What’s New: In Brief (February 06, 2009)

Aon Corporation (NYSE: AOC) saw its 2008 Q4 net income decrease 95%, down to US$10 million, compared to US$207 million for the prior-year quarter.The company said the drop was “primarily due to an expected [US]$116 million after-tax loss on the disposition of the remaining property and casualty insurance businesses that are now included in discontinued operations, an increase in restructuring-related costs, and costs related to the Benfield merger.”The company goes on to note that net income for the entire year of 2008 increased 71% to [US]$1.5 billion compared to [US]$864 million for the prior year.Total revenue for all of 2008 increased 4%, to [US]$7.6 billion, with organic revenue growth of 2%. The total revenue of Aon’s risk and insurance brokerage services segment increased 5%, to $6.2 billion in 2008, with organic revenue growth in commissions and fees of 2%. “We begin 2009 in a position of strength, with a core product portfolio that is now aligned around risk advice and human capital solutions,” said Greg Case, president andCEO of Aon Corporation. “Our balance sheet has remained strong, which has provided us with financial flexibility to effectively allocate capital, as is highlighted by the recent merger with Benfield.”

Zurich Financial Services Group (Zurich) had an after-tax net income of US$3 billion for 2008, representing a 47% decrease over 2007.The group’s General Insurance segment wrote gross written premiums and policy fees of US$ 37.2 billion, up 4% or 2% in local currencies, and reported a combined ratio of 98.1% (up 2.5 points over 2007).At North America Commercial, “the continued application of enhanced segmentation techniques, underwriting discipline and proactive targeting of profitable lines of business mitigated a significant portion of the effects of a challenging rate environment,” the company noted in a press release. “The Group, though, still experienced reduced premium volumes where margins were most under pressure while at the same time the effects of the recent hurricanes also drove down profitability.”The group says it will continue to assess its previously announced 2009 expense reduction target of US$200 million and will be taking further cost containment actions to deliver at least another US$200 million of expense reductions.