Greg Case
Chief Executive Officer at AON
Thank you and good morning, everyone. Welcome to our fourth quarter conference call. I'm joined by Christa Davies, our CFO, and Eric Andersen, our President. As in previous quarters, for your reference, we posted a detailed financial presentation on our website.
We begin today by thanking Aon colleagues around the world. Our strong performance in the fourth quarter and through 2022 and our strong momentum as we start 2023 continues to reflect tremendous dedication by our colleagues and the power of our Aon United strategy to support clients. Both in their demands of today, and as they plan to address their needs of tomorrow.
2022 was a year in which we continued to see clients focused on both the challenges and opportunities from increasing global risk, and the opportunities to engage clients continues to grow.
In Commercial Risk, our latest Weather, Climate and Catastrophe Insight report sized global economic losses from natural catastrophes at $313 billion, 4% over the 21st century average. It was only 42% covered by insurance, a $190 billion protection gap.
In Wealth Solutions, equity, and fixed-income market volatility in the back half of the year, created demand for our Wealth Solutions colleagues to help organizations reassess retirement readiness and financial well-being. And in Health Solutions, which includes our human capital business, the continuation of broad trends around the changing workforce, encompassing health, culture, wellness, engagement, inclusion, are growing of focus and importance across the C-suite and the states for never been higher.
In this environment of increasing risk and complexity across so many fronts, our colleagues are increasingly relying on Aon United. It would enable them to bring the full force of our firm, including core offerings and innovative solutions at scale to address evolving client demand.
Turning to financial performance. In the fourth quarter, we delivered organic revenue growth of 5%, highlighted by 9% growth in Reinsurance, 7% growth in Health Solutions and 6% growth in Wealth Solutions.
In Reinsurance, our teams were able to deliver strategic advice and data-driven analytics very early-on in the renewal process to help clients navigate difficult market dynamics. This market leadership benefited our clients greatly in a challenging 1/1 renewal and reflects our strong performance.
In Health Solutions, we saw strength in our core H&P and in Human Capital, both of which benefited from enhancements to our offerings, tools and platforms and increased client focus on employee health, rewards, engagement, and well-being.
In Wealth Solutions, our team delivered the strongest quarterly organic revenue growth in over five years, as our teams worked tirelessly to respond to client demand resulting from market and interest-rate volatility, particularly in the U.K. and continued to help clients execute on pension risk transfer, strategic venture management and respond to regulatory changes.
And finally, Commercial Risk grew 4% in the quarter and 6% for the year. We delivered double-digit organic revenue growth in Canada and Latin America and strong growth in Europe, the U.K. and Asia-Pacific.
In the U.S. otherwise, [Phonetic] strong results continue to reflect the impact of the external M&A and IPO environment on M&A services. This impact reduced quarterly organic growth by 5% and annual growth by 2.5%. And while the short-term pressure may continue into Q1, over the long-term, we are very well-positioned in this highly-attractive business, that has significant opportunity to contribute to long-term top- and bottom-line growth.
For the full-year, our organic revenue growth of 6% is a direct result of our Aon United strategy, and is a key driver of strong top- and bottom-line results for the full year. Noting, adjusted operating margins expanded 70 basis points to 30.8%. Adjusted earnings per share grew 12% to $13.39, overcoming 3% or $0.44 FX headwind. Free cash flow exceeded $3 billion with free cash flow margins of 24.2%, both, our highest ever. And we completed $3.2 billion of share buyback, demonstrating our confidence in the long-term value of the firm.
Our team's performance positions us exceptionally well to deliver in 2023 and over the long term. Looking back, since 2010, we've reported 4% average organic revenue growth, over 1,100 basis points of margin expansion or about 90 basis points per year, while adjusted EPS and free cash flow increased to the compound annual growth rates of 12% and 13%, respectively.
More important, we view the go-forward opportunity and momentum higher now than any time in our history. Looking ahead, we continue to expect mid-single digit or greater organic revenue growth for the firm, margin improvement and double-digit free cash flow growth for the full-year 2023 and over the long-term.
Reflecting on the year, we would offer a few observations on how Aon United continues to deliver for clients. The steps we've taken over the past decade, including our single brand and single P&L put us in an exceptionally strong position to deliver for clients and have significant impact on some of the greatest opportunities and challenges they face.
These ideas are not new, they're a continuation of over a decade of progress on the areas highlighted in our Aon United blueprint, clients, colleagues, innovation at scale and Aon Business Services that are increasingly interconnected and mutually reinforcing.
On delivering innovation at scale. The platform we built not only enable innovation of new concepts as we've demonstrated in areas like intellectual property solutions and climate, but increasingly enable us to bring together our analytics and expertise for new solutions development, both come with in-solution lines and conducted across our business.
For example, our Health Solutions team has developed an Aon Health Analytics platform, supported by hundreds of data scientists and credentials health actuaries, as well as experts from Aon Capital and Aon Business Services. It's designed to help clients assess and improve their employee's health, which in turn helps deliver well-being, productivity and lower-cost. Within this offering driven by proprietary analytics, we can assess data around employee health information, insurance and claims, workplace safety, absence, engagement data and external data on health trends and solutions, which together form a robust view of employee physical well-being.
With this insight, our teams can recommend individualized solutions, including better insurance offerings and targeted program. As an example, one manufacturing client wanted to improve employees' physical well-being and reduce cost. Together, we designed a comprehensive long-term well-being strategy and a customized health program that included 12 vendors. The targeted specific health and well-being programs for employees based on individual factors correlated success.
The results are impressive. In our target group as compared to non-participants, we saw meaningful improvement in selected health metrics, at 24% lower cost per person. Further, the platform allows for rapid scale and distributions of solution, that help our clients drive workforce health, wealth, and productivity. Equally important, our colleagues love having this kind of impact which is an important driver of our very-high Aon colleague engagement. And we see examples like this across the firm, every day as we help our clients manage risk and support their people, and this demonstrates the opportunity to continue delivering innovative solutions at scale to address our client's biggest challenges across the backdrop of rapid change and ongoing volatility.
To summarize, we begin 2023 in a position of strength. Our firm is more connected than ever before. They want us to deliver better solutions for clients and to better support our colleagues. Aon United will continue to deliver results now and over the long-term for our clients, colleagues and shareholders and is reflected in our progress to achieve key financial objectives.
Now, I'd like to turn the call over to Christa for her thoughts on our financial progress in Q4 and 2022 and our long-term outlook. Christa?
