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Aon Corporation Study Finds Hospital Claims at New Lows
Date:10/2/2007

Patient safety initiatives linked to claims reductions in obstetrics and

emergency departments.

CHICAGO, Oct. 2 /PRNewswire-FirstCall/ -- The frequency and severity of hospital claims are at new lows, according to the Aon Corporation 2007 Hospital Professional Liability and Physician Liability Benchmark Analysis released today. The annual report, the most comprehensive look at liability claims in the U.S. health care industry, is published by Aon Corporation (NYSE: AOC) in conjunction with the American Society for Healthcare Risk Management.

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The study measures 65,689 non-zero claims representing more than $7.7 billion of incurred losses. More than 80 health care organizations representing 1,000 facilities and 90,000 licensed beds contributed to the study.

Findings at a glance:

-- Hospital claims are at their lowest levels in eight years.

-- Claim severity is increasing at just three percent annually -- the

lowest severity trend in eight years.

-- For the third straight year, there has been no increase in the

frequency of claims.

-- Patient safety initiatives aimed at obstetrics and emergency

departments are linked to reductions in the number of claims in those

areas.

-- Facilities that are recognized for their patient safety initiatives

exhibit lower liability loss costs.

-- Frequency, severity and loss cost benchmark statistics vary

significantly by state.

For the third straight year, the industry has seen no increase in the frequency of claims. Since the last edition of the study, the trend in the severity of claims has been cut in half. Liability losses are projected to be just three percent higher in 2008, down from six percent in the 2007 projection. The resulting loss cost trend is the lowest in the eight-year history of Aon's published advisory benchmarks.

"We continue to recognize improvements in the underlying claims environment and have enhanced our ability to measure the impact of the improvement on claims costs," said Greg Larcher, director and actuary of Aon Global Risk Consulting and author of the analysis. "I expect many hospitals to realize lower liability expense in 2008 as hospitals adjust to the new cost environment."

The 2007 study introduces benchmark statistics for the obstetrics and emergency departments. More than 800 facilities that experienced approximately 700,000 births and 16 million emergency department visits provided historical loss information for these measures.

"Since many of the patient safety initiatives being implemented focus on obstetrics and emergency departments, it is important to have industry benchmarks available to measure their effectiveness," said Frank Dodero, senior vice president of Aon Healthcare.

The study found that the number of claims per 10,000 births decreased from 9.4 in 2001 to 6.2 in 2006 while the number of claims per 100,000 emergency department visits dropped from 5.8 to 3.4 in that same period.

The report includes a case study of a multistate hospital operator where similar improvements were linked to patient safety initiatives. In obstetrics, fetal heart monitoring and a focus on high-risk deliveries were found to be contributing factors in claim reduction. The assessment of high-risk presentations such as chest pain in patients over 50 and abdominal pain in all patients contributed to the reduction of claims in the emergency department.

In addition, the study found that the nation's best hospitals, those recognized for their patient safety environments, exhibit significantly lower liability loss costs compared to the national averages. This is important because hospitals that emulate the nation's best in terms of their patient safety environment may realize reduced liability costs in the future.

The benchmark study is designed as a hands-on tool to provide health care risk managers with a better understanding of their facilities' cost of risk compared to an industry benchmark. To purchase a copy of the 2007 Hospital Professional Liability and Physician Liability Benchmark Analysis, please dial +1.800.242.2626 and request item #178703. Visit http://www.aon.com/hpl_study for more information.

About ASHRM

The American Society for Healthcare Risk Management (ASHRM) is a personal membership group of the American Hospital Association with more than 5,000 members representing clinical care, insurance, law and other related professions. ASHRM initiatives focus on developing and implementing safe and effective patient care practices, the preservation of financial resources and the maintenance of safe working environments.

About Aon

Aon Corporation (http://www.aon.com) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. There are 43,000 employees working in Aon's 500 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

This press release contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future 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: general economic conditions in different countries in which we do business around the world, changes in global equity and fixed income markets that could affect the return on invested assets, fluctuations in exchange and interest rates that could influence revenue and expense, rating agency actions that could affect our ability to borrow funds, funding of our various pension plans, changes in the competitive environment, our ability to implement restructuring initiatives and other initiatives intended to yield cost savings, our ability to execute the stock repurchase program, changes in commercial property and casualty markets and commercial premium rates that could impact revenues, changes in revenues and earnings due to the elimination of contingent commissions, other uncertainties surrounding a new compensation model, the impact of investigations brought by state attorneys general, state insurance regulators, federal prosecutors, and federal regulators, the impact of class actions and individual lawsuits including client class actions, securities class actions, derivatives actions, and ERISA class actions, the cost of resolution of other contingent liabilities and loss contingencies, and the difference in ultimate paid claims in our underwriting companies from actuarial estimates. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, is contained in the Company's filings with the Securities and Exchange Commission.

Media Contact

Kelly Drinkwine

KemperLesnik Communications

312.755.3537

Kelly.Drinkwine@kemperlesnik.com


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SOURCE Aon Corporation
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