Aon will become the world’s largest insurance broker after agreeing to acquire Willis Towers Watson (WTW) for $US29.9 billion ($45.38 billion) in shares.

The combined company will be worth an estimated $80 billion ($121.43 billion), eclipsing previous global broking frontrunner Marsh, which itself acquired JLT in 2018 for $US5.7 billion ($8.65 billion).

The deal is the insurance industry’s largest, narrowly overtaking Ace’s $US28.3 billion ($42.95 billion) purchase of Chubb announced in 2015.

The new firm will operate under London-based Aon’s brand, and be led by Aon CEO Greg Case and CFO Christa Davies. WTW CEO John Haley will become Executive Chairman.

“While we will be bigger, yes, that’s not what this transaction is about. This is about better,” Mr Case told an analysts’ conference call.

“We will fundamentally be more innovative, more capable, more relevant and more responsive.”

He says the combined firm will enable a quicker response to “unmet client need” in a volatile and challenging insurance landscape.

“We are not going fast enough,” he said. “There is significant opportunity to accelerate together.”

The transaction is subject to shareholder and regulatory approval, but is expected to close in the first half of next year.

Ms Davies, a University of Queensland graduate, told analysts the deal would result in annual cost synergies of $US800 million ($1.21 billion) by the third full year of combination.

“There are significant opportunities for efficiency in our combined cost-base which creates significant shareholder value,” she said.

Mr Haley believes the two companies bring “complementary capabilities”.

“The whole premise of this merger is not about where we are today, it is about where we can be in the future,” he said.

Speculation over the deal has been rife in recent weeks, and it was previously explored a year ago before Aon backed away.

In March last year Aon confirmed it was “in the early stages of considering an all-share business combination with Willis Towers Watson”, before announcing the next day that it did not intend to pursue it after all.