance, cash, all aspects – in ability to execute decisions across the board. And by all

measures, I mean look at the quarter and look at the result, we currently stand in an exceptionally strong position,

we know that and we know that very well. Yet, we also know what all the scenarios look like, all the economics

scenarios irrespective of how remote and for us, it's an absolute priority to have our entire firm in place to support

clients in a potentially historic and sustained downturn.

And you know if you take this priority seriously, it requires you to take difficult steps styles, Christa, highlighted to

protect 50,000 colleagues. And so the alternative by the way is to hope and hope that the current downturn really

comes back to 2008-2009 revisited, that alternative by the way puts client leadership fully at risk at the very time

clients might need it the most. And there's no doubt in every respect that's the easier path to take. And you can

sort of shade over a lot of things along the way. And we have essentially said listen, we desperately hope that's

the outcome, but if it's not, we want to be in an absolutely unique and pristine place to help our client succeed and

protect our colleagues.

And what I would highlight is, we're going to – we fully anticipate coming out as much stronger firm. And this really

comes back to our investments over the last decade in Aon United. I'll tell you something for our team, we often

talk about Aon United and the capability in positive times, but it turns out, Aon United is equally meaningful in

times of challenge and this decade of investment in Aon United means we can take a global set of actions that we

know will be difficult for maybe for others to do, but for us a global set of actions that really puts us in a position to

support clients in every scenario.

So our colleagues around the world have done very, very unique things and very, very strong things and we're

excited. We're excited right now about our ability to help clients in times of need irrespective of what that comes

out. So from our standpoint, Meyer, we're going to be a stronger firm coming out of it and we're taking steps that

we can take that we know are important to the right answer for us to make that happen. .....................................................................................................................................................................................................................................................................

Eric Andersen President, Aon Plc (United Kingdom) A Hey, Greg, maybe just to jump in a little bit on one of the examples. We talked about the COVID-19 taskforce in

your early opening. But I think it's important to recognize that this is the fourth time we've activated that group.

Now going back to 2009 whether it was H1N1, SARS, Ebola. So this group is a group that consists of experts

across the firm from everything from epidemiology to credit risk to capital solutions and liquidity all different

capabilities around the world and essentially what they're trying to do is innovate on behalf of clients whether it's

trying – whether they're working on how they're dealing with their employee. How they're thinking about return to

work. How they're working on capital solutions and liquidity for the firm.

It really is across the entire firm, learning from areas of the world that were affected early and being able to share

best practices. And so there is an advisory part of it for sure. But more importantly, I think we're trying to help





them think through on an innovative new way that you actually can't do until you pull all the capabilities together

with the one guiding principle of trying to help the clients get through this. And so while the salary piece is one

part. There was a lot of innovation that we're pushing and working on to able to help those clients get through the

challenge. .....................................................................................................................................................................................................................................................................

Meyer Shields Analyst, Keefe, Bruyette & Woods, Inc. Q Well, completely understood. Thank you very much. .....................................................................................................................................................................................................................................................................

Operator: Thank you. We have a question from Suneet Kamath of Citi. Your line is now open. .....................................................................................................................................................................................................................................................................

Suneet Kamath Analyst, Citigroup Global Markets, Inc. Q Thanks. I just wanted to follow-up on the base salary reductions. Can you just give some feedback in terms of

how the employee response has been? It seems like obviously a pretty dramatic steps. So just curious what

you've been hearing since Monday's announcement? .....................................................................................................................................................................................................................................................................

Gregory C. Case Chief Executive Officer & Executive Director, Aon Plc (United Kingdom) A Yeah. It really has been [indiscernible] (0:33:14). Again I would sort of come back in an incredibly strong positive

reinforcement on Aon United and what we're all about. Again, imagine we essentially step back and asked our

colleagues around the globe and our leadership team, how do we actually prepare on behalf of clients and we

looked at all the scenarios. And again as I'd highlighted the alternative right now for is to hope that the current

downturn ends up being a recession, which by the way we hope too, we hope – we celebrate that and hope that's

the case.

But we all realized at the time the difficult choice is how do you protect 50,000 colleagues to serve clients in the

most effective way. And you recognize that if you wait and the downturn becomes more acute, how do you

actually have them there? How do you support the colleagues to do that? And we collectively made a decision

that we are going to take the steps we took because we know again in addition of protecting 50,000 jobs. Our

ability to continue supporting clients is extraordinary. And so that was the piece.

It was, obviously, when we talked about it on Monday, I would say since Monday what's happened around the

world has really been our colleagues have embraced it and understood exactly what we're trying to do. And as I

said before we're coming through this a stronger firm. And if we're wrong, Suneet – if we're wrong by the way, I

hope we're wrong. We hope it ends up being a recession. In the end our colleagues know we took steps that

perhaps it would be hard for other people to take to support clients and that if we're wrong, we basically remediate

all the actions we take and mitigate our actions, no problem whatsoever. And they've done something no one else

could do. And the fact that we can act across the firm and in an Aon United fashion is pretty unique and it actually

has been incredibly invigorating as our colleagues have actually put this in place. Among other things as we have

reduced expenses and done a number of other things, Christa, described that package puts our firm in a unique

position to perform in ways really no one else could do under any scenario. .....................................................................................................................................................................................................................................................................

Suneet Kamath Analyst, Citigroup Global Markets, Inc. Q Got it. And is there any way that you can help us think through the size of the expense reductions that, just maybe

as a percentage of total expenses, just to help us frame how impactful what your guys are doing will be?





Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A So Suneet, we haven't given guidance on the size of this. We would say that so far the expense reductions we've

taken a modest and we're not giving guidance on revenue or margins, but we would say that if revenue was to

come down that we would reduce expenses proportionately. And we're also very focused as I mentioned earlier

on cash and making sure that we maintain a very strong cash position. It's always been the way we run the firm.

We have unique insight and visibility into our cash flow by line of the cash flow statement, by solution line. And

one of things I would say is we've taken a number of actions on the non-salary side and we did that first, we

reduced a number of expenses things like G&A, things like third-party spends much earlier in Q1 and so we are

taking action from a position of strength in advance of impacts we observe. .....................................................................................................................................................................................................................................................................

Gregory C. Case Chief Executive Officer & Executive Director, Aon Plc (United Kingdom) A One of the thing I just want to highlight, Suneet, in context of this is as we talk to clients and you know it's a long

discussion with clients in the months leading up to our decision it was sort of what we've done across the board

on the different aspects. And when we explain the principles-based approach, our clients not surprising are

incredibly grateful. They understand what happened. They understand our inability to serve them, if you take

different courses if things get difficult. And candidly some of our global clients have asked for the playbook. They

really just said how do you do this around the world in different geographies and make it work. And we described

to them what Aon United is all about, how it's played out over a decade, how we built our foundation over time

and them seen us come together, support each other in an ability to support them in times of need. Whatever

those times are has been also frankly inspiring for our colleagues to sort of get that reaction as clients recognize

what we're doing on their behalf. .....................................................................................................................................................................................................................................................................

Suneet Kamath Analyst, Citigroup Global Markets, Inc. Q Got it. Okay, thank you. .....................................................................................................................................................................................................................................................................

Operator: Thank you. Our next question is from Jimmy Bhullar of JPMorgan. Your line is now open. .....................................................................................................................................................................................................................................................................

Jamminder Bhullar Analyst, JPMorgan Securities LLC Q Hi. Good morning. So I had a few questions. First, just on the impact of COVID, you discussed the sensitivity or

the exposure of the various businesses, but on the commercial risk business your organic growth was decent 4%.

But it had been like 6% to 7% in the past couple of years actually. And so is the decline just tougher comps or is it

more just a slowdown in March, and is it reasonable to assume that that's a business that could potentially turn

negative in the near-term? .....................................................................................................................................................................................................................................................................

Gregory C. Case Chief Executive Officer & Executive Director, Aon Plc (United Kingdom) A Yeah. Listen from our standpoint, no, we feel very strong momentum in commercial risk across the board as we

highlight again in the first quarter. We were touching on some of the impacts coming at the end of the quarter in

terms of sort of overall where we are. But no, we feel tremendous momentum sort of across each of our solution

lines, particularly as we're connecting with clients. And there are a number of things that are happening sort of in

those solution lines as they currently exist, as well as our ability to candidly generate net new business as I

described before, net new business for us all-time high, retention all-time high, rollover all-time high, and isn't just





in the business it's also the net new things we're doing. Maybe Eric, can you talk a little bit about some of the

bright spots that we're seeing across the playing field here, as well as some of the new initiatives that we're

putting in place. .....................................................................................................................................................................................................................................................................

Eric Andersen President, Aon Plc (United Kingdom) A Sure Greg. There's a couple in particular, certainly in the D&O area. The work we're doing around distressed

companies in particular, has really created some opportunity for us and also trying to create liquidity using surety

bonds to replace letters-of-credit and other areas along the line I would say, balance sheet protection and

providing financial liquidity are just things that, honestly, today the clients are very interested in dealing with. But

also I would say just our traditional business, and how we're providing advice and how helping clients do

structuring and understanding the different areas where perhaps they can take more risk themselves or perhaps

combined programs and things along those lines. But we're pretty optimistic with the business as it came through

the first quarter.

[indiscernible] (0:39:27) .....................................................................................................................................................................................................................................................................

Eric Andersen President, Aon Plc (United Kingdom) A One of the things if you look at the 80% that Christa described, incredibly strong core, the 20% we're working

through but these net new areas are very strong, very powerful in terms of how that plays out over time in building

momentum of the business. .....................................................................................................................................................................................................................................................................

Jamminder Bhullar Analyst, JPMorgan Securities LLC Q And but you would expect a slowdown in that business as well in the short-term though, right, in commercial? .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A So what we would expect is as I talked about the components of the business we would expect our commercial

risk, our reinsurance, and our health businesses to have a much higher percentage of core than the rest of our

business, because the business is a highly recurring nondiscretionary. And as Eric said, they're regulated and

required and often a necessary cost of doing business, even firms in financial distress. .....................................................................................................................................................................................................................................................................

Jamminder Bhullar Analyst, JPMorgan Securities LLC Q Okay. And then just on the Willis deal, I think there was sort of – on the part of Willis' investors, they were

somewhat disappointed with the modest premium and obviously – that you offered on the takeout and on top of

that your stocks declined a lot but many Aon shareholders are also concerned about you potentially raising the

offer especially given sort of the super voting requirements at Willis. Can you sort of discuss if the deal does not

go through as proposed would you be willing to walk away from it, or is there a possibility you'd actually consider

higher bid? .....................................................................................................................................................................................................................................................................

Gregory C. Case Chief Executive Officer & Executive Director, Aon Plc (United Kingdom) A





You know, Jimmy, from our standpoint, listen, we've been engaging with our shareholders and John Healy and

team with their shareholders on the Willis Tower Watson side, our feedback has been exceptionally positive.

Again when our shareholders really started to understand and Willis Tower Watson really started to understand

what this combination could do, is extraordinary. And there is just no other way to describe it. And it's

extraordinary on behalf of clients. It's extraordinary in the now as I described for a bit, the solution line, [ph]

complementary pieces (0:41:23) is very, very positive, geographically very, very positive in terms of what we're

trying to do. The segments are very positive.

Obviously, the future equally strong or stronger with analytic capability that lets us do things around

understanding client need and creating net new markets that are extraordinary. So I think our investors see that

potential and are incredibly excited about it, and Willis Tower Watson sees the same, incredibly excited about it,

obviously the structure of the deal means the share price movements down are really less relevant in terms of

where we are at all. And so, that opportunity is extraordinary, then obviously not to mention, we highlighted $800

million in synergies and that isn't changing in any way, shape or form.

So from our standpoint, this is really about the upside and the revenue potential and new solutions for clients. And

we're incredibly excited about it and continue to be. And as I said before ironically, if there's one thing about this

current crisis, this pandemic, it really highlights the need for higher octane, higher capability, higher insight and

you want that you go to Aon-Willis Tower Watson that's really what we're talking about. So that's really been one

of the observations our shareholders have made. And so, it's the Willis Tower Watson shareholders as we've

engaged with them. .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A And Greg, I would just add I think as we look forward, Jimmy, we're very excited about the combination. You

could hear the excitement in terms of – I'm even more excited today when we were when we announced it on

March 9. And going forward we expect sort of two big milestones. The first is we're going to file-up [ph] in-memory

proxy (0:42:50) in the coming weeks and the second is, in Q3, we will file-up definitive proxy and have both

shareholder votes. So we're very much looking forward to those milestones and looking forward to the combined

capabilities to be able to serve client needs better than we do today. .....................................................................................................................................................................................................................................................................

Jamminder Bhullar Analyst, JPMorgan Securities LLC Q Thank you. .....................................................................................................................................................................................................................................................................

Operator: Thank you. Our next question is from Dave Styblo of Jefferies. Your line is now open. .....................................................................................................................................................................................................................................................................

David Styblo Analyst, Jefferies LLC Q Hi, good morning, thanks for the question. Appreciate the global diversification and solutions that you guys can

provide to clients during this time and obviously, that can help inflate the business. At the same time, everyone's

trying to figure out and assess the impact of what larger companies might dial back down from a discretionary

standpoint, and then smaller companies that may not be able to survive.

I'd like to take a little bit more at the 80% of the business that's non-discretionary. I'm curious just to make sure I

understood comments there is that already contemplating companies that that may not be able to survive in that

situation where even without discretionary they're just not there anymore, or if it's not, can you provide a little bit





more color about the revenue breakdown by employer size, whether – how much of that is from employers with

1,000-plus employees versus some span between 100 or 1,000 or less than 100 to give us a sense of what might

be at risk in that book? .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A Absolutely. So as we think about our business it is globally diversified. It's diversified across clients, across

industries, across geographies. We do operate in over 100 countries and no one client actually makes up even

1% of revenue. And so we're very fortunate to have a very resilient business. As we look at our business in that

80% of the core, it's highly recurring non-discretionary activity where many of this services are regulated, required

or necessary cost to big business, even for clients in financial distress, even for clients who are potentially

entering bankruptcy.

Many of these services is still required. And so, we have real opportunities to actually provide liquidity and capital

solutions for clients in financial distress. And as we think about even client-size, Dave, we are very well diversified

there too. And so we feel good about the core part of our business being extraordinarily resilient. The 20% of our

business is more discretionary. The discretionary revenues include things like project work and risk consulting,

transaction liability, human capital consulting, our travel and events business, and so much of this actually recurs

and renews each year, it just may have the opportunity to be deferred slightly which is what we did see in Q1 in

our retirement and data and analytics businesses. .....................................................................................................................................................................................................................................................................

David Styblo Analyst, Jefferies LLC Q Right. Okay. And then... .....................................................................................................................................................................................................................................................................

Eric Andersen President, Aon Plc (United Kingdom) A Christa, maybe you just a took up on a point of that, just to drive it a little bit in that, like, on the transactional

liability, it is tied to deals being closed on construction projects for bonds, it's tied to putting a shovel on the

ground. So those events will eventually happen. They're just essentially been deferred until those deals come

back in. .....................................................................................................................................................................................................................................................................

Gregory C. Case Chief Executive Officer & Executive Director, Aon Plc (United Kingdom) A And also to add, Dave, this is not a static position. Remember, as Christa and Eric just described, we keep

evolving. So the new offerings, Eric, described before the new solutions, our clients need change. So we reinforce

the 80% and then we actually change and build the 20%. So it isn't just a zero sum game. And the work we do is

and the investments we could make on behalf of clients. And now we're going to be able to make in any scenario

on behalf of clients is a very unique position. It's also why in the end, you end up seeing particularly in times of

stress of like the quality where clients just literally come to places that they know they can get great results and

great service and great capability. And we're very fortunate and we're seeing a lot of that too. So there are lots of

things that put us in a unique position, we think to actually perform exceptionally well in the current environment,

or frankly any other environment one can imagine. .....................................................................................................................................................................................................................................................................

David Styblo Analyst, Jefferies LLC Q Okay. Great.





Eric Andersen President, Aon Plc (United Kingdom) A Greg, I think we saw that a lot in reinsurance, certainly with the pandemic models, the ability to access capital

globally, and so I think you saw some of that in particular in reinsurance this quarter. .....................................................................................................................................................................................................................................................................

David Styblo Analyst, Jefferies LLC Q Great. Right. That's helpful. And then, maybe to shift the conversation back to the margin side. Appreciate the

comments there and the flexibility to manage through revenue pressure, through the operating expenses.

Obviously, there's a wide range of outcomes, but as you've modeled this and thought through the levers that you

can pull on your end, how much of revenue decline, and for how long can you absorb that without margins coming

under pressure year-over-year? .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A Look, it's a great question, Dave, and what we would say is we're not giving guidance on revenue or margins. And

obviously, very uncertain both in terms of the macro impact and the duration as you described. What we have

done is we've acted on the position of strength and we've taken definitive steps in Q1 to reduce non-people

expenses, third-party expenses, G&A et cetera. And our investment in the Aon Business Services platform have

really enabled us to do that far more effectively and far more quickly with third-party providers.

And we continue to do this early and ensure that we're taking those steps proactively to ensure that we can

handle whatever comes in this uncertain environment. And until we come out of this stronger, delivering for clients

in a time they need us most. And I finished by saying as – if there are potential revenue impacts in the year, we

[ph] will be saving some early (0:48:35) on in Q1 in our discretionary revenue, then we will reduce expenses

proportionally. .....................................................................................................................................................................................................................................................................

David Styblo Analyst, Jefferies LLC Q Okay. Thanks, Christa. .....................................................................................................................................................................................................................................................................

Operator: Thank you. Our next question is from Paul Newsome of Piper Sandler. Your line is now open. .....................................................................................................................................................................................................................................................................

Paul Newsome Analyst, Piper Sandler & Co. Q Good morning, thanks for the call. You folks have made a lot – Aon has made a lot of acquisitions and divestures

in the financial crisis. How would the 80% recurring number look and compare and then business mix change

from the financial crisis, if we're trying to compare and contrast the two periods? .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A Yeah. Look it's a really good question, Paul. And one of the things we've spent a lot of time on is, not just on the

revenue or margin side, but actually on the cash side too and comparing where we are today in terms of our

portfolio versus the 2008-2009 financial crisis. The thing we would say is, our business is far stronger today both

in terms of the overall portfolio and the recurring and non-discretionary nature of it versus the financial crisis, and

the Aon Business Services platform which allowed us to reduce non-people expenses very quickly, for example





82% of our third-party spend is all managed centrally. And so we were able to, you know, through our online

procurement platform actually just turn off that spend and deferred payments immediately in Q1.

And so we feel very good about our overall business portfolio from a revenue and sort of margin point of view but

equally from a free cash flow point of view, because we've been managing the company on free cash flow for well

over 10 years, including through the financial crisis, which allows us to compare cash flow over the last couple of

years, by day, by a lot of the cash flow statement, by business, and also to see how the impacts are better or

worse versus financial crisis. So we feel very good about our insight and the strength of our business to manage

through it, it's extremely resilient. .....................................................................................................................................................................................................................................................................

Gregory C. Case Chief Executive Officer & Executive Director, Aon Plc (United Kingdom) A And remember, Paul, as Christa described before on these calls, as we thought about capital allocation – by the

way pre-crisis, at-crisis, post-crisis back in 2008-2009, it really is been an allocation of capital based on return-on-

adjusted capital, cash-on-cash return, which means the businesses we brought in since the crisis, by definition if

you're going to meet that are higher margin, higher growth, higher free cash flow businesses in terms of what

we're up to.

And we've also been at that period of time, done things as we thought about return-on-invested capital, but really

has changed our ability to kind of create a cash margin, cash flow margin against revenue overall in terms of what

we're trying to do You know working capital improved over time. So the translation of cash from a dollar revenue

has also improved. So we've changed the business mix and strengthened our ability to generate cash over that

period of time. So all those things contribute to a stronger Aon now than we were in 2008-2009. .....................................................................................................................................................................................................................................................................

Paul Newsome Analyst, Piper Sandler & Co. Q No question, the margins and cash flow are higher than they were back there dramatically. But I guess I was

looking for particular examples that may have been changed that would have been more resilient as opposed to

dramatically higher margins obviously.

So my second question is just the accounting one when the insurance companies allow customers to delay

payment. How does that run through your income statement? .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A We actually haven't seen that yet, Paul. But if they were to allow because I think what we've seen in certain areas

is in the consumer lines also or things like that. But we haven't seen in our business so far. .....................................................................................................................................................................................................................................................................

Paul Newsome Analyst, Piper Sandler & Co. Q Just how's the accounting works, you know, yet? .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A So we would still recognize revenue [ph] pool (0:52:19), because we'd be placing the business. It would then be a

collection of cash issue. .....................................................................................................................................................................................................................................................................





Paul Newsome Analyst, Piper Sandler & Co. Q Great. Thank you very much. .....................................................................................................................................................................................................................................................................

Operator: Thank you. Our next question is from Michael Phillips of Morgan Stanley. Your line is now open. .....................................................................................................................................................................................................................................................................

Michael W. Phillips Analyst, Morgan Stanley & Co. LLC Q Thank you. Good morning. Greg, a couple of times in your comments you've mentioned the difficulty of some of

the steps you've taken, the difficulty that others would have on a global basis. And I assume, part of that, is the

salary cuts that you're talking about. But I guess could you give some examples of other things that you referred

to there that would be difficult for competitors to do? .....................................................................................................................................................................................................................................................................

Gregory C. Case Chief Executive Officer & Executive Director, Aon Plc (United Kingdom) A Yeah. I actually start with we don't make it a practice actually to comment on competitors or others. So we really

shouldn't comment on them in any way, shape, or form, but I would highlight is Aon and that really is the place we

know well, that's what we focused on every day. And we would say as you step back and think about the steps

we've taken to position our firm to be able to serve clients in any circumstance and protect our 50,000 colleagues.

The investment in Aon United for the last decade has put us in a position where we can sit together and look

across our global firm with our teams in place in every way, shape, or form they come up with a point of view.

They come up with a point of view that they know is right on behalf of clients and they know we can execute it

now, not just because, because it's the right thing to do, because that's just one step, because we've come

together we actually are supporting each other in ways we haven't before but then Aon Business Services allows

us to execute it.

So when you think about the overall package, we step back, looked at the scenarios that you know the economy

as it's evolving and to listen under every scenario one could imagine, particularly given the uncertainty. How do

we make sure we're ready and the ready is by the way the expense pieces, because that Christa talked about,

that are [ph] non-slip (0:54:08) related and this is Aon Business Services at its fast. I mean we're doing things

instantly that used to take us, you know you had to build consensus over time.

Our teams got extraordinary capability there. We obviously did things around the buyback and M&A that are much

more straightforward. But what we're doing in Aon Business Services is very unique and it really supports what

we do on efficiency and productivity. But it really is the team and as how they've come together in every way,

shape, or form in terms of sort of where we are and what we're up to, and that's really what's been different, and

that's what's unique about Aon United. .....................................................................................................................................................................................................................................................................

Eric Andersen President, Aon Plc (United Kingdom) A Hey Greg, I think there's also another component that's worth mentioning and that a lot of what we've done about

ABS is really about leveraging our capability and getting it out globally. And so we're able to deliver for clients

today using our technology being able to connect with markets, being able to connect with clients actually pulling

global capability to the client virtually in a way that actually allows them to move forward with their business to

understand the risk they've had, certainly the things we've talked about in the past we're continuing to work on,

whether it's the mortgage business, whether it's building an intellectual property market, whether it's working on





transaction liability, [indiscernible] (0:55:16) we're continuing to move forward in terms of product creation using

the technology investments we've made historically, trying to get in front of what we perceive as client need that's

there today but also what we think is coming as people return to the workplace. So it's not just the expense side,

it's actually the front-end value creation that we're leveraging using the investments that we made in technology

and business services. .....................................................................................................................................................................................................................................................................

Michael W. Phillips Analyst, Morgan Stanley & Co. LLC Q Okay, great. Thank you very much. Appreciate the color. .....................................................................................................................................................................................................................................................................

Operator: Thank you. Our last question is from Phil Stefano of Deutsche Bank. Your line is now open. .....................................................................................................................................................................................................................................................................

Phil Stefano Analyst, Deutsche Bank Securities, Inc. Q Yeah. Thanks. I appreciate the color commentary on the discretionary versus the more discretionary breakout of

the business. I guess is there any way qualitatively you can help us understand maybe a proportion of business

that's depended upon volume or number of exposure units something along those lines? .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A I mean the place I'd start with is you know 80% of our business is core and our core revenue is highly recurring

non-discretionary. And many of these services are regulated, required, and necessary cost of doing business,

even if a business is in financial distress or potentially going into bankruptcy. And so it is an incredibly stable and

resilient business. It's globally diversified, it's diversified by industry, client, segment et cetera.

And then we'd say the 20% of our business is more discretionary much of this recurs and renews every year. And

so we do see that being actually quite strong too. There is some project work in May which could be deferred as

Eric described. As we think about impacts on GDP, there are, obviously, as I mentioned impacts on GDP or

employment levels or asset values and we may see exposures to go down, but we do often see clients buy more

in these circumstances given the increased risk of the current crisis is highlighting to them. .....................................................................................................................................................................................................................................................................

Phil Stefano Analyst, Deutsche Bank Securities, Inc. Q Okay. From the perspective of the comp reduction, can you just help us think about the timing of this, and are

there employment regulations in certain regions that maybe complicate this versus other regions, maybe just how

we think about that – how this might flow through from a timing perspective? .....................................................................................................................................................................................................................................................................

Gregory C. Case Chief Executive Officer & Executive Director, Aon Plc (United Kingdom) A No, Phil, this is back to the prior question around sort of 10 years ago would we be able to do this without Aon

United in where we are? The answer is no, we're executing very, very quickly on an overall game plan that

support our firm in a way and our 50,000 colleagues so we can support our clients in every single scenario one

can imagine.

So no, actually what we've done essentially is put all these in place and we're seeing and asked for a kind of

voluntary where it needs to be voluntary, it's been actually done exceptionally well by country around the world





with our leaders and EMEA doing an amazing work, and Asia and Latin America amazing work coming together,

and our US and Canadian. It is just exceptional sort of frankly toured of course on leadership around the world.

And so, we've tailored to the local markets, but no, the timing is immediate, or relatively immediate in terms of

days, weeks not months in terms of sort of where we are.

So happening very, very quickly and it's something we can do now that we couldn't have done 10 years ago,

impossible and we couldn't have executed it and actually taken some of the things Eric described and actually

scale them around the globe, impossible.

Today with Aon United, we not only can do it, we can do it actually in a way that actually strengthens the firm and

builds the firm. We can do it in a way that protects our colleagues and our clients and we could do it in a way that

that candidly gives us a position to actually strengthen our firm coming out of the crisis, which is why this

investment in Aon United, as I said earlier, has really been wonderful and positive, we're in good environments,

turns out this environment is really shows us that it's incredibly powerful in the more challenging environments as

well. And it really is a credit to our colleagues around the world, they've just been extraordinary. .....................................................................................................................................................................................................................................................................

Phil Stefano Analyst, Deutsche Bank Securities, Inc. Q Okay. Thank you. .....................................................................................................................................................................................................................................................................

Christa Davies Executive Vice President-Global Finance & Chief Financial Officer, Aon Plc (United Kingdom) A And look I would say Phil, as we think about – [ph] we're obviously not giving (0:59:15) revenue or margin

guidance, but this along with our expense control measures, if we do see revenue declines during the year, we

will decrease expenses proportional with revenue as we manage through some certainty. So we're very focused

on the incredibly stable revenue base we have as we've described and the resilient business we have to navigate

through this, [ph] hops our clients can come out as stronger (0:59:38). .....................................................................................................................................................................................................................................................................

Phil Stefano Analyst, Deutsche Bank Securities, Inc. Q Okay. Thanks, and be well. .....................................................................................................................................................................................................................................................................

Operator: Thank you. I would now like to turn the call back over to Greg Case for closing remarks. .....................................................................................................................................................................................................................................................................


Just want to say, again, truly appreciate everybody participating on the call today and to our Aon colleagues

around the world. Excited to be with you so that we push through this environment and emerge more strong on

the other side. [ph] Toxin (1:00:11), thanks very much. .....................................................................................................................................................................................................................................................................

Operator: And that concludes today's conference. Thank you for your participation. You may now disconnect.





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