Executives at Aon and Arthur J. Gallagher say that the U.S. labor market still looks strong, but that big increases in U.S. health coverage costs are definitely getting employers’ attention.
At Aon, the health solutions unit increased revenue 6%.
“This is a 20%-plus segment of the U.S. economy, and costs are growing at 9% to 10% a year,” Aon Chief Executive Officer Greg Case told securities analysts Friday during a conference call. “It’s a tremendous burden on companies.”
Aon analysts recently published a reporting showing how smart use of the new GLP-1 agonist weight-loss drugs could end up improving an employer’s overall population health and bending the cost curve, and that’s the kind of project that gets the Aon benefits team excited, Case said.
Doug Howell, the chief financial officer at Gallagher, said during a call his firm held with analysts Thursday, that demand for help with efforts to attract and retain is holding steady.
But “human resources leaders are waking up to medical inflation,” Howell said. “I think there’s always a war for talent. But, right now, I think human resources folks are really working hard on medical inflation. That will put some opportunities into our books here in the fourth quarter, and I think it will keep us really busy next year.”
What it means: An employer’s health care cost problem might be a benefits advisor’s advisory opportunity.
The calls: The companies streamed the calls live on the web.
Aon has posted a recording of its call on its website, and Gallagher has posted a recording of its call on its site.
The earnings: Aon and Gallagher held their conference calls to go over earnings for the third quarter, which ended Sept. 30.
Aon is reporting $470 million in net income for the latest quarter on $4 billion in revenue, up from $355 million in net income on $3.7 billion in revenue for the third quarter of 2024.
Gallagher is reporting $410 million net income for the quarter on $2.9 billion in revenue, up from $382 million in net income on $2.4 billion in revenue for the year-earlier quarter.