Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information

Segment Information

18.  Segment Information

Aon classifies its businesses into two operating segments:  Risk Solutions and HR Solutions.  Unallocated income and expenses, when combined with the operating segments and after the elimination of intersegment revenues and expenses, total to the amounts in the Condensed Consolidated Financial Statements.

Operating segments have been determined using a management approach, which is consistent with the basis and manner in which Aon’s chief operating decision-maker uses financial information for the purposes of allocating resources and evaluating performance.  Aon evaluates performance based on stand-alone operating segment operating income and generally accounts for inter-segment revenue as if the revenue were from third parties and at what management believes are current market prices.

Risk Solutions acts as an advisor and insurance and reinsurance broker, helping clients manage their risks, via consultation, as well as negotiation and placement of insurance risk with insurance carriers through Aon’s global distribution network.

HR Solutions partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance by designing, implementing, communicating and administering a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies.

Aon’s total revenue is as follows (in millions):

	Three months ended June 30,						Six months ended June 30,
	2011			2010			2011			2010
Risk Solutions	$	1,728		$	1,587		$	3,377		$	3,174
HR Solutions	1,090			317			2,207			639
Intersegment elimination	(7		)	(6		)	(14		)	(11		)
Total revenue	$	2,811		$	1,898		$	5,570		$	3,802

Commissions, fees and other revenues by product are as follows (in millions):

	Three months ended June 30,						Six months ended June 30,
	2011			2010			2011			2010
Retail brokerage	$	1,349		$	1,214		$	2,600		$	2,400
Reinsurance brokerage	367			359			754			747
Total Risk Solutions Segment	1,716			1,573			3,354			3,147
Consulting services	546			265			1,115			540
Outsourcing	550			51			1,106			98
Intrasegment	(6		)	—			(14		)	—
Total HR Solutions Segment	1,090			316			2,207			638
Intersegment	(7		)	(6		)	(14		)	(11		)
Total commissions, fees and other revenue	$	2,799		$	1,883		$	5,547		$	3,774

Fiduciary investment income by segment is as follows (in millions):

	Three months ended June 30,				Six months ended June 30,
	2011		2010		2011		2010
Risk Solutions	$	12	$	14	$	23	$	27
HR Solutions	—		1		—		1
Total fiduciary investment income	$	12	$	15	$	23	$	28

A reconciliation of segment operating income before tax to income from continuing operations before income taxes is as follows (in millions):

	Three months ended June 30,						Six months ended June 30,
	2011			2010			2011			2010
Risk Solutions	$	355		$	305		$	661		$	562
HR Solutions	115			45			238			94
Unallocated expenses	(36		)	(82		)	(69		)	(115		)
Operating income from continuing operations before income taxes	434			268			830			541
Interest income	4			4			10			5
Interest expense	(63		)	(33		)	(126		)	(67		)
Other income (expense)	(23		)	5			(6		)	12
Income from continuing operations before income taxes	$	352		$	244		$	708		$	491

Unallocated expenses include administrative or other costs not attributable to the operating segments, such as corporate governance costs and the costs associated with corporate investments.  Interest income represents income earned primarily on operating cash balances and certain income producing securities.  Interest expense represents the cost of worldwide debt obligations.

Other income (expense) consists of equity earnings, realized gains or losses on the sale of investments, gains or losses on the disposal of businesses, and also includes the loss on extinguishment of debt.