AOC Aon Corp.

CHICAGO, Oct. 24 /PRNewswire-FirstCall/ -- Aon Re Global, the world's largest reinsurance broker, recently facilitated communications between rating agency A.M. Best and Lloyd's that resulted in a clarification of Best's treatment of reinsurance recoverables from Lloyd's. Companies who buy reinsurance from Lloyd's will now have the benefit of the Lloyd's Credit for Reinsurance Trust Fund (CRTF) collateralization requirements reflected in their Best's Capital Adequacy Ratio (BCAR), the agency's primary quantitative measure of financial strength. (Logo: http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO ) A.M. Best policy is for companies with recoverables from "A" rated reinsurers to receive a capital charge of 6.0% and to allow a 90% offset for acceptable collateral. With this clarification, the net capital charge for reinsurance recoverables from Lloyd's will be reduced to 0.6% to reflect the collateral held in the CRTF. A.M. Best will reflect this adjustment in their calculation of the published BCAR, as well as their separate calculation that predicts financial strength following an actual catastrophic occurrence. "We are pleased to have identified this issue and worked to ensure a successful resolution on behalf of our clients. With the insurance industry still adjusting to the increased capital constraints that followed recent catastrophic losses, it is good to find a measure of capital relief," said Greg Heerde, senior vice president with Aon Re Services, Inc. "The information required to fully reflect this benefit is not currently included in publicly available information and, as a result, we at Aon Re are helping our clients to ensure they receive the appropriate treatment." About Aon Aon Re Global is the reinsurance and captive services subsidiary of Aon Corporation (NYSE:AOC), providing brokerage and consultancy services to insurance companies and captives through its network of offices throughout the world. Aon Corporation ( http://www.aon.com/ ) 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, our ability to consummate the pending sale of the Aon Warranty Group, 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. For more information, contact: Rahsaan Johnson, Aon Corporation/Aon Re Global 312.381.2684 http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO http://photoarchive.ap.org/ DATASOURCE: Aon Re Global CONTACT: Rahsaan Johnson, Aon Corporation-Aon Re Global, +1-312-381-2684, Web site: http://www.aon.com/

Copyright