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Aon Corporation Finds Dramatic Increase in Cost of Directors' and Officers' Insurance for Financial Institutions
Rates for coverage in other industries continue to decline
PRNewswire-FirstCall
CHICAGO
(NYSE:AOC)

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. 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
   Raphaele.Schnoll@kemperlesnik.com

Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com

SOURCE: Aon Corporation

CONTACT: Raphaele Schnoll, +1-312-755-3592,
Raphaele.Schnoll@kemperlesnik.com, for Aon Corporation

Web site: http://www.aon.com/

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