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Aon's (AON) Solution to Help Businesses Check Cyber Threats

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Zacks Equity Research
·3 min read
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Aon plc AON recently introduced a digital cyber insurance solution, which is designed to help small and middle market businesses in purchasing and managing cyber and professional liability insurance through digital means.

The solution can be availed of by businesses coming under a wide range of sectors including retail, technology, professional services, manufacturing to name a few. Also, the solution is conceived mainly for any business which can produce annual revenues of up to $100 million.

Further, businesses utilizing this new solution can also seek assistance from an insurance specialist, who is entrusted with the responsibility to guide businesses on the application process and details of cyber insurance coverage.

Shares of this currently Zacks Rank #3 (Hold) company have gained 4.5% in a year compared with the industry’s growth of 7.5%.

Moreover, the launch of this solution seems to be time opportune amid the increased adoption of digital means, which was gradually gaining popularity and the COVID-19 pandemic further accelerated the trend.  At a time when majority of the companies tend to digitize their processes, cyber risks, such as data breach, ransomware, contractual liability, media liability, business interruption and social engineering are likely to witness an uptick. Consequently, they pose a significant threat to small and middle market businesses, which are already grappling with dearth of technology and security resources.

We note that the access to cyber insurance coverage is further eased by the company’s user-friendly digital platform, which in turn, is propelled by its acquisition of CoverWallet this January that boasts a digital insurance platform. Notably, the motive behind the January buyout can be attributed to the mutual purpose of Aon and CoverWallet to cater to the needs of small and medium-sized businesses.

Furthermore, the new cyber insurance solution is an addition to the company’s suite of offerings to the middle market businesses. The latest strategic move also reinforces Aon’s commitment to meet the requirements of 30 million small and medium-sized U.S. businesses that it serves by constantly enhancing its solutions and services.

Additionally, Aon is making concerted efforts to enhance its line of risk solutions and services for countering the growing number of cyber risks. In February 2020, the company acquired Canadian-based Cytelligence, which is best known as a cyber security firm offering incident response advisory, digital forensic expertise, security consulting services and cyber security training for employees so that they can tighten the organizations’ security by offsetting cyber security threats.

Apart from rolling out a host of new solutions, we believe, the company’s expansion through buyouts and collaborations, and prudent shareholder-friendly moves via dividend hikes and buybacks bode well for the long haul.

Stocks to Consider

Some better-ranked stocks in the insurance space are eHealth, Inc. EHTH, Brown & Brown, Inc. BRO and Primerica, Inc. PRI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

eHealth, Brown & Brown and Primerica have a trailing four-quarter earnings surprise of 83.27%, 13.91% and 10.04% each, on average.

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