Favorable Outlook for Insureds as Rates Decrease and Capacity Increases, Says Aon

CHICAGO, May 26 /PRNewswire-FirstCall/ -- Aon Risk Services, the risk management and insurance brokerage business of Aon Corporation, today released its 2010 U.S. Insurance Market Overview. The report, generated by Aon Analytics, provides the latest information on insurance pricing, limit, deductible and retention trends.  

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

2010 Aon U.S. Insurance Market Overview Highlights:

Property:  

• Rates will continue to drop 5 percent to 15 percent for most risks, despite record global catastrophic losses seen in early 2010. Property capacity levels are very strong for the industry and will create a competitive market. Most insureds will keep the same limits, deductibles/retentions and coverage.  

Casualty:

• Insureds with favorable loss history and limited exposure changes will continue to experience flat to single-digit rate decreases, while insureds with less than favorable loss histories and/or significant downward exposure changes may expect rate increases. Most insureds will maintain limits and deductibles/retentions. With capacity at record levels, no significant increase in capacity is expected this year.

Directors' and Officers' Liability:

• The marketplace for D&O remains soft, with flat to single-digit rate decreases for most insureds. There will be little change in limits purchased this year and the majority of insureds will maintain deductibles/retentions. With only 49 cases through the first four months of the year, the number of federal securities class-action lawsuits was 27 percent lower than in the first four months of 2009, when there were 67 cases.

Employment Practices Liability:

• The marketplace is currently favorable across nearly all industry segments. EPL remains potentially volatile for larger employers (10,000+ employees) due to the continued shortage of primary carriers in the market. We have seen what appears to be an uptick in filings of class-based actions and while we expect this trend to continue for the remainder of the year, the length of time required for such claims to impact carriers will likely result in generally flat pricing for the remainder of the year.

Fidelity/Crime:

• As more claims are filed and paid, rates are likely to stabilize or slightly increase for financial institutions. Most insureds will maintain limits and current deductibles/retentions. Capacity will also level off this year.

Kidnap, Ransom and Extortion:

• As a result of a surge in piracy and kidnappings, the market is currently plagued by unique incidents and losses. Levels of extortion-related incidents are higher than kidnap incidents, and there is a surge in detentions without monetary demands. New capacity in the domestic market and a realignment of existing capital will cause premiums to stabilize and perhaps decline for clients with U.S.-based exposures.

Lambros Lambrou with Aon Analytics said, "As the world's leading risk advisor and insurance broker, Aon has unique insight into market conditions, premium rates and best practices in program design across all industries and regions around the world. Information from this report will help companies better manage risks, overcome challenges and capture opportunities to grow their business."

Methodology: The 2010 U.S. Insurance Market Overview is compiled by Aon Analytics and incorporates data from proprietary Aon databases such as the Aon Global Risk Insight Platform®, the world's leading repository of global risk and insurance placement information.

To access Aon's 2010 U.S. Insurance Market Overview, visit http://www.aon.com/marketoverview

Follow Aon on Twitter: http://www.twitter.com/aoncorp

Sign up for News Alerts: http://aon.mediaroom.com/index.php?s=58

About Aon

Aon Corporation (NYSE: AON) is the leading global provider of risk management services, insurance and reinsurance brokerage, and human capital consulting. Through its more than 36,000 colleagues worldwide, Aon delivers distinctive client value via innovative and effective risk management and workforce productivity solutions. Aon's industry-leading global resources and technical expertise are delivered locally through more than 500 offices in more than 120 countries. Named the world's best broker by Euromoney magazine's 2008 and 2009 Insurance Survey, Aon also ranked highest on Business Insurance's listing of the world's largest insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008 and 2009. A.M. Best deemed Aon the number one insurance broker based on brokerage revenues in 2007, 2008, and 2009 and Aon was voted best insurance intermediary, best reinsurance intermediary and best employee benefits consulting firm in 2007, 2008 and 2009 by the readers of Business Insurance. For more information on Aon, log onto http://www.aon.com.

SOURCE Aon Corporation