London – 12 April 2005 – Although the third quarter of 2004 saw the highest quarterly insured losses ever in the US following a season of multiple hurricanes, buyers of US property insurance should still expect to see moderate decreases at their renewal in 2005. This was one of the main findings from Aon’s 2005 US Property Report, ‘The Calm After the Storms’, which also indicated that the uncertainty around the reauthorisation of TRIA (Terrorism Risk Insurance Act) could serve to destabilise the property insurance market.

Despite significant catastrophe losses in 2004, which at US$24.7 billion were double that of 2003, the trend towards a more technical underwriting approach has enabled the insurance industry to withstand those losses. In addition, a moderate expansion of market capacity in 2004 has led to underwriters competing for business which resulted in premium deductions of around 10% for more than 50% of buyers surveyed for Aon’s report.

Commenting on the study, Nick Maher, chairman of Aon’s Global Property Practice Group, said: “It may seem remarkable that following a year of record catastrophe losses, buyers of US commercial property insurance are still seeing premium reductions and are, in some cases, also benefiting from higher policy limits and lower deductibles. During 2005, the competition amongst insurers for premium income is likely to continue to work in the buyers’ favour although we should expect any decreases to be moderate.”

Gary Marchitello, managing director of Aon’s US National Property Syndication Group, added: “While the outlook for buyers is very positive, the cloud looming on the horizon is the uncertainty over the reinstatement of TRIA. TRIA has undoubtedly stabilised the primary insurance market and made terrorism cover more affordable to buyers. It is not clear whether the commercial insurance market will be able to move in and fill the void should TRIA disappear – almost certainly leading to premium increases for terrorism cover and perhaps reducing the number of companies choosing to cover themselves against the potential damage from a terrorist attack.”


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 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, 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 regulatory investigations brought by state attorneys general and state insurance regulators related to our compensation arrangements with underwriters and related issues, the impact of class actions and individual lawsuits including derivative actions and claims under ERISA, 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.

Aon Limited is authorized and regulated by the Financial Service Authority in respect of insurance mediation activities only.