Aon Extends Long-Term Partnership; Regulators Open Full-Scale Investigation

Aon plc, a global leader offering a broad range of risk, retirement and health solutions, has extended its long-term partnership with parametric technology firm CelsiusPro. CelsiusPro is a Swiss-based insurance technology firm specializing in risk modeling, underwriting and administration of index-based insurance products in the context of weather risk and natural disasters.

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The collaboration between Aon (AON) and CelsiusPro has culminated in parametric data being delivered within a few hours of a triggering event, and the subsequent claim sometimes being paid within 48 hours.

“Due to the speed of the payout, parametric solutions offer clients immediate and quantifiable cashflow as opposed to the delayed cash replacement offered by traditional insurance,” said Paul Ramiz, Director of Aon’s Innovation and Solutions team.

Aon and CelsiusPro have been working together since 2012, and their partnership has been key in the structuring of client solutions across multiple sectors all over the world, particularly in the risk analysis and design of hurricane insurance products.

This development comes on the same day as EU antitrust regulators’ announcement that they are investigating Aon’s $30 billion bid for Willis Towers to create the world’s largest insurance broker. Aon missed the deadline on Monday to provide concessions to address EU competition concerns, according to Reuters. (See AON stock analysis on TipRanks)

Piper Sandler analyst Paul Newsome downgraded the stock a month ago to a Hold with a price target of $187.00 (9% downside potential). He stated, “The company has a high proportion of its businesses in economically sensitive consulting businesses with heavy project work components to revenue.”

Consensus among analysts is a Hold based on 1 Buy, 3 Holds and 1 Sell. The average price target of $216.75 implies a potential upside of around 6% over the next 12 months.