Aon Corporation Finds Dramatic Increase in Cost of Directors' and Officers' Insurance for Financial Institutions
27 Febbraio 2008 - 4:00PM
PR Newswire (US)
Rates for coverage in other industries continue to decline CHICAGO,
Feb. 27 /PRNewswire-FirstCall/ -- Directors' and officers'
liability insurance costs for financial institutions significantly
increased in the fourth quarter of 2007, according to a D&O
pricing index released today by Aon Corporation (NYSE:AOC).
Authored by Aon Financial Services Group, the index tracks changes
in D&O premium costs relative to the base year of 2001. (Logo:
http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO) Measured
on a price per million basis, D&O insurance costs for banks and
securities firms increased 18.66 percent from Q4 2006 to Q4 2007.
Comparatively, firms operating in industries outside the financial
services sector experienced an 18.99 percent decrease in D&O
costs during the same time period. Since 2001, industries across
the board have experienced similar decreases in average D&O
pricing. Now, pricing for financial institutions is increasing at a
time when the rest of the market is experiencing price decreases.
The index explains these findings by pointing to the fact that
financial institutions were impacted particularly hard by the
subprime crisis during the last three months of 2007. In that
timeframe, the S&P 500 Financial Sector saw a 21.62 percent
drop(1) in the value of a broad index of financial institutions. As
a result, D&O underwriters associated larger amounts of risk
with the directors and officers of these firms and thus increased
D&O costs for the financial services sector. "On behalf of our
clients -- financial institutions in particular -- we are
continuing to closely monitor how D&O underwriters are
responding to the subprime crisis," said Mike Rice, managing
director of Aon Financial Services Group and an author of the
index. "Aon will continue to work tirelessly with underwriters in
the coming year to provide clients in all industries with D&O
insurance at affordable costs." The index is designed as a hands-on
tool to provide the directors, officers and risk managers of
Fortune 500 firms with a better understanding of current and
historical pricing conditions for directors' and officers'
liability insurance. It is produced on a quarterly basis. About Aon
Aon Corporation (NYSE:AOC) is the leading global provider of risk
management services, insurance and reinsurance brokerage, human
capital and management consulting, and specialty insurance
underwriting. Through its 43,000 professionals worldwide, Aon
readily delivers distinctive client value via innovative and
effective risk management and workforce productivity solutions. Our
industry-leading global resources, technical expertise and industry
knowledge are delivered locally through more than 500 offices in
more than 120 countries. Aon was ranked by A.M. Best as the number
one global insurance brokerage in 2007 based on brokerage revenues,
and voted best insurance intermediary, best reinsurance
intermediary, and best employee benefits consulting firm in 2007 by
the readers of Business Insurance. For more information on Aon, log
onto http://www.aon.com/. (1) The difference between the high and
low values during the quarter. Media Contact Raphaele Schnoll
312.755.3592
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 Corporation Web site:
http://www.aon.com/
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