LONDON, 17 January 2006 – Following unprecedented storm damage losses in the US, 2005 is believed to be the most costly year ever for insurers, with 2006 set to provide more of the same. This is according to Aon Limited, a leading insurance broker and risk management consultant, which today published its 2006 Risk Report assessing some of the major new and existing risk challenges for UK businesses.

While businesses continue to deal with traditional risks such as employers’ liability and directors’ and officers’ liability, exacerbated by factors such as a growing UK compensation culture or more litigious shareholders, new or re-emerging risks such as oil price volatility, pensions scheme legacies, terrorism, pandemics, and climate change have all risen up the corporate agenda. Key points highlighted in the report include:
 

• Storm damage topped the causes of insurance losses in 2005, with Aon expecting further increased hurricane activity in the short term

• After the oil price surges of 2005, Aon advises businesses to recognise the historic volatility of the oil markets and plan for the prospect for sudden price falls as well as rises

• The history of global pandemics shows why businesses need to bring threats such as avian flu higher up the company agenda and to treat them differently from earlier corporate concerns such as SARS and the technological threat offY2K

• As the world learns to live with the new age of terrorism, the market for terrorism risk is maturing – premiums remain soft – but the need for cover is increasingly acknowledged by business

• With two thirds of companies having no exit strategy in place for their defined benefit pension schemes, companies need to take action now to deal with this legacy

Dennis Mahoney, chairman and chief executive of Aon Limited, commented, “It really is a case of in with the old and in with the new as we begin 2006. Old risks aren’t going away and are increasingly being supplemented by new and previously unseen threats. Globalisation means that risks that were once prevalent only in far-away countries are now right on our doorstep. Terrorism, pandemics and environmental risks know no boundaries. Businesses need to be ever more alert and plan ahead. Whilst the risks in 2006 are unlikely to be identical to those in 2005, this report provides a reminder of the extent to which companies are exposed and need to be prepared”.

* For a copy of the report, please contact: Sally Taylor (sally.taylor@aon.co.uk)

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 53,000 professionals in its 600 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, 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, 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, and the timing and resolution of related insurance and reinsurance issues relating to the events of September 11, 2001.  Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, are contained in the Company's filings with the Securities and Exchange Commission.