CHICAGO-Aon Corp. is banking on a young, relatively unknown insurance consultant to lead the Chicago-based brokerage giant during one of the most tumultuous times in the industry's history.

Gregory C. Case, a 42-year-old McKinsey & Co. consultant, became president and chief executive officer of Aon last Monday, succeeding Patrick G. Ryan, who announced last fall his intentions to step down as CEO after nearly 40 years at the helm (BI, Oct. 4, 2004).

Mr. Ryan, a high-profile figure within the insurance industry, will remain executive chairman of Aon, which he built into the world's second-largest insurance brokerage through a series of major acquisitions over the past 35 years.

While observers say the appointment of Mr. Case removes any uncertainty about the brokerage's leadership going forward, they are concerned about his youth and inexperience.

Unlike his predecessor, who spent his entire career running insurance companies or brokerages, Mr. Case has little operational experience in the industry. He has spent most of his career-the past 17 years-with McKinsey, where he most recently served as head of the management consulting firm's financial services practice. Prior to that, he was responsible for McKinsey's global insurance practice, of which Aon had been a client.

Marsh & McLennan Cos. Inc. also has been a client of McKinsey. The consulting firm in the late 1990s helped Marsh develop its Global Broking unit, which was at the heart of bid-rigging allegations in a suit filed by New York Attorney General Eliot Spitzer last October (BI, Nov. 1, 2004). Mr. Case said he has no knowledge of that relationship.

Mr. Case's appointment caps a five-month search, during which time the brokerage settled fraud and anti-competitive practice charges in suits filed by Mr. Spitzer and the attorneys general of Connecticut and Illinois (BI, March 7). Aon agreed to pay $190 million as restitution to policyholders and to revamp its business practices to settle the suits, which charged that the brokerage steered clients to the insurers and reinsurers paying the highest contingent commissions and linked insurance placements with reinsurance brokerage business.

Aon then reached a $38 million settlement to resolve a class action lawsuit in Chicago alleging the brokerage breached its fiduciary duty by collecting contingent commissions from insurers without disclosing them to clients.

With those issues behind it, on April 4, Aon announced Mr. Case's appointment.

"Our board was determined to conduct a thorough search, and we could not be more pleased with the result," said Andrew J. McKenna, Aon's lead director and chairman of the board's search committee, in a statement. "Greg's management experience in professional services, his firsthand knowledge of the insurance industry, and his keen understanding of the complexity of global organizations make him an ideal candidate to succeed Pat Ryan, who has built Aon into the tremendous franchise it is today."

As executive chairman, Mr. Ryan said in a conference call to analysts that he will focus his efforts working with existing client relationships and developing new client opportunities, a side of the business he said he "loves" and is "excited" to spend more time on.

"Let me make this clear," Mr. Ryan said. "Greg Case is now the boss of Aon, and my role is to support and assist him in any way I can."

During an interview with Business Insurance, Mr. Case said he too is "excited" about his new role.

"In essence, when I thought about the parallels and the alignment between McKinsey and Aon, that is what got me incredibly excited about this opportunity," Mr. Case said. "I never intended to leave the firm. I love the firm. It's a phenomenal place. I had a very, very unique role there, and I was privileged to have had it. But the alignment between McKinsey and Aon was unbelievably compelling to me."

Mr. Case noted, for example, that both firms are advice-based and talent-driven businesses.

Parallels to business

Although he has never run an insurance brokerage, Mr. Case said he did serve on McKinsey's shareholder's operating committee, which is the group of 25 individuals that runs the 11,000-person firm. He also headed up the global insurance and financial service practices, which he likened to individual businesses.

"Over the last 12 years, I have had direct hands-on operating experience guiding the firm overall and running these two practices," he said. And while McKinsey never talks about itself, "I will tell you that, of the 17 practices at McKinsey, the practices I was fortunate to be part of were quite successful."

Mr. Case also is intimately familiar with Aon.

"I've known Pat Ryan for two or three years from a business standpoint, not socially," Mr. Case said.

"I know Aon much, much better than most will ever know Aon," he said. "That has contributed to my excitement, having been able to see the skills, the leadership and the global reach first-hand."

Future path for Aon

Mr. Case also said that he relishes the opportunity to lead Aon, given the current state of the insurance brokerage industry.

"When you think about the industry and you think about McKinsey, McKinsey doesn't play unless there is turmoil and ambiguity," Mr. Case said. "We are never engaged with clients without turmoil. That's been my life for 17 years."

"To me, I look at the turmoil and I look at the change the insurance industry is going through, and I am very respectful of the challenges here, and I approach them with a lot of humility. But I have to tell you, I see huge opportunity for Aon, and I'm incredibly excited about it."

For Aon clients who may feel as though their trust with the brokerage has been broken due to the steering allegations, Mr. Case has a simple message: "We are absolutely about client value added. We're absolutely about values and trust, and we're absolutely about creating a world class of products and services that help them create value and run their businesses. I can't speak to the past, but that is my commitment."

Though Mr. Case said it is too soon for him to outline his specific goals and priorities for the company, he said that whatever decisions he makes will emphasize growth, creating value for clients and operating discipline.

"Those three ideas...will be the three lenses that I look at as I spend time with my colleagues around Aon," he said.

Observers upbeat

Industry observers are cautiously optimistic about Aon's new leadership.

"I think Fitch, in general, views the appointment as a positive, simply because it eliminates another thing on their list of things to do and they can get on to focusing more on their business model," said Gretchen Roetzer, a credit analyst with Fitch Ratings in Chicago.

Mr. Case's status as an outsider to the industry is a positive from Fitch's perspective, Ms. Roetzer added. "Aon is clearly sending a message that they want a fresh start, a fresh view, no conflicts-very much a post-Spitzer world operation," she said. "But at the same time, he's 42 years old and he has no corporate management experience and limited insurance experience."

"I think it's good that (Mr. Case) was at the management consulting firm," said Greg Simcik, an equity analyst with Standard & Poor's equity group in New York. "He's probably got some good relationships with at least the insurance companies, and that's important. He may need a little help with the client side, which is particularly important, given all the turmoil in the industry over the last six months or so. But Pat Ryan is going to be there to help out with that," he said.

Mr. Simcik said, though, that he does have some concern about Mr. Case being a novice CEO.

"He hasn't really run a company per se, but, then again, with Pat Ryan still being on the board and being involved in at least the day-to-day business, I'm sure he's going to have someone to rely upon," he said.

"Could they have gotten a higher-profile person? It is possible that if they'd done that, it would have been received better in the marketplace," Mr. Simcik said. "But it's sort of a wait-and-see thing."