Aon plc (AON) is successfully moving toward its goal of portfolio expansion. In its latest move, the company has closed the acquisition of StoneRiver National Flood Services, Inc. and related entities (National Flood Services). Last month, one of the subsidiaries of Aon, namely Aon U.S. Holdings, Inc. had entered into a definitive agreement to acquire National Flood services from StoneRiver Group, L.P.
The acquisition of National Flood Services, a leading flood insurance processor is aimed to help Aon Affinity cater to the growing demand for flood insurance solutions. Aon Affinity is the consumer, association and group program business of Aon Risk Solutions – the global risk management business of the holding company.
Aon Affinity has been providing customized and innovative insurance solutions to more than 18 million individual customers for the past 60 years. The latest acquisition will complement the company’s services by increasing its flood offerings and distribution. The acquirer intends to capitalize on National Flood Services’ high-end flood risk assessment technology for commercial and residential markets, to boost its existing portfolio of flood solutions.
Over the past century, due to the transition toward a more urban society, the U.S. witnessed changes in land use that led to an increased number of floods. As per sources, on an average, 100 people are killed every year due to U.S. floods. This death toll is by far the highest per year figure when compared to deaths caused by other natural catastrophes.
Consequently, the demand for insurance coverage products has increased. Thus, we believe that at this juncture, the acquisition of National Flood Services and consequently, the upgrade in its services will enable Aon to become more attractive to clients.
Currently, Aon carries a Zacks Rank #3 (Hold). Better-ranked players in the insurance space that look attractive at current levels include Cninsure Inc. (CISG), Blue Capital Reinsurance Holdings Ltd. (BCRH) and Alleghany Corp. (Y). All these stocks sport a Zacks Rank #1 (Strong Buy).