LONDON, 10 April 2008 – UK companies are seeing their insurance premiums fall by up to 20% and they could continue to benefit from a competitive market until 2009/10, according to Aon, the UK’s leading insurance broker. Speaking to south west companies at SS Britain this week, Mark Crawford, broking director at Aon, advised businesses that now is the time to focus on managing business risks in preparation for the next big shift in rates.

A combination of fewer claims, more proactive risk management and new insurers, such as QBE, has lead to increased competition and reduced rates.  Insurance brokers are negotiating up to 20% decreases in premium for cover including property and liability. And this comes at a time when the risks to business are increasing, as the Corporate Manslaughter Act, a 15% increase in employment tribunals and a 2007 record high for product recalls could lead to more liability claims.

Mark Crawford commented: “The sub-prime market crisis has not impacted insurer balance sheets as deeply as anticipated due to their conservative investment behaviour. As such, this has not led to an urgent need to increase rates. Motor premiums are usually the first to shift and we’ve seen increases of up to 10% in the first quarter of 2008 but corporate premiums are usually the last to turn.

“Without significant insurer financial failure or major losses in the meantime, we’re forecasting rates to be on the rise by 2010. Premiums will turn and there are likely to be big swings so companies cannot afford to be complacent. They must focus on making their business robust to risks ranging from data loss and property damage to employee injury and directors’ liability. This will prove to insurers that they have strong risk management which will help to mitigate the swings in premium.”

Aon is advising companies to stay ahead of a potential swing in the insurance market cycle by:

·         improving risk management to demonstrate a good claims record and innovative approach to preventing losses in the first place;

• considering self insurance to offset premium increases;
• building and maintaining insurer relationships.

Ends

For more information contact:

Alexandra Lewis

020 7882 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. Through its 37,000 colleagues 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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