Aerospace Insurance Premiums Fall by up to 11 Percent in 2007: Aon Analysis

(Logo: http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO)

The Aon review brings together data for the last year and extrapolates its likely effect on the market in 2008 and beyond. The key findings of the review are:

    -- average lead premium reduction for 2007 was 6 percent, compared to a 3
       percent growth in 2006;

    -- Asian operations received the best average reduction at 8 percent,
       closely followed by Europe and the Americas with 7 percent and 6
       percent reductions respectively;

    -- service providers had the largest reductions in 2007, with lead premium
       falling by 11 percent on average compared to a 4 percent increase in
       2006; airport lead premium fell by 8 percent on average in 2007,
       compared to a 2 percent increase in 2006; the manufacturers sector fell
       by 3 percent, compared to a 5 percent average growth in 2006;

    -- the number and value of claims have been limited in the aviation sector
       generally, although the high level of airline hull losses in 2007 may
       translate into an increased number of claims on the aerospace market as
       accident investigators assign responsibility.

"The aerospace insurance market saw modest reductions in the price of lead premium throughout 2007, but there were differences in the way that the different sectors within the market were treated," said Doug Peterson, Aon Aviation & Aerospace Group Practice Leader. "This suggests that the markets are pricing insurance programmes according to their actual level of risk, rather than simply applying an industry average year-on-year price change. This is a sign of a healthy and functioning market, although there is an argument that certain sectors are not receiving the same level of reductions as a result of historical loss perceptions that do not take recent improvements into account."

Download the report at http://aon.mediaroom.com/index.php?s=55.

NOTE: The review looks in detail at data from across the aerospace market, breaking it down by region, sector, month, and liability limit, and looks at the data from both a US dollar and a reporting currency perspective. It also offers a round-up of market and industry activity, and an overview of some of the wider insurance products that Aon can offer on its aerospace insurance programmes. It examines how the industry's evolution during 2007 will impact the market during 2008 and beyond.

     For more information contact:
     Alexandra Lewis
     020 7882 0541
     Alexandra.lewis@aon.co.uk

     Rahsaan Johnson
     312.381.2684
     Rahsaan_Johnson@aon.com

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 www.aon.com.

SOURCE Aon Corporation

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