Good morning and thank you for holding. Welcome to Aon plc's First Quarter 2022 Conference Call. [Operator Instructions] I would also like to remind all parties that this call is being recorded. If anyone has an objection, you may disconnect 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 2022 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.

Thank you and good morning, everyone. Welcome to our first quarter conference call. I'm joined by Christa Davies, our CFO; and Eric Andersen, our President. As in previous quarters, we posted a detailed financial presentation on our website. We'd like to start by acknowledging the tremendous work of our colleagues across the firm. They continue to exhibit remarkable leadership, supporting clients in a challenging environment. We also want to thank our colleagues for their inspiring support of our team, their families and others who have been impacted by the Russian war in Ukraine. This is a tragic example of increasing global volatility adding to the challenges of facing organizations and invites every day, including continued effects of COVID-19, especially in Asia; inflation; climate change; capital availability; and connected impact to supply chains, intellectual property, workforce resilience and retirement readiness. In this environment, helping our clients protect and grow their businesses, support their employees, their communities and their stakeholders has never been more important. Turning to financial performance. Our team delivered an excellent first quarter and start to the year with 8% organic revenue growth, an increase from a strong prior year performance of 6% in Q1 2021. This top line strength translated to a 38% adjusted operating margin, an increase of 60 basis points and 13% adjusted EPS growth, demonstrating the power of our Aon Business Services platform to drive sustainable margin expansion as well as support growth. Within our solution lines, we would highlight in Commercial Risk, we delivered 9% organic revenue growth with growth in every major geography and particular strength across renewals and retention. Our teams are working incredibly hard to make sure our clients have the right coverage that fully considers the impact of inflation and other economic factors. Reinsurance Solutions organic revenue grew 7% driven…

Thanks so much, Greg, and good morning, everyone. As Greg highlighted, we delivered a strong operational and financial performance in the first quarter to start the year, highlighted by 8% organic revenue growth that translated into 60 basis points of margin expansion and double-digit growth in earnings per share. We look forward to building on this momentum through the rest of 2022. As I reflect on the quarter, first, organic revenue growth was 8% driven by strong ongoing retention and net new business generation. I would note that total revenue growth of 4% includes an unfavorable impact from changes in FX driven primarily by a weaker euro versus the dollar as Q1 is just our seasonally largest quarter for euro-denominated revenues. As we look to the rest of 2022, we're continuing to monitor various macroeconomic factors, including the underlying drivers of GDP, inflation and interest rates, which all impact our clients and our business. In particular, I would note a few interrelated impacts. On GDP, we've noted there's a correlation between our revenue and GDP growth, particularly the underlying drivers of GDP, such as asset values, corporate revenues and employment levels. We've recently seen decreases in global GDP growth forecast for the year driven by the factors such as ongoing impacts of COVID-related restrictions, the war in Ukraine, rising inflation and expected increases in interest rates. As we've communicated previously, our revenue base is very resilient. An impact from GDP tend to shovel the more discretionary portions of our business, such as project-related work across the portfolio. These portions of our business were strong in Q1. Though, as Greg mentioned, we're seeing increased uncertainty in overall trends. I would also note there are many ways in which we can help clients in terms of challenging economic circumstances or increased volatility.…

[Operator Instructions] Our first question today comes from Elyse Greenspan with Wells Fargo.

My first question is on the reinsurance business. You guys saw 7% organic growth. It is a deceleration where you guys have been over the past few quarters. Was just hoping to get a little bit more color, just business impacted by something during the January 1 renewals? Is there just some timing? Just kind of what you saw with the next set and how we should think about growth within that business for the rest of the year?

Step back and think about what our colleagues have accomplished over the last number of years in reinsurance and it's really been extraordinary. And we just see so much opportunity in this space. By the way, Tyche that I described on the call that Christa followed up on is a real direct sort of investment in content capability that we'll even enhance. So we're doubling down on the opportunity sort of in this category. And really, the quarter doesn't reflect the continued momentum. By the way, 7%, strong first quarter, great capability. But we see tremendous momentum in this business and just great opportunity. But Eric, specifics around this, do you think?

Sure, Greg. And I would say, listen, it was a very strong quarter for the team. We had fantastic growth in the ILS business with the cat bond issuance very strong. In fact, a lot of great work with clients as they look to reposition their portfolio going into the January 1 renewal cycle. So I would say it was a very strong start for the year, I have high expectations for them as they continue to work through the existing insurance cycles, but a really strong start for them.

And then on the margin side, last year, continuing you started to see that pick up in the back half of the year. So given just that kind of comps related to T&E get a little bit easier in the back half of this year? Do you think that we're positioned to see stronger margin improvement in the back half than perhaps I see in the first half? Or is there anything else that we need to think about with the cadence of expenses this year?

Thanks for the question, Elyse. So I would say we think about margins over the course of a full year and don't really give specific guidance by quarter at least. But what I would say is we've delivered 1,100 basis points of margin expansion over the last 10 years, so approximately 100 basis points a year. And we'll continue to grow margins in 2022 driven by 3 key things: strong revenue growth; a portfolio mix shift to higher revenue growth, higher-margin areas; and leverage from our own business services where we're getting productivity each and every year. Those sort of drivers of margin expansion will be offset by our continued investment in colleagues, increased T&E and investments to grow the business long term. And I would note that we did deliver 160 basis points of margin expansion in 2021. So it's a very strong comparable. And we do expect to deliver margin expansion for the full year 2022, so we're very excited about that.

Our next question comes from Jimmy Bhullar.

Greg, I just wanted to see if you could comment on how you think the operating environment for your business has changed in the past few months. I think, obviously, pricing is still a tailwind, but it seems like it's slowing. The economic outlook is less clear than it was maybe a few months ago. But how have your views changed on how business trends are?

Well, there's no doubt -- I appreciate the question. There's no doubt there's obviously a lot going on out there in terms of sort of overall complexity and volatility, which is showing up all the things you described. I do want to start with, we're very confident when you look across that, take all that into consideration, both Christa and I emphasized mid-single-digit growth or greater in 2022 and over the long term. So we'll start with that. But we've just got great momentum. And the uncertainty, in many respects, means clients are asking us and talking to us about how they manage the volatility in their business. But if you think about the momentum coming out of 2021, highest annual growth in a couple of decades, and we just delivered a Q1 2022 that was higher than the Q1 2021 in that comparable quarter and the highest year ever. So we feel very, very good about where we are in the context of a very uncertain world. But it really shows up kind of -- with clients sitting across the table day to day. Maybe, Eric, you can provide a couple of examples, because I think its really where it comes to life.

Yes. Sure, Greg. And I would say that the results of the core have been very strong and just the work that we're doing each day across all of our solution lines. But I would also say there's a couple of key risks that the teams are engaged in that are very much on the clients' mind today, topics like supply chain, with what's going on in the world, colleague resilience, climate, cyber, pandemic, things that honestly, 3 years ago, 4 years ago, were not a big deal for them but today are very much on their focus. So we feel good about the growth prospects and our ability to help clients work on those emerging issues as we go forward. And I would also maybe add one other comment that the issues that people are talking about today really do merge for a specific client. So whether it's inflation or GDP or political risk or what have you, we just came out of our RIMS conference, where we had dozens of client meetings. And the themes across them were very much, as clients were thinking about investing in their business, whether it was building a plant, making an acquisition, expanding into new areas, they were thinking about GDP growth. They were thinking about inflation, but they were also thinking about labor costs and colleague impact and resilience. And so having that ability to have a holistic conversation with them as they strategically plan for their future, recognizing all the sense that risk today is more heightened than it has been historically, I think, really does play well to us and lets us have real impact for those clients.

Okay. And relatedly, there were concerns around disruption in your business given the merger and the fallout from that last year. And I think you had some high-profile departures as well, but it doesn't seem like we're seeing that in your results. But if you could just talk about employee retention and how it's trended over the past several months. And do you expect any sort of slowdown in your business because of people you might have lost?

Really quite the opposite of it. I think that we've been fortunate this quarter. As we've reported for the last number of quarters, we have exceptionally high retention. And in fact, voluntary attrition is at levels better than they were pre-COVID; and engagement levels 80%, plus. So this is about as strong as you get in terms of sort of where we are from a talent standpoint. And again, you know the momentum come out of 2021 and now the momentum going into 2022. So those, I think, are exceptionally positive. There's a point here that's important in terms of how we support our colleagues so they can support our clients. And yes, it means we're investing in new types of talent, for sure, but it also means, and Eric talked about this earlier, we're investing in developing our colleagues, the talent we have now on supporting them. And we've got to do it not just with talk. It's really supporting them with content, capability, enabling technology, real evolving, advanced analytics that accelerate innovation in what we do for clients. So this is critically important. Let's see where we come back and say the Aon Business Services platform is really essential. This is something that's been underway for 4 years. It really has driven -- helped drive the margin improvement, as Christa described. But more than that, it's created surplus to invest in innovation, things like IP, et cetera. And we've got 200 colleagues in IP right now that we're working through very, very positively. So a lot going on there, and that combination puts us in a very, very good spot.

Greg, maybe if I could just add as well because I do think you raised a great point about attrition and engagement and the like. But where we're investing in talent is really where we see the business going over the next couple of years. Like I mentioned to the previous question, climate, ESG, colleague resilient, cyber, these are areas that have -- that require deep expertise. And so when we're making investments either in capability or in talent, we're focusing it there. But once you get them in the firm, the key through this delivering Aon United strategy that we've been employing. How do you bring them together so that they understand the client need, working with our other experts to be able to deliver to the client the solution that they need or the advice that they want? And so there is a great opportunity for us to continue to invest. By the way, also investing substantially in the core to making sure that what we do for clients today have the right amount of expertise, the right service teams and the like. So I think we feel pretty good about our talent strategy and where we are and are optimistic about the future with them.

[Operator Instructions] Our next question comes from Meyer Shields with KBW.

One technical question. As I understand it, the language used for stopping operations in Russia is suspending rather than, I guess, terminating them. Does that mean if there's an office to organic growth in -- from discontinued Russian services right now?

As you highlighted -- And Chris, you covered it perfectly. There is not -- it's really, in the end, very, very minimal impact overall in terms of our core business. Obviously, a lot going on as we support clients and are in the process of suspending operations, but minimal impact.

Okay. Second question and sort of related to what's been asked already. But right now, there seems to be, I don't know what the right word is, a frenzy of newly formed or newly strengthened reinsurance brokers that want to rapidly become, I guess, the #4 in the marketplace. And I'm wondering whether that's actually impacting the competitive environment for reinsurance brokerage.

Listen, as we step back, we see opportunity on the reinsurance side, as we said before. We love this opportunity. And it isn't just with our insurance clients. It is -- and by the way, it's formidable there. And what we're doing with Tyche and our team is really coming together with a capability that really addresses client need. It's exactly what Eric talked about before. That's what we're about. And we see tremendous opportunity there. Also some of the capabilities on the reinsurance side, what we do for insurers, is becoming more and more applicable in the commercial marketplace. The most sophisticated companies in the world are -- require the kind of analytics that a decade ago only insurers really looked to receive. And so for us, we see a tremendous, tremendous opportunity. And a lot of what you see us doing is not just competing in the existing market as it stands today, but it is truly creating that new market. And what we're doing across the board in climate, in that new market, some of the work we're doing in IP, it's core to market but also net-net new market. And so what we're essentially saying is we're going to increase the size of the pie with the content and the analytics we have and the capability and the columns we have in place, and we see tremendous opportunity over time. It's a big contributor as we think about mid-single digit or greater over time. Eric, anything else you add to that through the detail?

Maybe, Greg the only thing I would add, Greg, you said it well is having global capability, having deep analytical insight, being able to deal with clients' needs using the global marketplace, all critical to the core of what we do today for our reinsurance clients and we'll continue to do. But I do think you hit it well: a lot of the issues that the insurance company clients have today are these future risks, trying to handle cyber as a product, trying to think through climate, if you're a homeowner's insurer, if you're a P&C insurer, how you deal with life from a mortality risk if it's pandemic. So the opportunities for us there are very strong. And so I'm not surprised if it's drawing competition. That's okay. The reality is we feel good that our franchise and the team, very closely aligned, and we continue to make investments to make sure they have cutting-edge capabilities.

Our final question comes from David Motemaden.

I had a question. Greg, you spoke about voluntary attrition continuing to be at favorable levels to pre-COVID levels. But I guess I'm wondering if you could just talk about how new head count adds have trended over the last few quarters, over the last year or 2, compared to pre-'19 or pre-COVID levels.

I'll offer an observation, but we don't talk about head count per se. For us, it's just not how we think about talent. We're investing -- we describe the port really in content capability so that our colleagues get better. They see opportunity differently. They grow professionally. And literally just adding someone is very different than developing organic capability and helping a colleague get better. So again, forward analytics, Eric just talked about reinsurance, are all forward analytics. You're no longer looking in the rearview mirror and thinking about what was there. You're thinking about how you model what's going to happen. You put that in the hands of your colleagues, its extremely powerful, and it really is a new way to -- an evolving way to compete. And we've been adding capability in the form of colleagues to do that, absolutely. And we've been adding organically in terms of investment in more analytics and support our colleagues. So it has been trending very, very positively. It's led to, as you've seen us report, top line growth, which is a record for us; operating performance, record for us; and trends in free cash flow, a record for us. And this Aon Business Services platform in the context of that is really unique. It's the next chapter because it's not just about efficiency, it really is about how we work more effectively with our clients on behalf -- with our colleagues.

Got it. Okay. That's helpful. And then just a follow-up question in Commercial Risk Solutions. In the press release I saw it mentioned double-digit growth in the U.S., Canada, Asia-Pac. I didn't see a comment on EMEA and the U.K. So I guess I'm wondering if you could just elaborate on how growth trended there throughout the quarter and also how expectations are there, given what looks like a potential severe slowdown in the economy in that region.

Sure, Greg. Maybe I'll take this one. This is Eric. From a Commercial Risk standpoint, our U.K. and EMEA business actually had very solid quarters both from a client retention, new business development and the like. I would say, certainly, the war in Ukraine is closer to home for them, and it's certainly a topic of their clients' discussion. How topics like supply chain, political risk credit are all sort of front of mind for a number of those clients. It is an opportunity in the end for us to provide real value for those clients on those topics. And so I would say we're focused very much on the well-being of the colleagues that were affected that are often familiar personally to a lot of our EMEA colleagues, and they're doing all the right things there, which I think ultimately helps build the culture. But certainly, the work and the need from the clients on our European clients and our U.K. clients is almost more heightened than it is in other parts of the world because they're so close to it. But they had very strong first quarter, is expected to have a very solid year as we go through '22.

Okay. Great. And maybe if I could just sneak one more in. The line item I look at when I look through the results of Aon and I'm not totally sure how to think about is the other income line item, which has bounced around a lot. It was $25 million this quarter. Is there a way I should think about that going forward? Is there any help you can provide me as I think about the earnings power of Aon going forward?

So what happened there in that quarter was just continued portfolio management. So you should think about our business, we continue to manage the portfolio on an ROIC basis. And we divested some lower-growth, lower-return businesses. And we model that other income line as 0 ourselves. But what we would say is, as you continue to think about Aon, we will continue to improve performance, driving revenue growth, higher revenue growth, higher-margin investments organically and inorganically and continue to divest lower-revenue growth, lower-margin portions of our portfolio. So that's what you saw again in this quarter.

There are no further questions in queue. And now back to Greg Case for closing remarks.

I just want to say thanks very much, everyone, for joining the call. We appreciate it, and we look forward to talking to you next quarter.

That concludes today's conference. Thank you all for participating. You may disconnect at this time.