Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information

Segment Information

17.  Segment Information

The Company has two reportable 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.

Reportable 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 (“CODM”) uses financial information for the purposes of allocating resources and evaluating performance.  The CODM assesses performance based on 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.  The Company does not present net assets by segment as this information is not reviewed by the CODM.

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.

Effective January 1, 2012, the Health and Benefits Consulting business was transferred from the HR Solutions segment to the Risk Solutions segment.  All prior year amounts have been adjusted to reflect that transfer.

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

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
Risk Solutions	$	1,899		$	1,912		$	3,804		$	3,763
HR Solutions	931			906			1,876			1,821
Intersegment elimination	(9		)	(7		)	(18		)	(14		)
Total revenue	$	2,821		$	2,811		$	5,662		$	5,570

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

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
Retail brokerage	$	1,511		$	1,533		$	3,005		$	2,986
Reinsurance brokerage	380			367			779			754
Total Risk Solutions Segment	1,891			1,900			3,784			3,740
Consulting services	366			367			746			738
Outsourcing	570			545			1,138			1,097
Intrasegment	(5		)	(6		)	(8		)	(14		)
Total HR Solutions Segment	931			906			1,876			1,821
Intersegment	(9		)	(7		)	(18		)	(14		)
Unallocated	—			—			—			—
Total commissions, fees and other revenue	$	2,813		$	2,799		$	5,642		$	5,547

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

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Risk Solutions	$	8	$	12	$	20	$	23
HR Solutions	—		—		—		—
Total fiduciary investment income	$	8	$	12	$	20	$	23

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,
	2012			2011			2012			2011
Risk Solutions	$	384		$	378		$	750		$	725
HR Solutions	58			95			131			178
Segment income from continuing operations before income taxes	442			473			881			903
Unallocated revenue
Unallocated expenses	(48		)	(33		)	(85		)	(65		)
Interest income	2			4			5			10
Interest expense	(57		)	(63		)	(116		)	(126		)
Other income (expense)	12			(29		)	12			(14		)
Income from continuing operations before income taxes	$	351		$	352		$	697		$	708

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, gains or losses on hedging activities, and gains or losses on foreign currency transactions.