AOC Aon Corp.

Current increases are more than four times general inflation rates CHICAGO, June 5 /PRNewswire-FirstCall/ -- Health care costs are expected to increase on average 11 percent in the next 12 months,(1) according to Aon Consulting, the human capital consulting organization of Aon Corporation (NYSE:AOC). While costs continue to rise at double-digit rates, the current trend rate has declined more than four percentage points since fall 2001, when the projection was 15.6 percent. (Logo: http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO) Aon Consulting surveyed more than 70 leading health care insurers (representing more than 100 million insured individuals) and found that health care costs are projected to increase by 10.9 percent for HMOs, 10.8 percent for POS plans, 11.2 percent for PPOs and 10.7 percent for CDH plans. This represents rates of increase lower than one year ago, when HMO cost increases were 12.2 percent, 11.9 percent for POS plans, 12.4 percent for PPOs and 12.5 percent for CDH plans. (See below for a table outlining trend data from Aon Consulting's prior health care surveys.) "Although it is encouraging to see a continuing decline in health care trend rates, employers are still challenged by the fact that health care cost increases are more than four times general inflation rates, said Bill Sharon, senior vice president with Aon Consulting and director of the study. "For many businesses, health care costs continue to be their fastest growing expense." According to Sharon, there are a variety of reasons for the double-digit health care cost increases, including: -- Increasing patient demand for health care services as the population ages; -- Rising medical technology and hospital costs; -- Increasing price and utilization of prescription drugs; -- Poor lifestyle choices. "Fortunately, employers have a number of strategies at their disposal to reduce the rate of these increases," Sharon explained. "Some of the more successful strategies consist of implementing consumer driven health care plans, chronic condition management programs and health promotion programs. Coupled with plan design changes and/or employee contribution changes these strategies can reduce an employer's health care cost increase by more than half." Health care rate increases for retirees over the age of 65 are projected to be 11.2 percent for Medicare Supplement plans and 9.2 percent for Medicare Advantage plans. "We believe the lower Medicare Advantage trend rate is due to favorable government reimbursement rates and the competitive market for these plans," said Jonathan Nemeth, senior vice president with Aon Consulting. For prescription drugs, general pharmacy costs are expected to increase by 9.5 percent, compared with 12.2 percent one year ago. Specialty drug costs will increase by 15.1 percent, down from 17 percent from spring 2006. (Specialty drugs are biotechnology-derived injectable medications used primarily to treat high-cost disease states.) Aon Consulting conducts the Health Care Trends Survey every six months to ensure that its human capital clients and the industry on the whole have an up-to-date point of reference for planning purposes. The study is available for downloading at http://www.aon.com/us/busi/hc_consulting/hw_redirect.jsp About Aon (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 43,000 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. Aon Consulting Worldwide (http://www.aon.com/hcc) is among the top global human capital consulting firms, with 2006 revenues of $1.282 billion and 6,500 professionals in 117 offices worldwide. Aon Consulting is reshaping the workplace of the future through benefits, talent management and rewards strategies and solutions. In August 2006, Aon Consulting was named the best employee benefit consulting firm by the readers of Business Insurance magazine. 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 obtain regulatory or legislative changes to permit continuous sales of our supplemental Medicare health product, 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, ERISA class actions, the impact of the analysis of practices relating to stock options, 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. The following table summarizes the Aon Consulting Health Care Trends Survey results from 2001 - 2007: Fall Spring Fall Spring Fall Spring 2001 2002 2002 2003 2003 2004 Medical (w/Rx) HMO 14.4% 16.2% 15.1% 16.4% 14.8% 14.1% POS 15.7% 16.0% 15.1% 16.1% 14.8% 14.1% PPO 16.8% 16.0% 15.8% 15.7% 14.9% 14.2% Indemnity 19.2% 18.3% 18.1% 17.2% 16.3% 15.3% CDH 14.1% Medical (w/o Rx) HMO 12.7% 14.6% 14.0% 14.7% 13.7% 13.4% POS 14.0% 14.5% 13.9% 14.5% 14.0% 13.5% PPO 15.1% 14.6% 14.6% 14.4% 14.3% 13.5% Indemnity 18.6% 17.1% 17.2% 16.4% 15.5% 14.7% CDHP 13.3% Dental DHMO 4.4% 4.4% 5.3% 4.8% 5.1% 5.0% PPO 7.7% 7.6% 7.8% 7.6% 7.7% 7.3% Indemnity 8.0% 8.4% 8.3% 7.6% 7.6% 7.7% Pharmacy General 16.0% 17.8% 18.3% 17.7% 15.3% 14.4% Specialty Vision N/A 3.2% 3.5% 3.8% 3.4% 3.9% Fall Spring Fall Spring Fall Spring 2004 2005 2005 2006 2006 2007 Medical (w/Rx) HMO 13.3% 13.2% 12.9% 12.2% 11.4% 10.9% POS 13.6% 13.0% 13.0% 11.9% 11.2% 10.8% PPO 13.6% 13.0% 13.0% 12.4% 11.6% 11.2% Indemnity 15.4% 14.6% 14.2% 14.4% 13.9% 12.7% CDH 13.7% 12.7% 13.3% 12.5% 10.5% 10.7% Medical (w/o Rx) HMO 12.7% 12.9% 12.7% 12.0% 11.4% 11.0% POS 13.2% 12.7% 12.8% 11.8% 11.2% 10.9% PPO 13.2% 12.7% 12.8% 12.3% 11.4% 11.3% Indemnity 15.1% 14.6% 14.3% 14.4% 13.9% 13.1% CDHP 13.1% 12.4% 13.2% 12.3% 10.3% 10.7% Dental DHMO 4.3% 4.7% 4.8% 4.8% 4.7% 4.5% PPO 7.0% 7.1% 7.1% 6.7% 6.5% 6.1% Indemnity 7.4% 7.6% 7.6% 7.1% 7.2% 7.1% Pharmacy General 13.1% 13.1% 11.8% 12.2% 10.6% 9.5% Specialty 22.5% 19.0% 17.0% 14.9% 15.1% Vision 3.3% 3.9% 4.0% 3.6% 2.9% 3.1% (1) This survey forecasts the health care trend rates for the 12-month rating periods beginning from April 2007 to September 2007. Aon Consulting defines trend as the expected future increase in employer-provided medical plan claims cost, before any plan changes. These trend figures are based on the opinions of health plan actuaries. For more information, contact: Raphaele Schnoll 312.755.3592 or Sara Carlson 312.381.5045 http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO http://photoarchive.ap.org/ DATASOURCE: Aon Corporation CONTACT: Raphaele Schnoll, +1-312-755-3592, , for Aon; or Sara Carlson of Aon, +1-312-381-5045, Web site: http://www.aon.com/

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