Aon plc (NYSE:AON) Q4 2022 Earnings Call Transcript

Eric Andersen: Yes, Greg. I would say in our Affinity businesses, we serve specialized groups of small. So we’re very active in the small space but really where we can bring distinct value, whether it’s in the travel space or museums, that type of thing, where we actually have a product or capability where we’re able to provide distinct value to the clients. I would also say with our office — our 500 offices around the world, we engage with clients across all segments. I mean, there are only 500 Fortune 500 clients. We do an awful lot in the middle market and the small commercial. Our strategy is to bring product solutions using the expertise that we have across all of our capabilities and package them and deliver them in a way where we’re providing the real value of using Aon as your adviser, so you get that product expertise but delivered in a way where it’s efficient and cost effective for them to be able to use our capabilities.

Mike Zaremski: Okay. That’s interesting and helpful. And my last follow-up was on fiduciary investment income. And I know there’s some nuances and that make it not — it’s tough for us to model exactly but should we be expecting a quarterly step up, a material step-up into ’23 based on where the interest rates are now across the globe?

Christa Davies: Yes. So what I would tell you is what we saw in 2022 was that interest rate stepped up in Q3 and Q4 of 2022. And so if interest rates stay where they are today, you’ll see a similar impact to Q4 in Q1 and Q2. And so we would expect that increase in interest rates stay where they are. And then for modeling going forward, every 100 basis point increase in interest rates is approximately $65 million in fiduciary investment income. And there’s no delay between interest rate increases and it impacting our fiduciary investment income.

Operator: Ladies and gentlemen, this concludes our question-and-answer session. I’ll turn the floor back to Mr. Case for any final comments.

Greg Case: I just want to say thanks, everybody, for joining us today. We appreciate it and look forward to the next call.

Operator: Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.