A Scandal Turns Into a Blessing

Aon, under the deft hand of new CEO Greg Case, has emerged as the nation's largest insurance broker 

by Joseph Weber

Things looked bleak for Aon (AOC) three years ago, after regulators from New York, Connecticut, and Illinois teamed up to accuse it and other insurance brokers of cheating customers. Aon's stock plunged by more than a third, and its finances looked parlous. Even worse, with founding Chief Executive Patrick G. Ryan headed for semiretirement, the executive suite was in disarray. But in a classic case of unintended consequences, the regulatory attack led by then-New York Attorney General Eliot Spitzer may have been the best thing to happen to Aon. It drove the outfit to recruit an untainted outsider—longtime McKinsey consultant Gregory C. Case—to take over as CEO. It also weakened Aon's biggest rival, Marsh & McLennan (MMC), whose clients and executives rushed for the exits, paving the way for Aon to poach business. And it compelled major brokers to tell clients exactly what they were paying for—giving Aon marketers a selling edge against rivals that don't break out revenue sources. "Spitzer was clearly a good thing for Aon," says UBS (UBS) analyst Brian R. Meredith.

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