Aon Corporation provides risk management services, insurance brokerage, and human resource consulting and outsourcing services. The Company's segments its operations are broken into Risk Solutions, formerly known as Risk and Insurance Brokerage Services, and HR Solutions. The Company market's these services to corporations, insurance companies, Governments, and other organizations. As a consulting and service provider, Aon's operations are vulnerable to cyclical swings in the economy. The Company also operates in highly competitive industries, putting pressure on the Company to maintain its reputation and provide attractive pricing.
Aon's organic growth depends primarily on the demand for its existing risk, insurance, and HR consulting services. In addition, the Company has increased its core offerings through acquisitions.
With new, younger leadership and management, Aon hopes to improve its customer service and improve its operations. From a financial perspective, Aon's leadership has emphasized improving margins; instead, of increasing organic sales growth. As a result, Aon has focused on improving customer service and maintaining its price levels while not attempting to compete for extremely price-sensitive businesses. Whiles Aon's value-added managerial leadership and improved customer service may lead to flat organic growth in the short term, it could lead to improved customer retention and increase its customer base in the long term.
As a consulting and services provider, Aon's revenues depend significantly on the ability of afford multiple services and insurance products. If clients are actively looking to reduce non-core spending in order to meet budget reductions, they may discontinue their contracts with Aon. As a result, In economic downswings, Aon's services are exposed to pricing pressures as multiple insurance and contracting companies compete for limited contracts. In addition, lower revenues resulting have the potential of resulting form declining insurable risks due to decreasing asset values, including property values, payroll, number of active employees, and corporate revenues. However, sales have the potential of increasing during economic upswings.
As a provider of insurance, risk, and human resources services, Aon competes with several large institutions located around the world.