Good morning. Managing risk and investing for growth is top of mind for finance chiefs. But Edmund Reese, the new CFO of Aon PLC, a $80 billion market cap global insurance broker, focuses on strategic risk management and human capital solutions for clients, and at his own firm as well.
“Companies are just facing more challenges that drive more volatility in their P&Ls that are more complex,” he said during our conversation.
Reese, who has more than 25 years of experience at large-cap corporations, began his tenure as EVP and CFO at Aon on July 29. He joined the firm from fintech Broadridge Financial Solutions, where he was the CFO. Before that, Reese was at American Express, where he last served as SVP and CFO of the global consumer services group and also held several financial leadership positions, including head of investor relations and CFO of global business services.
While working at Broadridge, Reese joined the board of The Hartford, an insurance company, and it was there he learned more about Aon, he said.
Mitigating risk
Reese pointed to four challenges or “megatrends” companies are currently facing and offered examples:
—Trade: geopolitical instability, the potential for a tariff war, and supply chain challenges
—Technology: cybersecurity, implementing AI
—Talent: retaining and attracting high performers, benefits, pay transparency
—Weather: natural disasters
“Not only are these risks more complex, but they’re interconnected,” he said. “As a CFO, I think you want to think about your total cost of risk, not just a component of it, to make decisions,” he said.
When it comes to weather-related events like wildfires and natural disasters, for example, as an insurance broker Aon’s job is to provide data to be able to understand the risk and match capital with that risk, Reese said. According to Aon’s latest data on the California wildfires, insured loss from residential and commercial property and auto may exceed $15 billion to $20 billion for the Palisades fire and exceed $7 billion to $10 billion for the Eaton fire.
“We are very focused on our colleagues and on the corporations that we support,” Reese said.
As for his new mission at Aon, I asked Reese what’s currently high on his CFO agenda. Over the past 10 years, Aon has exhibited high performance with about 126 basis points of margin expansion a year, and earnings growth and free cash flow both in the double digits, he said.
“But we are now at what I would call the next horizon for growth,” he said. Reese is partnering with Aon CEO Greg Case to drive a three-year “3×3 plan” to support the firm’s growth. As CFO, accelerating topline growth, managing the portfolio and investment capital discipline are the areas that require attention, he said.
Does he have any other advice for CFOs in navigating times of high risk and volatility? There’s an opportunity for innovation, Reese said. And innovation can come through solutions supported by data, he said.
SherylEstrada
sheryl.estrada@fortune.com
Leaderboard
Mark Weinswig is stepping down from his role of CFO at Ouster, Inc. (Nasdaq: OUST), a provider of software solutions, effective Jan. 31, to pursue a new career opportunity. Chen Geng, Ouster’s VP of strategic finance and treasurer, will serve as interim CFO. Geng joined Ouster in 2021.
Big Deal
Eighty-three percent of respondents believe AI will both elevate the importance of uniquely human skills and enhance human creativity, leading to new forms of economic value. In comparison, earlier Workday-commissioned research on AI found only 52% of workers welcomed AI in their workplace at this time last year.
Meanwhile, 93% of active AI users agree that AI allows them to focus more on higher-level responsibilities such as strategy and problem-solving. The most active users of AI are most optimistic about its benefits, with a sentiment score of 4.23 out of 5, while those planning to adopt AI within the next 12 months show the lowest optimism with an average score of 3.89 out of 5.
The findings are based on a survey of 2,500 full-time workers from a variety of industries across 22 countries spanning North America; Asia-Pacific; and Europe, the Middle East, and Africa.
"By embracing AI for good, we can elevate what makes us uniquely human—our creativity, our empathy, our ability to connect—and build a workplace where these skills drive success," Jim Stratton, chief technology officer at Workday, said in a statement. "Our research shows that workers are ready to embrace this possibility as reality."
Going deeper
"Inside the first Crypto Ball: Snoop, the Treasury Secretary—and a $70 billion memecoin surprise from Trump," a new report by Fortune's Leo Schwartz takes a look into the first-of-its-kind inauguration party in Washington, D.C. "The industry waged a successful political campaign to elect crypto-friendly politicians, including President-elect Trump," Schwartz writes. "Now, the industry is enjoying a once-unimaginable level of power and respect in Washington, D.C."
During the event on Jan. 17, venture capitalist and incoming White House "AI and crypto czar" David Sacks told the assembled crowd: “The beginning of innovation in America for crypto has just begun.”
Overheard
"Donald Trump’s second term as president is highly anticipated by much of the finance and M&A community, with many hopeful that his disposition to business will spur a rise in dealmaking. But the one thing we know from his last term is that we need to expect the unexpected."
—Lucinda Guthrie is head of Mergermarket, a service of ION Analytics, writes in a new Fortune opinion piece.
