AOC Aon Corp.

LONDON and CHICAGO, Aug. 16 /PRNewswire-FirstCall/ -- Despite recent product recalls, brokers and insurers are rising to the challenge of insuring the Chinese manufacturing industry for recalls. However, leading insurance broker and risk management consultant Aon (NYSE:AOC) is warning that companies need to boost their commitment to quality control to secure coverage. (Logo: http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO ) Chinese manufacturers are beginning to realize that to trade on a worldwide basis many customers will make it a contractual requirement for their suppliers to buy product recall protection. But this cover will only be available after comprehensive assessment of the individual risk by insurers. Mark Quinn, associate director at Aon, commented on the reaction of the insurance market: "Undoubtedly there is interest from the insurance market to offer product recall solutions to manufacturers in expanding economies and there are markets that see the development of recall insurance in China as an exciting opportunity, if handled correctly." The issue for insurers and brokers alike is developing recall insurance in a Chinese market that is relatively unsophisticated and only just coming to terms with the concept of product liability, let alone product recall -- a niche area often written as a standalone product or as part of a wider liability package. The industry needs to promote product recall in China at grass roots levels, explaining the different recall policies available and the requirements of the insurance market in order to secure cover. In particular, insurers will demand evidence of testing and controls throughout the supply chain. This appears to have been lacking in some cases and contributed to the high level of recalls emanating from the region. Bad track records will lead to high premiums or refusal to quote at all. But effective quality control does not stop with the manufacturers. Quinn advises that companies across the supply chain should be conducting due diligence on suppliers' quality control processes: "Businesses trading with China need to consider the knock-on effect to their business. Recent EU legislation means that companies are obligated to inform authorities in the event of a recall and as such should also have robust checks in place to test products before being released to the public." Media contact: London: Alexandra Lewis 011 44 207 882 0541 Chicago: Rahsaan Johnson 312.381.2684 About Aon 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 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. 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 successfully execute strategic options for our Combined Insurance subsidiary, the impact of current, pending and future regulatory and legislative actions that affect our ability to market and sell, and be reimbursed at current levels for, our Sterling subsidiary's Medicare Advantage health plans, 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. Aon Limited is authorized and regulated by the Financial Services Authority in respect of insurance mediation activities only. http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO http://photoarchive.ap.org/ DATASOURCE: Aon Corporation CONTACT: London, Alexandra Lewis, 011 44 207 882 0541, , or Chicago, Rahsaan Johnson, +1-312-381-2684, , both of Aon Corporation Web site: http://www.aon.com/

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