LONDON, 16 June 2008 - An increasingly competitive large account insurance market, coupled with more sophisticated client demands, will be the catalyst for regulated and global businesses to embrace aligned long term insurance programmes (ALTPs). According to global broker Aon, which recently placed the six year fixed insurance programme for Network Rail, ALTPs will be key in supporting companies with defined financial strategies and a step away from annual regurgitation of information and renewal process.

ALTPs will allow clients to focus time and resource on more added value projects, in addition to giving certainty of insurance cost over an agreed budgetary period. Other key benefits include:
• absolute cost certainty to client and removal of volatility;
• certainty of protection in the event of a claim as the major lines of property, business interruption and general liability risks covered by a single insurer;
• cost efficiencies and certainty of capacity allocation benefits to insurers from the packaging of a multi-line programme over a longer period.

Matt Grimwade, head of risk transfer at Aon Global, said: “The introduction of ALTPs is proof of a sophisticated insurance market with buyers that understand these programmes are a viable option. Likewise, it’s a sign of the market aligning to work in a customer friendly fashion. The soft market has been one catalyst for this ground-breaking policy but companies must demonstrate that the ALTP is a key part of their financial strategy and not just an opportunistic buy.  It’s a step away from annual regurgitation of information so FDs can concentrate on the other aspects of managing the business effectively.”

The ALTP was initially targeted at regulated businesses to complement their financial strategy. For example, Network Rail’s insurance programme fits with its next five year regulatory period of 2009-14, while the water industry’s five year franchises from OfWat should create another raft of opportunities. However, any major business with a defined, long term budgetary plan and a strong philosophy to partner with insurers in the long term can benefit from a VTLA.

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 36,000 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 named the world’s “best broker” by Euromoney magazine’s 2008 Insurance Survey. Aon also 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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