Aon Unveils Tornado/Hail Loss Solutions

April 2, 2002

Aon announced that its reinsurance services unit has assembled substantial capacity for clients that are exposed to potentially significant tornado/hail losses. The capacity is available on either an indemnity or index basis.

Despite the fact that reinsurers paid significant losses for tornado/hail exposures during 2001, sufficient capacity continues to exist in the marketplace in order to assist insurers that wish to protect against major events. While high levels of tornado/hail events have occurred in each of the last four years, the significant losses in 2001, including the first ever $2 billion single event, have prompted insurance company management and investors to consider additional protection.

Ken Selzer, Senior Vice President of Aon Re Inc. noted, “In prior years, insurers have thought of tornado/hail events as nuisances. Now, insurers better understand that potentially severe individual events can substantially reduce quarterly earnings. Aon can assist clients by modeling potential losses from tornado/hail events, using its own proprietary models as well as multiple third party models, and has the capacity to provide solutions to identified exposures.”

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