Aon Claims 1stQ Earnings Did Not Meet Internal Targets

April 23, 2002

Aon Corporation has reported that first quarter 2002 dilutive earnings per share are expected to be in the range of $0.56-$0.59 per share (including a one-time pretax income item of $48 million or $0.11 per share). This compares with year-ago net income of $0.32 per share before special charges and goodwill amortization. The one-time income item is the result of a tax settlement.

“Our first quarter earnings per share, excluding the one-time income item, did not meet internal targets that we established at the beginning of the year,” Patrick Ryan, chairman and CEO of Aon Corp., commented. “International, reinsurance, and wholesale brokerage operations performed well and organic revenue growth for the Insurance Brokerage and Other Services segment improved to approximately 13 percent. U.S. retail brokerage results pressured first quarter earnings however due largely to increased employee compensation costs related to the business transformation. Additionally, our managing underwriting business within the brokerage segment experienced a temporary decline in revenue due to a required change in an insurance carrier relationship that is expected to be corrected during the second quarter. Aggregate operating segment reported revenue growth is estimated to be up approximately 8 percent year-over-year for the first quarter.”

Aon is scheduled to report first quarter results on April 30.

“As previously reported in our third and fourth quarter 2001 earnings releases, there are many factors, including the finalization of the business transformation, that influence 2002 results,” Ryan commented. “Based on our current view of our businesses for the full year and our assessment of internal and external factors, we believe that earnings for 2002, excluding the $0.11 per share one-time income item in the first quarter, will be within the lower half of the $2.30 to $2.75 earnings per share range of analysts’ estimates. Estimates are based on Aon’s current structure before the pending spin-off and exclude special charges and the financial impact of the World Trade Center loss.”

Spin-Off of Insurance Underwriting OperationsThe Internal Revenue Service recently issued a favorable private letter ruling for the spin-off of Combined Specialty Group, Inc. The ruling provides, among other things, that Aon’s common stockholders should not owe U.S. tax on a dividend of shares of Combined Specialty common stock in the spin-off. Aon currently expects to complete the spin-off in the second quarter. Completion remains subject to regulatory and other conditions.

Aon plans to raise capital in relation to the spin-off primarily to take advantage of new insurance underwriting growth opportunities, and to strengthen the Company’s capital base. Aon has filed a $750 million universal shelf registration statement to provide flexibility in raising capital before the spin-off, and as previously announced, Combined Specialty may conduct its own capital raising to fund growth opportunities.

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