LONDON, 10 March 2008 – The London insurance market could miss out on covering Indian mega-projects by underestimating its improved risk management. By recognising new opportunities in heavy industry, London will be able to promote its expertise and capacity to attract the business that is fuelling India’s growth.

Ambitious plans for India’s economy have already achieved 9-11% growth in GDP, exceeded only by China, as the country is attracting US$16bn of foreign direct investment (FDI). Major initiatives and potential include:

• Government of India’s mission of ‘Power for all by 2012’ which aims for installed generation capacity of 200 GW by 2012;
• permission for 100% foreign-equity participation in the construction industry to create an industry value of US$59.4bn;
• retail sales in India's consumer goods market are expected to grow to US$400 billion by 2010 and the FDI stake is up by 51% with investment from major foreign players including Walmart and Carrefour.

Kavita Pandey, head of Aon’s India Desk in London, said: “To dispel the myth of poor risk management in India, we organised site visits for underwriters to challenge their views. These proved invaluable and provoked new attitudes and interest in Indian risks, which is now being reflected in the rates. Singapore is still a competing market but London is ahead of the game with excess of loss and now can drive this area with using expertise to write massive projects in BRIC countries.”

In an increasingly competitive global market, now is London’s chance to seize upon the opportunities and cover these risks. The local Indian market comprised four government owned insurers until liberalisation in 2000, allowing 26% foreign direct investment in today’s USD6 billion market. This now includes 11 joint ventures with international insurers including RSA and AIG. However, Indian companies can only export their risks when the sum insured is over USD610 million, following legal enforcement in 2007 by the Insurance Regulatory and Development Authority (IRDA).

At the same time, underwriters need to be aware of risks, including joint venture cultural differences, talent management (seeing a shift from insurance to banking), reputational risk, a poor score on corruption index, health and safety and natural catastrophes.

Kavita added: “Historically, there has been no financial incentive to introduce risk management, rarely going beyond basic loss control surveys. However, recognition has grown now that listed Indian companies must adhere by corporate governance. A culture of solidarity in firms also means that employees are becoming involved with risk management as they view it as ‘their’ company and its values are further embedded.”

Ends

For more information contact:

Alexandra Lewis

0207 882 0541

Alexandra.lewis@aon.co.uk

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.

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