Aon To Finish Spin-off Soon
By Mark E. Ruquet
NU Online News Service, June 26, 2:50 p.m. EST?Aon's chief executive officer confessed that parts of a plan to spin off the brokerage's insurance company were flawed and he is displeased with the pace of the effort, but the work should be completed shortly, he said.
The comments by Patrick G. Ryan, chairman and CEO of the Chicago-based broker, were made during a Webcast of the 22nd annual William Blair & Company Growth Stock Conference in Chicago.
The firm will move "expeditiously" to complete the spin-off once it receives final approval from the U.S. Securities and Exchange Commission, Mr. Ryan said.
Aon is waiting for approval of some "routine filings" with the SEC so it can complete the transformation plan. He said the filings are going "through the normal process," and final approval could come in a few days or weeks.
Under the plan, Aon's insurance company–Combined Specialty Group, Inc.–would become a separate company. Mr. Ryan said that as two separate operations, the broker and insurer would grow faster than if they remained together. The firm announced earlier this month that completion of the spin-off would be delayed.
"We have had some problems executing our transformation plan and we have been working on those services," Mr. Ryan admitted.
He said the transformation had gone "extremely well outside of the U.S. It has stubbed more than its toe in the U.S. Part of the strategy was flawed and part of the implementation was flawed, and we are working very hard to correct those problems." He added that the firm is confident about the future and is getting its "hands around" the issue.
He said that Michael D. O'Halleran, Aon's president and chief operating officer, has been appointed to fix these problems.
Mr. Ryan said he expects the firm to see a positive impact in the fourth quarter resulting from the company's transformation strategy. However, some investments the company has made "have been too ambitious," and Aon is dealing with them. He said the firm would not be taking any charges for this.
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