Aon: Personal Lines Had Lowest Earnings Volatility in 2002

May 8, 2003

Aon Corp. announced the results of its 2002 “Property and Casualty Earnings Volatility Study” that highlighted the insurers and reinsurers that were most effective at minimizing the volatility in their earnings. Consistent with the results from prior years, the 2002 study indicated that the combination of effective capital management and solid underwriting were the key drivers to more predictable earnings.

“Once a year we want to recognize the companies that led their respective sectors in generating the least volatile earnings,” said Michael Bungert, president and CEO of Aon Re Inc.

“Over the past 18 to 24 months, insurers and reinsurers have faced volatility in both the business they have underwritten as well as in their investment portfolios. Legacy issues, including asbestos and environmental losses, increased losses from directors’ and officers’ liability claims and rising tort costs have led to erosion of capital and a higher frequency of rating agency downgrades.”

The study encompassed the one, two, three and five-year earnings periods ended December 31, 2002 and measured volatility each quarter on a year-over-year basis.

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