Diemazz

AON Corporation

Type	Public (NYSE: AOC)
Founded	1919, Chicago, IL
Headquarters	Chicago, IL, U.S.
Key people	Pat Ryan, Chairman & Greg Case, CEO
Industry	Reinsurance & Management consulting
Products	Insurance, Risk management, Human resource consulting
Revenue	▲$7,471 million USD (2007)
Operating income	▲$1,162 million USD (2007)
Net income	▲$864 million USD (2007)
Employees	42,500(2007)
Website	www.aon.com

Aon Corporation (NYSE: AOC) is a world leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. It is based in Chicago, at the Aon Center, the third tallest building in Chicago. It was created in 1982, when the Ryan Insurance Group (founded by Pat Ryan in the 1960s) merged with Combined International Corporation (founded by W. Clement Stone in 1919). In 1987, that company was introduced to Wall Street as Aon, a Gaelic word meaning “Oneness.”

Aon Consulting Worldwide won Best Employee Benefit Consulting Firm and Best Retail Agent/Broker in 2007 by Business Insurance, an weekly industry newsmagazine.^[1][2] In July 2007, Aon Corp. was ranked as the world's second largest insurance broker.^[3]

On August 22 2008, Aon announced that it will acquire London based Benfield Group. The acquiring price will be $1.75 Billion (USD) or 935 Million pounds, with $170 Million (USD) of debt. ^[4]

Corporate Overview

Aon Corp. is a global provider of insurance brokerage services, insurance products,and risk and insurance advice, as well as other consulting services, conducting business in more than 120 countries and sovereignties. The company operates in three major segments: commercial brokerage, consulting services, and consumer insurance underwriting. The company's brokerage unit, Aon Risk Services, provides retail property/casualty, liability, and other insurance products for groups and businesses, as well as risk management services. Aon Re Global handles reinsurance brokerage services for aviation, marine, energy, professional liability, and other niche and specialty business lines. Its consulting unit, Aon Consulting Worldwide, specializes in employee benefits administration. The risk and insurance brokerage segment accounted for 82% of total revenue from continuing operations in 2007, and the consulting segment 18%.

The company employs approximately 43,000 professionals in its 500 offices in more than 120 countries. Aon is the world's second largest insurance brokerage, and largest reinsurance brokerage.^[5] It is also the top captive insurance company manager, and the third largest employee benefits consultant.

Aon Center

History

This section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unverifiable material may be challenged and removed. (November 2008)

Aon began with W. Clement Stone around the turn of the 20th century. Stone's mother bought a small Detroit insurance agency and in 1918 brought her son into the business. Young Stone sold low-cost, low-benefit accident insurance, underwriting and issuing policies on-site. The next year he founded his own agency, the Combined Registry Co. While selling up to 122 policies per day, he recruited a nationwide force of agents.

As the Depression took hold, Stone reduced his workforce and improved training. Forced by his son's respiratory illness to winter in the South, Stone followed the sun to Arkansas and Texas. In 1939 he bought American Casualty Insurance Co. of Dallas. It was consolidated with other purchases as the Combined Insurance Co. of America in 1947. The company grew through the 1950s and 1960s, continuing to sell health and accident policies. In the 1970s Combined expanded overseas despite being hit hard by the recession.

In 1982, after 10 years of stagnant growth under Clement Stone Jr., the elder Stone (then 79) resumed control until the completion of a merger with Ryan Insurance Co. allowed him to transfer power to Patrick Ryan. Ryan, the son of a Wisconsin Ford dealer, had started his company as an auto credit insurer in 1964. In 1976 the company bought the insurance brokerage units of the Esmark conglomerate. Ryan focused on insurance brokering and added more upscale insurance products. He also trimmed staff and took other cost-cutting measures, and in 1987 he changed Combined's name to Aon. In 1995, the company sold its remaining direct life insurance holdings to focus on consulting. The following year it began offering hostile takeover insurance policies to small and midsized companies.

Aon built a global presence through purchases. In 1997 it bought The Minet Group, as well as troubled insurance brokerage Alexander & Alexander Services in a deal that made Aon (temporarily) the largest insurance broker worldwide. The firm made no US buys in 1998, but doubled its employee base with purchases including Spain's largest retail insurance broker, Gil y Carvajal, and the formation of Aon Korea, the first non-Korean firm of its kind to be licensed there.

Responding to industry demands, Aon announced its new fee disclosure policy in 1999, and the company reorganized to focus on buying personal line insurance firms and to integrate its acquisitions. That year it bought Nikols Sedgwick Group, an Italian insurance firm, and formed RiskAttack (with Zurich US), a risk analysis and financial management concern aimed at technology companies. The cost of integrating its numerous purchases, however, hammered profits in 1999.

Despite its troubles, in 2000 Aon bought Reliance Group's accident and health insurance business, as well as Actuarial Sciences Associates, a compensation and employee benefits consulting company. Later in that year, however, the company decided to cut 6% of its workforce as part of a restructuring effort. In 2003, the company saw revenues increase primarily because of rate hikes in the insurance industry (meaning higher commissions for Aon). Also that year Endurance Specialty, the company's Bermuda-based underwriting operations, went public. The next year Aon sold most of its holdings in Endurance.

September 11 Attack

Its New York offices were on floors 92 and 98-105 of the south tower of the World Trade Center at the time of the September 11, 2001 terrorist attack. As a result, 175 employees of Aon Corp. were killed in the attacks.^[6]

Spitzer Investigation

In 2004-2005 Aon, along with other brokers including Marsh & McLennan and Willis Group Holdings, fell under regulatory investigation under New York Attorney General Eliot Spitzer and other state attorneys general. At issue was the practice of insurance companies' payments to brokers (known as contingent commissions). The payments were thought to bring a conflict of interest, swaying broker decisions on behalf of carriers, rather than customers. In the spring of 2005, without acknowledging any wrongdoing, Aon agreed to a $190 million settlement payable over 30 months.

UK regulatory breach

In January 2009 Aon was fined £5.25m in the UK after it unwittingly made more than $7m worth of "suspicious" payments to overseas firms and individuals. The UK's Financial Services Authority stated that the fine related to the company's inadequate bribery and corruption controls, claiming that Aon between 14 January 2005 and 30 September 2007 had failed properly to assess the risks involved in its dealings with overseas firms and individuals. Aon fully cooperated with its investigation and qualified for a 30% discount on the fine. Aon said its conduct was not deliberate, adding it had since "significantly strengthened and enhanced its controls around the usage of third parties" .^[7]

References

External links

• Aon Corporation website
• Aon UK website
• Aon Nederland website
• Aon France website
• Virginia Surety
• Aon Remembers at Legacy.com
• Emporis - Aon Center, Chicago

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