Aon acquires USI for $17 billion to target middle market insurance sector

Aon announced on Monday that it will acquire rival USI Insurance Services from private equity firm KKR in a deal valued at $17 billion. The acquisition will be funded through new debt and is expected to close in the fourth quarter, pending regulatory approvals. This strategic move aims to bolster Aon's position in the U.S. insurance market.

CEO Greg Case stated in a CNBC appearance that the merger will create what he described as the "premier U.S. middle-market platform." He emphasized the importance of this segment, noting that it serves around 200,000 middle-market companies and their 48 million employees. The acquisition builds on Aon's previous purchase of NFP in 2024, which also focused on the middle market.

USI is the tenth largest insurance broker in the United States, generating more than $3 billion in annual revenue and employing over 10,500 individuals. Following the merger, USI's CEO Mike Sicard will take on a new role as Aon's president and global CEO of middle market. In a statement, Sicard expressed enthusiasm for the merger, highlighting shared values and the potential for accelerated growth within the Aon United platform.

Despite the potential benefits, Aon’s shares fell 7% following the announcement. Piper Sandler insurance analyst Paul Newsome noted that the middle market shows promising growth potential, typically outpacing larger commercial accounts by a percentage or two. While the immediate market reaction was negative, Case remained optimistic, stating that this opportunity could be the most valuable he has seen in his 20-year tenure as CEO.