Good morning and thank you for holding. Welcome to Aon plc's Second Quarter 2022 Conference Call. At this time, all parties will be in a listen-only mode until the question-and-answer portion of today's call. I would also like to remind all parties that this call is being recorded. If anyone has an objection, you may disconnect your line at this time. It is important to note that some of the comments in today's call may constitute certain statements that are forward-looking in nature as defined by the Private Securities Litigation Reform Act of 1995.
Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. Information concerning risk factors that could cause such differences are described in the press release covering our second quarter 2022 results, as well as having been posted on our website.
Now, it is my pleasure to turn the call over to Greg Case, CEO of Aon plc. Thank you, sir. You may begin.
Thank you, and good morning, everyone. Welcome to our Second Quarter Conference C all. I'm joined by Christa Davies, our CFO, and Eric Andersen, our President. As in previous quarters, we posted a detailed financial presentation on our website. We begin by expressing our deepest appreciation for our colleagues. Their extraordinary dedication in delivering results for clients, bringing the best of Aon from across geographies and solution lines is inspiring, and their passion and commitment are reflected in the highest ever colleague engagement recorded in our latest poll survey.
In the second quarter, our colleagues delivered excellent results, demonstrating continued momentum and progress against our key financial metrics. Organic revenue growth is 8% in Q2 and year-to-date, on top of 11% in the prior year quarter, consistent with our ongoing financial guidance of mid-single digit or greater organic revenue growth.
This top-line strength translated into an adjusted operating margin of 26.2% in the quarter, up 40 basis points from last year, and adjusted EPS growth of 15%, demonstrating the strength of our Aon United strategy and Aon Business Services platform. Turning to revenue, Commercial Risk delivered 7% organic revenue growth, driven by ongoing strong retention and renewals, highlighting the strength of our core business and strength from areas of investment like CoverWallet within Digital Client Solutions.
In addition, external trends like inflation continue to be an opportunity for us to help ensure clients are covered for increased exposure. Reinsurance delivered 9% organic revenue growth in a dynamic renewal market. Our team brought the full capability of our firm's data, analytics, and expertise, resulting in strong retention and net new business generation.
Health Solutions delivered 11% organic revenue growth, with strong growth in core health and benefits driven by client demand, increasing healthcare costs, and continued growth in advisory work related to regulatory changes, well-being, and resilience. Within Human Capital Solutions, demand remains very high to support clients with advice and solutions, especially as they manage ongoing return-to-work clients, a highly competitive talent market, wage inflation, and employee well-being.
Finally, Wealth Solutions delivered 3% organic growth as our team continued to deliver results in core retirement and investment solutions with ongoing additional work to help clients address regulatory changes and impact from recent market conditions like the opportunity for pension risk transfer. Across wealth and health, external factors are increasing client costs, making it more important than ever for them to efficiently provide optimal benefits for their employees.
Overall, our strong performance in Q2 and year-to-date reflects the strength of our core business across regions and solution lines. While there is uncertainty around external economic factors, some of the trends that challenge the broader economy are positive for our business and create opportunities to help clients.
For the full year, we remain confident in our ability to deliver results in each of our three financial commitments, mid-single digit or greater organic revenue growth, margin improvement, and double-digit free cash flow growth. On the topic of innovation, among many categories of investment, we'd like to highlight two areas where clients are demanding new or better solutions, and we are making meaningful progress in serving them, intellectual property and climate.
On IP, our Intellectual Property Solutions team is delivering a first-of-its-kind solution that enables entrepreneurs to fund IP-rich startup growth businesses without giving up ownership, using debt that is backed by insured IP assets. Q2 marked an exciting milestone as the team crossed the $1 billion threshold in IP-backed insurance-enhanced debt financing.
Let me highlight one recent opportunity where our team supported a high-growth technology hardware company. Given the company's business model and growth stage, it had multiple funding avenues available. The company chose this solution to meet its growth capital needs, minimizing equity dilution. The $100 million transaction allowed the company to secure financing for growth, while insurance markets were able to diversify risk pools with an innovative application to an intangible asset class.
Going forward, we're making progress to increase the number of lenders and insurance carriers participating in that solution as we build client awareness, accelerate distribution, and continue to scale this business. One additional note, as current and evolving economic conditions may compress equity-driven valuations, IP-backed debt provides a potential new option for startup growth clients to protect equity ownership and forego potential down round funding.
On climate, our term team is working on many initiatives. Today, we will highlight two, Aon's work on Aon and our work supporting renewable energy investment. We'll start with our progress on Aon's journey to zero carbon. In March 2021, we made an industry-leading commitment to be net zero by 2030 in alignment with science-based targets for scope 1, 2, and 3 emissions.
We're pleased to report that we've made great progress so far and reduced our 2021 carbon emissions 12% from our 2019 baseline as we decarbonized our supply chain, reduced our real estate footprint with smaller, greener space and reduced travel in part due to the impacts of COVID-19. Our recent ESG impact report details our commitment and actions on climate as well as other ESG topics which are embedded in our overall strategy.
For our clients, this comes down to helping them understand and quantify their climate risk, be prepared to communicate and report on this risk and do something about it by building resiliency, positioning to lower carbon and investing in transition.
Given our track record of underwriting new risks and developing proprietary evaluation models paired with our climate analytics data and partnerships, we're very well positioned to help clients quantify current and potential future risks which we can then help them mitigate and transfer. For example, in renewable energy alone, onshore and offshore wind investment exceeds $70 billion today and could grow to nearly $400 billion by 2030.
Another rapidly growing addressable market that we serve with meaningful solutions today to ensure the construction and ongoing operation of these facilities. Similarly, in solar, there is $45 billion in investment today in construction, manufacturing and technology development, and we expect this investment to grow to over $100 billion by 2025.
Recently, our team facilitated a placement for one of the world's largest solar farms, requiring Aon United equity to cross Commercial Risk and Reinsurance to obtain coverage despite challenging market conditions. As these renewable energy projects continue to grow in size, scale and complexity, the need for expertise and innovation in existing technologies will only increase. Further innovation in areas like carbon capture and storage, hydrogen and other new technologies will require even more innovation to enable the risk financing necessary to make these projects more economically attractive.
Our ability to reduce risks of new solutions helps bring in new investment and ultimately helps enable continued moves toward decarbonization. In summary, we delivered a strong quarter demonstrating continued operating momentum and progress in our key financial metrics.
Our Aon United strategy and operating model, supported by Aon Business Services, places us in a very strong position to support our clients as they face changing economic conditions. In addition, our colleague engagement is very high as our team delivers on a strategy that enables us to achieve results today, both in the core and in priority growth areas, while also investing in innovative new client solutions like intellectual property and climate.
Finally, our strong performance in Q2 and year-to-date reinforces our commitment to achieving our financial objectives for the year. Now I'd like to turn the call over to Christa for her thoughts on our performance and long-term outlook for continued shareholder value creation. Christa?
Thanks so much, Greg, and good morning, everyone. As Greg highlighted, we delivered continued progress for both the quarter and year-to-date. Through the first half of the year, we translated 8% organic revenue growth into 50 basis points of adjusted margin expansion and double-digit adjusted earnings per share growth. We look forward to building on this momentum through the rest of 2022. As I reflect on our performance through the first half of the year, as Greg noted, organic revenue growth was 8% in both Q2 and year-to-date. We continue to expect mid-single digit or greater organic revenue growth for full year 2022 and over the long term.
I would also note the reported revenue growth of 3% in Q2 and 4% year-to-date includes an unfavorable impact from changes in effects, primarily driven by a stronger U.S. dollar versus most currencies and fiduciary investment income of $7 million in Q2 and $9 million year-to-date. Further, I'd note we are uniquely well positioned with respect to current economic conditions. Inflation increases insured values, which has a positive impact on our business, and we continue to see modest tailwinds from insurance pricing, which remains strong.
Interest rate increases benefit us through fiduciary investment income and reduced pension liabilities. Broadly, as Greg mentioned, volatility makes the solutions and advice we offer around risk and people even more valuable to our clients. For instance, in areas like workforce resilience and pension de-risking. Moving to operating performance.
We delivered strong operational improvement through the first half of the year with adjusted operating margins of 32.7%, an increase of 50 basis points driven by organic revenue growth and efficiencies from our Aon Business Services platform, overcoming expense growth, which includes investment in colleagues, technology to drive long-term growth and some ongoing reduction of T&E.
Looking forward, we expect to deliver margin expansion in 2022 and over the long term as we continue our track record of cost discipline and managing investments in long-term growth on an ROIC basis. We've previously communicated, we think about margins over the course of a full year, and we expect continued investment in colleagues and ongoing reduction of T&E throughout the year. Our Aon Business Services platform continues to be a key contributor to margin expansion and represents a competitive advantage, especially in a high inflationary market.
While our Aon Business Services platform continues to enhance our ability to scale innovation and unlock growth opportunities, it also supports continuous improvement as we automate day-to-day processes around the firm. For instance, our Aon Business Services and Commercial Risk teams saw an automation opportunity for certificates of insurance. We're now using automation to locate, extract and validate the data rather than manually pulling it from emails and attachments.
Over the year, this will save our North American team 83,000 work hours, representing a 30% reduction in total time spent processing service requests for certificates of insurance before further enhancements. We're delivering high-quality client service and enabling our colleagues to spend more time on higher value-added activities and improving colleague engagement.
Our Aon Business Services platform enables us to find and capture efficiency opportunities like this around the firm and remains a key driver of ongoing efficiency improvements and margin expansion. We translated strong adjusted operating income growth into double-digit adjusted EPS growth of 15% in Q2 and 14% year-to-date.
As noted in our earnings materials, FX translation was an unfavorable impact of approximately $0.10 per share in Q2 and $0.29 per share year-to-date. If currency were to remain stable at today's rates, we would expect an unfavorable impact of approximately $0.11 per share in the second half or approximately $0.04 in Q3 and $0.07 in Q4 of 2022. Turning to free cash flow and capital allocation.
Free cash flow decreased 17% year-to-date to $1,063 million, primarily driven by higher receivables as well as higher incentive compensation payments given our strong 2021 financial results as we described in Q1, offset by strong operating income growth. We've communicated before, free cash flow can be lumpy quarter to quarter, and free cash flow generation in the second half of the year is seasonally stronger than the first half.
We continue to expect to deliver double-digit free cash flow growth for the full year 2022. Looking forward, we continue to expect to drive free cash flow growth over the long term, driven by operating income growth and working capital improvements. Given our strong outlook for free cash flow growth in 2022 and beyond, we expect share repurchases to continue to remain our highest return on capital opportunity for capital allocation.
We believe we are significantly undervalued in the market today, highlighted by approximately $500 million of share repurchases in the quarter and $1.3 billion year-to-date. We can also expect to continue to invest organically and inorganically in content and capabilities to address unmet client needs. Our M&A pipeline continues to be focused on our priority areas that will bring scalable solutions to our clients' growing and evolving challenges.
We will continue to actively manage the portfolio and assess all capital allocation decisions on an ROIC basis. Now turning to our balance sheet and debt capacity. We remain confident in the strength of our balance sheet and manage liquidity risk through a well-laddered debt maturity profile. As we've said before, we'll continue to add debt as EBITDA grows while maintaining our current investment-grade credit ratings.
Thinking about interest rates, I'd note that our term debt is all fixed rate with an average interest rate of approximately 3.8% and a weighted average maturity of approximately 12 years. I'd also note that our pension liability improves as interest rates increase, and historically, we've taken steps to derisk this liability and reduce volatility.
In summary, our strong financial results in the quarter and year-to-date demonstrate continued momentum and progress against our key financial metrics. While we're seeing signs of economic uncertainty, we remain confident in the strength of our firm and our financial guidance for 2022. Overall, our business is resilient, and our Aon United strategy gives us confidence in our ability to deliver results in any economic scenario. With that, I'll turn the call back over to the operator, and we'd be delighted to take your questions.
At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes from the line of Elyse Greenspan with Wells Fargo. You may proceed with your question.
Hi, thanks. Good morning. You know, last quarter on your conference call, you guys had alluded to, you know, if we go into a recession, there could be an impact on the discretionary pieces of your business, which I believe is around 20% of your revenue. I was just hoping for you guys to expand just upon, you know, if we do go into a recession later this year or 2023, how that could impact revenue in Aon. I'm assuming, like, right now, given the growth you saw in the quarter, you're not, you know, seeing any signs of a slowdown just yet.
Elyse, maybe I'll start with that and go to Eric and Christa as well. We tried to convey last quarter, we'll just reinforce this quarter. As we look at the world as it stands and is evolving, we're in a very unique place, incredibly well-positioned, and it really shows through in the first quarter, shown through in the second quarter, and we expect through the year and into 2023. You look at growing risks across the board.
Clients are looking at their current businesses of course, but growing risks around supply chain and climate, cyber resilience, people, aspects. All these things are areas where we have a great opportunity to support clients, and that's coming through. It really comes through across the board on our core book of business and also our investment part of our business.
Then the underlying pieces that are talked about inflation and interest rates, as Christa described, have a positive impact on our business. Finally, Aon Business Services enables us to react and implement solutions globally while continuing to operate and invest efficiently. You're seeing us do what we do. We improve and drive mid-single-digit or greater organic growth, margin improvement, and free cash flow growth at a double-digit level. That's what we want to convey and make sure you understand sort of where we look as we think about the global economy. Eric, anything else you'd add from a client standpoint?
Sure, Greg. I would say, look, Elyse, it's a great question, and areas of growing risks like climate change, geopolitical uncertainty, all have a major impact. Changing regulation on areas like wealth. The focus on workforce resilience, well-being, challenging talent market, you go on and on, healthcare costs, you know, are all issues that our clients are facing irrespective of broader economic conditions.
I would also say the Aon United model that we've built is actually built for moments like this, where our teams are integrating together, trying to come up with innovative solutions for clients in a way that pulls all the different capabilities of the firm and can deliver it in one unified fashion. We think, you know, the world isn't getting any less risky, and so the opportunity is there for us to continue to grow our business.
Elyse, I'd just add that many of the underlying drivers of GDP, as Greg highlighted, positively impact our business. We've talked about market impact, which is really made up of two components, insurance pricing, which provides modest tailwinds to growth and remains strong, and inflation, which increases insured values. Exposures, wages, medical costs, some asset values, all things that positively correlate with our revenue and offset potential pressure of slowing GDP.
We've also mentioned that interest rates have a positive impact on our business through fiduciary investment income. Each 100 basis point increase in interest rates is $60 million top line and bottom line for us. It also decreases our pension unfunded liability, which decreases cash contributions to pensions. Finally, our investment in Aon Business Services continues to drive efficiency and support growth while helping mitigate inflationary impacts on our own cost base.
We're very confident of these trends and the fact that volatility actually creates challenges for other industries, but really creates opportunity for us with clients, as Greg and Eric have highlighted.
That's helpful. My second question, Christa, your prepared remarks, you talked about the slowdown in free cash flow to start the year, and mentioned net receivables as part of the reason. As you think about the back half of the year, do you think cash flow is going to be strong enough that you'll hit the double-digit target this year, relative to, you know, the guide, this guidance is still double-digit growth for 2022.
We are certainly confident about achieving double-digit growth for 2022, Elyse. We absolutely, as you described, second half cash flow is always stronger than first half cash flow. First half was really impacted by two things. Higher receivables, which is really due to stronger organic revenue growth. I would note, by the way, DSO is actually flat, so we're keeping up, but we're not accelerating that, and we have a plan to accelerate and collect receivables much faster.
It was also impacted by incentive compensation payments from a very strong 2021 performance, which is exactly what we should be doing in rewarding our colleagues. We're very confident about double-digit free cash flow growth for the full year, 2022, and beyond, 2023 and beyond. We've got a very strong free cash flow outlook, and we're really excited about deploying that organically in M&A and in share repurchase, which is our highest return on capital opportunity across Aon.
Great. One last quick modeling thing. The other income line, you did see gains, a couple of quarters in a row on some business sales. Should we model that going forward? I know in the past you've told us just to assume kind of, you know, zero for that line on an ongoing basis.
We would assume zero for that line on an ongoing basis, Elyse. What you saw in this quarter was us continuing to manage the portfolio as we do. We continue to invest in higher revenue growth, higher margin, higher return on capital opportunities, and we continue to divest, and this is a small divestment, in lower revenue growth, lower margin, lower return on capital opportunities. I would continue to model it at zero going forward.
Okay. Thank you.
Our next question comes from the line of Jimmy Bhullar with JP Morgan. You may proceed with your question.
Hi, good morning. I had a couple of questions. First, on margins. You mentioned you expect to improve margins in 2022 and thereafter. I think seasonally, second half should be weaker than the first half, but do you expect to improve margins in the second half as well with a potential increase in T&E versus last year and maybe some inflationary pressures if you're seeing them?
Thank you so much for the question. We absolutely agree that we are focused and committed to expanding margins for the full year 2022. We don't give margin guidance by quarter. We've certainly seen very strong 50 basis points of margin expansion in the first half of the year, and we expect to see full year margin expansion driven by organic revenue growth, our portfolio mix shift to higher revenue growth, higher margin areas, and our continued productivity benefits through Aon Business Services, which I mentioned, specifically in our prepared remarks. Again, completely committed to full year 2022 margin expansion.
Okay. On fiduciary investment income, I think theoretically, obviously it's understandable how it should pick up. But rates have been high for a while now, and we haven't seen too much of a pickup. I'm just wondering if you could comment on the expected lag, and what the outlook is for fiduciary investment income if interest rates stay around current levels maybe a year or two years from now.
As I mentioned, in my prepared remarks, every 100 basis point increase in interest rates, and this is the short end of the curve, is $60 million top line and bottom line for us. I'd note that our assets in terms of investments on behalf of clients are about 55% in the U.S. and 45% outside the U.S. Our fiduciary investment income for Q2 was $9 million. It is increasing as interest rates rise.
Okay. Thank you.
Our next question comes from the line of Paul Newsome with Piper Sandler. You may proceed with your question.
Good morning. I wanted to follow up on Elyse's question about the economic sensitivity. Maybe you could just kind of remind us and contrast with sort of the Aon of today versus the Aon of past recessions, if we look back, and why is the business mix materially different, and how should we think about sort of the relative sensitivity today versus not. It's just sort of any sort of magnitude that would be very helpful. Kind of as a follow-up, as we think further into M&A, does the M&A strategy change in any way because of the recession or desire to change economic sensitivity?
Excellent, Paul. Well, let's take both of those two big categories, both important. On the first piece, when we talk about mix, Eric's point around how we approach our clients around Aon United is fundamentally different and evolving and getting stronger and stronger. We're bringing the full capability of our firm to clients every day, and that really does enhance our ability to grow in the core, but also bring new solutions and ideas to them, and also solutions and ideas which connect across areas. I mean, we're connecting things in D&O with our people business in ways we haven't done before that fundamentally changes the risk cost for clients sort of in the D&O world with that piece. That really cuts across solution lines.
What we're trying to convey and why we're confident in mid-single-digit or greater growth across all the environments Christa described is this capability fundamentally different than it's ever existed before. We've been working it for quite some time, and it's really it really is reinforcing client in how we were able to serve clients. Exceptionally positive, which is why, as I said before, we're confident in mid-single-digit for the year and over time. It really does show up at a client level, and there are aspects that are discretionary, but those change over time and evolve over time. Overall, the client service leadership capability just continues to strengthen. Additional thoughts and views.
Thanks so much, Greg. Paul, what I would add is if you go back to 2008-2010, that was really the worst economic environment you could design for a company like Aon. It was a global economic recession without inflation and without interest rates, which is pretty unusual. During 2008-2010, Aon grew organically over those two years. Our reported revenue grew 6% CAGR over those two years. We expanded margins by 250 basis points, and we grew free cash flow very strongly. We would say in this environment, there are three things that make us stronger than that performance. The first is inflation, which has a positive impact on our revenue, as I described, increasing asset values, employment levels, revenue, etc.
The second is interest rates, which has a positive impact on fiduciary investment income. As I mentioned, $60 million top line and bottom line for a 100 basis point increase in interest rates. The third, as Greg highlighted, is our investments, and Eric highlighted, in Aon United, which allows us to bring together capability to serve clients who in times of volatility need us more, whether that's workforce resilience, pension de-risking, supply chain, climate, a number of different areas. We feel very good about our ability to navigate through, which is why we're reiterating the guidance we have for full year 2022 and beyond. You have single-digit organic revenue growth, margin expansion for the full year, and double-digit free cash flow growth.
Maybe if we could take a minute and then Paul, come back to your other question, also legally important around M&A, what we're up to and how we're thinking about it. We are seeing an evolving market. It's terrific. You know, maybe it's helpful to start, Christa, with you on just overall capital allocation, how we're thinking about it, 'cause there's really opportunity around the M&A front, but elsewhere. Then Eric, some examples that we're seeing and some things we've done recently. Christa, you-
Absolutely. Look, I would say firstly, Greg, our M&A pipeline is really strong, and we are continuing to invest organically and inorganically in areas of great growth, and great margin expansion. Data analytics with Tyche, digital with CoverWallet, a number of other areas across our business where we're seeing enormous client needs, supply chain, workforce resilience, climate, et cetera.
Then I would say we continue to operate in a very disciplined way on return on capital. As we generate very strong free cash flows for full year 2022, we expect our highest and best use of cash will remain share repurchase because we remain undervalued today. We remain undervalued at our peak pricing of, you know, $350. We continue to invest in share repurchase because it remains the highest return on capital opportunity across Aon.
For us to invest in M&A or organically in any of these very, very attractive opportunities, it has to beat share repurchase because that's the bar. Eric, you're in the middle of a lot of the great investments in our business and including in M&A. Maybe you can talk a little bit more about it.
Sure, Christa, and maybe I'll just touch on the Tyche platform that we acquired just as a way to tie some of these pieces together. For those that remember, it Tyche was really about enhancing the capability around capital modeling that we do around reserving and pricing predominantly for the life and non-life business on the reinsurance side.
Ultimately, where we see it going over time is how we extend the platform beyond insurers to corporate clients. As many of these large corporates with big balance sheets are looking to optimize their own risk strategies across insurance, captive self-insurance, et cetera, and need better information to be able to do it.
The ability to add that team and that talent to be able to provide that existing impact to our insurance clients from a reinsurance angle, but then use that capability across the broader firm is one of the areas of why we were so interested in Tyche. It's also just worth saying that, you know, once you acquire an asset like that, getting them involved in the Aon United mindset, how we actually integrate them and leverage their capabilities across the broader firm has been what we've been working on over the last couple of months, and I think just builds confidence in our ability to use that kind of capability across the broader firm.
Well, great. Thank you for your help as always. Appreciate it. Congratulations on the quarter.
Thanks, Paul.
Our next question comes from the line of David Motemaden with Evercore ISI. You may proceed with your question.
Hi, good morning. Christa, last quarter you made some commentary around the discretionary parts of your business. I was just wondering if you can talk about what you're seeing in terms of leading indicators of demand on those discretionary businesses, specifically in the second quarter.
Sure. Look, what you're seeing, David, is very strong growth across our business. 8% growth in the quarter, 8% growth year-to-date. We're reiterating guidance of mid-single digit or greater organic revenue growth for the full year, exactly the outlook we started the year with. We're seeing consistently strong areas of demand from clients in the core and in the discretionary areas.
Really, David, because in times of volatility, a lot of the services we're offering clients are in greater demand. Whether that's supply chain volatility, whether that's market volatility, which is creating opportunities for pension de-risking and pension buyouts, buy-ins, whether that's workforce resilience, whether that's supply chain, there are so many areas of increased demand from clients in times of disruption.
Got it. Okay. That's helpful. Greg, last quarter I'd asked a question around just new headcount, and you spoke more about focusing on productivity. I think on this call, Christa, you made some interesting comments on just how Aon Business Services is helping enhance productivity. I'm wondering if you could just help me think about, you know, are there any metrics you look at internally just on producer productivity? Maybe you can just share how much those have increased over the last several years and sort of the outlook going forward on producer productivity.
Well, David, thanks. We love the question around talent. It is, it's the heart of our firm. Everything we do comes back to our colleagues as they support clients. We continue to invest very substantially in attracting and retaining talent. It's been the strategy for forever at Aon and continues to be. As Christa described and Eric described, we are investing in capability to do that more effectively. Yes, last time we talked about productivity. Productivity for us is helping our colleagues do more with clients. They love it. When they can sit across the table and wow a client on new ideas, it's a tremendous outcome. We are developing content and capability that makes it easier and easier for them to do that.
Yes, not just bringing talent in, but making talent better, not just bigger, but better. It really is at an individual level working to do that. It's why, as I described in Q2, we recorded the highest ever engagement we've ever had from our pulse survey. You see that from the standpoint of sort of how colleagues are reacting to that. You know, our voluntary attrition, for example, is you know way back in line with where it was pre-pandemic. All things are coming together very, very positively and continue to reinforce each other from an overall talent perspective. You know, we'll take energy and efforts to sort of make investments wherever we need to support our business and to support our client leadership.
Eric, you're leading this every day, you know, at a talent level. It's so fundamental. What do you see?
Thanks, Greg. It's a great question and one that's really important to us and we spend a lot of time on, and we have been making investments, which are, you know, really exciting. I would say they come in, like, three buckets. The first is we're investing in client leadership, especially people who have industry focus and deep understanding of client-specific challenges. We're also investing organically in some of the areas we've been talking about, like climate, cyber, IP, analytics, all the areas where we think we can add real value to clients and need expertise to be able to provide that value. Then the third, and we talked a little about it with Tyche, but CoverWallet the same, through M&A, we're bringing in expertise not only from a people perspective, but a technology perspective as well.
You know, critical to, I think, Greg, just picking up on your last point, making sure that we embed that talent in the firm so that the broader firm can use it and leverage it with their clients. Using that Aon United model to get that talent across all types of clients around the world is critical. Really focused on making sure we've got the best talent in the industry, and I think we're making great progress.
I mean, Eric, two great examples as you sort of go back in time. We're talking now CoverWallet and Tyche, but if you go back in time, the investments we made in cyber have been phenomenal, both on the acquisition front and M&A front. It's put us in an unbelievable position to serve clients today, you know, in a category. Also go back to 601 W we haven't talked about on these calls for quite some time a few years ago. Now we've evolved with, you know, what was a truly world-class capability into 200 colleagues working on, you know, intellectual property. We put the example out today on sort of after a number of years, sort of what we're seeing, you know, $1 billion now across the threshold on IP debt.
These are all the things that we think are fundamental, David, that come into this, and we track it carefully, as you might expect, and we're seeing results and progression. I do wanna just touch on the Aon Business Services and get Christa to highlight that again too, 'cause that also is an area that helps us scale capability that reinforces talent. Christa, you want to just talk about ABS for a minute?
Yeah. Look, a really important part of our talent strategy is Aon Business Services. As you've heard us say before, it's not just driving efficiency, but it's enabling us to increase growth and scale innovation much faster. The power of Aon Business Services enables us to drive efficiency in our core operations, which helps offset the trends we see around wage inflation, enabling us to continue to invest in talent and people, which drives long-term margin expansion. We're really excited about how Aon Business Services helps us accelerate Aon United.
Okay, great. That's, I really appreciate the comprehensive answer. Thanks so much.
Our next question comes from the line of Meyer Shields with KBW. You may proceed with your question.
Thanks. Setting aside, I guess, the semantic game right now, I don't mean you, I mean politically, we've gone through two quarters of contracting real GDP growth. Can you talk about how that impacted your first half results relative to expectations?
Meyer.
Meyer
Go ahead, Christa.
Yeah. Look, Meyer, I would start with we've seen really strong revenue growth, 8% in Q1, 8% in Q2, 8% year-to-date, and we continue to reiterate guidance for the full year exactly as we did at the beginning of the year. Mid-single-digit or greater organic revenue growth, margin expansion for the full year, and double-digit free cash flow growth.
We're seeing opportunities, Meyer, whether it's inflation which positively impacts our revenue in you know driving up asset values, driving up employment levels, driving up corporate revenues. Whether it's interest rates, which obviously positively impact us on the revenue side in terms of fiduciary investment income, or whether it's volatility and clients needing us more on supply chain, workforce resilience, pension de-risking in times of increased volatility. Greg, what would you say?
No, I think you captured it well. Meyer, we're just trying to reinforce in every way we can, mid- to single-digit or greater in terms of some of the performance for the year and ongoing. There are lots of different ways and perspectives that we've been able to accomplish that, and you've just seen it. You've seen the performance. You've seen, by the way, when we think about growth, it's not just top line growth, it's also operating income growth and free cash flow growth, as Christa described before.
Okay. No, that's helpful. Second, maybe more detailed question, 'cause we've been talking a little bit about CoverWallet. I was hoping you could just update us on how consumer, or I should say customer willingness to use technologies like CoverWallet, how is that evolving over time?
Excellent. Eric, why don't you take that one?
Sure, Greg, I will. It's a great question and something we're really excited about as a platform. There's two ways you use it. You use it direct to consumer, which continues to be sort of the base of what CoverWallet was when we acquired it, and that continues to grow. Where we're actually seeing great opportunity is how we bring CoverWallet to our existing clients that have large distribution issues on their own, whether it's rideshare companies or dealerships or what have you, where they need to provide product to a broad number of people. Think of it from a B2 B2 C perspective versus a direct to consumer.
When you look at our enterprise client strategy and our ability to get to those large clients with this capability as they're trying to provide value either to their own colleagues or to their business partners, it does give us a platform that we think drives great growth for us and rounds out the relationships that we have with these clients in a way we're providing real value. We bought it as a D2C, and we've been able to expand it into the B2B2C arena and are having some good success with it.
When you think about it, Meyer, this is really about not even really introducing technology. You're sitting across the table from a client, again, that they've got, as Eric described, gig workers around the world, and essentially saying, "Hey, we think we can actually help you provide service to them with a really clean pipe interface that does things that help them manage their business on your behalf. We can do it globally." That's just not something that anyone can say. You know, the behind the scenes technology is massive. The behind scenes technology and IP, intellectual property, is also massive, but you're not having that conversation.
The conversation is our colleagues essentially asking someone who's got a growth business, "Hey, would you like to actually raise growth capital in a way that doesn't dilute your equity ownership?" The technology, the content, is all behind that and reinforces that. The introduction of technology to clients is really through helping them win in their business, and that's where we found great receptivity.
Okay. That's very helpful. Thank you so much.
Our next question comes from the line of Robert Cox with Goldman Sachs. You may proceed with your question.
Hey, thanks for taking my question. I was hoping to get a little more color on what's driving the strong growth in Health Solutions broadly, and if you could quantify how meaningful the benefit from the timing of revenues was in the core health and benefits brokerage business in the quarter.
Excellent. Love this question, Rob, and we love this category, as we've talked about before. So much going on around the global world with health, and it really does cut across regions beyond just a specific area. Eric, thoughts on the progression in health?
Sure. I mean, I think when you look at the long-term outlook, certainly helping the clients mitigate healthcare costs and improving employee health and well-being is a great business at the moment, and I think we're really competent in it. The growth has come from all geographies, and it's driven by retention, renewals, project work across a broad, you know, broad segment of that area. Also great growth related to the well-being and employee resilience part of health. The human capital piece with the data solutions growth, the advisory work, really broad-based in terms of its impact we're having with clients across all of our geographies.
Got it. On the timing benefit on revenues in the quarter, is there any way to quantify that?
Yeah. Rob, what I would say is, we haven't disclosed it, but what we have said is it's come from Q3 into Q2. It's, you know, it's not material, Rob, but you should see some, you know, small amount in Q3 than you would otherwise expect.
Okay. Got it. Then just lastly, I was just hoping to ask a question on, you know, Aon's ability to negotiate higher pricing in some of the fee-based businesses in light of inflation, and if you've seen any greater success in doing so in certain fee-based businesses versus others.
Rob, the conversation we have with our clients always is about value. The value we provide for them, how we build teams that support them, and create. You know, having established that they have to understand the value, appreciate the value. We talk about what's fair in the context of sort of how we are compensated for that. That's been something we always do. Ours is about higher value. We wanna bring more incremental value to clients, you know, than anyone else and more over time. In doing so, we have been, you know, we have been rewarded for that, as it relates to value for clients.
We continue to do that, and we're having, you know, the progression this year just like we have last year and the years before.
Thank you.
Our last question comes from the line of Weston Bloomer with UBS. You may proceed with your question.
Hi, good morning. One follow-up question on organic growth within reinsurance. You highlight strong growth in both treaty and facultative in the quarter. With the facultative piece, understanding it's more transactional in nature in the second half. Yeah, just curious on your outlook for facultative placements in the second half of the year. Any tailwinds worth pointing out, or is facultative growing faster or slower than treaty currently?
Facultative has been a great business for us over many years. If you put it in the context of the overall market, where many of the insurers continue to remediate their portfolios, and they often do that through the use of facultative placements in order to maintain their direct client relationship. Facultative for us around the world continues to be a great business, and we add great value with it and expect that would continue as we go forward.
Great. Thank you.
Ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn this call back over to Mr. Greg Case for closing remarks.
Thanks very much, and just wanted to say to everybody, appreciate you being part of the call and look forward to our discussion next quarter.
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Enjoy the rest of your day.