Segment Information

9 Months Ended

Sep. 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 January1, 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):

	ThreemonthsendedSeptember30,						NinemonthsendedSeptember30,
	2012			2011			2012			2011
Risk Solutions	$	1,778		$	1,772		$	5,582		$	5,535
HR Solutions	971			957			2,847			2,778
Intersegment elimination	(12		)	(6		)	(30		)	(20		)
Total revenue	$	2,737		$	2,723		$	8,399		$	8,293

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

	ThreemonthsendedSeptember30,						NinemonthsendedSeptember30,
	2012			2011			2012			2011
Retail brokerage	$	1,390		$	1,392		$	4,395		$	4,378
Reinsurance brokerage	377			365			1,156			1,119
Total Risk Solutions Segment	1,767			1,757			5,551			5,497
Consulting services	394			403			1,140			1,141
Outsourcing	585			558			1,723			1,655
Intrasegment	(8		)	(4		)	(16		)	(18		)
Total HR Solutions Segment	971			957			2,847			2,778
Intersegment	(12		)	(6		)	(30		)	(20		)
Total commissions, fees and other revenue	$	2,726		$	2,708		$	8,368		$	8,255

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

	ThreemonthsendedSeptember30,				NinemonthsendedSeptember30,
	2012		2011		2012		2011
Risk Solutions	$	11	$	15	$	31	$	38
HR Solutions	-		-		-		-
Total fiduciary investment income	$	11	$	15	$	31	$	38

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

	ThreemonthsendedSeptember30,						NinemonthsendedSeptember30,
	2012			2011			2012			2011
Risk Solutions	$	309		$	311		$	1,059		$	1,036
HR Solutions	80			61			211			239
Segment income from continuing operations before income taxes	389			372			1,270			1,275
Unallocated expenses	(50		)	(44		)	(135		)	(109		)
Interest income	1			4			6			14
Interest expense	(57		)	(60		)	(173		)	(186		)
Other (expense) income	(9		)	20			3			6
Income from continuing operations before income taxes	$	274		$	292		$	971		$	1,000

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 (expense) income 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.