Aon Maintains Its Strong Growth in Third Quarter

Aon’s unusually strong growth continued in the third quarter, with the company realizing its highest level of organic growth in over a decade. We saw similar results at the company’s closest peer. The narrow-moat company has benefited this year from higher insurance market pricing and the macroeconomic rebound, and these tailwinds have combined with easy comparisons to produce outsize growth. However, the company has achieved only modest organic growth historically, which is what we expect over the long term. We will maintain our $220 fair value estimate. We continue to believe the shares are materially overvalued and that the market is overly focused on near-term prospects for Aon and the other leading brokers.