Prepared remarks
Good morning and thank you for holding. Welcome to Aon plc's Second Quarter 2026 Conference Call. At this time, all parties will be in a listen-only mode until the 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 an objection, you may disconnect your line at any 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 Litigation 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. For information concerning these risk factors, please refer to our earnings release for this quarter and to our most recent quarterly or annual SEC filings, all of which are available on our website. Now it is my pleasure to turn the call over to Gregory C. Case, President and CEO of Aon plc.
Thanks, Dylan, and good morning, everyone. Thank you for joining our second quarter earnings call. I am here today with Edmund Reese, our CFO. As always, the financial presentation, which Edmund will reference, is available on our website. Consistent execution, the strength of our Aon United strategy accelerated through the 3x3 Plan, and the resilience of our business model produced second quarter and first half results in line with objectives. In addition, our investments in talent, technology, and innovative capital solutions continue to strengthen the value we deliver, expand our addressable market, and drive sustainable growth. As we enter the second half of 2026, we are well positioned to deliver on our strategic and financial commitments and continue generating long-term shareholder value. My remarks today focus on three areas. First, our client demand continues to grow as organizations navigate increasingly interconnected risk and workforce challenges. Second, our organizational structure, which brings together risk capital and human capital and is supported by Aon Business Services and our substantial investments, drives our ability to meet client demand and differentiate Aon in the marketplace. And third, how our investments are translating into strong client impact, durable growth, and confidence in our ability to deliver through-the-cycle performance. Let's start with the external landscape. The environment facing our clients continues to evolve rapidly. Geopolitical uncertainty remains elevated. Economic growth remains uneven. Cyber threats continue to increase in frequency and sophistication. Climate-related risks continue to challenge traditional underwriting and capital allocation models. At the same time, organizations are adapting to profound workforce changes. The common thread across these developments is increasing complexity. As complexity rises, decision-making becomes more difficult and the cost of being wrong is more consequential. Clients are seeking greater clarity around risk exposure, capital allocation, and workforce strategy. They need integrated solutions and trusted partners who can help them navigate uncertainty, rather than simply react to it. This is creating growing demand for the capabilities that distinguish Aon in the marketplace. Our expansion of Aon Claims Copilot during the quarter is one example. Building on our successful launch in November, our expansion across North America, Asia Pacific, and EMEA brings a substantial portion of our global claims management information onto a single technology platform. Claims Copilot, recently recognized by Business Insurance as the innovation of the year, enables delivery of a globally consistent claims experience for clients while strengthening our ability to generate insights to inform placement negotiation and broader risk strategies. This expansion underscores our continued investment in AI-enabled technology and innovation to help clients navigate the current environment. Importantly, Claims Copilot enhances our strong track record of claims performance. Over the past decade, we have helped clients recover more than $10 billion in financial value from overturned denials through our advocacy. By combining that expertise with Claims Copilot, we are helping clients achieve better outcomes. The same dynamics that increase demand for our capabilities are also driving demand both within the segments where Aon is historically strong and in areas where we see opportunities to expand our addressable market. Our enterprise, large, and middle market clients have complex needs. They are seeking insight, advice, and execution, not just transactions. Their decisions depend on combining data analytics, expertise, and judgment. Organizations are increasingly seeking new sources of capital to fund growth and manage volatility. Aon is creating opportunities to engage with private equity firms and other capital providers, helping clients access the risk-bearing capacity necessary to support their strategic objectives. The opportunities we see today are the result of deliberate decisions we have made over the years. Aon United remains at the center of our strategy and underpins our competitive advantage. The concept is simple, yet powerful. By bringing together expertise across risk, capital, and human capital, we create more value for clients, expand access to capital, and drive growth. Aon Business Services is foundational to this strategy. Over the last several years, we have accelerated investment to improve our ability to diagnose risk, access capital, and deliver better outcomes for clients. Our advantage has never been rooted in technology alone. It always comes from combining deep expertise, trusted relationships, and proprietary insights to help clients navigate important decisions. That is particularly evident in areas where we develop substantial proprietary data and expertise. Within Talent Solutions, for example, we are helping clients understand how AI will reshape workforce strategies. Our ongoing investments and capabilities such as Radford McLagan compensation database and our proprietary AI sensitivity tool are enhancing the insight we bring to clients as they assess the impact of AI on their organizations and make informed talent decisions. As clients reskill and redeploy talent, we are helping them strengthen the employee experience. For example, through Aon Activate, our data-led, AI-powered total rewards and benefits platform, organizations can deliver a more connected, personalized experience across benefits, well-being, pensions, and rewards. These capabilities are helping clients address both sides of the workforce transformation—enabling employees to adapt to the changing nature of work while enhancing the experience that supports them. Across the firm, we see growing evidence our technology investments are enabling our strategy and enhancing value for clients. Organizations increasingly turn to us to help them navigate some of their most important strategic decisions around digital infrastructure and data centers. A recent engagement with one of the world's largest technology companies demonstrates the value of our integrated approach. As the client accelerated its investment in large-scale digital infrastructure, traditional risk solutions were no longer sufficient. We brought together expertise across commercial risk and reinsurance to help redesign the client's risk financing strategy, expand available capacity, and improve operational efficiency. The client was looking for a strategic partner that could help reimagine the process using technology, integrate more effectively with its own sophisticated systems, and create a more data-driven approach to managing risk and capital. This is not a one-off example, but reflects a broader opportunity as companies across tech are turning to Aon to help address their complex risk, resilience, and capital challenges through coordinated solutions. The scale of this opportunity and the value we bring to clients is further reflected in the continued expansion of our data center lifecycle insurance program. Last week, we announced an increase in program capacity to $5 billion while broadening the integrated risk solutions we provide to support digital infrastructure assets throughout their lifecycle. We are also seeing increasing demand from private equity and other capital providers as they seek differentiated insights and capability to deploy capital more effectively. As we deepen our relationships with these firms, we are creating and helping connect institutional funds with opportunity, while creating new sources of capital for clients and providing investors with access to uncorrelated risk and return streams. In doing so, we are expanding the addressable market, strengthening resilience, and reducing the protection gap for clients. Demand for our integrated capabilities is proving equally powerful in the middle market, where we continue to see increased adoption of data-driven analytics and greater collaboration across solution lines. We are expanding our middle market platform through our programmatic tuck-in strategy and have deployed more than $350 million in capital year-to-date, including opportunities that enhance our MGU and MGA capabilities. At the same time, we continue to draw on our ABS platform to accelerate NFP's growth. The success we are seeing today reinforces our confidence in continuing to invest behind these opportunities to further expand and strengthen our middle market platform over time. Taken together, these examples demonstrate how we connect risk, capital, and people solutions to drive stronger client outcomes and expand our opportunities. The continued demand for our capabilities reinforces the power of what we have created by integrating risk, capital, and human capital and is translating into strong financial performance and momentum. Turning briefly to our second quarter results, we delivered 5% organic revenue growth, achieving mid-single-digit or greater organic growth across all solution lines, 70 basis points of adjusted operating margin expansion, 9% adjusted EPS growth, and $483 million of free cash flow. Edmund will discuss our financial performance and capital allocation strategy in greater detail, but I will note that our balance sheet remains strong and flexible, supporting our disciplined approach to capital allocation. Looking ahead, we are confident in the trajectory of the business. The environment will continue to evolve. Pricing conditions will change. New technologies will emerge. Capital and client needs will continue to become more complex and interconnected. However, these dynamics increase the relevance of Aon's capabilities. Organizations increasingly need insight, expertise, and execution that span risk, capital, and workforce decisions. They need partners capable of helping them operate confidently amid uncertainty. Now more than ever, we are exceptionally well positioned to meet that need. Our organizational alignment around risk, capital, human capital, supported by Aon Business Services, further strengthens our ability to bring together distinctive capabilities on behalf of clients. As our capabilities expand and client relationships deepen, we continue to see growing opportunities to create value. For our 3x3 Plan, we are focused on continuing to execute with discipline and build on capabilities that support growth well beyond the plan. Finally, to our more than 60,000 colleagues around the world, thank you for your commitment to our clients, each other, and your Aon United strategy. Your dedication continues to drive our success and position us for long-term growth. Now let me turn the call over to Edmund. Edmund?
Thank you, Greg, and good morning, everyone. Before turning to the details of our second quarter results, I want to frame today's discussion on the continuation of a consistent theme: through-the-cycle performance. Over the past several quarters, disciplined execution across our business and financial model has translated into a consistently strong performance, in line with or above industry across the key financial metrics including organic revenue growth. As we move into the second half of 2026, our underlying business and financial model—the foundation of that performance—remains unchanged. What has evolved is the environment in which we are executing. We are operating in a period characterized by both a transitioning pricing cycle and an accelerated pace of technological change. Periods like this increase the dispersion across outcomes and bring into sharper focus business models that are structurally advantaged and built to perform through the cycle. Against that backdrop, our results continue to reflect differentiated performance. We are delivering top-line growth, expanding margins, and generating strong free cash flow. Our consistency, particularly in a changing environment, is an important signal. It reflects not just execution in a single period or given quarter, but the durability and persistence we expect from our underlying model. That durability is grounded in structural decisions we have made over time. Our client-centric organizational model—Aon United—now established over more than 15 years, aligns how we deliver solutions, invest in talent, and allocate capital. Combined with our early and continued investments in data and increasingly AI-enabled analytical capabilities, we are enhancing the quality, speed, and relevance of the insights we deliver to clients. As value continues to shift toward insight-led decision-making that drives client outcomes, that advantage becomes even more pronounced. We also recognize that the current pace of technological change broadens the range of potential long-term outcomes. Importantly, our disciplined approach remains consistent. We continue to make deliberate high-conviction investments, many of which generate value today and build strategic advantage over time. Regardless of how the technology landscape evolves, these investments act as catalysts to strengthen our competitive advantage and support sustained growth that compounds. Areas like this tend to further differentiate strong businesses. As we look at our performance and our positioning, we believe that is exactly what is occurring. In the changing environment, consistent performance is the clearest signal, and that is what our results continue to demonstrate. With that framing, let's turn to our second quarter results. On slide 5, you see the second quarter results. Organic revenue growth was 5%, and total revenue increased 2% year-over-year to $4.2 billion. Adjusted operating margin expanded by 70 basis points for the quarter and reached 28.9%. Adjusted EPS was $3.81, up 9% year-over-year. And finally, we generated $483 million in free cash flow. Let's get into the details of these results starting with organic revenue growth on Slide 6. Organic revenue growth was 5% in the quarter, in line with our mid-single-digit-or-better guidance. Growth was broad-based with all four solution lines delivering 5% organic revenue growth, reflecting the strength of our diversified business mix and the consistency of the growth drivers underpinning our performance. That consistency is most evident in new business, which has contributed nine to 11 points for nine consecutive quarters, providing a durable foundation for sustainable growth through varying market conditions. Commercial risk organic revenue growth was 5%, reflecting continued strength in our core P&C business where new business generation and higher retention drove meaningful contribution from EMEA and North America. Construction delivered a fifth consecutive quarter of double-digit growth as we continue to convert our record data center pipeline. Additionally, our MGA and MGU platforms benefited from ongoing client demand for specialized underwriting solutions. M&A services were lower year-over-year against the Q2 2025 comparison that benefited from elevated closed deal activity, which tempered overall commercial risk growth in the quarter, but announced transaction volumes are up over 60% which is reflected in a stronger second half pipeline. Reinsurance delivered 5% organic revenue growth despite meaningful rate pressure in the market. Treaty growth reflected continued strong new business activity including the addition of new logos, which more than offset 15% to 20% lower rates, while facultative placements continue to perform well globally. Growth was further supported by double-digit performance in our strategy and technology group, underscoring the increasing value clients place on analytics and access to alternative capital solutions. As part of our risk capital structure, reinsurance performance reflects continued contribution from our data center development efforts. Given that we typically deliver approximately three quarters of annual treaty revenue during the first half of the year, we have strong visibility into our full-year outlook. The strength of our results through six months combined with the continued momentum in international facultative placements and strong demand for our strategy and technology group solutions reinforces our confidence in delivering full-year organic revenue growth consistent with our mid-single-digit-or-greater objective. Health solutions grew 5% in the quarter driven by continued strength in our core health and benefits business, particularly in EMEA where demand for global benefits remains strong. Growth also benefited from improved performance in Talent Solutions as we converted a strong pipeline, along with contribution from NFP, particularly in executive benefits. Employers continue to face rising health care costs, evolving workforce needs, and increasing benefits complexity—all of which drive demand for our health analytics. Finally, Wealth generated 5% organic revenue growth reflecting sustained demand for regulatory and valuation work across the U.K. and EMEA, and demand for increased pension risk transfer solutions in the U.S. as plan sponsors resume evaluating de-risking opportunities and seek to improve balance sheet efficiency. Turning to the key components of our Q2 organic revenue growth on slide 7, a key driver of predictability in our revenue profile is the consistency of our new business performance. In Q2, new business contributed 10 points to organic revenue growth supported by a balanced mix of new client wins and expanding our share of wallet with existing clients. Our sustained investment in revenue-generating talent is a meaningful driver of the consistent new business contribution. The 2024 and 2025 cohorts contributed approximately 100 basis points of organic revenue growth in the quarter, with their impact increasing as productivity ramps. Revenue-generating headcount is up 3% year-to-date and given the opportunities we continue to see across priority growth areas, including construction, energy, and health, we remain on track to expand this population by 4% to 8% despite the competitive talent market. Retention remained strong at a mid-90s level. Continued improvement in commercial risk—up 40 basis points—and reinsurance—up 20 basis points—reflect increased engagement through our Enterprise Client Group, enhanced service delivery from ABS, and our ability to provide differentiated access to both traditional and alternative forms of capital. Net new business contributed 5 points to organic revenue growth in the quarter. Net market impact, which captures the impact of rate and exposure, was modestly positive and within our expected zero to two-point range despite a softer pricing environment in P&C and reinsurance. Importantly, these results reflect the durability of our business model across market cycles, with growth driven by business investment and client demand rather than pricing cycles. One final point on revenue: second quarter fiduciary investment income was $58 million, down 12% from the prior year as higher average balances were more than offset by lower interest rates. On slide 8, Q2 adjusted operating income was up 5% to $1.2 billion, and adjusted operating margin expanded 70 basis points to 28.9%. This margin expansion reflects the impact of lower rates on investment income from fiduciary balances, benefit from the Aon United restructuring program, and most importantly, continued operating leverage enabled by our scalable ABS platform. All of which were in line with our expectations. The scale advantages created through ABS, including AI-enabled productivity improvements and disciplined expense management, continue to lower unit costs across our operations while increasing our capacity to invest. This is the power of the ABS growth engine, generating operating leverage that funds growth investments, enabling us to broaden the addressable market and deliver sustainable top-line growth while continuing to expand margins. Restructuring savings were $25 million in the quarter, contributing approximately 60 basis points to our adjusted operating margin. We remain on track to deliver $100 million of savings in 2026, advancing toward our goal of $450 million in total savings by 2027 with 2026 marking the final year of our restructuring investment. Moving to interest, other income, and taxes on slide 9, interest income was $5 million in the second quarter driven by interest earned on proceeds from the sale of NFP Wealth. Interest expense came in at $179 million, $33 million lower than last year, primarily due to lower average debt balances. We expect Q3 2026 interest expense to be approximately $185 million. Other expense was $15 million lower than last year driven by remeasurements of balance sheet currency exposures and lower noncash pension expense. We estimate Q3 2026 other expense to range between $15 million and $20 million. Finally, the Q2 effective tax rate was 20.1%, up 360 basis points over Q2 2025 which benefited from a favorable discrete tax item. We continue to expect a full-year tax rate of 19.5% to 20.5%. Turning now to free cash flow and capital allocation on slide 10, we generated $483 million of free cash flow in the second quarter. As expected, Q2 2026 free cash flow included $267 million of tax impact from the NFP Wealth sale proceeds. Importantly, strong operating income growth offset that headwind, highlighting the strength of our cash generation. Through the first six months of the year, free cash flow is up 4% and we remain confident in our ability to deliver double-digit free cash flow growth in 2026. Running the capital on the right-hand side of the page, our strong free cash flow generation enables us to continue to execute our disciplined capital allocation model, balancing investment for growth with capital return to shareholders. We remained active on M&A and allocated $29 million to targeted tuck-in acquisitions in middle market to align with our strategic priorities and return thresholds. Consistent with last quarter, shareholder return represented the largest use of capital in Q2. In total, we returned $775 million, including $600 million in share repurchases. Given the dislocation in the market, we opportunistically accelerated repurchases during the first half of the year reflecting our conviction that Aon's share price remains well below the firm's intrinsic value. As always, our objective is disciplined capital allocation that maximizes long-term shareholder value. We have exceeded our objective of at least $1 billion in share repurchases for the year and we have continued strategic flexibility. We remain well positioned to allocate capital towards the highest return opportunities available, whether through high-return accretive M&A or incremental shareholder return. I will conclude my prepared remarks on slide 11 with a few thoughts on our financial objectives and 2026 guidance. Our second quarter results and our results through the first half of 2026 reflect the strength of our business and financial model, disciplined execution of the 3x3 Plan, and the durability of our through-the-cycle performance. The underlying drivers of growth remain firmly in place. We are generating sustainable organic revenue growth through consistent new business generation and high retention, translating that growth into strong earnings through operating leverage, and converting those earnings into double-digit free cash flow growth. As a result, we are reaffirming our 2026 full-year guidance, including mid-single-digit or greater organic revenue growth, 70 to 80 basis points of margin expansion, strong adjusted earnings growth, and double-digit free cash flow growth. Before we move to Q&A, I want to leave you with one final thought. The structural advantage we have built through our Aon United strategy, operationalized through risk, capital, human capital, and ABS, and our investment in AI-embedded technology within ABS, are increasingly differentiating our performance and serving as a catalyst for durable growth. We enter the second half of the year with greater visibility, significant financial flexibility, and confidence in our ability to continue creating value for clients, which fuels sustainable growth and long-term shareholder value creation. With that, let's open the line for questions. Dylan, back to you.
Questions and answers
Thank you. We will now be conducting a question-and-answer session. We ask that you please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. One moment while we poll for questions. Our first question comes from David Motemaden with Evercore. Please go ahead.
Just had a question on Commercial Risk. Edmund, you had called out M&A services as something that tempered the growth this quarter. I'm wondering if you could maybe size that. And you also mentioned a stronger second half pipeline. How should we think about that contributing for the rest of the year?
Sorry, David. Good morning, and thanks for the question. The momentum, I think the first thing I would say about Commercial Risk is the momentum continues to build here. Remember, we are in a lower rate environment. Commercial Risk was 5% in the quarter, 6% through the first six months, well within our mid-single-digit-or-greater results. You are right that I highlighted M&A services muted the growth for the quarter, and remember, it was growing over an elevated Q2 prior year. The important point is that announced transactions are up over 60%. That is reflected in our pipeline. We recognize revenue on M&A as the deals close, and I will say that M&A becomes a tailwind for the rest of the year given our leadership role within TMT. But the important thing here is that every other significant component of revenue within Commercial Risk was mid-single-digit or greater. The growth was broad-based across the regions. I talked about strength in EMEA and strength in North America in our core P&C business. I would also emphasize the growth in the priority areas. You saw a fifth consecutive double-digit quarter in construction—that is data center, but I would also highlight defense builds and pharmaceutical builds as well—and we are progressing in the specialty business, especially as we combine NFP with our legacy platforms and integrate some of the companies that we just acquired. For us, the key is the consistency of the growth drivers here. New business contributed over 10 points, which is very much supported by the priority hires that we have. Retention was up another quarter by 40 basis points. That is our Aon Client Treaty helping us win RFPs, and we are rolling that out across our different clients. And the net market contribution was still positive. So M&A will be a tailwind as we move forward. We will continue to focus on our investments, the drivers of growth—talent and technology. That is what gives us confidence in the guidance moving forward.
Well, I think that was a terrific summary. I would say, David, step back for a second. Edmund talked about 5% with a little bit of headwind from one of our strongest businesses on M&A services with a strong second half. But what I would add is a reflection on risk capital. You see it in Commercial Risk and in Reinsurance. Risk capital—the construct where you bring an integrated view to a client in a unique way, bringing content, capability, and expertise together—is a source of great strength. It cuts across the entire business, as Edmund described. I think about some of the work we have done on the data center front with some of the biggest balance sheets in the world, and our ability to bring new insight around how they understand exposure, how they transact risk, and how they access capital beyond traditional sources is a proof point around the strength of risk capital. You saw that show up in the quarter as well, along with all the details Edmund described.
Great. Thank you for that. Maybe just following up on the pricing environment within Commercial Risk as well. You noted the modestly positive market impact. What is your outlook on that as we go forward throughout the rest of the year? The pricing environment is obviously changing. It sounds like casualty pricing is moderating around the edges. Do you think you can continue to offset some of the moderating pricing and market impact with net new business?
Let me start and Edmund will finish. We are absolutely committed to mid-single-digit-or-greater growth under any pricing cycle. This is not about the pricing cycle for us. This is about client need and client response. We are going to drive mid-single-digit-or-greater irrespective. Step back and think about the macro view versus quarter-to-quarter: demand continues to outpace supply as you think about the complexity of risks. Risks are increasing across many areas—the four megatrends of trade, technology, weather, and workforce and new areas like data centers. All these are sources of demand. As that demand increases, it will work its way through pricing conditions over time. We are seeing a number of micro market dynamics: property down, casualty still increasing but slower, flattening in different areas. Net, the punch line for us is we support clients in different pricing environments and change the way we help them think about their overall structure. That is the power of risk capital—helping them understand, measure, and mitigate risk through a range of approaches. That is the power of client leadership within the 3x3.
David, this is one of the most important questions and emphasizes the theme of the call: performance through the cycle. Q2 is a heavy property quarter and reinsurance is weighted towards the first half of the year, so those are the two biggest areas of pricing impact and we are still performing despite rate pressure there. That reiterates our point that our organic growth is more correlated to business investment and nominal GDP, and much less correlated to pricing. Gregory's point is exactly right: we look at these as micro markets. Property has been down, casualty still growing but maybe at a lower rate; different dynamics on D&O and cyber, which are probably flat to low-single-digit. We also see differences by client segment, with more muted declines in the middle market. When you think about that, we still expect net market impact to be in line with our expected zero to two-point range. It has been positive and we expect that to continue, which supports our mid-single-digit guidance moving forward.
Awesome. Thank you.
Our next question comes from Rob Cox from Goldman Sachs. Please go ahead.
Hey, good morning. Just a question on the reinsurance business. The 5% organic growth is impressive given the level of property cap pricing declines. Is there something that has structurally changed within Aon's reinsurance business to make it more resilient here, or is there something unique about this time frame from a cyclical standpoint with facultative or cat bonds that is supporting the growth?
Rob, Edmund described this earlier: performance in the cycle is a key theme. Has the structure changed and made a difference in our ability to serve clients? The answer is yes. Over 15 years we've continuously invested in connecting the firm, operationalizing risk capital and human capital, and creating Aon Business Services which coordinates data and content so we can bring it together on behalf of clients. Q2 in reinsurance is another example of strong performance, but this reflects a series of strong quarters and real momentum in the first half of the year. For all the reasons Edmund described and the pricing cycle you mentioned, we've been able to continue to grow the business. We are privileged to have significant share on the property side, which is under the most pressure. What we have done is continue to grow and demonstrate the power of risk capital. This integrated capability helps clients calibrate exposure across commercial risk and reinsurance. The data sets and curated content we have through ABS are different in fidelity and scale. When colleagues act together on behalf of a client, we go beyond P&L or credit allocation and simply serve the client, and we are seeing that show through in reinsurance. We also had record first-half ILS activity and strong performance in facultative placements. So the structural organization—risk capital, human capital, and ABS—is creating differentiated client outcomes and showing up in our results.
Thank you. And a follow-up on AI adoption: it seems like from the outside there is a divergence among large brokers with respect to partnering externally versus building internally. Can you talk about Aon's approach and your confidence that it's the right move for Aon?
We did not start with an AI strategy as something new. AI accelerates what we have been working on. Over the last 15 years we've connected our firm and operationalized risk capital, human capital, and Aon Business Services, which allowed us to build a unique data lake, curate it, and create data fidelity no one else can match. It is not just about analytics; it's about putting that insight in the hands of practitioners and trusted advisers who sit across the table from clients. Those elements are in place and generative AI is an accelerant for us. We have been working on machine learning and analytics for many years, and generative AI amplifies that work. We partner where appropriate and tap the best partners to accelerate proven strategies. One of the things we bring is a revenue orientation—these are revenue-generating engines for clients driven and reinforced through ABS with AI. This is not a new strategy but an accelerator of our proven approach. That integrated, data-driven, analytics-driven approach through our colleagues is responding to specific client needs and making a difference in wins, retention, and outcomes.
Got it. Thanks for all the color.
Our next question comes from Tracy Benguigui with Wolfe Research. Please go ahead.
Good morning. You have linked commercial risk organic revenue growth to nominal GDP rather than price, but hyperscaler CapEx is roughly $750 billion, which probably counts for two points of nominal GDP. Excluding hyperscalers, closer to 3.5%. On that note, what is the largest known limit or shared underwriting capacity available per data center development since individual projects could reach $20 billion to $50 billion? Given hyperscalers' balance sheets dwarf the entire insurance industry, is this mostly risk self-insured with more fee-based rather than commission-based business?
Great question. We recently responded publicly on this topic. First, we've increased our facility to $5 billion with over 30 carriers participating. Because of the size of these projects, we expect to need nontraditional capital as well and have been working to bring that in. In terms of single-facility limits, we've moved from single-billion-dollar placements to larger placements. In a recent commentary we noted we can underwrite up to approximately $1.3 billion for a single facility. Many facilities cost in the range you described—$15 billion to $20 billion, and some $40 billion to $50 billion—and that will require capital beyond traditional insurance. We have a leadership position and a pipeline that is more than triple what it was last year. We are advising on these projects with engineering expertise and large facilities; these are drivers of growth for us and will require broader capital solutions.
Tracy, you summarized it well. The traditional insurance capital pool, roughly $4 trillion, is not enough for these massive projects. But the opportunity is to draw in nontraditional capital—pension funds, sovereign wealth funds, private equity, and other institutional investors. Aon's role is to bring the analytics, the data, and the insights to demonstrate where and how investors can earn a return and manage risk. That is how you increase capacity beyond traditional insurance. Our content and analytics are what bring that capital into the market. If we can get risk management right and disperse and understand risk in the right way, we can change the operating cost and the volatility of a data center. Business interruption in this space is measured in millions of dollars a minute; getting risk management right changes the economics. This is a massive opportunity and unique in the industry's history. We're optimistic we can play a central role in widening capacity and increasing relevance.
I appreciate the response, but can you clarify whether this is more fee-based business?
It's value-based business. We provide value to clients and that drives compensation. We are not discriminating between fee or commission models; we provide value and are compensated accordingly. There are opportunities across the value chain—the build, the operations, the capital providers, and the builders who need financing. If we add value and help clients succeed, we will be appropriately compensated across different models.
Great. And my follow-up: at the RIMS conference, Joe Peiser spoke about a pricing correction over 18 months rather than a traditional soft cycle. Is that correction included in your organic revenue outlook?
Again, great point. We think the correlation between pricing and our organic revenue growth is low. We emphasize nominal GDP as a better correlate. The pricing environment is nuanced and consists of many micro markets across geography, product, and segment. Some products are moving in different directions. Structural risk trends, particularly loss severity, argue against an extended prolonged softness, so the duration of any softness is likely measured. We're also beginning to see underwriting focus limiting aggressive price competition among carriers. For us, the focus remains client-centric: expand coverage, increase limits, and design solutions. We continue to expect net market impact to be in our zero to two-point range and that supports our mid-single-digit guidance.
Our next question comes from Bob Huang with Morgan Stanley. Please go ahead.
My first question is around capital. Edmund, you addressed buybacks earlier. Given the strong earnings and cash flow generation, is there a reason not to think you can maintain the current buyback momentum? In other words, can the current level of capital return be maintained?
It can absolutely be maintained. We came into 2026 with over $7 billion of capacity. We are playing for strategic flexibility given our position. Share repurchases are a key part of our balanced capital allocation model. The $1.1 billion in the first half has clearly hit that objective, and 79% of capital deployment in the first half was shareholder return. Buybacks represented the majority of that. We remain in a position of strength and strategic flexibility, evaluating pipeline opportunities for fit with our strategic and financial criteria. If those opportunities meet our thresholds, we'll pursue them; if not, we will return excess cash through repurchases. So this is a continuation of our capital allocation approach—invest for growth and return capital. We remain well positioned to do both.
Got it. Thank you. Second question: on the international EMEA business, can you talk about the durability of growth in that segment? Intuitively, EMEA may be seeing similar pricing pressure as the U.S., and GDP growth varies by jurisdiction. Thoughts on EMEA related to Commercial Risk solutions?
GDP growth is more uneven in international markets but not disruptive. The regulatory and geopolitical environment increases demand for our business. Our global footprint is diversified and moderately sensitive to any single region. You are seeing strong growth in EMEA and also in Latin America, which is benefiting from foreign direct investment that can outpace local GDP growth. Our commercial risk efforts on new business, specialty, and health—global benefits—are supporting growth. While individual market growth levels vary, our diversified portfolio gives us resilient growth and international locations continue to be strong contributors.
Really appreciate that. Thank you.
Our next question comes from Katie Fleischer with Autonomous Research. Please go ahead.
Thanks. Good morning. I would circle back to growth in revenue-generating producers. The 3% year-to-date is a bit below the full-year guide. Can you help us understand if that was subject to timing and when hires are made? And what drives your confidence to accelerate that pace back to the 4% to 8% range?
Through six months, we are pleased with 3% growth. Recruiting competition is intense right now, so we are not immune to that. The 2024 and 2025 cohorts are contributing over 100 basis points and we've seen their impact in construction, energy, and health. Because we are at 3% through six months, we are maintaining the 4% to 8% objective and would like to be at the higher end of that range. We built our plans on achieving that, but the competitive environment is intense. The capabilities that help us retain clients also help attract and retain talent. For us, it's not just quantity but quality of hires in high-growth areas. We feel good about the 4% to 8% objective, but it will be hand-to-hand combat the rest of the year to reach our target.
Edmund covered this well. I would highlight that we have a lot of client momentum across risk capital and human capital. If you are a practitioner and want to do great work, Aon is an attractive place because of the content, capability, and opportunities to be better professionally. We have many people seeking to join. We manage this carefully to bring in true leaders who will make a difference and then support them to be even better. We're optimistic about momentum in bringing the right colleagues into the firm and the impact they will have.
I understand the competitive environment. I'm trying to understand the bridge from 3% year-to-date to 4% on the full-year guide versus getting up to the midpoint or higher. Do you think your relative value proposition to new hires will help you win additional producers in the back half of the year? Is that enough to set you apart from competitors?
History over the last several years suggests yes. We focus on quality—true leaders who can make a difference—and provide content and capability that make them more effective. Our aspiration is to bring in the right colleagues and help them become even better. We're optimistic and have made great progress: 3% for the first half is strong and we will continue to drive growth in revenue-generating producers.
Thank you. I appreciate the color.
Thank you. I would now like to turn the call back over to Gregory C. Case for closing remarks. Please go ahead.
Thanks, Dylan. On behalf of Edmund and me, thanks everyone for joining. We appreciate it and look forward to catching up with you next quarter. Take care.
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