LONDON, 12 September 2006 – The dwindling pool of skilled officers in the marine industry could result in increasing claims and higher premiums in the long term, according to the leading insurance broker Aon. Marine operators need to combat the skills shortfall through more effective recruitment and retention plans to ensure future officers are fully equipped to handle technological advances and new trading patterns, thus preventing claims as a result of human error.

While the shipping industry continues to boom and the number of vessels is increasing year on year, employee numbers are keeping pace. Despite a surplus of ratings, there is an estimated shortage of around 10,000 officers or about 2% of the total workforce.  With a predicted shortfall of some 27,000 officers, or just fewer than 6% of the total workforce, by the year 2015, the problem could escalate to the point where shipping companies will have to face real operational difficulties. Furthermore, while the global shipyard order book stands at 4,942 ships with a further 796 vessels under construction, it is clear the industry is facing a major challenge.

For the industry to address this issue successfully, it must combat the factors that are causing the skills shortage:

• an ageing officer population with 50% over 40 years old;
• the notion that seafaring is an unsafe line of work with the threat of piracy and officer kidnapping;
• the shift of labour from North America, Europe, Japan and other OECD countries to east Europe and Asia means that the lack of international experience and cultural/ language skills are posing serious barriers to mariners wanting to take on global officer roles;
• new legislation, such as the European Union’s ship source pollution directive which criminalises negligence, is acting as a deterrent to those thinking of joining the industry and causing some to leave;
• as today’s vessels become more complex and technically advanced, the skills and knowledge required to manage them need to grow accordingly.

Steve Allum, chairman of Aon Global Marine, said: “Unless shipowners, managers and charterers take further action, the outlook for the maritime industry is not good. With diluted experience and training among crews, the possibility of human error is significantly higher and will inevitably lead to increased incidents and accidents. Technology alone cannot be expected to replace the loss of skilled crew in, for example, navigating congested shipping lanes. The inevitable consequence would be a higher cost of risk. Crew employment, training and retention policies may well become part of the key parameters which underwriters use to establish insurance premium for marine operators.”

Water for Fish, a leading people and organisation consultancy and an Aon company, identifies how shipping companies can address skill shortages:

• recruit mariners or identify their own ratings with the potential to develop;
• introduce a more rigorous selection process for fast track scheme candidates;
• look to new labour centres such as east Europe, India and China for skilled officers;
• liaise with international maritime training institutions to attract graduates;
• conduct stimulating recruitment campaigns – focusing on the positives such as the International Labour Organisation’s strict new rules on working hours - to attract people outside the industry who may initially lack technical knowledge but have the appropriate management skills;
• establish more comprehensive ongoing and recorded training and development to underpin professionalism of industry;
• work towards a comprehensive succession planning process;
• take action to retain staff looking at pay, work/life balance, career pathing etc.

Nicola Mindell, director of Water for Fish, comments: “As external factors such as government legislation are beyond the control of shipping companies, it means that they need to take responsibility for what they can control - the quality of their own employees. Mariners must ensure they have a comprehensive and sufficiently broad retention and recruitment strategy to keep and bring in experienced officers but also focus on those who have the potential to develop.”

Notes to editor:

About Aon

Aon Corporation is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. There are 46,000 employees working in Aon's 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 related to future results, or states our intentions, beliefs and expectations or predictions for the future 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: general economic conditions in different countries in which we do business around the world, changes in global equity and fixed income markets that could affect the return on invested assets, fluctuations in exchange and interest rates that could influence revenue and expense, rating agency actions that could affect our ability to borrow funds, funding of our various pension plans, changes in the competitive environment, our ability to implement restructuring initiatives and other initiatives intended to yield cost savings, our ability to execute the stock repurchase program, changes in commercial property and casualty markets and commercial premium rates that could impact revenues, changes in revenues and earnings due to the elimination of contingent commissions, other uncertainties surrounding a new compensation model, the impact of investigations brought by state attorneys general, state insurance regulators, federal prosecutors, and federal regulators, the impact of class actions and individual lawsuits including client class actions, securities class actions, derivative actions, and ERISA class actions, the cost of resolution of other contingent liabilities and loss contingencies, and the difference in ultimate paid claims in our underwriting companies from actuarial estimates. 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.