Aon Provides Update on Dispute with Reinsurers Regarding World Trade Center; Updates First Quarter Earnings Per Share Outlook.

Business Editors

CHICAGO--(BUSINESS WIRE)--April 29, 2002

Aon Corporation (NYSE:AOC) reported today that it will establish a first quarter 2002 pretax $90 million allowance ($56 million after tax) for a potentially uncollectible receivable related to a previously disclosed dispute with reinsurers over claims related to the World Trade Center disaster. The allowance is being established at this time due to a recent court ruling (in an unrelated case) that may impact the venue for litigation between the Company and its reinsurers. Aon continues to believe that its insurance underwriting subsidiary, Combined Insurance Company of America (CICA), which underwrote accident insurance for the benefit of Aon's employees, has valid reinsurance.

Patrick G. Ryan, chairman and CEO of Aon Corporation, said, "Accounting rules require that we be able to reasonably estimate the probable recovery under our claim to maintain a receivable, which we are precluded from doing at this time given the recent ruling. Therefore, we believe it is appropriate to establish an allowance at this time. The accounting decision, however, will in no way affect our vigorous pursuit of our claim under our reinsurance contract issued by certain Lloyds' syndicates."

Mr. Ryan added, "We have paid all claims submitted under the CICA policy and our dispute with CICA's reinsurers will in no way impact the payment of benefits made to our employees' families and beneficiaries."

Based upon the provisions of the Airline Stabilization Act, Aon believes that the Southern District of New York is the only proper jurisdiction for Aon's reinsurance claim. The Act created a Federal cause of action for damages arising out of events of September 11 and provides that the Southern District of New York "shall have original and exclusive jurisdiction over all actions for any claim...resulting from or relating to the terrorist-related aircraft crashes of September 11, 2001." Aon's reinsurers at Lloyds' have commenced an action in a U.K. High Court and have sought dismissal of Aon's New York case in favor of the U.K. action.

A recent decision (unrelated to Aon's case) in federal court in the Southern District of New York that addresses, among other things, exclusive jurisdiction for suits brought in relation to the World Trade Center terrorist attack, has raised the possibility that Aon's suit may not be heard in that district court. The district court judge assigned to Aon's case in New York has not yet ruled on the issue of jurisdiction.

Updated First Quarter 2002 Earnings Outlook

Based on this new information that resulted in the establishment of a $56 million after tax allowance, the Company has updated its outlook and now expects that reported net income per share for first quarter 2002 will be $0.20 lower than previously indicated on April 19, 2002. The previous earnings per share guidance announced on April 19th, which excludes World Trade Center losses, special charges and a positive $48 million one-time tax item, remains unchanged for first quarter 2002 and continues to be $2.30 - $2.52 per share for full year 2002 subject to the factors noted in the April 19 press release.

Aon will report earnings on Tuesday, April 30th.

Aon Corporation (www.aon.com) is a holding company that is comprised of a family of insurance brokerage, consulting and insurance underwriting subsidiaries.

This press release may contain certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated, depending on a variety of factors such as general economic conditions in different countries around the world, fluctuations in global equity and fixed income markets, changes in commercial property and casualty premium rates, the competitive environment, the actual cost of resolution of contingent liabilities, the final form of the business transformation plan, the ultimate cost and timing of the implementation thereof, the actual cost savings and other benefits resulting therefrom, whether the Company ultimately implements the proposed spin-off of its underwriting operations, and the timing and terms associated therewith, and events surrounding terrorists attacks of September 11, 2001, including the timing and resolution of related insurance and reinsurance issues. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, are contained in the Company's filings with the Securities and Exchange Commission.