Good morning and thank you for holding. Welcome to Aon plc’s Third Quarter 2017 Earnings Conference Call. At this time, all parties will be in a listen-only mode until the question-and-answer portion of today’s call. If anyone has an objection, you may disconnect your line at this time. I would also like to remind all parties that this call is being recorded and that 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 third quarter 2017 results as well as having been posted on our website. Now, it is my pleasure to turn the call over to Greg Case, President and CEO of Aon plc.

Thanks very much and good morning everyone. Welcome to our third quarter 2017 conference call. Joining me here today is our CFO, Christa Davies. Before beginning the discussion on our Q3 and year-to-date results, I would like to pause for a moment to reflect on the recent catastrophic events that have impacted various communities and millions of individuals around the world. Our sincere condolences go out to families who are enduring this trauma, to business owners forced to rebuild, and to those remain at risk or without sufficient resources. We are very fortunate that our 3,000 colleagues and their families across 30 Aon offices directly affected by the series of events were safe. During times of tragedy and devastation, it is heartening to see my colleagues from across the firm rise up and unite to help their neighbors, fellow collogues and clients. Aon is also a partner of Red Cross investing in their disaster relief efforts to respond in times of need and offering volunteer work on the ground to aid the millions of individuals personally affected. I can’t begin to express enough gratitude to my Aon collogues and partners who put forth tremendous effort during the time of such human need. With all hands on deck, we are fully focused on supporting our clients and our colleagues through the continued aftermath of these events. Now, referencing back to the specific topic of this call, we’d like to highlight that there are slides available on our website for you to follow along with our commentary today. As we discussed on prior calls, Aon’s current position is a result of a proven decade-long strategy that focuses on aligning our portfolio solutions around our clients’ highest priorities in the arenas of risk, retirement and health. We’ve taken significant steps to get here.…

Thank you so much, Greg, and good morning, everyone. As Greg noted, our performance marks a solid quarter of progress highlighted by strong operational improvement and effective capital management while continuing to take significant steps to increase the effectiveness and efficiency of our operating model. Our results year-to-date reflect growth across every major revenue line, strong operational improvement, and double-digit earnings growth heading into our seasonally strongest quarter of the year. Turning to slide 10 of the presentation. Our core EPS from continuing operations, excluding certain items, increased 18% to $1.29 per share for the third quarter compared to $1.09 in the prior-year quarter. Certain items that were adjusted for in the core EPS performance and highlighted in the schedules on Page 11 and 12 of the press release include non-cash intangible asset amortization, restructuring charges, charges related to certain regulatory and compliance matters, non-cash expenses related to pension settlements in the prior-year quarter, and the related tax impact. Included in the results was a $0.01 per share favorable impact from foreign currency translation due primarily to a stronger U.S. dollar versus the pound and a modestly weaker U.S. dollar overall. Turning to the next slide to discuss our strong operational performance. Operating income increased 16% and operating margin improved 170 basis points to 20.3%, compared to the prior year quarter. Operating margin improvement primarily reflects $55 million or 240 basis points of savings from restructuring initiatives and other operational improvements before any reinvestment. This was partially offset by $10 million or minus 40 basis points of transaction costs related to recent acquisitions, and $5 million or minus 20 basis points headwind, resulting from lower non-cash pension income. Year-to-date operating income has increased 14% and operating margin has improved 170 basis points compared to the prior year. From a dollar…

[Operator Instructions] Our first question comes from Sarah DeWitt from J.P. Morgan. Ma’am your line is open.

Hi. Good morning. First, I was wondering if you could just talk about on organic growth, what drove the decline in Commercial Risk Solutions. I think, you mentioned some timing issues. And do you expect that to rebound going forward? And then second, could you just talk about your outlook for PNC insurance pricing, post the active third quarter hurricane season?

Sure, happy to do that, Sarah. As we described, first of all, remember, this is our -- Q3 is our smallest quarter sort of over the course of the year heading into our strongest quarter, the fourth quarter. I talked about it, strong comparable from the Q3 last year of 4%, and essentially said, the timing was really showing up in Q1 and Q3. So, we don’t expect anything coming back in Q4. But, what we really try to highlight is kind of -- if you look at our results, not just in commercial risk but really overall and kind of the year-to-date perspective, this is really where we think sort of as a best assessment overall in terms of where we are, and this we essentially said. If we think year-to-date Q3 ‘15, ‘16, ‘17, we have gone from 2% in ‘15 to 3% in ‘16, 3% in ‘17, and we believe we can continue to accelerate that over time. We see Q3 as a little of a anomaly in the context of all that.

Pricing…

Pricing piece, I thought you might forget that. [Multiple speakers] Listen, on the pricing side, obviously a lot’s been written and talked about. Our view is -- look, there is just a -- continues to be a tremendous amount of uncertainty out there. The ultimate losses, unclear kind of where they all shake out from time to time, just look at the ranges sort of been published, they’ve been astronomical in terms of sort of how they’ve come in. I would say, from our standpoint, look, we still sit in a very well capitalized industry overall. We described while substantial, more of an earnings event versus a balance sheet event in terms of sort of where we’re over time. But I would highlight from Aon’s perspective, we see this very much on a client by client basis. We’ve invested in substantial data and analytics over time to put us in what we believe is a great position to help our clients, particularly in these kinds of environments. If you look at what we do with Aon Client Treaty for example, these are the types of investments that, frankly, reduce risk work for clients and create opportunity for them. From our standpoint, it’s going to play out over time. Sarah, there is no specific answer at this point. And we’re going to take it client by client as it evolves over time.

And your next question comes from Dave Styblo with Jefferies. Your line is open.

I just want to go back to operating income. So, if we take the 476 and back out the unfavorable adjustments from pension and M&A transaction costs, and adjust for the $55 million of cost savings, I guess, I get a margin around 18.6% on underlying basis, which should be flat year-over-year. Is that sort of a right way to think about it, or did you guys plough back some of the $55 million of cost savings? And obviously, if you did that, the core margin would show some expansion. So, I’m just trying to understand what’s happening on a fundamental basis, when we exclude some of the larger puts and takes there.

I think about this on a year-to-date basis because I think quarter-to-quarter, it’s a little lumpy Dave. And frankly, Q3 is our seasonally smallest quarter. And so, if you look at it year-to-date, you can see that OI is up 14% or $183 million. If you look at that $183 million, $109 million of it came from restructuring and $74 million of it came from core operational improvement. So, you’ve basically got 60% of the growth in OI from restructuring savings before reinvestment and 40% of it from core organic revenue growth and margin expansion. So, we feel really good about the operating income growth for the year, and margins for the year are up 170 basis points. So, we’re very pleased with the progress so far.

I might add to that, Dave. If you look at it -- Christa just highlighted really Q3 year-to-date results, Q3 2017, if you did the exact same question in Q2, we’re better against each one of those metrics, as you go from Q2 to Q3. So, it’s plus 14, as Christa described and year-to-date Q3, the year-to-date Q2 was up 12%, we’re up a 170 basis points year-to-date Q3, that was a 160 basis points year-to-date Q2, up 17% EPS that same number was 15% in Q2. So, it’s actually a nice progression. And as we described it, don’t overplay, but a quarter of progress in terms of where we’re. And what you’re seeing is really core performance and operating leverage increasing as we continue to invest in the global business services platform.

Okay, got it. And then, on your $150 million of cost savings target, it sounds that’s unchanged for the year. But, if you look at how things are trending, if you just kept the same run rate from 3Q into 4Q, you’re going to be above that range. And I guess, I would assume that as you progress, your cost savings should actually increase. So, are you guys in position where you might actually be trending above your cost savings target for this year or is there something that makes that come down in the fourth quarter?

Dave, we are exactly on track with the program estimates and we feel really good about the progress so far.

So, it sounds like -- I mean, is there a reason why we come down? It sounds like you are holding to the $150 million.

We are holding $150 million and we will update at year-end.

Thank you. Our next question comes from Adam Klauber from William Blair. Sir, your line is open.

It looks like you’ve got roughly $2.4 billion or so of cash and short-term securities on the balance sheet. And historically, you hold more like $700 million to $900 million. So, that would suggest you have roughly $1.5 billion extra cash and then for next year, on top of that you have what you generate. Is that the way to think about what you have to deploy for 2018 versus 2017?

Yes. I think that’s right, Adam. And I guess, what I would say is, as you look at sort of the $2.4 billion, $850 million of it is committed to the M&A we did in the quarter. We did publicly announce those two deals, Townsend and UMG. So, you have $1.6 billion left plus Q4 free cash flow going into 2018.

I think you mentioned that tax payments reduced free cash this quarter. How much were those?

Yes. We haven’t given that number. But, what we can say is that the after tax proceeds from the sale of the outsourcing assets were approximately $3 billion.

Okay. And then, you’ve done a couple of good sized deals already in growth areas. Does that mean you have to digest those or do you still have a good pipeline, and is it possible to see some more good deals in 2018?

From our standpoint, listen, we’ve actually done, 19 acquisitions signed closed year-to-date and as Christa described, over a $1 billion committed on the M&A front. We see, again, real opportunities here to add content capability to the overall portfolio. As you’ve heard us say multiple times, so I’ll repeat it here again today, we take a very, very disciplined approach to this. Christa has put in place a return on invested capital framework, cash on cash return; nothing gets through that framework. And in essence, the benchmark is buyback, which we believe is a very, very attractive investment. But, when we find opportunities that exceed buyback, we invest in those. And there is a very substantial robust pipeline, lots of opportunities out there and we see these as kind of add-on acquisitions to the Aon family that content capability that we can scale. Townsend is a terrific example of that and UMG’s [ph] a terrific example of that, Admix in Latin America is a terrific example of that. So, lots of different opportunities for us out there and you’ll continue to see us invest along the framework I described.

And finally on Townsend, will that deal be flowing in the fourth quarter? And are the margins at this business generally in line, better or not as good as the overall business.

We do expect to close both Townsend and UMG in the coming months. We won’t be more specific about timing than that. And they are very attractive businesses. They are high growth, they are high margin and they are high free cash flow generation. And that’s really -- that fits with the overall story of how we are evolving the portfolio. We’re exiting lower growth, lower margin, lower free cash flow generation businesses, and we’re disproportionately investing. And that’s what you have seen in the over $1 billion of M&A that we have committed year-to-date and we are very excited about that.

And we really like, Adam, is -- not only do we like the financial characteristics but what drives that is really the underlying client capability and content characteristics. And each of those bring a unique capability to the table on our behalf and we are going to -- we can then see that across the firm. And this is back to the idea of the catalyst, which is really the -- if we saw the outsourcing business, it generates another level of investment we can put back into the business, both on the acquisition side as well as investing in global business services across Aon to strengthen the firm. So, it really is we think unique opportunity over the coming two to three years, when we think about capital deployment.

Our next question comes from Kai Pan from Morgan Stanley. Sir, your line is open.

It’s actually Mike Phillips here in place of Kai Pan this morning. Couple of questions, one on margins. In the quarter, the 120 basis-point improvement, decent improvement. I guess, with lots of moving parts behind that, one is FX. How much of the FX impact to the margin improvement?

So, there is no FX impact on margin for the quarter.

And then, same thing on margin with the organic growth being what it was, 2%. Does that mean that you can expand the margin, if organic grows even more?

Yes, we can. And so, what you are seeing, due to the investments we have made in higher growth, higher margin areas over the last few years, our investments in Aon United operating model is we can grow margin at low rates of growth. And so, as Greg said, we do expect to accelerate growth based on the investments we have made. And that’s where you should expect accelerating margin expansion.

Lots of brokers are talking about the excitement they have with maybe possible pricing changes and how they can take advantage of that, and you guys are closing the difference. I guess, can you talk about any possible risk to you guys because of the restructuring you’re doing, and possible maybe disruptions to brokers and maybe not to focus on the possible opportunities coming with the possible price changes, is there any risk there?

First of all, Mike, I would just step back. As I described when Sarah asked her question at the beginning, for us, a lot of uncertainty out there in terms of what’s going on. That means there is uncertainty for our clients and that is actually the wheelhouse of Aon. The content capability, analytics we have invested in over time, it literally puts us in a tremendous position. Our clients understand risk, measure risk and mitigate risk. And that’s really what we are doing. I want to also emphasize, the investment we are making back into the firm is a substantial investment. It involves restructuring but it is also investment in a number of areas to strengthen our firm, in technology, things we are doing on the real estate front to create greater client areas to bring our colleagues together. So, a lot is going on across Aon. But it is all fundamentally to make Aon stronger engine, a stronger firm to serve clients. So, I’d go the exact opposite. What we are doing to strengthening our firm, support clients over time and this is another example of a very high stress time for clients, so we can be helpful to them. So, I see exactly the opposite. To us, this is an opportunity to invest to strengthen the firm. And that’s in fact exactly what we are doing.

It sounds like you are pretty confident that brokers won’t get distracted or whatever by the restructuring making -- and you don’t see any risk there?

Quite the reverse. Again, I think our team is fully focused on clients 24x7 and that’s what Aon is all about, so don’t see any concern there at all.

Thank you. Our next question comes from Paul Newsome from Sandler O’Neill. Sir, your line is open.

I was wondering about where or not the goal to exceed 7.97 next year is dependent upon the current accounting system or the one that we’re going to get next year with the change in revenue recognition? And maybe just a view, an update whether or not you have a view how the revenue recognition might change your financials next year?

So, really the impact of 2018 revenue recognition accounting changes is largely immaterial to full year revenue and margin; it’s really going to change the timing by quarter. There will be a significant re-phasing of quarterly revenue within a given year, particularly within reinsurance solutions, but there will be immaterial changes to full year 2018. The other thing I would note is at our Q4 full year 2017 earnings day, we will actually restate 2016 full year and 2017 full year by quarter to give you that detail for the benefit of shareholders.

Does it in any way change how we calculate organic growth as well?

Because we’re going to restate 2016 and 2017, no.

Thank you. Our last question over to Arash Soleimani from KBW. Sir, your line is open.

I just wanted to get your thoughts the protection gap in insurance and to what extent you think the events we saw in the third quarter could actually lead to a higher insurance penetration within certain lines of business?

It’s a terrific question. And we’ve talked about that -- the industry has talked about that. These types of events highlight literally sort of individuals and companies that are quite literally uncovered in sort of events and times of trauma. I would say, at Aon, we think about it a little bit differently from a kind of a protection gap. Because if you think about this from the side of a client or an individual customer, we’re essentially saying, we have a gap out there in order for you to actually be in a better position, just buy more of our product. We look at it differentially. We look at it literally as, think about, how capital gets deployed, are there more efficient ways to deploy across the risk spectrum, and we believe there actually is. And there is different products and innovations that come with that. And so, our view is, when you think about kind of the world of risk out there and you recognize sort of how little the penetration is around the world, there is just tremendous opportunities to actually strengthen and build upon that, not just the existing risk like flood which is an obvious one but the new risk like cyber. I mean, again, if you think about cyber right now, there was $450 billion of loss in the U.S. last year, or reported loss in cyber and $2.5 billion or $3 billion in premium. The laws in Europe, which are going to come into effect in May, June of 2018 are going to create another wave of reported loss. How we respond to that to support clients is really a function of how we innovate as an industry. It is also true for the more straightforward coverages like flood and which we got to respond with innovation that actually make that more attractive, different than the current product we’ve got right now. So, we believe there is a very strong set of opportunities to increase the penetration, really serve clients more effectively as they understand, measure, and mitigate risk, but it’s going to require our industry to innovate in order to make that happen.

And just my one other question is since you mentioned cyber, and I know -- we heard a lot of industry estimates of cyber going from $3 billion up to $30 billion in just the matter of years. So, based on what you’ve been seeing in your own books, do you see demand potentially increasing at that level or how do you think about the potential growth opportunity in the next few years?

Again, we look at it -- we do see a substantial growth fully driven by client needs. So, I mean, again, if you think about literally just the $450 billion of reported loss from the U.S., virtually -- I’m saying U.S. because most of it was U.S. reported, that begs the question, is there just no cyber in Europe? Obviously, there is. So, why is it so much smaller? It’s a function of the laws, those are going to change. Therefore, cyber is going to go a number which is some -- many multiples of that. So, we see tremendous opportunity to help clients understand and deal with cyber. And it’s been a source of growth for us, will continue to be a source of growth for us. We’re privileged to be the largest place for this around the world and we’re doubling down our investment in it. Having said that, our industry including Aon, need to continue to innovate on behalf of clients on this category. So, we see this as a substantial opportunity because it’s a substantial source of risk for our clients.

Thank you. Our next question comes from the line of Elyse Greenspan from Wells Fargo. Ma’am your line is open.

I was hoping to spend -- get a little bit more color in terms of the reinsurance growth. I know, you mentioned that there wasn’t a lot of restatements there. It doesn’t -- was there any kind of one timers that you would point to? It’s obviously the second quarter of pretty strong growth in that business. What’s the outlook there? And then, as we think about margin improvement you saw in the quarter, typically, I would think reinsurance run at better margins and then rest of your business, was that helpful to the level of margin improvement you saw this quarter?

Why don’t I start on the revenue side and Christa you can pick up the margin piece? First of all, on the revenue side, much like we talked about sort of -- we don’t look at the quarter, we look at kind of year-to-date. We’re kind of 5% year-to-date. We think that’s actually great progress. I would come back reflecting on multiple calls over the last few years and just highlight again, we just have a superb team on the reinsurance side, they are tremendously well-positioned to support clients. We’re agnostic on the overall approach, we’re essentially helping our clients again think about ways to understand and control volatility. And what you saw this quarter, it really was record new business on the treaty side. And this is with existing clients but also with new clients to Aon as we gain market share in this arena. Also, we are number one in treaty, number one in facultative placements, and number one in insurance, like securities like et cetera. So, we just got an exceptionally strong position. This team has also taken great efforts to expand the marketplace. If you think about what we’ve done on the mortgage side and literally created net new markets in an area that hadn’t existed before. So, what you see on the reinsurance front is just continued progress from an exceptional team. And again, as I said clients that have lots of need out there to understand and deal with volatility, which is increasing over time. So, it’s just been terrific progress from a very, very strong team in this context. In terms of impact on margin, Christa?

Yes. So, Elyse, we would say that the margin growth year-to-date of a 170 basis points is really across the whole of Aon. It’s driven by strong growth in each of the five new revenue lines we have margin expansion in each of those areas, and then, underpinned by the investments we are making in the Aon United operating model and the savings we are driving from that. So, it isn’t disproportionately driven by any particular area of the business.

And then, you guys are a few quarters into this savings plan. I know in the past, you have had several and you had a good track record for seeing saves that have more than exceeded how you initially laid out some of your prior plans. So, a few quarters in, I guess, how are you seeing things as you’re going along with the program? And do you think there is a potential that we could see this be revised up down the road?

Elyse, we would say we are exactly on track. As I said earlier in the call, we will certainly update at year-end. But, we would say, we are exactly on track with -- to deliver $150 million this year, $300 million next year and $400 million the year after. And we feel very good about the progress.

And then, in terms of buybacks, the free cash flow was obviously negative in the quarter. How do we think about buybacks here, given that you have these two acquisitions that you are going to close in the near term? And you have obviously come off two quarters of pretty high level of buyback following the divestiture.

Yes. I mean, what I would say, Elyse, is we have returned, as Greg said, over $2 billion to shareholders year-to-date between buyback and dividends. And we have done $2 billion of buyback roughly so far this year, and we have committed $1 billion to M&A so far this year. I think what you will see in Q4 is more M&A and more buybacks. And it’s all driven by return on capital. As you think about the amount we can deploy, whether it’s on buyback or an M&A, you have got $2.4 billion on the balance sheet with the M&A spend committed of 850, so you’re left with $1.6 billion cash on the balance sheet, plus Q4 free cash flow generation, which is our seasonally strongest quarter of the year. And so, we are very excited about the opportunity to invest in organic opportunities, in M&A, and our highest return on capital opportunity across Aon remains share repurchase.

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

I just want to thank everybody for being part of the call today, and look forward to our conversation next quarter. Thanks very much.

Thank you, speakers. Participants, that concludes today’s conference call. Thank you all participating. You may now disconnect.