AON's PEP Achieves $2Bn Milestone in U.S. Assets & Commitments
Aon plc AON recently disclosed that its Pooled Employer Plan (Aon PEP) has hit the $2 billion milestone in 401(k) assets under administration and commitments. The PEP came into effect at the very beginning of 2021 and started off with a client base of only two employers.
Since then, client growth has exhibited an impressive trend based on which Aon PEP currently supports 70-plus employers extending 401(k) plans, an employer-sponsored retirement savings plan, to more than 50,000 employees. Also, the participating employers of the PEP hail from diversified industries, some of which are biotech and life sciences, manufacturing, services, consumer products, energy, technology and transportation. Reputed organizations are also leveraging the Aon PEP, thereby substantiating its widespread reach and multiple benefits.
The benefits of switching to Aon PEP include a reduced administration workload and employers are required to divert a lesser amount of time and resources for the management of 401(k) plans, compliance and governance. It also minimizes fiduciary risks for employers and enables them to devise enhanced retirement decisions for beneficiaries.
The PEP also fetches significant tailwinds to employees, who are required to pay less than half of the fees paid in traditional 401(k) plans. As a result, employees can make 11% more retirement savings during their working tenure. Lower plan costs are the outcome of combined scale in PEPs. Additionally, beneficiaries enjoy seamless access to investment tools and education services, which serve as a means to address retirement goals.
An extensive suite of the abovementioned benefits is expected to sustain the solid demand for AON’s PEP. Thereby, management anticipates more than 50% of U.S. employers will integrate their traditional 401(k) plans into PEPs within 2030. A growing employer client base within AON’s PEP is likely to provide an opportunity for the insurer to earn higher fees from rendering high-quality retirement services and subsequently, benefit the Wealth Solutions segment. It is through this unit that AON provides retirement consulting, pension administration, and investment consulting services.
Revenues in the Wealth Solutions segment improved 4% year over year in the first nine months of 2023. The established experience, global reach and comprehensive analytics of Aon have acted as a means to diversify its solutions suite and reinforced its position as a reputed global professional services firm providing a wide array of risk, health and wealth solutions.
Shares of Aon have gained 4.9% in the past year compared with the industry’s 13% growth. AON currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks in the Insurance Brokerage space are Erie Indemnity Company ERIE, Arthur J. Gallagher & Co. AJG and Marsh & McLennan Companies, Inc. MMC. While Erie Indemnity sports a Zacks Rank #1 (Strong Buy), Arthur J. Gallagher and Marsh & McLennan carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Erie Indemnity’s earnings surpassed estimates in three of the last four quarters and missed the mark once, the average surprise being 10.03%. The Zacks Consensus Estimate for ERIE’s 2023 earnings indicates a 49.4% rise from the prior-year tally. The consensus mark for revenues suggests an improvement of 13.5% from the prior-year tally. The consensus mark for ERIE’s 2023 earnings has moved 12.4% north in the past 30 days.
The bottom line of Arthur J. Gallagher outpaced estimates in each of the trailing four quarters, the average surprise being 2.23%. The Zacks Consensus Estimate for AJG’s 2023 earnings indicates a 13.6% rise from the year-ago figure. The consensus mark for revenues suggests an improvement of 18.3% from the year-ago tally. The consensus mark for AJG’s 2023 earnings has moved 1% north in the past 60 days.
Marsh & McLennan earnings outpaced estimates in each of the trailing four quarters, the average surprise being 6.45%. The Zacks Consensus Estimate for MMC’s 2023 earnings indicates a 15.8% rise from the year-ago figure. The consensus mark for revenues suggests an improvement of 9.5% from the year-ago figure. The consensus mark for MMC’s 2023 earnings has moved up 0.3% in the past 30 days.
Shares of Erie Indemnity, Arthur J. Gallagher and Marsh & McLennan have gained 1.9%, 23.9% and 13.9%, respectively, in the past year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report
Aon plc (AON) : Free Stock Analysis Report
Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report
Erie Indemnity Company (ERIE) : Free Stock Analysis Report
