Aon Unveils 2004 Political and Economic Risk Map; Political Risk Costing the World Economy $800 Billion.

Business Editors

CHICAGO--(BUSINESS WIRE)--Jan. 28, 2004

Globalization is expensive, and is costing the world more every day. Aon Corporation's Trade Credit and Political Risk practice group calculates that uncertainty surrounding political risk cost the world economy more than $800 billion in reduced corporate spending, investments, and growth in 2003. That's compared to an estimated $200 billion prior to the Sept. 11, 2001 terrorist attacks on the World Trade Center. According to Aon Trade Credit's Chief Economist, Dr. Michel Leonard, the global cost of political risk could reach $1 trillion this year.

Leonard says uncertainty surrounding political risk has contributed to the global economic slowdown and imposed the equivalent of a 0.25% "geo-political tax" on global GDP growth. "In addition to concerns over terrorism, 2003 saw the return of traditional geo-political risks such as general strikes in Nigeria, political insurgency in Venezuela, and the war in Iraq as major drivers of economic performance." Leonard says the combination of terrorism and traditional political risks substantially decreased the risk tolerance of investors, exporters, and bankers, thus negatively impacting global trade and investment.

The impact of political risk has been particularly severe on emerging markets. For instance, Leonard says Latin America and the Caribbean, still suffering from the aftershocks of Argentina, saw foreign direct investment (FDI) drop for the fourth consecutive year. An economic crisis in the Dominican Republic, precipitated by a $2.2 billion bank fraud, added to the region's woes. Closer to home, the dollar's recent weakness makes it increasingly vulnerable to geo-political uncertainties, particularly terrorism targeting U.S. interests at home or abroad. In contrast to what occurred in 2001, the dollar, rather than the U.S. stock market, is likely to bear most of the negative impact in the event of new terrorist attacks on the United States.

To help organizations learn about the political and economic risks of investing in emerging markets, Aon unveils its 2004 Political and Economic Risk Map rating the economic, currency and political risks of doing business in more than 200 territories worldwide. Research by Aon Trade Credit has been compiled and incorporated into a global map which is available online at www.aon.com/us/politicalrisk.

Established in 1912, Aon Trade Credit Global has pioneered the field of trade credit and political risk insurance and consultancy. Credit insurance covers counterparty payment default - e.g., circumstances when an exporter extends credit to an overseas buyer and the buyer does not pay. Political risk insurance covers perils originating from government intervention, inability to obtain or transfer hard currency, and political violence such as war, civil war, riots, and terrorism. With more than 400 professional staff in 60 offices throughout the world, and the financial resources of its parent Aon Corporation, the second largest retail broker in the world, Aon Trade Credit has the global reach to help clients navigate turbulent foreign markets.

Aon Corporation is a holding company that is comprised of a family of insurance brokerage, consulting, and insurance underwriting subsidiaries.

This press release contains 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 either historical or anticipated results, depending on a variety of factors. Potential factors that could impact results include the general economic conditions in different countries around the world, fluctuations in global equity and fixed income markets, exchange rates, rating agency actions, pension funding, changes in commercial property and casualty markets and commercial premium rates, the competitive environment, the actual costs of resolution of contingent liabilities and other loss contingencies, the heightened level of potential errors and omissions liability arising from placements of complex policies and sophisticated reinsurance arrangements in an insurance market in which insurer reserves are under pressure, and the timing and resolution of related insurance and reinsurance issues relating to the events of September 11, 2001.

Further information concerning the Company and its business, including factors that potentially could materially affect the Companys financial results, are contained in the Companys filings with the Securities and Exchange Commission.