Released on: November 28, 2007, 3:43 am

Press Release Author: Reuben Aitchison

Industry:

Press Release Summary: Aon Re Global, the world's largest provider of reinsurance
brokerage and integrated capital solutions and services and a unit of Aon
Corporation (NYSE: AOC), today released its sixth annual Reinsurance Market Update
at the insurance and reinsurance industry's Jan. 1 renewal season kickoff event, the
Rendez-Vous de Septembre in Monte Carlo.

Press Release Body: Aon Re Global, the world's largest provider of reinsurance
brokerage and integrated capital solutions and services and a unit of Aon
Corporation (NYSE: AOC), today released its sixth annual Reinsurance Market Update
at the insurance and reinsurance industry's Jan. 1 renewal season kickoff event, the
Rendez-Vous de Septembre in Monte Carlo.

Among the highlights:

*
Reinsurance market risk spreads are narrowing - directionally getting less
expensive
*
Worldwide credit market risk spreads are widening - directionally getting more
expensive
*
Worldwide equity market risk premiums are widening - directionally getting
more expensive
*
To finance risk that otherwise would have been retained, insurers will be more
likely to utilize the reinsurance market than the equity, senior and
subordinated debt markets
*
Large buyers of property catastrophe reinsurance now utilize the capital
markets to provide 10-25 percent of their catastrophe capacity. This is
expected to expand.

As the property catastrophe reinsurance market moves further away from the 2005
Atlantic Hurricane Season - the most significant recent catastrophic event to impact
the industry - trends indicate that renewal pricing peaked in July 2006, and that
the reinsurance margin per unit of risk reinsured is in decline. That decline comes
as the cost of equity and debt capital will be increasing for insurance; as such,
the reinsurance pricing and terms cycle can be uncorrelated with the cost of equity
and debt capital for insurers and reinsurers.

"We see the 2008 market cycle as an exciting and challenging one as reinsurance has
the opportunity to play a larger role in capital management strategies," said Bryon
Ehrhart, president and chief executive officer of Aon Re Services. "Having recovered
from the significant catastrophe events of 2005, we are pleased to see an
environment in which we, as brokers, can deliver new levels of value to clients.
Softening markets lend themselves to softening terms and conditions which allow Aon
brokers to closely analyze and negotiate on behalf of clients, looking towards a
fully transitioned post-Katrina landscape."

The size of the reinsurance industry property or casualty event that would be
necessary to change the direction of the reinsurance market is large - US$15 to $25
billion of ceded losses. Barring a major catastrophe event, to finance risk that
otherwise would have been retained, insurers will be more likely to utilize the
reinsurance markets than the equity, senior and subordinated debt markets.

With capacity greatly expanded since Hurricane Katrina in 2005, the reinsurance
market now provides efficient property, casualty, life and insurance enterprise risk
transfer and contingent capital solutions.

Large buyers of property catastrophe reinsurance now utilize the capital markets to
provide 10 percent to 25 percent of their catastrophe capacity. From January through
July 2007, the reinsurance markets have funded more capacity than was issued during
2006 in its entirety.

\"We also see this environment as an opportunity in which to look closely at
integrated risk management," Ehrhart said. "Rather than producing reporting on the
varied results of actual renewals, Aon Re Global is able to identify changes to the
reinsurance markets in advance of key renewal dates to deliver more consultative
value to clients when they need it."

Factors such as insurer underwriting methods, data quality, capacity required,
experience and current modeled margin levels can combine to create better or worse
outcomes. Detailed information and analysis from the Aon Re Global Reinsurance
Market Update can be obtained at www.aon.com.

Aon UK is ranked by A.M. Best as the number one global insurance brokerage based on
brokerage revenues and voted best insurance intermediary, offering classic
sports car insurance, high value home insurance, entertainment and media
insurance and construction site insurance.


Web Site:
http://www.privateclients.aon.co.uk/privateclients/microsites/cars/classic.aspx

Contact Details: directory@vandelay.co.uk