S&P500 Stock - Aon Corporation (NYSE: AOC)

Excellent Liquidity- A good stock for long term investment goal

Aon Corporation is headquartered in Chicago. It is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. It likes to be in the insurance industry and has a generous view. 43,000 people working in 500 offices in more than 120 countries help Aon earn its money. The company proudly says that it can anticipate how changes in one sector can impact another and integrate services leveraging its expertise across hundreds of disciplines around the world. Take a look at its "hundreds of disciplines"- 

Risk and Insurance Brokerage Services segment offers retail brokerage services, advisory services to entertainment, media, financial institutions, marine, aviation, construction, health care, and energy industries. Risk management solutions cover property, general liability, directors' and officers' liability, and workers' compensation risk. Affinity products are for professional liability, life, disability, income, and personal lines to individuals, associations, and businesses and lastly premium finance services takes care of general underwriting, placement, and captive management services. It is also a broker for reinsurance services and provides advice, placement of reinsurance and alternative risk transfer financing with capital markets, actuarial consulting, financial and regulatory consulting, portfolio analysis, catastrophe modeling, and claims services to insurance and reinsurance companies, and other risk assumption entities. Aon gives consulting services to employee benefits, compensation, management consulting, communications, strategic human resource consulting, financial advisory and litigation consulting. The Insurance Underwriting segment operates as an underwriter and distributor of individual accident, disability, health, and life insurance products. The company was founded in 1919 and is based in Chicago, Illinois. Whew! these are an overwhelming set of activities.

The star leadership team handling these business posses overwhelming experience and are well positioned to take care of the business. Gregory C. case is the President and Chief Executive Officer of Aon. He was with McKinsey & Company, the international management consulting firm, for 17 years, most recently serving as head of the Financial Services Practice. He serves as a member of the Executive Committee of Board of Directors and as a Director of Aon Foundation. He has outlined a three-part strategy for building Aon.  His vision centers on delivering distinctive value for clients, attracting the best talent and achieving operational excellence.  Under Case's leadership, Aon has strengthened its position as a global organization offering integrated business solutions for its clients.  Case has said Aon's goal is to be recognized as the leading and most distinctive risk advisor in the world, not the biggest. Case has nearly two decades of experience in the insurance and financial services industries. 

David P. Bolger is the chief financial officer. He was with Bank One Corporation  for 21 years.

Aon has a number CEO's located in different parts of the world handling its various business segment and worldwide operations.

The Risk and Insurance Brokerage Services segment generated approximately 63% of the Company's total operating revenues in 2006. This is the largest of Aon's operating segments. Risk and insurance brokerage and related services are provided by certain indirect subsidiaries, including Aon Risk Services Companies, Inc., Aon Holdings International bv, Aon Re Global, Inc., Aon Limited (U.K.) and Cananwill, Inc.

Retail brokerage delivers specialized advice and services in industries, such as entertainment, media, financial institutions, marine, aviation, construction, health care and energy. As a retail broker, Aon generally serves as an advisor to corporate clients, and arranges a spectrum of risk management solutions, including property, general liability, professional and directors' and officers' liability, workers' compensation and other exposures.

Consulting generated 14% of the Company's total operating revenues in 2006. This segment has operations in the United States, Canada, Europe, the Pacific region and South Africa. Through its subsidiary, Aon Consulting Worldwide, Inc. (Aon Consulting), Aon provides consulting services in two sub segments (Consulting Services and Outsourcing)

Insurance Underwriting has operations in the United States, Canada, Latin America, Europe and Asia/Pacific. This business generated 23% of Aon's total operating segment revenues in 2006. The Company classifies its insurance underwriting businesses into two sub-segments: accident, health and life, and property and casualty.

Organic revenue growth was 6%, Brokerage Services business grew 3% organically, despite soft market conditions, and Consulting Services grew 8% organically.Accident and Health insurance grew 21% organically, with strong growth in Sterling currency. Overall growth was 3%, driven by solid performance in retail brokerage operations. Pension expense for major defined-benefit pension plans is $14m, vs. $63m last years third quarter. Expects pension expense of approx. $85m in 2007, vs. $240m in 2006.

Net income increased 8% to $213 million or $0.66 per share, compared to $198 million or $0.57 per share for the prior year quarter. Net income from continuing operations increased 23% to $212 million or $0.66 per share, compared to $173 million or $0.50 per share for the prior year quarter. Net income from continuing operations per share, excluding certain items, increased 37% to $0.70 compared to $0.51 for the prior year quarter.Aon Corporation continues to make investments in new markets and talent for its future growth. Their balance sheet is strong and they repurchased $345 million of stock during the quarter, highlighting their commitment to creating long-term shareholder value. Adjusted EPS increased 67% in S1. 3Q07 Performance EPS from continuing operations were $0.59, more than double a year ago as compared to S2. 3Q07 financial performance. EPS were up significantly by any measure.

Arthur J. Gallagher, Torchmark, UnumProvident, CIGNA, AFLAC, Conseco and Universal American Financial are its competitors till date. As i had made a mention on its prediction capabilities earlier,here's another concrete example. Aon correctly predicted the return of a functioning worldwide property catastrophe reinsurance marketplace, In such a marketplace, cedents would generally find sufficient capacity at terms and conditions that represented accretive underwriting capital for their organizations .Aon believes in its ability to provide an expectation in advance of key renewal dates provides significant value to their clients.

The company was benefited from cash distributions relating to securities, with an estimated value of $150m in excess of their carrying value. Assuming horizon of 4-6 years for monetization of remaining private equity investments, the company expects average quarterly distribution of $6-10m over near-term assuming no change in underlying value of investments. Aon can deliver best-in-class expense discipline. Anticipates program will result in $360m of charges and $50-70m of savings in 2008, $175-200m in 2009, and $240m of cumulative annualized savings by 2010, before any potential reinvestment of savings, Liquidity is excellent. So I feel its worthy stock among its competitors.