LONDON  –  20 September 2005 – P&I Clubs should stop using Pool claims¹ as the only excuse to talk up P&I rates, according to Aon UK, a leading insurance broker and risk management consultant. New statistics from Aon’s P&I Mid-Term Review, published today, show that even though Pool claims in 2004 increased by 51% from 2003, historic loss frequency still remains within statistically predictable bounds at 16 claims per annum compared with the 17.3 average of the last 23 years. Forward planning by Clubs should have factored statistically predicable claims within the rating, thus limiting the impact of current claims experience on forward rates.

Aon says that more realistic explanations for the predicted increase in premiums at renewal 2006 are the need for Clubs to keep pace with inflation and anticipate increased solvency requirements from regulators. In some cases, the rises will also aim to mitigate continuing underwriting deficits as a consequence of certain Clubs looking to achieve underwriting discipline.

Aon’s Mid-Term Review highlights the fact that some of the P&I Clubs have been able to predict the trend in claims and reserve accordingly. This reflects a consistent loss frequency which has only been exceeded once, in 1990, over the last 23 years.

Larger Pool claims, those in excess of US$6 million, currently stand at US$206 million for 2004 compared to US$138 million in 2003. The boom in shipping and more sophisticated vessel technology means the increasing value of ships, plus their ability to carry more cargoes, is leaving ship owners more exposed to risk.

Stephen Hawke, Executive Director for Aon Marine and Chairman of AonPLF, Aon’s global P&I group, said: “Although the number of claims has risen, this is an inevitable correlation with the increased levels of trade. However, with more money being dedicated to ship development, the industry is responding with more tailored risk management programmes to help protect their assets.”

The Mid-Term Review explains how smaller claims under US$6 million, paid by the Clubs’ own reserves, were mainly caused by increased accidents as a result of more traffic on the seas. Clubs have seen a steady upward trend in small claims at a rate of 12.7% from 2003 to 2004.

Outlook for the future

Next year the cost of insurance is expected to steadily rise with P&I Clubs looking for general increases, exclusive of reinsurance, of up to 12.5% for 2006/2007. There may be the temptation for even higher requirements from some Clubs.

Mr Hawke continued: “At the 2005 renewal the market saw, as we predicted, an increase in rates (exclusive of reinsurance) from 0% to 12.5% - we expect the same in 2006. However as we enter the renewal season, we’re seeing a two tier approach where some Clubs will slightly increase rates to cover inflation.  We also expect that Club underwriters who have failed to predict certain risks will push rates closer to the 12.5% and beyond the anticipated increases.”

Mr Hawke added: “It is too early to anticipate the reinsurance market’s reaction to Katrina and the subsequent impact on the International Group of P&I Club’s reinsurance programme, but we will continue to monitor this and advise accordingly.”

For a copy of the report, please contact harriet.meikle@aon.co.uk

Note to Editors:

¹ Claims in excess of US$6 million

About Aon

Aon Corporation (www.aon.com) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. The company employs approximately 48,000 professionals in its 500 offices in more than 120 countries.  Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

This press release contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results, depending on a variety of factors.  Potential factors that could impact results include the general economic conditions in different countries around the world, fluctuations in global equity and fixed income markets, exchange rates, rating agency actions, resolution of pending regulatory investigations and related issues, including those related to compensation arrangements with underwriters, pension funding, ultimate paid claims may be different from actuarial estimates and actuarial estimates may change over time, changes in commercial property and casualty markets and commercial premium rates, the competitive environment, the actual costs of resolution of contingent liabilities and other loss contingencies, and the heightened level of potential errors and omissions liability arising from placements of complex policies and sophisticated reinsurance arrangements in an insurance market in which insurer reserves are under pressure.  Further information concerning the Company and its business, including factors that potentially could materially affect the Company’s financial results, is contained in the Company’s filings with the Securities and Exchange Commission.