GlobalData analysts believe the Aon and Willis Towers Watson merger will complement each broker’s business solutions and deliver better client services, following a block of their proposed merger by the Justice Department in the US.
The U.S. Department of Justice (DOJ) filed a civil antitrust lawsuit to block the proposed $30 billion combination, stating that the merger threatens to eliminate competition, increase prices, and ultimately create a “broking behemoth.”
In response to the DOJ’s announcement, Aon and WTW said that they disagreed with the action, “which reflects a lack of understanding of our business, the clients we serve and the marketplaces in which we operate.”
Jazmin Chong, Insurance Analyst at GlobalData, noted how the combination of both Aon’s and WTW’s corporate capabilities would bridge operational gaps between both brokage groups, delivering better outcomes for clients.
“GlobalData’s Job analytics database finds that Aon has predominantly focused on data and analytics capabilities, with the broker increasing its hiring of themes for cloud capabilities, personalisation, and Big Data, all of which have experienced a 17%, 16%, and 6% increase over the past 90 days, respectively,” Chong said.
Chong continued to highlight how, over the years, Aon has built a scalable infrastructure that relies on cloud technology and artificial intelligence (AI).
“This has allowed the broker to develop a competitive advantage when it comes to offering clients insurance policy and risk management solutions, accounting for 42.3% of the company’s total revenue in FY 2020.
“Additionally, Aon’s revenue growth was due to strong performances in its US, Canada, and Latin American markets.”
Concurrently, GlobalData analysis note how WTW has developed a very different corporate strategy, one that relies on partnerships that outsources its technological capabilities.
For example, in March 2021, WTW collaborated with HTC Global Services and Pegasystems to enhance pricing capabilities and workflow management.
According to GlobalData’s Job analytics, WTW is decreasing its staff capabilities that focus on AI, Big Data, and data analytics, with all three themes experiencing a 29%, 12% and 15% decrease in recruiting for these sector roles over the past 90 days.
“The Justice Department argues that the combination of assets would result in higher prices and reduce innovation for US businesses,” Chong added.
“However, Aon and WTW’s merger would allow for a combination of complementary solutions, capabilities and skillsets that would better assist consumers, during a time where the pandemic has drastically changed the way companies need to make innovative and rapid solutions that mitigate their operational risks.”