UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005

		OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		Commission file number 1-7933

Aon Corporation

(Exact Name of Registrant as Specified in Its Charter)

DELAWARE		36-3051915
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

200 E. RANDOLPH STREET, CHICAGO, ILLINOIS		60601
(Address of Principal Executive Offices)		(Zip Code)

(312) 381-1000
(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ý NO o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule12b-2 of the Exchange Act). YES ý NO o

Number of shares of common stock outstanding:

Class		No. Outstanding as of 3-31-05
$1.00 par value Common		317,816,108

Part 1
Financial Information
Ao n Corporation
Condensed Consolidated Statements of Financial Position

		As of
(millions)		Mar. 31, 2005			Dec. 31, 2004
		(Unaudited)
ASSETS
Investments
Fixed maturities at fair value		$	3,783		$	3,482
Equity securities at fair value		38			40
Short-term investments		4,798			4,448
Other investments		507			483
Total investments		9,126			8,453
Cash		526			570
Receivables
Risk and insurance brokerage services and consulting		8,029			8,235
Other receivables		1,601			1,645
Total receivables		9,630			9,880
Deferred Policy Acquisition Costs		1,135			1,137
Goodwill		4,644			4,705
Other Intangible Assets		134			133
Property and Equipment, net		622			660
Other Assets		2,748			2,791
TOTAL ASSETS		$	28,565		$	28,329

LIABILITIES AND STOCKHOLDERS’ EQUITY
Insurance Premiums Payable		$	10,209		$	9,775
Policy Liabilities
Future policy benefits		1,528			1,542
Policy and contract claims		1,892			1,854
Unearned and advance premiums and contract fees		2,972			2,979
Other policyholder funds		18			18
Total Policy Liabilities		6,410			6,393
General Liabilities
General expenses		1,436			1,557
Short-term borrowings		2			2
Notes payable		2,085			2,115
Pension, post-employment and post-retirement liabilities		1,560			1,528
Other liabilities		1,669			1,806
TOTAL LIABILITIES		23,371			23,176
Commitments and Contingent Liabilities
Redeemable Preferred Stock		50			50
Stockholders’ Equity
Common stock - $1 par value		340			339
Paid-in additional capital		2,448			2,386
Accumulated other comprehensive loss		(816		)	(681		)
Retained earnings		4,182			4,031
Less -	Treasury stock at cost	(783		)	(783		)
	Deferred compensation	(227		)	(189		)
	TOTAL STOCKHOLDERS’ EQUITY	5,144			5,103
	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	28,565		$	28,329

See the accompanying notes to the condensed consolidated financial statements.

Ao n Corporation
Condensed Consolidated Statements of Income
(Unaudited)

	First Quarter Ended
(millions except per share data)	March 31, 2005			March 31, 2004

Revenue
Brokerage commissions and fees	$	1,720		$	1,791
Premiums and other	698			692
Investment income	93			81
Total revenue	2,511			2,564

Expenses
General expenses	1,702			1,777
Benefits to policyholders	393			383
Depreciation and amortization	68			70
Interest expense	34			34
Provision for New York and other state settlements	1			—
Total expenses	2,198			2,264

Income from continuing operations before provision for income tax	313			300
Provision for income tax	113			108
Income from continuing operations	200			192

Discontinued operations
Loss from discontinued operations	—			(28		)
Income tax benefit	—			(6		)
Loss from discontinued operations, net of tax	—			(22		)

Net income	$	200		$	170
Preferred stock dividends	(1		)	(1		)
Net income available for common stockholders	$	199		$	169

Basic net income per share
Income from continuing operations	$	0.62		$	0.60
Discontinued operations	—			(0.07		)
Net income	$	0.62		$	0.53

Diluted net income per share
Income from continuing operations	$	0.59		$	0.58
Discontinued operations	—			(0.07		)
Net income	$	0.59		$	0.51

Cash dividends per share paid on common stock	$	0.15		$	0.15

Diluted average common and common equivalent shares outstanding	337.1			335.3

See the accompanying notes to the condensed consolidated financial statements.

Aon Corporation
Condensed Consolidated Statements of Cash Flows
(Unaudited)

	First Quarter Ended
(millions)	March 31, 2005			March 31, 2004

Cash Flows from Operating Activities:
Net income	$	200		$	170
Adjustments to reconcile net income to cash provided by operating activities
(Gain) loss from disposal of operations	(4		)	21
Insurance operating assets and liabilities, net of reinsurance	17			51
Amortization of intangible assets	13			14
Depreciation and amortization of property, equipment and software	55			57
Income taxes	(41		)	39
Special and unusual charges and purchase accounting liabilities	(3		)	(4		)
Valuation changes on investments, income on disposals and impairments	(19		)	(33		)
Other receivables and liabilities - net	574			487
Cash Provided by Operating Activities	792			802

Cash Flows from Investing Activities:
Sale of investments
Fixed maturities
Maturities	77			6
Calls and prepayments	39			14
Sales	441			108
Equity securities	1			1
Other investments	16			65
Purchase of investments
Fixed maturities	(900		)	(207		)
Equity securities	—			(1		)
Other investments	(16		)	(12		)
Short-term investments - net	(369		)	(624		)
Acquisition of subsidiaries	(28		)	(11		)
Proceeds from sale of operations	9			12
Property and equipment and other - net	(27		)	(23		)
Cash Used by Investing Activities	(757		)	(672		)

Cash Flows from Financing Activities:
Issuance of common stock	5			5
Repayments of short-term borrowings - net	—			(47		)
Issuance of long-term debt	302			3
Repayment of long-term debt	(329		)	(92		)
Cash dividends to stockholders	(48		)	(48		)
Cash Used in Financing Activities	(70		)	(179		)

Effect of Exchange Rate Changes on Cash	(9		)	—
Decrease in Cash	(44		)	(49		)
Cash at Beginning of Period	570			540
Cash at End of Period	$	526		$	491

See the accompanying notes to condensed consolidated financial statements.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. Statement of Accounting Principles

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include all normal recurring adjustments which the Registrant (Aon) considers necessary for a fair presentation. Operating results for the three months ended March 31, 2005 are not necessarily indicative of results that may be expected for the year ending December 31, 2005.

Refer to the consolidated financial statements and notes in the Annual Report on Form 10-K for the year ended December 31, 2004 for additional details of Aon’s financial position, as well as a description of Aon’s accounting policies, which have been continued without material change.

Certain amounts in the 2004 condensed consolidated financial statements relating to assets held for sale and discontinued operations have been reclassified to conform to the 2005 presentation.

Stock-Based Compensation

Aon follows Accounting Principles Board Opinion (“APB”) No. 25, Accounting for Stock Issued to Employees, and related Interpretations in accounting for its stock-based compensation plans. Under APB No. 25, no compensation expense is recognized for stock options when the exercise price of the options equals the market price of the stock at the date of grant. Compensation expense is recognized on a straight-lined basis for stock awards based on the vesting period and the market price at the date of the award.

The following table illustrates pro forma net income and pro forma earnings per share as if Aon had applied the fair value recognition provision of Financial Accounting Standards Board (“FASB”) Statement No. 123, Accounting for Stock-Based Compensation , to stock-based employee compensation.

		First quarter ended March 31,
(millions except per share data)		2005		2004

Net income, as reported		$	200	$	170
Add:	Stock-based compensation expense included in reported net income, net of tax	13		8
Deduct:	Stock-based compensation expense determined under fair value based method for all awards and options, net of tax	16		11
Pro forma net income		$	197	$	167

Net income per share:
Basic
As reported		$	0.62	$	0.53
Pro forma		$	0.61	$	0.52

Diluted
As reported		$	0.59	$	0.51
Pro forma		$	0.58	$	0.50

Endurance Warrants and Common Stock Investment

In December 2001, Aon invested $227 million in Endurance Specialty Holdings, Ltd. (Endurance), a Bermuda-based insurance and reinsurance company that provides additional underwriting capacity to commercial property and casualty insurance and reinsurance clients. During 2004, Aon sold virtually all of its common stock investment in Endurance, including 1.4 million shares in first quarter 2004, which resulted in a pretax gain of approximately $11 million.

In conjunction with the initial common stock investment, Aon also received 4.1 million stock purchase warrants, which allow Aon to purchase additional Endurance common stock through December 2011. These warrants meet the definition of a derivative, which requires them to be recorded in the financial statements at fair value, with changes in fair value recognized in earnings on a current basis. With the assistance of an independent third party, Aon valued the warrants using the Black-Scholes pricing methodology and determined the warrants had a fair value of approximately $96 million, $80 million and $84 million as of March 31, 2005, December 31, 2004, and March 31, 2004, respectively. The increase in the fair value of the warrants was $16 million and $4 million for the quarters ended March 31, 2005 and 2004, respectively.

The assumptions used to value the Endurance stock purchase warrants were as follows:

	March 31, 2005			December 31, 2004			March 31, 2004
• Maturity (in years)	6.71			6.96			7.71
• Spot Price	$	32.29		$	29.31		$	30.88
• Risk Free Interest Rate	4.91		%	4.40		%	3.97		%
• Dividend Yield	0.00		%	0.00		%	0.00		%
• Volatility	14		%	17		%	22		%
• Exercise Price	$	12.12		$	13.20		$	14.10

The model assumes: the warrants are “European-style”, which means they are valued as if the exercise can only occur on the expiration date; the spot and exercise prices are reduced by expected future dividends; and the dividend remains unchanged during the period the warrants are outstanding. Although Endurance currently pays a dividend, a zero dividend yield is used in the Endurance warrants valuation, because the future dividend payment value has been reflected in the spot and exercise valuation prices.

The change in fair value during the period was recognized as investment income in the Corporate and Other segment. The future value of the warrants may vary considerably from the value at March 31, 2005 due to the price movement of the underlying shares, as well as the passage of time and changes in other factors that are employed in the valuation model.

2. Accounting and Disclosure Changes

In October 2004, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 04-8 The Effect of Contingently Convertible Instruments on Diluted Earnings per Share. Contingent convertible instruments are generally convertible into common shares of an issuer after the common stock price has exceeded a predetermined threshold for a specific time period. EITF 04-8 requires that contingent convertible instruments be included in diluted earnings per share computations (if dilutive) regardless of whether the market price trigger (or other contingent feature) has been met. EITF 04-8 was effective for reporting periods ending after December 15, 2004. Prior period diluted earnings per share amounts presented for comparative purposes are required to be restated.

Aon’s 3.5% convertible debt securities, which were issued in November 2002 and are due November 2012, are contingently convertible. To comply with the requirements of EITF 04-8, Aon has adjusted its first quarter 2004 diluted earnings per share, reducing the amount initially reported from $0.53 to $0.51.

In December 2004, the FASB issued Statement No. 123 (revised 2004) Share-Based Payment . This Statement is a revision of FASB Statement No. 123, as amended, and requires entities to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost will be recognized over the period during which an employee is required to provide services in exchange for the award (usually the vesting period). Statement No. 123 (R) covers various share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. Statement No. 123 (R) eliminates the ability to use the intrinsic value method of accounting for share options, as provided in APB No. 25. Statement No. 123 (R) was to be effective as of the beginning of the first interim period that begins after June 15, 2005. On April 14, 2005, the Securities and Exchange Commission amended the effective date to the beginning of the next fiscal year after June 15, 2005. As a result, Aon will now be required to adopt Statement No. 123 (R) in first quarter 2006. Aon is currently evaluating the Statement’s transition methods and does not expect this Statement to have an effect materially different than the pro forma Statement No. 123 disclosures provided in Note 1.

In certain circumstances, our U.K. operations perform services, such as claims handling, subsequent to policy placement and recognition of associated revenue. Based on recent interpretations of U.K. accounting guidance by one of our competitors, we are re-evaluating whether these services are provided as part of a contractual obligation. We have not yet concluded this re-evaluation or determined if a provision is appropriate for U.K. or U.S. GAAP. In the event a provision is required, the charge is an adjustment for accounting purposes only, with no change in the pattern of cash expenditures.

3. Income Per Share

Income per share is calculated as follows:

	First quarter ended March 31,
(millions except per share data)	2005			2004
Basic net income:
Income from continuing operations	$	200		$	192
Loss from discontinued operations, net of tax	—			(22		)
Net income	200			170
Preferred stock dividends	(1		)	(1		)
Net income for basic per share calculation	$	199		$	169

Diluted net income:
Income from continuing operations	$	200		$	192
Loss from discontinued operations, net of tax	—			(22		)
Net income	200			170
Interest expense on convertible debt securities, net of tax	1			1
Preferred stock dividends	(1		)	(1		)
Net income for diluted per share calculation	$	200		$	170

Basic shares outstanding	321			318
Effect of convertible debt securities	14			14
Common stock equivalents	2			3
Diluted potential common shares	337			335
Basic net income per share:
Income from continuing operations	$	0.62		$	0.60
Discontinued operations	—			(0.07		)
Net income	$	0.62		$	0.53
Diluted net income per share:
Income from continuing operations	$	0.59		$	0.58
Discontinued operations	—			(0.07		)
Net income	$	0.59		$	0.51

Certain common stock equivalents related to options were not included in the computation of diluted net income per share because those options’ exercise price was greater than the average market price of the common shares. The number of options excluded from the quarterly calculation was 25 million and 18 million at March 31, 2005 and 2004, respectively.

As a result of the ratification of EITF No. 04-8, Aon is required to include in its diluted net income per share computation the impact of any contingently convertible instruments regardless of whether the market price trigger has been met. Aon’s 3.5% convertible debt securities, issued in November 2002, may be converted into a maximum of 14 million shares of Aon common stock, and these shares have been included in the computation of diluted net income per share. Prior periods diluted net income per share computations have been adjusted for the effects of EITF No. 04-8 (see Note 2, Accounting and Disclosure Changes, for further information).

4. Comprehensive Income

The components of comprehensive income, net of tax, for the first quarter ended March 31, 2005 and 2004 are as follows:

	First quarter ended March 31,
(millions)	2005			2004
Net income	$	200		$	170
Net derivative gains (losses)	(13		)	2
Net unrealized investment gains (losses)	(20		)	40
Net foreign exchange losses	(102		)	(30		)
Comprehensive income	$	65		$	182

The components of accumulated other comprehensive loss, net of tax, are as follows:

(millions)	March 31, 2005			December 31, 2004

Net derivative gains	$	27		$	40
Net unrealized investment gains	42			62
Net foreign exchange translation	19			121
Net additional minimum pension liability	(904		)	(904		)
Accumulated other comprehensive loss	$	(816	)	$	(681	)

5. Business Segments

Aon classifies its businesses into three operating segments: Risk and Insurance Brokerage Services, Consulting, and Insurance Underwriting. A fourth segment, Corporate and Other, when aggregated with the operating segments and after the elimination of intersegment revenues, totals to the amounts in the accompanying condensed consolidated financial statements.

The Risk and Insurance Brokerage Services segment consists primarily of Aon’s retail, reinsurance and wholesale brokerage operations, as well as related insurance services, including underwriting management, captive insurance company management services, claims services, and premium financing. During 2004, Aon sold essentially all of its claims services businesses. The Consulting segment provides a full range of human capital management services delivered predominantly to corporate clientele utilizing six major practices: employee benefits, human resource outsourcing, compensation, management consulting, communications and strategic human resource consulting. The Insurance Underwriting segment provides specialty insurance products including supplemental accident, health and life insurance coverages, extended warranty, credit and select property and casualty insurance products. Corporate and Other segment revenue consists primarily of investment income from equity, fixed-maturity and short-term investments that are assets primarily of the insurance underwriting subsidiaries that exceed policyholders liabilities and which may include non-income producing equities, and income and losses on disposals of all securities, including those pertaining to assets maintained by the operating segments. Corporate and Other segment general expenses include administrative and certain information technology costs.

The accounting policies of the operating segments are the same as those described in Aon’s Annual Report on Form 10-K for the year ended December 31, 2004, except that the disaggregated financial results have been prepared using a management approach, which is consistent with the basis and manner in which Aon senior management internally disaggregates financial information for the purpose of making internal operating decisions. Aon evaluates performance based on stand-alone operating segment income before income taxes and generally accounts for intersegment revenue as if the revenue were to third parties, that is, at what management believes are current market prices.

Revenues are attributed to geographic areas based on the location of the resources producing the revenues. Intercompany revenues and expenses are eliminated in computing consolidated revenues and income before tax.

Revenue from continuing operations for Aon’s segments is as follows:

	First quarter ended March 31,
(millions)	2005			2004
Risk and Insurance Brokerage Services	$	1,399		$	1,464
Consulting	309			301
Insurance Underwriting	789			781
Corporate and Other	29			36
Intersegment revenues	(15		)	(18		)
Total revenue	$	2,511		$	2,564

Aon’s operating segments’ geographic revenue and income before income tax is as follows:

First quarter ended March 31:	Risk and Insurance Brokerage Services				Consulting				Insurance Underwriting
(millions)	2005		2004		2005		2004		2005		2004
Revenue
United States	$	474	$	577	$	174	$	174	$	534	$	512
United Kingdom	231		234		49		52		94		132
Continent of Europe	458		426		56		47		81		63
Rest of World	236		227		30		28		80		74
Total revenue	$	1,399	$	1,464	$	309	$	301	$	789	$	781

Income before income tax	$	243	$	243	$	26	$	26	$	68	$	53

Selected information for Aon’s Corporate and Other segment follows:

	First quarter ended March 31,
(millions)	2005			2004
Revenue:
Income from marketable equity securities and other investments:
Income from change in fair value of Endurance warrants	$	16		$	4
Equity earnings – Endurance	—			16
Other	8			2
	24			22
Limited partnership investments	1			4
Net gain on disposals and related expenses:
Gain on sale of Endurance stock	—			11
Impairment write-downs	(2		)	(1		)
Other	6			—
	4			10
Total revenue	29			36
Expenses:
General expenses	19			24
Interest expense	34			34
Total expenses	53			58
Loss before income tax	$	(24	)	$	(22	)

6. Goodwill and Other Intangible Assets

Goodwill represents the excess of cost over the fair market value of net assets acquired. Goodwill is allocated to various reporting units, which are either its operating segments or one reporting level below the operating segment. Goodwill is not amortized but is subject to impairment testing at least annually. The impairment testing requires Aon to compare the fair value of its reporting units to their carrying value to determine if there is potential impairment of goodwill. If the fair value of a reporting unit is less than its carrying value at the valuation date, an impairment loss would be recorded to the extent that the implied fair value of the goodwill within the reporting unit is less than the recorded amount of goodwill. Fair value is estimated based on various valuation metrics. Aon’s annual impairment evaluation date is October 1.

In March 2005, the Company re-evaluated the results of its annual impairment review due to the subsequent developments on the matters described in Note 13 and concluded that its initial conclusions remain appropriate and that no impairment loss is required.

When a business entity is sold, goodwill is allocated to the disposed entity based on the fair value of that entity compared to the fair value of the reporting unit in which it is included.

The changes in the net carrying amount of goodwill for the three months ended March 31, 2005 are as follows:

(millions)	Risk and Insurance Brokerage Services			Consulting		Insurance Underwriting			Total
Balance as of December 31, 2004	$	4,085		$	375	$	245		$	4,705
Goodwill acquired	29			—		—			29
Foreign currency revaluation	(90		)	1		(1		)	(90		)
Balance as of March 31, 2005	$	4,024		$	376	$	244		$	4,644

Other intangible assets are classified into three categories:

• “Customer Related and Contract Based” intangible assets include client lists as well as non-compete covenants;

• “Present Value of Future Profits” intangible assets represent the future profits of purchased books of business of the insurance underwriting subsidiaries; and

• “Marketing, Technology and Other” intangible assets are all other purchased intangibles not included in the preceding categories.

Other intangible assets by asset class are as follows:

(millions)	Customer Related and Contract Based		Present Value of Future Profits		Marketing, Technology and Other		Total
As of March 31, 2005
Gross carrying amount	$	211	$	87	$	169	$	467
Accumulated amortization	172		70		91		333
Net carrying amount	$	39	$	17	$	78	$	134

(millions)	Customer Related and Contract Based		Present Value of Future Profits		Marketing, Technology and Other		Total
As of December 31, 2004
Gross carrying amount	$	210	$	87	$	158	$	455
Accumulated amortization	168		67		87		322
Net carrying amount	$	42	$	20	$	71	$	133

Amortization expense for intangible assets for the years ended December 31, 2005, 2006, 2007, 2008 and 2009 is estimated to be $48 million, $38 million, $19 million, $14 million and $13 million, respectively.

7. Restructuring Charges

In 1996 and 1997, Aon recorded restructuring liabilities as a result of the acquisition of Alexander and Alexander Services, Inc. (A&A) and Bain Hogg. The remaining liability of $31 million is for lease abandonments and other exit costs, and is being paid out over several years as planned.

The following table sets forth recent activity relating to these liabilities:

(millions)
Balance at December 31, 2003	$	40
Cash payments in 2004	(9		)
Cash payments in 2005	(1		)
Foreign currency revaluation	1
Balance at March 31, 2005	$	31

Beginning in 2000, Aon restructured its brokerage operations and recorded expenses of $294 million over the three years ended December 31, 2002. For first quarter 2005, Aon made $1 million in payments related to the business transformation plan. Aon has remaining liabilities of $5 million for termination benefits, of which $2 million is expected to be paid both during the remainder of 2005 and in 2006, respectively, with the remainder payable thereafter. Aon’s unpaid liabilities are included in general expense liabilities in the condensed consolidated statements of financial position.

8. Capital Stock

During the first three months of 2005, Aon issued 805,000 shares of common stock for employee benefit plans and 180,000 shares in connection with the employee stock purchase plan. There were 22.4 million shares of common stock held in treasury at March 31, 2005, all of which are restricted as to their reissuance.

9. Redeemable Preferred Stock

At March 31, 2005, one million shares of redeemable preferred stock were outstanding. These shares are redeemable at the option of Aon or the holders, in whole or in part, at $50.00 per share beginning one year after the death of both of the original owners, which occurred in September 2004. Aon has not received a notice of intent to redeem these shares, nor does Aon currently intend to redeem these shares.

10. Disposal of Operations

In first quarter 2005, Aon announced its intention to divest Swett & Crawford, its U.S. wholesale insurance brokerage unit, which is included in the Risk and Insurance Brokerage Services segment. The potential divestiture of Swett & Crawford qualifies as “Held for Sale.” The assets and liabilities of this operation have been reclassified to other assets and other liabilities, respectively, on the March 31, 2005 and December 31, 2004 condensed consolidated statements of financial position. Assets and liabilities reclassified were $337 million and $313 million, respectively, at March 31, 2005 and $417 million and $406 million, respectively, at December 31, 2004. Operating results for the quarters ended March 31, 2005 and 2004 remain in continuing operations. No loss is expected from the sale.

In fourth quarter 2004, Aon sold Cambridge Integrated Services Group (“Cambridge”), its U.S. claims services business, which was included in the Risk and Insurance Brokerage Services segment, to Scandent Holdings Mauritius Limited (“SHM”), for $90 million in cash plus convertible preferred stock in SHM valued at $15 million.

Because of Aon’s convertible preferred stock holding and other factors, Cambridge’s results prior to the sale date and the pretax gain on the sale of this business remain in income from continuing operations.

Discontinued Operations

In first quarter 2004, Aon committed to sell certain of its U.K. claims services businesses which were included in the Risk and Insurance Brokerage Services segment. The sale of these businesses was completed in early second quarter 2004, and resulted in a pretax loss of $24 million. Also during first quarter 2004, Aon sold a non-core Consulting subsidiary for a pretax gain of $4 million.

In second quarter 2004, Aon committed to sell its U.K. reinsurance brokerage runoff unit which was included in the Risk and Insurance Brokerage Services segment. This operation was sold in early third quarter 2004.

In third quarter 2004, Aon committed to sell a small non-core U.S. brokerage unit which was included in the Risk and Insurance Brokerage Services segment. This operation was sold in fourth quarter 2004.

The operating results of all these businesses were classified as discontinued operations, and prior year’s operating results have been reclassified to discontinued operations, as follows:

(millions)	First quarter ended March 31, 2004

Revenues:
U.K. businesses	$	20
Brokerage unit	1
	$	21

Pretax loss:
Operations:
U.K. businesses	$	(7	)
Brokerage unit	(1		)
	(8		)

Revaluation:
U.K. businesses	(24		)
Consulting business	4
	(20		)
Total pretax loss	$	(28	)

After-tax loss:
Operations	$	(5	)
Revaluation	(17		)
Total	$	(22	)

A&A Discontinued Operations

Prior to its acquisition by Aon, A&A discontinued its property and casualty insurance underwriting operations in 1985, some of which were then placed into run-off, with the remainder sold in 1987. In connection with those sales, A&A provided indemnities to the purchaser for various estimated and potential liabilities, including provisions to cover future losses attributable to insurance pooling arrangements, a stop-loss reinsurance agreement and actions or omissions by various underwriting agencies previously managed by an A&A subsidiary.

As of March 31, 2005, the liabilities associated with the foregoing indemnities were included in other liabilities in the condensed consolidated statements of financial position. Such liabilities amounted to $14 million, net of reinsurance recoverables and other assets of $92 million.

The insurance liabilities represent estimates of known and future claims expected to be settled over the next 20 to 30 years, principally with regards to asbestos, pollution and other health exposures. Although these insurance liabilities represent a best estimate of the probable liabilities, adverse developments may occur given the nature of the information available and the variables inherent in the estimation processes. Based on current estimates, management believes that the established liabilities for the A&A discontinued operations are sufficient.

11. Net Periodic Benefit Cost

The following table provides the components of net periodic benefit cost for Aon’s U.S. plans:

	Pension Benefits						Other Benefits
(millions) First quarter ended March 31:	2005			2004			2005		2004
Service cost	$	16		$	15		$	1	$	1
Interest cost	23			21			1		1
Expected return on plan assets	(23		)	(23		)	—		—
Amortization of net loss	8			5			—		—
Net periodic benefit cost	$	24		$	18		$	2	$	2

The following table provides the components of net periodic benefit costs for Aon’s material international pension plans, which are located in the U.K. and The Netherlands:

	Pension Benefits
(millions) First quarter ended March 31,	2005			2004
Service cost	$	16		$	16
Interest cost	51			46
Expected return on plan assets	(48		)	(41		)
Amortization of net loss	18			18
Net periodic benefit cost	$	37		$	39

Employer Contribution

Aon previously disclosed in its 2004 financial statements that it expected to contribute $47 million in 2005 to its U.S. defined benefit pension plans to satisfy minimum funding requirements and $7 million to fund other postretirement benefit plans. As of March 31, 2005, contributions of $1 million have been made to the U.S. pension plans and $2 million to other postretirement benefit plans. Aon currently expects to contribute a minimum of $47 million in 2005 to its U.S. pension plans.

Aon previously disclosed in its 2004 financial statements that it expected to contribute $155 million in 2005 to its major international defined benefit pension plans. Based on current rules and assumptions, Aon now plans to contribute $156 million to its major international defined pension plans during 2005. As of March 31, 2005, $39 million has been contributed.

12. Other-Than-Temporary Impairments

The following table analyzes our investment positions with unrealized losses segmented by quality and period of continuous unrealized loss (excluding deferred amortizable derivative losses of $1 million) as of March 31, 2005.

	Investment Grade
($ in millions)	0-6 Months			6 -12 Months			> 12 Months			Total
FIXED MATURITIES
U.S. Government & Agencies
# of positions	37			13			—			50
Fair Value	$	311		$	90		$	—		$	401
Amortized Cost	317			93			—			410
Unrealized Loss	(6		)	(3		)	—			(9		)
States & Political Subdivisions
# of positions	15			2			1			18
Fair Value	$	44		$	4		$	1		$	49
Amortized Cost	45			4			1			50
Unrealized Loss	(1		)	—			—			(1		)
Foreign Government
# of positions	113			13			10			136
Fair Value	$	754		$	118		$	231		$	1,103
Amortized Cost	764			122			236			1,122
Unrealized Loss	(10		)	(4		)	(5		)	(19		)
Corporate
# of positions	327			23			42			392
Fair Value	$	719		$	42		$	136		$	897
Amortized Cost	731			44			140			915
Unrealized Loss	(12		)	(2		)	(4		)	(18		)
Mortgage & Asset Backed
# of positions	163			9			5			177
Fair Value	$	149		$	11		$	9		$	169
Amortized Cost	151			11			10			172
Unrealized Loss	(2		)	—			(1		)	(3		)

TOTAL FIXED MATURITIES
# of positions	655			60			58			773
Fair Value	$	1,977		$	265		$	377		$	2,619
Amortized Cost	2,008			274			387			2,669
Unrealized Loss	(31		)	(9		)	(10		)	(50		)

% of Total Unrealized Loss	61		%	18		%	19		%	98		%

	Not Rated
	0-6 Months			6 -12 Months			> 12 Months			Total
EQUITIES
# of positions	1			1			—			2
Fair Value	$	27		$	2		$	—		$	29
Amortized Cost	27			3			—			30
Unrealized Loss	—			(1		)	—			(1		)

% of Total Unrealized Loss	0		%	2		%	0		%	2		%

For categorization purposes, Aon considers any rating of Baa or higher by Moody’s Investor Services or equivalent rating agency to be investment grade. Aon has no fixed maturities below investment grade with an unrealized loss.

Aon’s fixed-maturity portfolio in total had a $50 million gross unrealized loss at March 31, 2005, excluding $1 million related to deferred amortizable derivative losses, and is subject to interest rate, market, and credit risks.

No single position had an unrealized loss greater than $2 million. With a carrying value of approximately $3.8 billion at March 31, 2005, our total fixed-maturity portfolio is approximately 97% investment grade based on market value. Fixed-maturity securities with an unrealized loss are all investment grade and have a weighted average rating of “Aa” based on amortized cost. Aon’s non- publicly-traded fixed maturity portfolio had a carrying value of $333 million, including $59 million remaining in notes received from Private Equity Partnership Structures I, LLC, (“PEPS I”) on December 31, 2001 related to the securitization of limited partnerships and $96 million in notes issued by PEPS I to Aon since December 2001. Valuations of these securities primarily reflect the fundamental analysis of the issuer and current market price of comparable securities.

Aon’s equity portfolio is comprised of non-redeemable preferred stocks, publicly traded common stocks and other common and preferred stocks not publicly traded. This portfolio had $1 million of unrealized loss at March 31, 2005, and is subject to interest rate, market, credit, illiquidity, concentration and operational performance risks.

Aon periodically reviews securities with material unrealized losses and evaluates them for other than temporary impairments. Aon analyzes various risk factors and determines if any specific asset impairments exist. If there is a specific asset impairment, Aon recognizes a realized loss and adjusts the cost basis of the impaired asset to its fair value.

Under some conditions, it is assumed that a decline in value below cost is not other-than-temporary. This assumption is made for fixed-maturity investments with unrealized losses due to market conditions or industry-related events when the market is expected to recover, and Aon has the intent and ability to hold the investment until maturity or the market recovers, which is a decisive factor when considering an impairment loss. If the decision that holding the investment is no longer appropriate, Aon will reevaluate that investment for other-than-temporary impairment.

Aon reviews invested assets with material unrealized losses each quarter. Please see Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates in Aon’s 2004 Annual Report on Form 10-K for further information.

13. Contingencies

Aon and its subsidiaries are subject to numerous claims, tax assessments, lawsuits and proceedings that arise in the ordinary course of business. The damages claimed in these matters are or may be substantial, including, in many instances, claims for punitive, treble or extraordinary damages. Aon has purchased errors and omissions (“E&O”) insurance and other appropriate insurance to provide protection against losses that arise in such matters. Accruals for these items, net of insurance receivables, when applicable, have been provided to the extent that losses are deemed probable and are reasonably estimable. These accruals and receivables are adjusted from time to time as developments warrant.

On April 21, 2004, Aon received a subpoena from the Office of the Attorney General of the State of New York calling for the production of documents relating to Placement Service Agreements, Market Service Agreements and similar agreements under which insurance carriers pay compensation to Aon beyond standard commissions. The office subsequently issued several other requests for information to Aon as part of its inquiry into alleged practices in the insurance industry, including bid-rigging, fictitious quotes, “tying,” and “steering” of business. The departments of insurance or attorneys general of approximately 25 other states have also issued subpoenas or requested information regarding these and other issues. Aon is fully cooperating with all of these investigations.

On March 4, 2005, Aon Corporation (“Aon”) and its subsidiaries and affiliates (collectively, the “Company”) entered into an agreement (the “Settlement Agreement”) with the Attorney General of the State of New York, the Superintendent of Insurance of the State of New York, the Attorney General of the State of Connecticut, the Illinois Attorney General and the Director of the Division of Insurance, Illinois Department of Financial and Professional Regulation (collectively, the “State Agencies”) to resolve all the issues related to investigations conducted by the State Agencies.

The material terms of the Settlement Agreement are as follows:

The Company will pay $190 million into a fund (the “Fund”) to be distributed to certain eligible policyholder clients. These payments are in full satisfaction of the Company’s obligations under the Settlement Agreement and the State Agencies have agreed not to impose any other financial obligation or liability on the Company related to the lawsuits. No portion of the payments by the Company is considered a fine or penalty. The Company will make payments into the Fund as follows:

• On or before September 1, 2005, the Company shall pay $76 million into the Fund.

• On or before September 1, 2006, the Company shall pay $76 million into the Fund.

• On or before September 1, 2007, the Company shall pay $38 million into the Fund.

The Fund, plus interest, will be used to compensate the Company’s eligible policyholder clients according to procedures set out in the Settlement Agreement. No amount paid to the Fund will be returned to Aon under any circumstances.

On or before June 30, 2005, the Company will calculate, in accordance with a formula approved by the State Agencies, the amount that each policyholder client is eligible to receive from the Fund. Clients eligible to participate in the Fund are those U.S. clients that engaged the Company to place, renew, consult on or service insurance with inception or renewal dates between January 1, 2001 through December 31, 2004 (the “Relevant Period”) where such placement, renewal, consultation or

servicing resulted in contingent commissions or overrides recorded by Aon during the Relevant Period (the “Eligible Policyholders”).

On or before June 30, 2005, the Company must send a notice to each Eligible Policyholder setting forth, among other things, the amount it will be paid from the Fund if it elects to participate (a “Participating Policyholder”). Participating Policyholders must tender a release of claims against the Company arising from acts, omissions, transactions or conduct that are the subject of the lawsuits.

On November 30, 2005, September 30, 2006 and September 30, 2007, each Participating Policyholder shall receive from the Fund as much of that Participating Policyholder’s aggregate share of the Fund as possible with the monies then available in the Fund.

In the event that an Eligible Policyholder elects not to participate or otherwise does not respond by October 30, 2005 (a “Non-Participating Policyholder”), that client’s allocated share may be used by the Company to satisfy any pending or other claims asserted by clients relating to issues in the Settlement Agreement. In no event shall a distribution be made from the Fund to any other client until all Participating Policyholders have been paid, nor shall total payments to any Non-Participating Policyholder exceed 80% of that policyholder’s original allocated share. If any funds remain in the Fund as of October 1, 2007, such funds shall be distributed pro rata to the Participating Policyholders by November 1, 2007. In no event shall any of the amounts paid into the Fund be used to pay attorneys’ fees.

Also within 60 days of the date of the Settlement Agreement, the Company shall commence the implementation of certain business reforms, including agreeing not to accept contingent compensation as defined in the Settlement Agreement.

The Company shall not, directly or indirectly, seek or accept indemnification pursuant to any insurance policy or other reimbursement with respect to any amounts payable under the Settlement Agreement.

In accordance with APB Opinion No. 21, Interest on Receivables and Payables , the Company has discounted the payment stream associated with the settlement and recorded the present value of the liability and corresponding expense of $180 million in the financial statements as of December 31, 2004. The discount was determined using Aon’s incremental borrowing rate. The Company has not discounted the payment due on September 1, 2005. The settlement was considered fully tax deductible and is not treated as a permanent difference in the Company’s tax calculation.

Purported clients have also filed civil litigation against Aon and other companies under a variety of laws and legal theories relating to broker compensation practices and other issues under investigation by New York and other states. As previously reported, a putative class action styled Daniel v. Aon (Affinity) has been pending in the Circuit Court of Cook County, Illinois since August 1999. On July 28, 2004, the Court granted plaintiff’s motion for class certification. On March 9, 2005, the Court gave preliminary approval to a nationwide class action settlement within the $40 million reserve established in the fourth quarter of 2004.

Beginning in June 2004, a number of other putative class actions have been filed against Aon and other companies by purported clients under a variety of legal theories, including state tort, contract, fiduciary duty, antitrust and statutory theories, and federal antitrust and Racketeer Influenced and Corrupt Organizations Act theories. These actions are currently pending at early stages in state court in California and Illinois and in federal court in Florida, South Carolina and New Jersey. Aon believes it has meritorious defenses in all of these cases, and intends to vigorously defend itself

against these claims. The outcomes of these lawsuits, and any losses or other payments that may occur as a result, cannot be predicted at this time.

Beginning in late October and early November 2004, several putative securities class actions have been filed against Aon in the United States District Court for the Northern District of Illinois. Also beginning in late October and early November 2004, several putative ERISA class actions were filed against Aon in the United States District Court for the Northern District of Illinois. Aon believes it has meritorious defenses in all of these cases, and intends to vigorously defend itself against these claims. The outcomes of these lawsuits, and any losses or other payments that may occur as a result, cannot be predicted at this time.

In early February 2005, the Company received a subpoena from the U.S. Department of Labor regarding compensation arrangements in connection with clients’ employee benefit plans. The Company is cooperating with the investigation.

In July 2004, several subsidiaries of Aon were joined as defendants in an action in a U.K. court between British Petroleum (“BP”) and underwriters who subscribed to policies of insurance covering various offshore energy projects on which BP and its co-venturers have incurred losses of approximately $120 million. In the event BP does not recover from its underwriters, BP might seek to hold Aon liable for all or part of this amount. BP has also asserted a claim against Aon for additional losses of approximately $88 million on the same projects for which there is a lack of cover as a result of an earlier settlement between BP and other underwriters who subscribed to the same policies of insurance. The proceedings are at an early stage. Aon intends to vigorously defend itself against these claims. The outcomes of these actions, and any losses or other payments that may occur as a result, cannot be predicted at this time.

Although the ultimate outcome of all matters referred to above cannot be ascertained, and liabilities in indeterminate amounts may be imposed on Aon or its subsidiaries, on the basis of present information, amounts already provided, availability of insurance coverages and legal advice received, it is the opinion of management that the disposition or ultimate determination of such claims will not have a material adverse effect on the consolidated financial position of Aon. However, it is possible that future results of operations or cash flows for any particular quarterly or annual period could be materially affected by an unfavorable resolution of these matters.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

This Management’s Discussion and Analysis is divided into five sections. First, key recent events are described that have or will affect our financial results during 2005. We then review our consolidated results and segments with comparisons from first quarter 2005 to first quarter 2004. Next, we cover our financial condition and liquidity along with related disclosures as well as information on our off balance sheet arrangements. The final section addresses the factors that can influence future results.

The outline for our Management’s Discussion and Analysis is as follows:

KEY RECENT EVENTS

Investigation by the New York Attorney General and Other Regulatory Authorities

Sale of Non-Core Business

New Chief Executive Officer

REVIEW OF CONSOLIDATED RESULTS

General

Consolidated Results

REVIEW BY SEGMENT

General

Risk and Insurance Brokerage Services

Consulting

Insurance Underwriting

Corporate and Other

FINANCIAL CONDITION AND LIQUIDITY

Cash Flows

Financial Condition

Short-term Borrowings and Notes Payable

Stockholders’ Equity

Off Balance Sheet Arrangements

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

KEY RECENT EVENTS

Investigation by the New York Attorney General and Other Regulatory Authorities

The insurance industry has recently come under significant scrutiny by various regulatory authorities.

In April 2004, the New York Attorney General began investigating various insurance industry practices, including placement service agreements, market service agreements, and similar agreements under which insurance carriers pay compensation to insurance brokers, including Aon, beyond standard commissions. The New York AG issued subpoenas to various companies in the insurance industry, including Aon, related to these agreements and various other practices, including alleged tying of reinsurance, bid rigging, and soliciting fictitious quotes. Other state attorneys general and state departments of insurance have also issued subpoenas to Aon or begun investigations into contingent commissions and other business practices of brokers, agents and insurers, and some state regulators have announced that they intend to enact new regulations or policies to govern these practices. Contingent commissions generally are non-service-specific, volume- or profit-based compensation arrangements between insurers and brokers. Similarly, regulatory authorities in other countries are either considering or have already begun similar inquiries. Aon is fully cooperating with all the investigations, and has retained outside counsel to conduct its own internal review of its compensation and other practices.

In October 2004, the New York AG filed a complaint against Marsh & McLennan Company, Inc., and its subsidiary, Marsh Inc., alleging that Marsh committed fraud and violated New York State antitrust and securities’ laws. On October 15, 2004, Marsh announced that it was suspending the use of contingent commission agreements.

On October 22, 2004, we announced that we were terminating contingent commission arrangements with underwriters. We have nearly completed this process and are working with clients, insurance carriers, regulators, and others to establish a new business model that ensures that our compensation is transparent, easy to understand, and accepted by clients. Other insurance brokers and carriers have also announced that they will terminate contingent commission arrangements.

We earned $13 million of contingent commissions in first quarter 2005 compared to $39 million in first quarter 2004. The $13 million of contingent commissions reflected recognition of certain amounts related to arrangements terminated as of October 1, 2004.

The material terms of the Settlement Agreement are as follows:

• On or before September 1, 2005, the Company shall pay $76 million into the Fund.

• On or before September 1, 2006, the Company shall pay $76 million into the Fund.

• On or before September 1, 2007, the Company shall pay $38 million into the Fund.

In the event that an Eligible Policyholder elects not to participate or otherwise does not respond by October 1, 2005 (a “Non-Participating Policyholder”), that client’s allocated share may be used by the Company to satisfy any pending or other claims asserted by clients relating to the issues in the Settlement Agreement. In no event shall a distribution be made from the Fund to any other client until all Participating Policyholders have been paid, nor shall total payments to any Non-Participating Policyholder exceed 80% of that policyholder’s original allocated share. If any funds remain in the Fund as of October 1, 2007, such funds shall be distributed pro rata to the Participating Policyholders by November 1, 2007. In no event shall any of the amounts paid into the Fund be used to pay attorneys’ fees.

Within 60 days of the date of the Settlement Agreement, applicable business units of the Company shall commence the implementation of certain business reforms, including the following:

• To accept only a specific fee to be paid by the client, a specific percentage commission on premium to be paid by an insurer set at the time of purchase, renewal, placement or servicing of an insurance policy, or a combination of both.

• To fully disclose in plain, unambiguous written language commissions in either dollars or percentage amounts.

• Not to accept any other valuable compensation or consideration from an insurer other than as stated above, including contingent compensation and any compensation or preference in connection with the selection of insurers from which to solicit bids for clients.

• Not to request or accept from any insurer any false, fictitious or inflated quote, or quote that does not represent the insurer’s best evaluation at the time of the minimum premium the insurer would require to bind the insurance coverage sought by the client.

• Not to request or accept from any insurer any promise or commitment for the use of our services, including reinsurance brokerage, conditioned upon any arrangement to provide preferential treatment for any insurer.

• Not to place, renew or service a client’s business through a wholesale broker unless agreed to by the client after full disclosure of all the compensation to be received, any interest we may have in the wholesale broker, and any alternative to using the wholesaler broker.

• To fully disclose to each client all quotes received in connection with coverage of the client’s risk with all terms and all commissions to be received for each quote, and to provide disclosure of and obtain clients’ written consent to all compensation arrangements.

• To disclose to each client at the end of each year all compensation received during the preceding year from any insurer or third party in connection with the client’s policy.

• To implement company-wide written standards of conduct regarding compensation from insurers consistent with the terms of the settlement and institute appropriate training of employees, including business ethics, professional obligations, conflicts of interest, antitrust and trade practices compliance and record keeping.

• To establish a Compliance Committee of our Board of Directors that will monitor our compliance with the standards of conduct regarding compensation.

• To maintain a record of all complaints regarding compensation from any insurer, and provide such record to the Compliance Committee.

• To file annual reports with New York and Illinois for five years.

In accordance with APB Opinion No. 21, Interest on Receivables and Payables , we have discounted the payment stream associated with the settlement and recorded the present value of the liability and corresponding expense of $180 million in our financial statements as of December 31, 2004. The discount was determined using our incremental borrowing rate. We have not discounted the payment due on September 1, 2005. In first quarter 2005, we recognized $1 million of this discount in our condensed consolidated statement of income.

Sale of Non-Core Businesses

We continue to pursue opportunities to sell non-core businesses. We are actively marketing our Swett & Crawford wholesale insurance business, which is included in our Risk and Insurance Brokerage Services segment. In first quarter 2005, Swett & Crawford met the criteria set forth in FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets that require us to reclassify the assets and liabilities of this business to “Held for Sale,” and accordingly we have done so. Operating results of this unit remain in our income from continuing operations. We expect to receive an amount in excess of our net book value, therefore there are no indications of impairment.

New Chief Executive Officer

On April 4, 2005, we announced the hiring of Gregory C. Case as president and chief executive officer, effective immediately. Mr. Case was also elected to our Board of Directors. Mr. Case succeeds Patrick G. Ryan, who has served as Aon’s CEO since 1982. Mr. Ryan continues to serve as executive chairman of the Aon Board of Directors.

REVIEW OF CONSOLIDATED RESULTS

General

In the discussion of operating results, we sometimes refer to supplemental information extracted from consolidated financial information which is not required to be presented in the financial statements by U.S. generally accepted accounting principles (“GAAP”).

Supplemental information related to organic revenue growth is information that management believes is an important measure to evaluate business production from existing operations. We also believe that this supplemental information is helpful to investors. Organic revenue growth excludes from reported revenue the impact of foreign exchange, acquisitions, divestitures, transfers between business units, investment income, reimbursable expenses, unusual items, and for the underwriting segment only, an adjustment between written and earned premium.

The supplemental organic revenue growth information does not affect net income or any other GAAP reported figures. It should be viewed in addition to, not in lieu of, our condensed consolidated statements of income. Industry peers provide similar supplemental information about their revenue performance, although they do not necessarily make identical adjustments.

Aon has offices in over 120 countries and sovereignties. Movement of foreign exchange rates in comparison to the U.S. dollar may be significant and will distort true period-to-period comparisons of changes in revenue or pretax income. Therefore, management has isolated the impact of the change in currencies between periods by providing percentage changes on a comparable currency basis for revenue, and has disclosed the effect on earnings per share. Reporting on this basis gives financial statement users more meaningful information about our operations.

Certain tables in the segment discussions show a reconciliation of organic revenue growth percentages to the reported revenue growth percentages for the segments and sub-segments. We separately disclose the impact of foreign currency as well as the impact from acquisitions, divestitures, and transfers of business units, which represent the most significant reconciling items. Other reconciling items are generally not significant individually, or in the aggregate, and are therefore totaled in an “all other” category. If there is a significant individual reconciling item within the “all other” category, we provide additional disclosure in a footnote.

The following table and commentary provide selected consolidated financial information.

	First quarter ended
(millions)	March 31, 2005			March 31, 2004			Percent Change
Revenue:
Brokerage commissions and fees	$	1,720		$	1,791		(4	)%
Premiums and other	698			692			1
Investment income	93			81			15
Total revenue	2,511			2,564			(2	)

Expenses:
General expenses	1,702			1,777			(4	)
Benefits to policyholders	393			383			3
Depreciation and amortization	68			70			(3	)
Interest expense	34			34			—
Provision for New York and other states settlements	1			—			N/A
Total expenses	2,198			2,264			(3	)
Income from continuing operations before provision for income tax	$	313		$	300		4	%
Pretax margin-continuing operations	12.5		%	11.7		%

Consolidated Results

Revenue

Total revenue in the quarter declined 2% to $2.5 billion. Excluding the impact of favorable foreign exchange rates, revenue declined 4%. Brokerage commissions and fees were down 4% driven by the sale of our U.S. claims service business in fourth quarter 2004, a 9% decline in Brokerage-Americas organic revenue caused by the elimination of contingent commissions and the impact of declining property and casualty pricing, and lower reinsurance organic revenue, principally driven by consolidation among certain property and casualty insurance companies.

Contingent commission revenue was $13 million in the first quarter of 2005, reflecting recognition of certain amounts related to arrangements terminated as of October 1, 2004. Contingent commission revenue was $39 million in the first quarter of 2004.

Premiums and other was marginally higher compared to the prior year first quarter. The increase was driven by reinsurance program changes for a specialty accident and health line, strong growth in the sales of a supplemental health product, and a positive foreign exchange impact. These improvements were partially offset by planned reductions in certain programs and the loss of an account within our European credit line of business.

Investment income includes related investment expenses and income or loss on disposals and impairments. Investment income increased $12 million from first quarter 2004. The increase is attributable to a $12 million year over year gain related to the quarterly revaluation of our Endurance warrants, higher average interest rates on funds held by our operating segments, and favorable foreign exchange rates. These factors more than offset the impact of equity earnings from our investment in Endurance common stock in 2004, along with an $11 million pretax gain on the sale of approximately 1.4 million shares of Endurance stock last

year. After the sale of virtually all our common stock investment in Endurance in December 2004, we no longer account for our remaining investment (approximately 110,000 shares) using the equity method.

Expenses

For first quarter 2005, total expenses decreased 3% over the same period last year to $2.2 billion. On a comparable currency basis, expenses decreased 5%. General expenses decreased $75 million or 4%. Our Cambridge claims services business, which we sold in fourth quarter 2004, impacted 2004’s general expenses by $59 million. In addition, expense management helped mitigate the impact of weak revenues. Benefits to policyholders increased $10 million or 3% to $393 million, a change consistent with increases in revenue. Interest expense was even with first quarter 2004.

Income from Continuing Operations Before Provision for Income Tax

Income from continuing operations before provision for income tax increased $13 million to $313 million in first quarter 2005 as compared to $300 million for first quarter 2004. Increased investment income, lower general expenses, the impact of favorable foreign currency, and the divestiture of lower margin businesses in 2004 accounted for the improvement.

Income Taxes

The effective tax rate for continuing operations was 36% for first quarter 2005 and 2004. Differences between the overall effective tax rate and the U.S. federal statutory rate are due to U.S. state income tax provisions and differentials between U.S. and international tax rates.

Income from Continuing Operations

Income from continuing operations for first quarter 2005 increased to $200 million ($0.62 and $0.59 per basic and diluted share, respectively) from $192 million ($0.60 and $0.58 per basic and diluted share, respectively) in 2004. First quarter 2005 earnings per share was positively impacted by $0.02 related to translation gains. In addition, first quarter 2005 and 2004 earnings per share included $0.02 and $0.03, respectively, related to currency hedging gains.

REVIEW BY SEGMENT

General

Aon classifies its businesses into three operating segments: Risk and Insurance Brokerage Services, Consulting and Insurance Underwriting (see Note 5). Aon’s operating segments are identified as those that:

• report separate financial information

• are evaluated regularly when we are deciding how to allocate resources and assess performance.

Revenues are attributed to geographic areas based on the location of the resources producing the revenues. Segment revenue includes investment income, as well as the impact of related derivatives, generated by operating invested assets of that segment . Investment characteristics mirror liability characteristics of the respective segments:

• Our Risk and Insurance Brokerage Services and Consulting businesses invest funds held on behalf of clients and operating funds in short-term obligations.

• In Insurance Underwriting, policyholder claims and other types of non-interest sensitive insurance liabilities are primarily supported by intermediate to long-term fixed-maturity instruments. For this business segment, operating invested assets are approximately equal to average net policy liabilities.

• Our insurance subsidiaries also have invested assets that exceed net policy liabilities, in order to maintain solid claims paying ratings. Income from these investments are reflected in Corporate and Other segment revenues.

The following table and commentary provide selected financial information on the operating segments.

	First quarter ended
(millions)	March 31, 2005			March 31, 2004
Revenue:(1)
Risk and Insurance Brokerage Services	$	1,399		$	1,464
Consulting	309			301
Insurance Underwriting	789			781
Income before income tax:
Risk and Insurance Brokerage Services	$	243		$	243
Consulting	26			26
Insurance Underwriting	68			53
Pretax Margins:
Risk and Insurance Brokerage Services	17.4		%	16.6		%
Consulting	8.4		%	8.6		%
Insurance Underwriting	8.6		%	6.8		%

(1) Intersegment revenues of $15 million and $18 million were included in first quarter 2005 and 2004, respectively.

The following table reflects investment income earned by the operating segments, which is included in the foregoing results.

	First quarter ended
(millions)	March 31, 2005		March 31, 2004
Risk and Insurance Brokerage Services	$	27	$	14
Consulting	1		—
Insurance Underwriting	36		31

The $13 million increase in the Risk and Insurance Brokerage Services segment was driven primarily by an increase in average short-term interest rates.

The increase in the Insurance Underwriting segment is driven by a change in our investment management strategy to move to longer-term, higher-yield investments.

Risk and Insurance Brokerage Services

Aon is a leader in many sectors of the insurance industry: globally, it is the second largest insurance broker, the largest reinsurance broker and the leading manager of captive insurance companies worldwide. In the U.S., Aon is the largest wholesale broker. These rankings are based on the most recent surveys compiled and reports printed by Business Insurance.

Changes in premiums have a direct and potentially material impact on the insurance brokerage industry, as commission revenues are generally based on a percentage of the premiums paid by insureds. More specifically, lower premium rates, or a “soft market” generally result in lower commission revenues. Over the last year, rates in the property and casualty marketplace have declined. The downward rate trend varies by line of business, area of the world, and when each line of business began its downward trend. This trend may inhibit brokers’ ability to grow revenues.

Risk and Insurance Brokerage Services generated approximately 56% of Aon’s total operating segment revenues for first quarter 2005. Revenues are generated primarily through:

• commissions and fees paid by insurance and reinsurance companies,

• fees paid by clients,

• other carrier compensation, and

• interest income on funds held on behalf of clients.

As noted earlier, we announced on October 22, 2004, that we were terminating arrangements under which we accept contingent commissions from underwriters. We expect modest amounts of revenue to be recorded from pre-October 1, 2004 agreements during the first half of 2005. However, other compensation for services to underwriters would continue to be received where permitted by applicable law.

Our revenues vary from quarter to quarter throughout the year as a result of:

• how our clients’ policy renewals are timed,

• the net effect of new and lost business,

• the timing of services provided to our clients, and

• the income we earn on investments, which is heavily influenced by short-term interest rates.

Our retail brokerage companies operate in a highly competitive industry and compete with many retail insurance brokerage and agency firms, as well as individual brokers and agents and direct writers of insurance coverage. Specifically, this segment:

• addresses the highly specialized product development and risk management needs of commercial enterprises, professional groups, insurance companies, governments, healthcare providers, and non-profit groups, among others;

• provides affinity products for professional liability, life, disability income and personal lines for individuals, associations and businesses;

• provides wholesale brokerage, managing underwriting and premium finance services to independent agents and brokers as well as corporate clients;

• provides actuarial, loss prevention and administrative services to businesses and consumers; and

• offers claims management and loss cost management services to insurance companies and firms with self-insurance programs. During 2004, we exited most of these activities by completing the sale of our U.K. claims operations in second quarter 2004 and our U.S. third party claims administration business in fourth quarter 2004.

We review our product revenue results using the following sub-segments:

• Risk Management and Insurance Brokerage – Americas (Brokerage – Americas) encompasses our retail and wholesale brokerage services, affinity products, managing general underwriting, placement and captive management services and premium finance services in North and South America, the Caribbean and Bermuda.

• Risk Management and Insurance Brokerage – International (Brokerage – International) offers similar products and services to the rest of the world not included in Brokerage – Americas.

• Reinsurance Brokerage and Related Services (Reinsurance) offers sophisticated advisory services in program design and claim recoveries that enhance the risk/return characteristics of insurance policy portfolios, improve capital utilization and evaluate and mitigate catastrophic loss exposures worldwide.

• Claim Services (Claims) offered claims administration and loss cost management services. We exited these activities in 2004 by selling our U.S. and U.K. claims administration businesses.

Revenue

First quarter 2005 Risk and Insurance Brokerage Services revenue declined 4% to $1.4 billion from $1.5 billion earned in first quarter 2004. Excluding the effect of foreign exchange rates, revenue declined 6% from last year. The drop in Risk and Insurance Brokerage Services revenue was primarily caused by the sale of our Cambridge claims services business in November 2004. Divestitures (net of acquisitions) accounted for a $29 million decline in revenue.

Revenue on an organic basis declined 5% in first quarter, influenced by softening premium rates and lower new business production. Contingent commission revenue was $12 million in the first quarter of 2005, reflecting recognition of certain amounts related to arrangements terminated as of October 1, 2004. Contingent commission revenue was $35 million in the first quarter of 2004. Excluding the loss of contingent commissions, organic revenue in the current quarter declined 3%.

First quarter investment income was $27 million for this segment, an increase of $13 million over first quarter 2004. This improvement was driven primarily by an increase in average short-term interest rates.

This table details Risk and Insurance Brokerage Services revenue by product sub-segment.

(millions) First quarter ended March 31,	2005		2004		Percent Change		Less: Currency Impact		Less: Acquisitions, Divestitures & Transfers		Less: All Other		Organic Revenue Growth

Brokerage – Americas	$	499	$	531	(6	)%	1	%	1	%	1	%	(9	)%
Brokerage – International	660		633		4		4		2		(1	)	(1	)
Reinsurance	240		239		—		2		—		2		(4	)
Claims	—		61		(100	)	—		(100	)	—		—
Total revenue	$	1,399	$	1,464	(4	)%	2	%	(3	)%	2	%	(5	)%

• The 9% decline in Brokerage – Americas organic revenue was primarily driven by the termination of contingent commission arrangements and the impact of declining property and casualty pricing. Excluding the impact of the loss of contingent commissions, Brokerage-Americas organic revenue declined 5%.

• Brokerage-International reported a 1% decline in organic revenue, due principally to a difficult pricing environment.

• Reinsurance organic revenue declined 4%, principally driven by consolidation among certain property and casualty insurance companies.

• We sold our domestic and U.K. Claims services business during 2004.

This table details Risk and Insurance Brokerage Services revenue by geographic area.

	First quarter ended
(millions)	March 31, 2005		March 31, 2004		Percent Change

United States	$	474	$	577	(18	)%
United Kingdom	231		234		(1	)
Continent of Europe	458		426		8
Rest of World	236		227		4
Total revenue	$	1,399	$	1,464	(4	)%

For the U.S., the change in first quarter 2005 from first quarter 2004 includes the impact of:

• the fourth quarter 2004 sale of our claims services business ($57 million);

• a decline in contingent commissions ($23 million);

• negative pricing and timing of renewals in our U.S. retail brokerage; and

• lower pricing and lost business in our reinsurance business due to consolidation among certain property and casualty companies.

Other factors included in the change between first quarter 2005 and 2004 include:

• U.K. revenues decreased 1% despite favorable foreign exchange rates due in part to a difficult pricing environment;

• Continent of Europe revenue increased 8% due to positive impacts of currency exchange rates and organic revenue growth reflective of new business; and

• Rest of World revenue increased due to the positive impact of currency exchange rates.

Income Before Income Tax

Pretax income was $243 million in first quarter 2005 and 2004. Pretax margins in this segment were 17.4% and 16.6% for first quarter 2005 and 2004, respectively. The consistent pretax income was largely due to changes to incentive compensation programs and the favorable impact of foreign exchange rates, which offset lower revenue. Additionally, margin improvement was aided by the 2004 sale of our low margin claims services business and higher investment income, which more than offset the impact of lower contingent commissions. Expense controls have been effective in mitigating the impact of weak revenue on our pretax income.

U.K. Potential Contractual Obligation

Consulting Business

Aon Consulting is one of the world’s largest integrated human capital consulting organizations. This segment:

• provides a full range of human capital management services, from employee benefits to compensation consulting, and

• generated 12% of Aon’s total operating segment revenue in first quarter 2005.

We review our revenue results using the following sub-segments:

• Consulting services , which provide human capital consulting services in five major practice areas:

1. Employee Benefits advise clients about the structure, funding and administration of employee benefit programs which attract, retain and motivate employees. Benefits consulting includes health and welfare, retirement, executive benefits, absence management, compliance, employer commitment, investment advisory and elective benefit services.

2. Compensation focuses on designing salary, bonus, commission, stock option and other pay structures, with special expertise in the financial services and technology industries.

3. Management Consulting assists clients in process improvement and design, leadership, organization and human capital development, and change management.

4. Communications advises clients on how to communicate initiatives that support their corporate vision.

5. Strategic Human Resource Consulting advises complex global organizations on talent, change and organization effectiveness issues including assessment, selection performance management, succession planning, organization design and related people-management programs.

• Outsourcing , which offers employment processing, performance improvement, benefits administration and other employment-related services.

Revenues in the Consulting segment are affected by changes in clients’ industries, including government regulation, as well as new products and services, the state of the economic cycle, broad trends in employee demographics and the management of large organizations.

Revenue

First quarter 2005 revenue increased 3% from last year to $309 million. Excluding foreign currency exchange rate translation, the growth rate was 1%. Revenue on an organic basis declined 1%. Excluding the $4 million loss of contingent commission revenue, organic revenue was unchanged.

This table details Consulting revenue by product sub-segment.

(millions) First quarter ended March 31,	2005		2004		Percent Change		Less: Currency Impact		Less: Acquisitions, Divestitures & Transfers		Less: All Other		Organic Revenue Growth

Consulting services	$	240	$	225	7	%	2	%	2	%	1	%	2	%
Outsourcing	69		76		(9	)	1		—		1		(11	)
Total revenue	$	309	$	301	3	%	2	%	2	%	—	%	(1	)%

First quarter 2005 revenue compared to first quarter 2004, was impacted by:

• an increase in consulting services revenue, driven by the positive impact of foreign currency exchange rates and growth in certain sectors of the business, partially offset by the loss of contingent commission revenue, and

• outsourcing revenue, which declined 11% on an organic basis, reflecting the loss of a large client.

This table details Consulting revenue by geographic area.

	First quarter ended
(millions)	March 31, 2005		March 31, 2004		Percent Change

United States	$	174	$	174	—	%
United Kingdom	49		52		(6	)
Continent of Europe	56		47		19
Rest of World	30		28		7
Total revenue	$	309	$	301	3	%

Quarter to quarter changes include the impact of:

• Growth in certain sectors of the U.S. business was offset by the loss of contingent commission revenue,

• $3 million in lower U.K. revenues due to declines in organic revenue, and

• $11 million increase in Continent of Europe and Rest of World revenues as a result of favorable currency exchange impacts and organic revenue growth in Europe.

Income Before Income Tax

Pretax income was $26 million, unchanged from last year. In first quarter 2005, pretax margins in this segment were 8.4%, down from 8.6% in 2004. The small decrease in pretax margins is attributable to lower margins in our outsourcing business.

Insurance Underwriting

The Insurance Underwriting segment:

• provides supplemental accident, health and life insurance coverage mostly through direct distribution networks, primarily through approximately 7,000 career insurance agents working for our subsidiaries. Our revenues are affected by our success in attracting and retaining these career agents;

• provides Medicare supplement and Medicare Advantage policies in the U.S. through a dedicated sales force;

• offers extended warranty and credit insurance products that are sold through retailers, automotive dealers, insurance agents and brokers, and real estate brokers. Our revenues are affected by the addition and retention of these retailers, dealers, agents and brokers;

• offers select commercial property and casualty business on a limited basis through managing general underwriters, primarily Aon-owned companies;

• administers certain extended warranty services on automobiles, electronic goods, personal computers and appliances;

• has operations in the United States, Canada, Europe and Asia/Pacific; and

• generated 32% of Aon’s total operating segment revenue for first quarter 2005.

We review our revenue results using the following sub-segments:

• Accident & Health and Life (AH&L) , through which we provide an array of accident, sickness, short-term disability and other supplemental insurance products. Most of these products are primarily fixed-indemnity obligations and are not subject to escalating medical cost inflation;

• Warranty and Credit , through which we provide warranties on automobiles and a variety of consumer goods, including electronics and appliances. In addition, we provide non-structural home warranties and other warranty products, such as credit card enhancements and affinity warranty programs; and Property & Casualty , through which we provide select commercial property and casualty business on a limited basis.

Revenue

Written premium and fees are the basis for organic revenue growth in this segment; however, reported revenues reflect earned premiums.

Revenue in first quarter 2005 was $789 million, an increase of 1% over the same period in 2004. Excluding the effect of foreign exchange rate translation, revenues declined 1% compared to first quarter 2004.

This table details Insurance Underwriting revenue by product sub-segment:

(millions) First quarter ended March 31,	2005		2004		Percent Change		Less: Currency Impact		Less: All Other (1)		Organic Revenue Growth

Accident & health and life	$	440	$	425	4	%	2	%	—	%	2	%
Warranty, credit and property & casualty	349		356		(2	)	1		4		(7	)
Total revenue	$	789	$	781	1	%	2	%	2	%	(3	)%

(1) The difference between written and earned premium and fees, as a percentage change, was (3)% for accident & health and life, 3% for warranty, credit and property & casualty, and 0% for total revenue.

• AH&L revenue increased $15 million primarily due to reinsurance program changes for a specialty AH&L line, as well as sales of a supplemental health product that more than offset planned reductions in certain programs and the run-off of non-core businesses.

• The decline in warranty, credit and property & casualty revenue principally reflected the loss of an account within the European credit line of business that had minimal impact on pretax income.

This table details Insurance Underwriting revenue by geographic area.

	First quarter ended
(millions)	March 31, 2005		March 31, 2004		Percent Change

United States	$	534	$	512	4	%
United Kingdom	94		132		(29	)
Continent of Europe	81		63		29
Rest of World	80		74		8
Total revenue	$	789	$	781	1	%

• The increase in U.S. revenue is a result of changes in a reinsurance program and growth in revenue from a supplemental health product, along with growth in construction group and warranty programs, which more than offset lower results in discontinued programs.

• The U.K.’s quarterly comparison was negatively impacted by the inclusion in 2004 of three months of revenue from a book of specialty AH&L business, and the loss of an account in the credit line of business.

• Continent of Europe revenue increased $18 million or 29% due to improved organic growth and the favorable impact of foreign currency exchange.

• Rest of World showed significant improvement as compared to the prior year primarily as the result of positive foreign exchange gains and new credit and warranty programs.

Income Before Income Tax

For first quarter 2005, pretax income increased $15 million from the prior year to $68 million. Pretax margins for this segment rose to 8.6% from 6.8%.

Reasons for the improvement in pretax income include:

• higher investment income due to changes in the investment portfolio resulting in longer duration and higher returns,

• solid results in core AH&L businesses,

• lower policy acquisition costs, reflecting an increase in fronting programs in our warranty business and a change in amortization of the business mix in AH&L, and

• favorable foreign exchange rates.

The improvement was partially offset by deterioration of our Euro credit results due to the loss of an account, and losses in our European warranty business.

Corporate and Other

Corporate and Other segment revenue consists primarily of investment income (including income or loss on investment disposals and other-than-temporary impairment losses), which is not otherwise reflected in the operating segments. This segment includes:

• invested assets and related investment income not directly required to support the risk and insurance brokerage services and consulting businesses, and

• the assets in excess of net policyholder liabilities of the insurance underwriting subsidiaries and related income.

Corporate and Other segment revenue includes changes in the valuation of Endurance warrants. Aon carries its investment in Endurance warrants at fair value and records changes in the fair value through the Corporate and Other segment.

In 2004, revenue also included income from Endurance common stock, which was accounted for under the equity method before the sale of virtually all of our holdings in December 2004.

Private equities are principally carried at cost except where Aon has significant influence, in which case they are carried under the equity method. These investments usually do not pay dividends.

Limited partnerships (LP) are accounted for under the equity method and changes in the value of the underlying LP investments flow through Corporate and Other segment revenue.

Although our portfolios are highly diversified, they still remain exposed to market, equity, and credit risk.

We:

• periodically review securities with material unrealized losses and evaluate them for other-than-temporary impairments,

• analyze various risk factors and identify any specific asset impairments. If we determine there is specific asset impairment, we recognize a realized loss and adjust the cost basis of the impaired asset to its fair value, and

• review invested assets with material unrealized losses each quarter (see Note 12 for additional information regarding other-than-temporary impairments).

This table shows the components of Corporate and Other revenue and expenses:

	First quarter ended
(millions)	March 31, 2005			March 31, 2004			Percent Change
Revenue:
Income from marketable equity securities and other investments:
Income from change in fair value of Endurance warrants	$	16		$	4		300	%
Equity earnings – Endurance	—			16			(100	)
Other	8			2			300
	24			22			9
Limited partnership investments	1			4			(75	)
Net gain on disposals and related expenses:
Gain on sale of Endurance stock	—			11			(100	)
Impairment write-downs	(2		)	(1		)	N/A
Other	6			—			N/A
	4			10			(60	)
Total revenue	29			36			(19	)
Expenses:
General expenses	19			24			(21	)
Interest expense	34			34			—
Total expenses	53			58			(9	)
Loss before income tax	$	(24	)	$	(22	)	N/A	%

Revenue

Corporate and Other revenue was $29 million in first quarter 2005, compared to revenue of $36 million last year. First quarter 2004 included the sale of approximately 1.4 million shares of Endurance stock, which generated an $11 million pretax gain. In addition, last year we recognized $16 million of equity earnings from our investment in Endurance common stock. As noted earlier, we sold virtually all our common stock investment in Endurance in December 2004. Partially offsetting these items was the mark-to-market of our Endurance warrants, which increased our revenue by $16 million this year versus $4 million in 2004.

Loss Before Income Tax

Corporate and Other expenses were $53 million for first quarter 2005, a decrease of $5 million from the comparable period in 2004. General expenses were $19 million in first quarter 2005 versus $24 million last year reflecting, in part, lower incentive and occupancy costs.

These revenue and expense comparisons contributed to the overall Corporate and Other pretax loss of $24 million in first quarter 2005 versus a loss of $22 million in the same period last year.

FINANCIAL CONDITION AND LIQUIDITY

Cash Flows

Cash flows from operations represent the net income we earned in the reported periods adjusted for non-cash charges and changes in operating assets and liabilities.

Cash flows provided by operating activities for three months 2005 and 2004 are as follows:

(millions) As of March 31,	2005			2004
Insurance Underwriting operating cash flows	$	(3	)	$	118
Change in funds held on behalf of brokerage and consulting clients	550			400
All other operating cash flows	245			284
Cash provided by operating activities	$	792		$	802

Insurance Underwriting operating cash flows

Our insurance underwriting operations include accident & health and life, warranty, credit, and property & casualty businesses. These insurance products have distinct differences in the timing of premiums earned and payment of future liabilities.

The operating cash flow from our insurance subsidiaries, which also includes related corporate items, was $(3) million for first quarter 2005, down $121 million compared to 2004. In first quarter 2005, operating cash flows, analyzed by major income statement component, indicated that premium and other fees collected, net of reinsurance, were $804 million compared to $801 million in first quarter 2004. Investment and other miscellaneous income received was $46 million and $38 million for first quarter 2005 and 2004, respectively. Investment income improved in 2005 due to favorable interest rates and an increase in invested assets. In addition, we had a bearish outlook in 2004 on interest rates and began to redeploy short-term securities into longer duration assets in first quarter 2005.

We used revenues generated from premiums, investments and other miscellaneous income to pay claims and other cash benefits, commissions and general expenses and taxes. Claims and other cash benefits paid were $352 million in 2005 verses $318 million in first quarter 2004. Prior year’s written premiums, changes to certain reinsurance contracts and the timing of claim payments primarily influenced the $34 million increase. Commissions and general expenses paid were $422 million in first quarter 2005, compared to $386 million in the previous year’s first quarter. Tax payments for first quarter 2005 were $79 million compared to $17 million in 2004. Tax payments rose in first quarter 2005 primarily due to the timing of payments related to the sale of our Endurance common stock holdings, which occurred late in 2004.

We will invest and use operating cash flows to satisfy future benefits to policyholders, and when appropriate, make them available to pay dividends to the Aon parent company (Aon Parent). For first quarter 2005, Combined Insurance Company of America (CICA), one of our major insurance underwriting subsidiaries, declared and paid a cash dividend of $95 million to Aon Parent.

Generally, we invest assets supporting policyholder liabilities in highly liquid and marketable investment grade securities. These invested assets are subject to insurance codes set forth by the various governmental jurisdictions in which we operate, both domestically and internationally. The insurance codes restrict both the quantity and quality of various types of assets within the portfolios.

Our insurance subsidiaries’ policy liabilities are segmented among multiple accident and health and property casualty portfolios. Those portfolios have widely varying estimated durations and interest rate characteristics. Generally, policy liabilities are not subject to interest rate volatility risk. Therefore, in many of the portfolios, asset and policy liability duration are not closely matched. Interest rate sensitive policy liabilities are generally supported by floating rate assets.

Funds held on behalf of clients

In our Risk and Insurance Brokerage Services and Consulting segments, we typically hold funds on behalf of clients as a result of:

• premiums received from clients that are in transit to insurers. These premiums held on behalf of, or due from, clients are reported as assets with a corresponding liability due to the insurer.

• claims due to clients that are in transit from insurers. Claims held by, or due to, us, and which are due to clients, are also shown as both assets and liabilities.

These funds held on behalf of clients can fluctuate significantly depending on when we collect cash from our clients and when premiums are remitted to the insurance carriers.

All other operating cash flows

The operating cash flow from our Risk and Insurance Brokerage Services and Consulting segments, as well as related corporate items, was $245 million in first quarter 2005 compared to $284 million for the comparable quarter in 2004. These amounts exclude the change in funds held on behalf of clients for the quarter of approximately $550 million in 2005 and $400 million in 2004, as described above. The operating cash flows depend on the timing of receipts and payments related to revenues, incentive compensation, other operating expenses, and income taxes. Comparing first quarter 2005 to 2004, the net decrease in cash from our Risk and Insurance Brokerage Services and Consulting segments and related corporate items of $39 million was primarily affected by the timing of income tax payments and revenue declines.

Aon Parent uses the excess cash generated by our brokerage and consulting businesses to meet its liquidity needs, which consist primarily of servicing its debt and for paying dividends to its stockholders.

Investing and Financing Activities

We used the consolidated cash flow from operations (net of funds held on behalf of clients) of $792 million for:

• investing activities of $757 million. The cash flows used by investing activities included purchases of investments, net of sales, of $711 million and acquisitions, principally made by our international brokerage operations, of $28 million. Additionally, our investing activities included capital expenditures, net of disposals, of $27 million, and proceeds from the sale of operations of $9 million.

• financing needs of $70 million. Financing uses primarily included cash dividends paid to shareholders of $48 million and long-term debt repayments, net of issuances, of $27 million.

Financial Condition

Since year-end 2004, total assets increased $236 million to $28.6 billion.

Total investments at March 31, 2005 were $9.1 billion, an increase of $673 million from December 31, 2004. The increase is due in part to an increase in short-term investments of $350 million. In addition, fixed maturities increased $301 million to $3.8 billion during the first three months. Approximately 94% of Aon’s investment portfolio at quarter end was in short-term and fixed maturities, with 97% of our fixed income securities rated investment grade.

The following table details our investments by type at March 31, 2005:

(millions)	Amount Shown in Statement of Financial Position		Percentage of Total Investments

Fixed maturities - available for sale:
US government and agencies	$	459	5	%
States and political subdivisions	66		1
Debt securities of foreign governments not classified as loans	1,723		19
Corporate securities	1,220		13
Public utilities	111		1
Mortgage-backed and asset-backed securities	204		2
Total Fixed Maturities	3,783		41

Equity securities - available for sale:
Common stocks:
Banks, trusts and insurance companies	4		—
Industrial, miscellaneous and all other	33		—
Non-redeemable preferred stocks	1		—
Total Equity Securities	38		—
Policy loans	59		1
Other long-term investments:
Endurance Warrants	96		1
PEPS I Preferred Stock	176		2
Other	176		2
Total Other Long Term Investments	448		5
Total Other Investments	507		6

Short-term investments	4,798		53
TOTAL INVESTMENTS	$	9,126	100	%

Risk and Insurance Brokerage Services and Consulting receivables decreased $206 million in the first three months of 2005, primarily as the result of the timing of cash receipts. Insurance premiums payable increased $434 million over the same period reflecting the timing of cash payments, client demand for risk programs and the effect of foreign exchange rates.

Other assets decreased $43 million from December 31, 2004. Other assets are comprised principally of prepaid premiums related to reinsurance, prepaid pension assets, current and deferred income taxes and assets held for sale.

Short-term Borrowings and Notes Payable

Borrowings

Total debt at March 31, 2005 was $2.1 billion, a decrease of $30 million from December 31, 2004. Notes payable decreased by $30 million due to reduced borrowings on the Euro facility.

In February 2005, we replaced our credit facility with a three-year, $600 million facility to support commercial paper and other short-term borrowings. This facility allows us to issue up to $150 million in letters of credit. At March 31, 2005, we had $580 million available to us under this facility, as we have a $20 million letter of credit outstanding.

We also have several foreign credit facilities available. At March 31, 2005, we had available to us:

• €420 million under a new €650 million multi-currency facility effective in February 2005, which includes a €325 million three-year and €325 million five-year facility. See Note 7 to the consolidated financial statements in our 2004 Form 10-K for further discussion on both the U.S. and Euro facilities;

• a 364-day £45 million facility and a 10 million Canadian dollar facility, both of which expire in September 2005; and

• a €20 million open-ended facility.

In May 2005, $250 million of our debt becomes due. We anticipate that we will repay this debt with available cash.

The major rating agencies’ ratings of our debt at May 1, 2005 appear in the table below.

	Senior long-term debt		Commercial paper
	Rating	Outlook	Rating	Outlook
Standard & Poor’s	BBB+	Negative	A-2	Negative
Moody’s Investor Services	Baa2	Stable	P-2	Stable
Fitch, Inc.	BBB+	Negative	F-2	Negative

In March 2005:

• Fitch, Inc. lowered its ratings on our senior debt from “A-” to “BBB+” and affirmed our commercial paper rating of “F2.” Their rating outlook continues to be negative;

• S&P affirmed its ratings for Aon and removed us from credit watch; and

• Moody’s affirmed its ratings for Aon and changed their outlook from negative to stable.

A further downgrade in the credit ratings of our senior debt and commercial paper will:

• increase the company’s borrowing costs and reduce its financial flexibility. The Company’s 6.20% notes due 2007 ($250 million of which are outstanding) expressly provide for interest rate increases in the case of certain ratings downgrades. Because of the recent downgrade, the interest rate on these notes increased 25 basis points in January 2005 to 6.95%; and

• increase Aon’s commercial paper interest rates or may restrict our access to the commercial paper market altogether. Although we have committed backup lines in excess of our current outstanding commercial paper borrowings, we cannot assure that the company’s financial position will not be hurt if we can no longer access the commercial paper market.

Stockholders’ Equity

Stockholders’ equity increased $41 million during the first three months of 2005 to $5.1 billion, mainly reflecting net income before preferred dividends of $200 million, which was partially offset by dividends paid to stockholders of $48 million, and an increase in foreign exchange losses of $102 million.

Accumulated other comprehensive loss increased $135 million since December 31, 2004. Net unrealized investment gains decreased $20 million during the first three months of 2005. Net derivative gains declined $13 million over year-end 2004. Net foreign exchange translation gains decreased by $102 million due to the slight strengthening of the U.S. dollar against certain foreign currencies as compared to the prior year-end.

Our total debt and preferred securities as a percentage of total capital was 29% at March 31, 2005 compared to 30% at year-end 2004.

Off Balance Sheet Arrangements

Aon and its subsidiaries have issued letters of credit to cover contingent payments for taxes and other business obligations to third parties. We accrue amounts in our condensed consolidated financial statements for these letters of credit to the extent they are probable and estimable.

We have various contractual obligations that are recorded as liabilities in our condensed consolidated financial statements. Other items, such as certain purchase commitments and other executory contracts, are not recognized as liabilities in our condensed consolidated financial statements but are required to be disclosed.

We use special purpose entities and qualifying special purpose entities (QSPE), also known as special purpose vehicles, in some of our operations, following the guidance of FASB Statement No. 140 and other relevant accounting guidance.

Premium Financing

Some of our special purpose vehicles were formed solely to purchase financing receivables and sell those balances to conduits owned and managed by third-party financial institutions. Subject to certain limitations, agreements allow us to sell to these conduit vehicles through December 2005. As of March 31, 2005, the maximum commitment contained in these agreements was $2.0 billion.

Under the agreements, the receivables are sold to the conduits. Consequently, the conduits bear the credit risks on the receivables, subject to limited recourse in the form of credit loss reserves provided by our subsidiaries which we guarantee. Under the guarantee provisions, our maximum cash requirement was approximately $57 million at March 31, 2005. In January 2005, we eliminated the percentage guarantee for the European facility, replacing it with other collateral enhancements. In April 2005, we did the same for the U.S. facility. In January 2005, the Canadian facility was amended, reducing the ratings trigger and adding the financial covenants from the credit facility. We intend to renew these conduit facilities when they expire. If there are adverse bank, regulatory, tax or accounting rule changes, our access to the conduit facilities and special purpose vehicles would be restricted. These special purpose vehicles are not included in our condensed consolidated financial statements.

PEPS I

On December 31, 2001, we sold the vast majority of our LP portfolio, valued at $450 million, to PEPS I, a QSPE. The common stock interest in PEPS I is held by a limited liability company, owned by one of our subsidiaries (49%) and by a charitable trust, which we do not control, established for victims of the September 11th attacks (51%).

PEPS I sold approximately $171 million of investment grade fixed-maturity securities to unaffiliated third parties. It then paid our insurance underwriting subsidiaries the $171 million in cash and issued them an additional $279 million in fixed-maturity and preferred stock securities. The $171 million of securities have been either redeemed or funds are held in escrow for redemption.

Standard & Poor’s Ratings Services rated the fixed-maturity securities our subsidiaries received from PEPS I as investment grade. As part of this transaction, the insurance companies had been required to purchase from PEPS I additional fixed-maturity securities in an amount equal to the unfunded LP commitments as they are requested. These fixed-maturity securities are rated less than investment grade. Beginning in July 2004, Aon Parent assumed this responsibility. Aon Parent funded $6 million of commitments in first quarter 2005. As of March 31, 2005, the unfunded commitments amounted to $54 million. These commitments have specific expiration dates and the general partners may decide not to draw on these commitments.

The assets, liabilities and operations of PEPS I are not included in our condensed consolidated financial statements.

In previous years Aon has recognized other than temporary impairment writedowns of $59 million, equal to the original cost of one tranche. The preferred stock interest represents a beneficial interest in securitized limited partnership investments. The fair value of the private preferred stock interests depends on the value of the limited partnership investments held by PEPS I. These preferred stock interests have an unrealized investment gain as of March 31, 2005. Management assesses other-than-temporary declines in the fair value below cost using a financial model that considers the:

• value of the underlying limited partnership investments of PEPS I and

• nature and timing of the cash flows from the underlying limited partnership investments of PEPS I.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

This report 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, 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 regulatory investigations brought by state attorneys general and state insurance regulators related to our compensation arrangements with underwriters and related issues, the impact of class actions and individual lawsuits including client class actions, securities class actions, derivative 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to potential fluctuations in earnings, cash flows and the fair value of certain of our assets and liabilities due to changes in interest rates, foreign exchange rates and equity prices. In order to manage the risk arising from these exposures, we enter into a variety of derivative instruments. Aon does not enter into derivatives or financial instruments for trading purposes.

We are subject to foreign exchange rate risk associated with translating financial statements of our foreign subsidiaries into U.S. dollars. Our primary exposures are to the British pound, the Euro, the Canadian dollar, and the Australian dollar. We use over-the-counter (OTC) options and forward contracts to reduce the affect of foreign currency fluctuations on the translation of the financial statements of our foreign operations.

Additionally, some of our foreign brokerage subsidiaries receive revenues in currencies that differ from their functional currencies. Our U.K. subsidiary earns a portion of its revenue in U.S. dollars but the majority of its expenses are incurred in pounds sterling. Our policy is to convert into pounds sterling a sufficient amount of U.S. dollar revenue to fund the subsidiary’s pound sterling expenses using OTC options and forward exchange contracts. Additionally, some of our foreign brokerage subsidiaries receive revenues in currencies that differ from their functional currencies. Our U.K. subsidiary earns a substantial amount of its revenue in U.S. dollars (approximately 30% in 2004), but the majority of its expenses are incurred in pounds sterling. Our policy is to convert sufficient amounts of U.S. dollar revenue into pounds sterling to fund the subsidiary’s pound sterling expenses using OTC options and forward exchange contracts. At March 31, 2005, we have hedged 87% of our U.K. subsidiaries’ expected U.S. dollar transaction exposure for the next twelve months. We do not generally hedge exposures beyond three years.

The translated value of revenue and expense from our international brokerage and underwriting operations are subject to fluctuations in foreign exchange rates. First quarter 2005 earnings per share were positively impacted by $0.02 related to translation gains and $0.02 related to currency hedging gains.

We also use forward contracts to offset foreign exchange risk associated with foreign denominated inter-company notes.

The nature of the income of our businesses is affected by changes in international and domestic short-term interest rates. We monitor our net exposure to short-term interest rates and, as appropriate, hedge our exposure by entering into interest rate swap agreements and use exchange-traded futures and options to limit our net exposure. A decrease in global short-term interest rates adversely affects Aon’s income. This activity primarily relates to brokerage funds held on behalf of clients in the U.S. and U.K.

Interest rate swaps and caps are used to limit exposure to changes in interest rates related to interest rate guarantees provided by a subsidiary of Aon to certain unaffiliated entities.

Our underwriting companies fixed income investment portfolios are subject to credit risk. The reduction of a fixed income security’s credit rating will adversely affect the price of the security. The credit quality of Aon’s fixed income portfolio is high. The portfolio maintains an “Aa” average credit rating. The fixed maturity portfolio credit profile is monitored daily and evaluated regularly.

The valuation of our marketable equity security portfolio is subject to equity price risk. We sell futures contracts and purchase options to reduce the price volatility of our equity securities portfolio and equity securities we own indirectly through limited partnership investments.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. Based on Aon management’s evaluation (with the participation of the chief executive officer and chief financial officer), as of the end of the period covered by this report, Aon’s chief executive officer and chief financial officer have concluded that the disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d) –15(e) under the Securities Exchange Act

of 1934, as amended, (the “Exchange Act”)) are effective to ensure that information required to be disclosed by Aon in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Changes in internal control over financial reporting. There was no change in Aon’s internal control over financial reporting during first quarter 2005 that has materially affected, or is reasonably likely to materially affect, Aon’s internal control over financial reporting.

Review by Independent Registered Public Accounting Firm

The condensed consolidated financial statements at March 31, 2005, and for the three months then ended, have been reviewed, prior to filing, by Ernst & Young LLP, Aon’s independent registered public accounting firm, and their report is included herein.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Aon Corporation

We have reviewed the consolidated statement of financial position of Aon Corporation (the Company) as of March 31, 2005, and the related consolidated statements of income and cash flows for the three-month period ended March 31, 2005 and 2004. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial position of Aon Corporation as of December 31, 2004, and the related consolidated statements of income, stockholders’ equity, and cash flows for the year then ended, not presented herein, and in our report dated March 9, 2005 we expressed an unqualified opinion on those consolidated financial statements that included an explanatory paragraph regarding the Company’s changes in its method of calculating earnings per share in 2004 and its accounting for its involvement with certain variable interest entities in 2003. In our opinion, the information set forth in the accompanying consolidated statement of financial position as of December 31, 2004, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived.

ERNST & YOUNG LLP

Chicago, Illinois

May 3, 2005

PART II

OTHER INFORMATION

ITEM 1.		LEGAL PROCEEDINGS

		See Note 13 (Contingencies) to the condensed consolidated financial statements.

ITEM 6.		EXHIBITS

		Exhibits - The exhibits filed with this report are listed on the attached Exhibit Index.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Aon Corporation
	(Registrant)

May 9, 2005	/s/ David P. Bolger
	DAVID P. BOLGER
	EXECUTIVE VICE PRESIDENT,
	CHIEF FINANCIAL OFFICER, AND
	CHIEF ADMINISTRATIVE OFFICER
	(Principal Financial and Accounting Officer)

Aon CORPORATION

Exhibit Number

In Regulation S-K

Item 601 Exhibit Table

10.1	Employment Agreement dated April 4, 2005 between the Registrant and Gregory C. Case.

10.2	Employment Agreement dated May 2, 2005 between the Registrant and Ted T. Devine.

10.3	Employment Agreement dated November 30, 1998 between Aon Group, Inc., Aon Group Limited and Dennis L. Mahoney.

10.4	Employment Agreement dated October 31, 1988 between Aon Holdings b.v. and Dirk P.M. Verbeek.

12 Statements regarding Computation of Ratios

		(a)	Statement regarding Computation of Ratio of Earnings to Fixed Charges.
		(b)	Statement regarding Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.

15 Letter re: Unaudited Interim Financial Information

31.1 Certification of CEO

31.2 Certification of CFO

32.1 Certification of CEO Pursuant to section 1350 of Title 18 of the United States Code

32.2 Certification of CFO Pursuant to section 1350 of Title 18 of the United States Code

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is dated as of April 4, 2005, between Aon Corporation, a Delaware corporation (the “Company”), and Gregory C. Case (the “Executive”).

WHEREAS, the Company seeks to employ Executive as President and Chief Executive Officer of the Company; and

WHEREAS, Executive desires to serve and to be employed upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereby agree as follows:

1. Employment . The Company hereby agrees to employ the Executive and the Executive hereby agrees to be employed upon the terms and subject to the conditions contained in this Agreement. The term of employment of the Executive pursuant to this Agreement (the “Employment Period”) shall commence effective as of April 4, 2005 (the “Effective Date”) and shall end on April 3, 2010, unless earlier terminated pursuant to Section 4 hereof.

2. Position and Duties; Responsibilities; Board Service . (a) Position and Duties . The Company shall employ the Executive during the Employment Period as its President and Chief Executive Officer. During the Employment Period, the Executive shall perform faithfully and loyally and to the best of his abilities the duties assigned to him hereunder and shall devote his full business time, attention and effort to the affairs of the Company and its subsidiaries and shall use his best efforts to promote the interests of the Company and its subsidiaries. The Executive may engage in charitable, civic or community activities and, with the prior approval of the Board of Directors of the Company (the “Board”), may serve as a director of any other business corporation, provided that (i) such activities or service do not interfere with his duties hereunder or violate the terms of any of the covenants contained in Sections 7, 8 or 9 hereof and (ii) such other business corporation provides the Executive with director and officer insurance coverage which, in the opinion of the Board, is adequate under the circumstances.

(b) Responsibilities . Subject to the powers, authority and responsibilities vested in the Board and in duly constituted committees of the Board, the Executive shall have the authority and responsibility for the management, operation and overall conduct of the business of the Company. The Executive shall also perform such other duties (not inconsistent with the position of Chief Executive Officer) on behalf of the Company and its subsidiaries as may from time to time be authorized or directed by the Board. The Executive shall report to the Board.

(c) Board Service . Promptly following the Effective Date, the Executive will be appointed as a member of the Board. Provided that the Executive’s employment with the

Company has not previously been terminated, the Executive will be nominated for election as a member of the Board at the Company’s 2005 annual meeting of shareholders and at each subsequent annual meeting of shareholders during the Employment Period. If so appointed and elected, the Executive agrees that he will serve as a member of the Board.

3. Compensation . (a) Base Salary . During the Employment Period, the Company shall pay to the Executive a base salary at the rate of $1,500,000 per annum (“Base Salary”), payable semi-monthly in accordance with the Company’s executive payroll policy. Such Base Salary shall be reviewed annually on the Company’s regular executive salary review schedule, and shall be subject to adjustment at the discretion of the Board.

(b) Annual Bonus . During the Employment Period, commencing in calendar year 2005, the Executive shall participate in one or more annual incentive bonus plans (collectively, the “Senior Executive Plan”). Each such annual incentive bonus shall be determined pursuant to the terms of the Senior Executive Plan as in effect from time to time; provided, however, that (i) the Executive’s target annual incentive bonus shall not be less than 125% of the Executive’s Base Salary as in effect at the end of the fiscal year to which such annual incentive bonus relates (the “Bonus Year”), (ii) the Executive shall be eligible to earn an annual incentive bonus of up to 250% of the Executive’s Base Salary as in effect at the end of the Bonus Year, (iii) the Executive’s annual incentive bonus for Bonus Years after 2005 shall be paid 80% in cash and 20% in restricted stock units, which restricted stock units shall vest in equal installments (33-1/3% per year) at the end of each of the first three calendar years beginning after the end of the Bonus Year and shall otherwise be subject to the terms and conditions generally applicable to restricted stock unit grants under the Aon Stock Incentive Plan, and (iv) provided that Executive is employed by the Company on the regular payment date for the 2005 Bonus Year, Executive’s incentive bonus for the 2005 Bonus Year shall be equal to not less than $1,875,000 and shall be paid 100% in cash.

(c) Stock Awards . On the Effective Date, the Executive shall receive an inducement restricted stock unit award in the form attached hereto as Exhibit A of 125,000 shares of common stock (“Common Stock”) of the Company, which restricted stock units shall vest in installments of 12,500 shares at the end of each of the first four years beginning on the Effective Date and in a final installment of 75,000 shares at the end of the fifth year beginning on the Effective Date, and shall otherwise to the extent not inconsistent with Exhibit A to this Agreement be subject to terms and conditions the same as the terms and conditions generally applicable to restricted stock unit grants under the Aon Stock Incentive Plan. In the event of termination of the Executive’s employment by the Company without Cause pursuant to Section 4(d) hereof, or by the Executive for Good Reason pursuant to Section 4(e) hereof, such award shall become immediately vested. The Company will file a Form S-8 registration statement with respect to such restricted stock unit award.

(d) Stock Options . (i) On the Effective Date, the Executive shall be granted non-qualified options in the forms attached hereto as Exhibits B and C for an aggregate of 1,000,000 shares of the Common Stock of the Company. The non-qualified stock option in the form attached hereto as Exhibit B shall be granted pursuant to the terms of the Aon Stock Incentive Plan. The non-qualified stock option in the form attached hereto as Exhibit C shall be granted as an inducement non-qualified stock option award outside of the Aon Stock Incentive

Plan. The Company will file a Form S-8 registration statement with respect to such inducement non-qualified stock option award. Such options shall vest, in the aggregate, in installments of 333,334 shares at the end of the second year beginning on the Effective Date and of 333,333 shares at the end of each of the third and fourth years beginning on the Effective Date in accordance with the terms generally applicable to option grants under the Aon Stock Incentive Plan to the extent not inconsistent with this Agreement. In the event of termination of the Executive’s employment by the Company without Cause pursuant to Section 4(d) hereof, or by the Executive for Good Reason pursuant to Section 4(e) hereof, such options shall continue to vest in accordance with their original vesting schedules.

(ii) In each calendar year after 2005 during the Employment Term, subject to the approval of the committee administering the Aon Stock Incentive Plan, the Executive shall be granted annually, on the regular date for annual executive option grants, non-qualified stock options to purchase shares of Common Stock with a Black-Scholes value (based on the same methodology as used in valuing regular 2005 option grants under the Aon Stock Incentive Plan) of not less than $1,800,000, each such option shall vest in accordance with the terms generally applicable to option grants under the Aon Stock Incentive Plan; provided, however, that in the event of termination of the Executive’s employment by the Company without Cause pursuant to Section 4(d) hereof, or by the Executive for Good Reason pursuant to Section 4(e) hereof, each such option shall become vested to the extent that it would have become vested if the Executive’s employment had continued until the second anniversary of the date of the Executive’s termination of employment.

(e) Other Benefits . During the Employment Period, the Executive shall be entitled to participate in the Company’s employee benefit plans generally available to executives of the Company (such benefits being hereinafter referred to as the “Employee Benefits”); provided that life insurance coverage shall be no less than $5 million. The Executive also shall be entitled to take time off for vacation (not less than 4 weeks per year) or illness in accordance with the Company’s policy for executives and to receive all other fringe benefits as are from time to time made generally available to executives of the Company. If the Executive’s termination of employment occurs for any reason, other than by the Company for Cause pursuant to Section 4(c), after the Executive has both attained at least age 50 and completed at least ten years of continuous employment with the Company, the Executive and the Executive’s spouse and dependent children shall be eligible for coverage under the Company’s retiree medical program, as such program may be amended, excluding any amendment of the age and service eligibility requirements, from time to time (the “Retiree Medical Plan”).

(f) Expense Reimbursement . During the Employment Period the Company shall reimburse the Executive in accordance with the Company’s policies and procedures, for all proper expenses incurred by him in the performance of his duties hereunder. The Company shall pay the reasonable legal fees and expenses incurred by the Executive in connection with the negotiation and preparation of this Agreement in an amount not to exceed $25,000.

4. Termination . (a) Death . Upon the death of the Executive, all rights of the Executive and the Executive’s heirs, executors and administrators to compensation and other benefits under this Agreement shall cease immediately, except that the Executive’s heirs, executors or administrators, as the case may be, shall be entitled to:

(i) accrued Base Salary through and including the Executive’s date of death;

(ii) the amount of any annual incentive bonus earned and payable but not yet paid for the Bonus Year prior to the year in which the Executive’s termination of employment occurs;

(iii) prorated annual incentive bonus (based on the target bonus under the Senior Executive Plan or any successor plan for the Bonus Year in which the Executive’s termination of employment occurs) through and including the Executive’s date of death;

(iv) other Employee Benefits to which the Executive was entitled on the date of death in accordance with the terms of the plans and programs of the Company;

(v) the treatment of the restricted stock units granted to the Executive pursuant to Section 3(c) hereof in accordance with the terms thereof; and

(vi) the treatment of the options granted to the Executive pursuant to Section 3(d) hereof in accordance with the terms thereof.

(b) Disability . The Company may, at its option, terminate the Executive’s employment upon written notice to the Executive if the Executive, because of physical or mental incapacity or disability, fails to perform the essential functions of the Executive’s position, with or without reasonable accommodation, if relevant, required of the Executive hereunder for a continuous period of 120 days or any 180 days within any 12-month period. Upon such termination, the Executive’s entitlement to compensation and benefits shall cease immediately, except that the Executive shall be entitled to:

(i) accrued Base Salary through and including the effective date of the Executive’s termination of employment;

(ii) the amount of any annual incentive bonus earned and payable but not yet paid for the Bonus Year prior to the year in which the Executive’s termination of employment occurs;

(iv) other Employee Benefits to which the Executive is entitled upon termination of employment in accordance with the terms of the plans and programs of the Company;

(v) the treatment of the restricted stock units granted to the Executive pursuant to Section 3(c) hereof in accordance with the terms thereof; and

(vi) the treatment of the options granted to the Executive pursuant to Section 3(d) hereof in accordance with the terms thereof.

In the event of any dispute regarding the existence of the Executive’s incapacity or disability hereunder, the matter shall be resolved by the determination of a physician selected by the Board and reasonably acceptable to the Executive. The Executive shall submit to appropriate medical examinations for purposes of such determination.

(c) Cause . (i) The Company may, at its option, terminate the Executive’s employment under this Agreement for Cause (as hereinafter defined) upon written notice to the Executive (the “Cause Notice”). The Cause Notice shall state the particular action(s) or inaction(s) giving rise to termination for Cause. No action(s) or inaction(s) will constitute Cause unless (1) a resolution finding that Cause exists has been approved by a majority of all of the members of the Board (excluding the Executive) at a meeting at which the Executive is allowed to appear with his legal counsel and (2) where remedial action is feasible, the Executive fails to remedy the action(s) or inaction(s) within 10 days after receiving the Cause Notice. If the Executive so effects a cure to the satisfaction of the Board, the Cause Notice shall be deemed rescinded and of no force or effect.

(ii) As used in this Agreement, the term “Cause” shall mean any one or more of the following:

(A) any willful refusal by the Executive to follow lawful directives of the Board which are consistent with the scope and nature of the Executive’s duties and responsibilities as set forth herein;

(B) the Executive’s conviction of, or plea of guilty or nolo contendere to, a felony or of any crime involving moral turpitude, fraud or embezzlement;

(C) any gross negligence or willful misconduct of the Executive resulting in a material loss to the Company or any of its subsidiaries, or material damage to the reputation of the Company or any of its subsidiaries;

(D) any material breach by the Executive of any one or more of the covenants contained in Section 7, 8 or 9 hereof; or

(E) any violation of any statutory or common law duty of loyalty to the Company or any of its subsidiaries.

(iii) The exercise of the right of the Company to terminate this Agreement pursuant to this Section 4(c) shall not abrogate the rights or remedies of the Company in respect of the breach giving rise to such termination.

(iv) If the Company terminates the Executive’s employment for Cause, the Executive’s entitlement to compensation and benefits shall cease immediately, except that the Executive shall be entitled to the payments and benefits specified in Sections 4(b)(i) and 4(b)(iv) hereof.

(v) If the Company terminates the Executive’s employment for Cause, the Executive agrees to immediately resign from the Board.

(d) Termination Without Cause . The Company may, at its option, terminate the Executive’s employment under this Agreement upon written notice to the Executive for a reason other than a reason set forth in Section 4(a), 4(b) or 4(c). Any such termination shall be authorized by the Board. If the Company terminates the Executive’s employment for any such reason, the Executive’s entitlement to compensation and benefits shall cease immediately, except that the Executive shall be entitled to:

(i) the payments and benefits specified in Sections 4(b)(i) through 4(b)(iv) hereof, inclusive;

(ii) other Employee Benefits to which the Executive is entitled upon termination of employment in accordance with the terms of the plans and programs of the Company; provided that the Company shall continue to provide medical, dental and vision benefits to the Executive, spouse and dependent children for twenty-four (24) months following the date on which the Executive’s employment terminates, followed immediately thereafter with immediate eligibility for coverage under the Retiree Medical Plan (irrespective of his age and years of continuous employment), until the Executive, spouse and dependent children become covered by the plan of another employer providing comparable benefits;

(iii) the treatment of the restricted stock units granted to the Executive pursuant to Section 3(c) hereof in accordance with the terms thereof;

(iv) the treatment of the options granted to the Executive pursuant to Section 3(d) hereof in accordance with the terms thereof; and

(v) a lump sum cash payment equal to the product of (x) two, and (y) the sum of the Base Salary and the Executive’s target annual incentive bonus under the Senior Executive Plan for the Bonus Year in which the Executive’s employment terminates; provided that for this purpose the Executive’s Base Salary and target annual bonus shall be no less than his initial Base Salary and initial target bonus.

(e) Voluntary Termination . Upon 60 days prior written notice to the Company (or such shorter period as may be permitted by the Board), the Executive may voluntarily terminate the Executive’s employment with the Company for any reason. If the Executive voluntarily terminates the Executive’s employment pursuant to this Section 4(e), the Executive’s entitlement to compensation and benefits shall cease immediately, except that the Executive shall be entitled to the payments and benefits specified in Sections 4(b)(i) and 4(b)(iv) hereof.

(f) Termination for Good Reason . (i) Upon 30 days prior written notice to the Company (or such shorter period as may be permitted by the Board), the Executive may voluntarily terminate the Executive’s employment with Good Reason (as hereinafter defined). If the Executive voluntarily terminates employment pursuant to this Section 4(f), the Executive’s entitlement to compensation and benefits shall cease immediately, except that the Executive shall be entitled to:

(A) the payments and benefits specified in Sections 4(b)(i) through 4(b)(iv) hereof, inclusive;

(B) other Employee Benefits to which the Executive is entitled upon termination of employment in accordance with the terms of the plans and programs of the Company; provided that the Company shall continue to provide medical, dental and vision benefits to the Executive, spouse and dependent children for twenty-four (24) months following the date on which the Executive’s employment terminates, followed immediately thereafter with immediate eligibility for coverage under the Retiree Medical Plan (irrespective of his age and years of continuous employment), until the Executive, spouse and dependent children become covered by the plan of another employer providing comparable benefits;

(C) the treatment of the restricted stock units granted to the Executive pursuant to Section 3(c) hereof in accordance with the terms thereof;

(D) the treatment of the options granted to the Executive pursuant to Section 3(d) hereof in accordance with the terms thereof; and

(E) a lump sum cash payment equal to the product of (x) two, and (y) the sum of the Base Salary and the Executive’s target annual incentive bonus under the Senior Executive Plan for the Bonus Year in which the Executive’s employment terminates; provided that for this purpose the Executive’s Base Salary and target annual bonus shall be no less than his initial Base Salary and initial target bonus.

(ii) As used in this Agreement, the term “Good Reason” shall mean during the Employment Period, without the written consent of the Executive, any one or more of the following, provided that an isolated, insubstantial or inadvertent action not taken in bad faith or failure not occurring in bad faith which is remedied by the Company promptly after receipt of notice thereof given by the Executive shall not constitute Good Reason:

(A) the assignment to the Executive of any duties materially inconsistent in any respect with the Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by this Agreement;

(B) any failure by the Company to comply with the provisions of Section 3 hereof;

(C) any requirement by the Company that the Executive’s principal office be located more than 50 miles outside of the greater Chicago metropolitan area; or

(D) any other material breach by the Company of this Agreement.

5. Change in Control . During the Employment Term, the Executive shall be entitled to Change in Control severance protection pursuant to the Severance Agreement attached hereto as Exhibit D, which Severance Agreement may not, without the Executive’s consent, be amended or terminated during the Employment Term.

6. Federal and State Withholding . The Company shall deduct from the amounts payable to the Executive pursuant to this Agreement the amount of all required federal, state and local withholding taxes in accordance with the Executive’s Form W-4 on file with the Company, and all applicable federal employment taxes.

7. Noncompetition; Nonsolicitation . (a) General . The Executive acknowledges that in the course of his employment with the Company he has and will become familiar with trade secrets and other confidential information concerning the Company and its subsidiaries and that his services will be of special, unique and extraordinary value to the Company and its affiliates.

(b) Noncompetition . The Executive agrees that during the period of his employment with the Company and for a period of two years thereafter (the “Noncompetition Period”) he shall not in any manner, directly or indirectly, through any person, firm or corporation, alone or as a member of a partnership or as an officer, director, stockholder, investor or employee of or consultant to any other corporation or enterprise or otherwise, engage or be engaged, or assist any other person, firm, corporation or enterprise in engaging or being engaged, in any business, in which the Executive was involved or had knowledge, being conducted by, or contemplated by, the Company or any of its subsidiaries as of the termination of the Executive’s employment in any geographic area in which the Company or any of its subsidiaries is then conducting such business.

(c) Nonsolicitation . The Executive further agrees that during the Noncompetition Period he shall not in any manner, directly or indirectly, induce or attempt to induce any employee of the Company or any of its subsidiaries to terminate or abandon his or her employment for any purpose whatsoever.

(d) Exceptions. Nothing in this Section 7 shall prohibit the Executive from being (i) a stockholder in a mutual fund or a diversified investment company or (ii) a passive owner of not more than two percent of the outstanding stock of any class of a corporation, any securities of which are publicly traded, so long as Executive has no active participation in the business of such corporation.

(e) Reformation . If, at any time of enforcement of this Section 7, a court holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. This Agreement shall not authorize a court to increase or broaden any of the restrictions in this Section 7.

(f) Consideration; Breach . The Company and the Executive agree that the payments to be made, and the benefits to be provided, by the Company to the Executive pursuant to Section 3 hereof shall be made and provided in consideration of the Executive’s agreements contained in Section 7 hereof. In the event that the Executive shall commit a material breach of any provision of Section 7 hereof, the Company shall be entitled immediately to terminate making all remaining payments and providing all remaining benefits pursuant to Section 3 hereof and upon such termination the Company shall have no further liability to the Executive under this Agreement.

8. Confidentiality . The Executive shall not, at any time during the Employment Period or thereafter, make use of or disclose, directly or indirectly, any (i) trade secret or other confidential or secret information of the Company or of any of its subsidiaries or (ii) other technical, business, proprietary or financial information of the Company or of any of its subsidiaries not available to the public generally or to the competitors of the Company or to the competitors of any of its subsidiaries (“Confidential Information”), except to the extent that such Confidential Information (a) becomes a matter of public record or is published in a newspaper, magazine or other periodical available to the general public, other than as a result of any act or omission of the Executive, (b) is required to be disclosed by any law, regulation or order of any court or regulatory commission, department or agency, provided that the Executive gives prompt notice of such requirement to the Company to enable the Company to seek an appropriate protective order, or (c) is necessary to perform properly the Executive’s duties under this Agreement. Promptly following the termination of the Employment Period, the Executive shall surrender to the Company all records, memoranda, notes, plans, reports, computer tapes and software and other documents and data which constitute Confidential Information which he may then possess or have under his control (together with all copies thereof).

9. Inventions . The Executive hereby assigns to the Company his entire right, title and interest in and to all discoveries and improvements, patentable or otherwise, trade secrets and ideas, writings and copyrightable material, which may be conceived by the Executive or developed or acquired by him during the Employment Period, which may pertain directly or indirectly to the business of the Company or any of its subsidiaries. The Executive agrees to disclose fully all such developments to the Company upon its request, which disclosure shall be made in writing promptly following any such request. The Executive shall, upon the Company’s request, execute, acknowledge and deliver to the Company all instruments and do all other acts which are necessary or desirable to enable the Company or any of its subsidiaries to file and prosecute applications for, and to acquire, maintain and enforce, all patents, trademarks and copyrights in all countries.

10. Enforcement . The parties hereto agree that the Company and its subsidiaries would be damaged irreparably in the event that any provision of Section 7, 8 or 9 of this Agreement were not performed in accordance with its terms or were otherwise breached and that money damages would be an inadequate remedy for any such nonperformance or breach. Accordingly, the Company and its successors and permitted assigns shall be entitled, in addition to other rights and remedies existing in their favor, to an injunction or injunctions to prevent any breach or threatened breach of any of such provisions and to enforce such provisions specifically (without posting a bond or other security). The Executive agrees that he will submit himself to

the personal jurisdiction of the courts of the State of Illinois in any action by the Company to enforce any provision of Section 7, 8 or 9 of this Agreement.

11. Survival . Sections 4, 5, 7, 8, 9 and 10 of this Agreement shall survive and continue in full force and effect in accordance with their respective terms, notwithstanding any termination of the Employment Period.

12. Notices . All notices and other communications required or permitted hereunder shall be in writing and shall be deemed given when (i) delivered personally or by overnight courier to the following address of the other party hereto (or such other address for such party as shall be specified by notice given pursuant to this Section 12) or (ii) sent by facsimile to the following facsimile number of the other party hereto (or such other facsimile number for such party as shall be specified by notice given pursuant to this Section 12), with the confirmatory copy delivered by overnight courier to the address of such party pursuant to this Section 12:

If to the Company, to:

Aon Corporation

200 East Randolph

Chicago, Illinois 60601

Attention: Chairman of the Board

with copies to:

Aon Corporation

200 East Randolph

Chicago, Illinois 60601

Attention: Chairman of the Governance Committee

Aon Corporation

200 East Randolph

Chicago, Illinois 60601

Attention: General Counsel

If to the Executive, to the Executive’s home address as shown on the Company’s records.

13. Reimbursement of Legal Expenses . In the event that the Executive is successful, whether in arbitration or litigation, in pursuing any claim or dispute involving the Executive’s employment with the Company, including any claim or dispute relating to (a) this Agreement, (b) termination of the Executive’s employment with the Company or (c) the failure or refusal of the Company to perform fully in accordance with the terms hereof, the Company shall promptly reimburse the Executive for all costs and expenses (including, without limitation, attorneys’ fees) relating solely, or allocable, to such successful claim. In any other case, the Executive and the Company shall each bear all their own respective costs and attorneys’ fees.

14. Indemnification . The Company shall maintain, for the benefit of the Executive, director and officer liability insurance in form at least as comprehensive as, and in an amount that is at least equal to, that maintained by the Company for any other officer or director. In addition, the Executive shall be indemnified by the Company against liability as an officer and director of the Company and any subsidiary or affiliate of the Company to the maximum extent permitted by applicable law. The Executive’s rights under this Section 14 shall continue so long as he may be subject to such liability, whether or not this Agreement may have terminated prior thereto.

15. Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision of this Agreement or the validity, legality or enforceability of such provision in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

16. Entire Agreement . This Agreement constitutes the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related in any manner to the subject matter hereof.

17. No Mitigation . In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not the Executive obtains other employment.

18. Successors and Assigns . This Agreement shall be enforceable by the Executive and his heirs, executors, administrators and legal representatives, and by the Company and its successors and assigns, and shall be binding on such successors and assigns.

19. Headings; Inconsistency . Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. In the event of any inconsistency between the terms of this Agreement and any form, award (including the award agreements attached hereto as Exhibits A, B and C), plan or policy of the Company or any other agreement between the Executive and the Company, the terms of this Agreement shall control.

20. Governing Law . This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois without regard to principles of conflict of laws.

21. Amendment and Waiver . The provisions of this Agreement may be amended or waived only by the written agreement of the Company and the Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.

22. Counterparts . This Agreement may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

AON CORPORATION


By:	/s/ Patrick G. Ryan

Title:		Chairman & Chief Executive Officer


EXECUTIVE:

/s/ Greg Case

EXHIBIT A

Notice of Grant
of Restricted Stock Units

Notice is hereby given of the following restricted stock unit (RSU) grant.

Employee: Gregory C. Case

Employee Address:

Grant Date: April 4, 2005

Grant Number:

Number of RSU’s: 125,000

The RSU’s will vest in increments according to the schedule below:

Shares		Vest Date
12,500		April 3, 2006
12,500		April 3, 2007
12,500		April 3, 2008
12,500		April 3, 2009
75,000		April 3, 2010

Other pertinent details related to this grant are contained in the Inducement Restricted Stock Unit Agreement attached hereto.

INDUCEMENT RESTRICTED STOCK UNIT AGREEMENT

This Inducement Restricted Stock Unit Agreement (the “Agreement”) is entered into between Aon Corporation, a Delaware corporation (the “Company”) and the employee (the “Employee”) as listed on the “Notice of Grant of Restricted Stock Units”(the “Notice”).

The Company desires to grant the Employee restricted stock units (“RSU’s”), each RSU representing the right to receive a share of Aon common stock (“Common Stock”), $1.00 par value per share of Common Stock, to encourage the Employee to remain in the employ of the Company or its subsidiaries, to provide the Employee with an incentive to contribute to the financial progress of the Company, and to encourage ownership of the Company’s stock by the Employee.

NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, the parties hereto agree as follows:

1. Grant of Restricted Stock Units. The Company grants to the Employee an award of RSU’s as specified in the “Notice of Grant of Restricted Stock Units”.

2. Notice of Grant of Restricted Stock Units. The Notice shall specify the date of grant (the “Grant Date”), number of RSU’s and the vesting schedule of the RSU’s. The Notice is incorporated herein by reference and the terms of this Agreement are incorporated by reference in the Notice.

3. Tax Withholding Obligations. Prior to the delivery of shares, the Employee shall deposit with the Company, through means provided for by the Company, an amount of cash equal to the amount determined by the Company to be necessary upon delivery of the shares for any taxes, social security / social insurance contributions, or the like under any government statute. Alternatively, the Company may, at its sole election, a) withhold the required amounts from the Employee’s pay, or b) may permit the Employee, subject to such conditions as the Company shall require, to sell a number of shares otherwise deliverable having a value sufficient to satisfy all or part of the Employee’s estimated total tax obligations associated with vesting of the shares. The Company shall not deliver any of the shares until and unless the Employee has made the deposit required herein or proper provision for required withholding has been made.

4. Effect of Termination of Employment.

a) Voluntary termination prior to age 55 . The unvested portion of the RSU will be forfeited.

b) Termination due to disability or death . The RSU shall continue to vest as if the Employee remained employed by the Company.

c) Involuntary termination (other than for cause) or termination for good reason . The RSU shall be immediately vested in full. Termination for good reason shall mean termination pursuant to the provisions of Section 4(f) of the Employee’s Employment Agreement with the Company dated as of April 4, 2005 (the “Employment Agreement”).

d) Voluntary termination on or after age 55 . The RSU shall be immediately vested pro rata. The remaining unvested portion of the RSU shall be forfeited. Pro rata vesting is based on the period of employment since the Grant Date.

e) Termination for cause . All unvested shares shall be forfeited. Termination for cause shall mean termination pursuant to the provisions of Section 4(c) of the Employment Agreement.

5. Receipt by the Employee of the Prospectus. The Employee acknowledges receipt of the prospectus that contains the entire 2001 Aon Stock Incentive Plan (the “Plan”), and is incorporated herein by reference. The Employee represents and warrants that the Employee has read the Plan and agrees that all RSU’s awarded under this Agreement shall, to the extent not inconsistent with this Agreement, be subject to terms and conditions which are the same as the terms and conditions of the Plan.

6. Issuance of Shares. RSU’s shall be converted to shares of Common Stock as of the vesting date. Shares of Common Stock will be issued to the Employee as soon as practicable after the vesting date, subject to Section 3 of this Agreement

7. Rights as Shareholder. The Employee may not have voting or any other right as a shareholder of the Company with respect to the RSU’s. Upon conversion of the RSU to shares of Company Stock, the Employee will obtain full voting and other rights as a shareholder of the Company

8. Additional Covenants

a) Non-Solicitation Covenant

(i) Business Considerations. The Company is in the business of providing insurance brokerage, reinsurance brokerage, benefits consulting, compensation consulting, human resources consulting, managing underwriting and related insurance services including accounting, claims management and handling, contract wording, information systems and actuarial services. An essential element of its business is the development and maintenance of personal contacts and relationships with clients. Because of these contacts and relationships, it is common for the Company’s clients to develop identification with the employee who services its insurance needs, rather than with the Company itself. The personal identification of clients of the Company with a Company employee creates the potential for the Employee’s appropriation of the benefits of the relationships developed with clients on behalf of and at the expense of the Company. Since the Company would suffer irreparable harm if Employee left its employ and solicited the insurance or other related business of clients of the Company, it is reasonable to protect the Company against solicitation activities by Employee for a limited period of time after Employee leaves the Company so that the Company may renew or restore its business relationship with its client.

(ii) Covenant Not to Solicit . Employee hereby covenants and agrees that, except with the prior written consent of the Company, Employee will not for a period of two years after the end of employment compete directly or indirectly in any way with the business of the Company. For the purposes of this Agreement, “compete directly or indirectly in any way with the business of the Company” means to enter into or attempt to enter into (on Employee’s own behalf or on behalf of any other person or entity) any business relationship of the same type or kind as the business relationship which exists between the Company and its clients or customers to provide services related to the business of the Company for any individual, partnership, corporation, association or other entity who or which was a client or customer for whom the Employee was the producer or on whose account Employee worked or became familiar during 24 months prior to the end of employment.

(iii) Covenant Not to Hire . The Employee hereby also agrees not to induce or attempt to induce, or to cause any person or other entity to induce or attempt to induce, any person who is an employee of the Company to leave the employ of the Company during the term of the covenant set forth in (ii) above.

(iv) Acknowledgments . The Company and the Employee acknowledge and agree that the covenants contained in (ii) and (iii) are reasonably necessary for the protection of the Company and are reasonably limited with respect to the activities they prohibit, their duration, their geographical scope and their effect on the Employee and the public. The parties acknowledge that the purpose and effect of the covenants simply are to protect the Company for a limited period of time from unfair competition by the Employee.

Nothing in this Agreement shall prohibit the Employee from obtaining a livelihood. The intent of the parties is that the restrictive covenant of non-solicitation by the Employee is limited to those clients and customers of the Company, as reflected by the books of the Company, during the 24 months prior to the end of Employee’s employment with the Company.

law, and that a breach of this Agreement will result in irreparable and continuing harm to the Company, and that therefore, in addition to any other remedy which the Company may have at law or in equity, the Company shall be entitled to injunctive relief for a breach of this Agreement by Employee. In the event that the Company brings an action to enforce the terms and conditions of this Agreement, Employee shall pay the costs and expenses incurred by the Company in bringing such action, including legal fees.

c) Trade Secrets and Confidential Information. Employee acknowledges that the Company’s business depends to a significant degree upon the possession of information which is not generally known to others, and that the profitability of such business requires that this information remain proprietary to the Company. The Employee shall not, except as required in the course of employment by the Company, disclose or use during or subsequent to the course of employment, any trade secrets or confidential or proprietary information relating to the business of the Company of which the Employee becomes aware by reason of being employed or to which Employee gains access during his employment by the Company and which has not been publicly disclosed (other than by Employee in breach of this provision).

Such information includes client and customer lists, data, records, computer programs, manuals, processes, methods and intangible rights which are either developed by the Employee during the course of employment or to which the Employee has access. All records and equipment and other materials relating in any way to any confidential information relating to clients or business of the Company shall be and remain the sole property of the Company during and after the end of employment.

9. Other Provisions

a) Prior Employment Agreement Shall Not Control. Employee’s acceptance of this Agreement shall signify Employee’s acceptance that the terms and conditions of this grant shall supercede provisions of any prior agreement that could be construed as governing the terms of this grant.

b) Restriction on Transfer. Unless the RSU’s are vested as provided above, they may not be sold, transferred, pledged, assigned, or otherwise alienated at any time.

c) Right of Employment. Grants of RSU’s under this Agreement do not confer upon Employee any right to continue in the employ of theCompany.

d) Beneficiary. An Employee’s “beneficiary” means the person(s) or entity designated by the Employee in the most recent written beneficiary designation form filed with the Company to receive the benefits specified under the RSUs awarded under this Agreement upon the death of the Employee, or, if there is no designated beneficiary or surviving designated beneficiary, then the estate of the Employee.

e) Data Privacy. Employee understands and authorizes that Employee’s personal data (i.e. identification data, including name, address, telephone; financial data, including account numbers, wages; personal data, including age, gender, date of birth; education related data, including academic curriculum, professional experience; profession related data, including title and description of functions with the Company) will be shared with third party vendors hired by the Company to assist in administering the RSUs granted under this Agreement. Employee also authorizes the Company to receive, possess, use, retain, and transfer the data, in electronic form or other, and to further transfer data to third party vendors for purposes of assisting in the administration of the RSUs granted under this Agreement.

f) Need to Accept Grant. Employee acknowledges that this grant must be accepted within ninety (90) days of the Grant Date in order to be eligible to receive any benefits from this grant. If this grant is not accepted within ninety days, the grant will be cancelled and all benefits under this grant will be forfeited. To accept this grant, the Employee must sign the agreement and return it to Aon’s Executive Compensation Department within ninety (90) days.

g) Computation of Severance / Retirement Benefits. Benefits and rights acquired under the Plan do not constitute “base salary” or other regular employment earnings. Accordingly, Employee understands and accepts that benefits provided under the Plan will not be considered in calculating any of the Company’s and its subsidiaries’ obligations to Employee for bonus, retirement, severance, termination, health and welfare, or any other such payments, unless otherwise specified in the applicable plan.

h) Waiver. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of a subsequent breach or failure of the same term or condition, or a waiver of any other term or condition of this Agreement. Any waiver must be in writing.

i) Severability. To the extent that the terms set forth in this Agreement or any word, phrase, clause or sentence is found to be illegal or unenforceable for any reason, such word, phrase, clause or sentence shall be modified or deleted in such manner so as to afford the Company the fullest protection commensurate with making this Agreement, as modified, legal and enforceable under applicable laws, and the balance of this Agreement shall not be affected thereby, the balance being construed as severable and independent.

j) Governing Law . The validity, interpretation , instruction, performance, enforcement and remedies of or relating to this Agreement, and the rights and obligations of the parties hereunder, shall be governed by and construed in accordance with the substantive laws of the State of Illinois, without regard to the conflict of law principles, rules or statutes of any jurisdiction.

k) Notice . All notices given hereunder shall be in writing and, if intended for the Company, shall be addressed to it or delivered to it at its principal office to the attention of Executive Compensation Department. If intended for the Employee, notices shall be delivered personally or shall be addressed (if sent by mail) to the Employee’s then current residence address as shown on the Company’s records, or to such other address as the Employee directs in a notice to the Company. All notices shall be deemed to be given on the date received at the address of the addressee or, if delivered personally, on the date delivered.

IN WITNESS WHEREOF, the parties have accepted this Agreement as of the date hereof.

AON CORPORATION



Patrick G. Ryan, Chairman and Chief Executive Officer


RSU Recipient (Employee)		Date

EXHIBIT B

Notice of Grant
of Stock Options

Notice is hereby given of the following option grant (the “Option”) to purchase shares of Aon Corporation common stock, under the 2001 Aon Stock Incentive Plan.

Employee: Gregory C. Case

Employee Address:

Grant Date: April 4, 2005

Grant Number:

Number of Shares: 675,000

Exercise Price:

Type of Option: NQ

Expiration Date: April 3, 2015

The Option will vest according to the schedule below:

Shares		Vest Date
225,000		April 3, 2007
225,000		April 3, 2008
225,000		April 3, 2009

Other pertinent details related to this grant are contained in the 2001 Aon Stock Incentive Plan Stock Option Agreement and the 2001 Aon Stock Incentive Plan prospectus.

IMPORTANT NOTICE

This grant must be accepted within ninety (90) days of the grant date in order to be eligible to receive any benefits from this grant. Refer to Section 11 Other Provisions, Item g. “Need to Accept Grant” for more information. Additionally, if this is your first grant of Options from Aon, please make sure to submit a “Stock Option Beneficiary” form now. The form can be found under the OptionsLink “Company Information” tab. The same form is also used to change your beneficiary.

AON CORPORATION
2001 AON STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT

This Stock Option Award Agreement (the “Agreement”) is entered into between Aon Corporation, a Delaware corporation (the “Company”) and the employee (the “Employee”) as listed on the “Notice of Grant of Stock Options”(the “Notice”).

The Company desires, by affording the Employee an opportunity to purchase shares of Aon’s common stock (the “Common Stock”) as hereinafter provided, to encourage the Employee to remain in the employ of the Company or its subsidiaries, to provide the Employee with an incentive to contribute to the financial progress of the Company, and to encourage ownership of the Company’s stock by the Employee.

NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, the parties hereto agree as follows:

1. Grant of Option and Option Price. The Company grants to the Employee under the 2001 Aon Stock Incentive Plan (the “Plan”) the right and option (“Option”) to purchase all or part of the number of shares of the Common Stock of the Company and at the Option price per share specified in the “Notice of Grant of Stock Options” (the “Notice”).

2. Notice of Grant of Stock Options. The Notice shall specify the date of grant (the “Grant Date”), the Option price (the “Exercise Price”), the number of shares granted to the Employee, the expiration date of the Option, the vesting schedule of the Option, and the type of Option, specifying whether the grant is for non-qualified stock options (“NQ”) or incentive stock options (“ISO”). The ISO only applies to Employees in the United States and is intended to qualify as an incentive stock option within the meaning of Section 422 of the United States Internal Revenue Code of 1986, as amended. The Notice is incorporated herein by reference and the terms of this Agreement are incorporated by reference in the Notice.

3. Timing of Exercise. Any portion of the Option may be exercised at any time after such options have become vested as long as the Employee remains employed, and for periods thereafter as indicated in Section 6 of this Agreement, but no later than 10 years after the Grant Date.

4. Payment of Exercise Price. The Employee shall at the time of exercise of an Option (except in the case of a cashless exercise) tender the full Exercise Price. At the discretion of the Committee, and subject to such rules and regulations as it may adopt, the Exercise Price may be paid: (i) in full in cash through means provided by the Company; (ii) by delivering irrevocable instructions to a broker to promptly deliver to the Company the amount of sale or loan proceeds to pay the Exercise Price; (iii) by attesting to the ownership of sufficient shares of Common Stock which have been held by the Employee for at least six months to pay the Exercise Price; or (iv) through a cashless exercise with a broker approved for this purpose by the Company.

5. Tax Deposit. Upon exercising all or any part of an Option, the Employee shall deposit with the Company, through means provided for by the Company, an amount of cash equal to the amount determined by the Company to be withheld upon the exercise of the Option for any withholding taxes, social security / social insurance contributions, or the like under any government statute. The Committee may, at its sole discretion, and subject to such rules as it may adopt, permit the Employee to satisfy this withholding obligation, in whole or in part, by electing to sell shares of Common Stock having a fair market value on the date that the amount of tax to be withheld is determined equal to the applicable required minimum withholding. The Company shall not issue and deliver any of its Common Stock upon the exercise of any Option until and unless the Employee has made the deposit required herein or proper provision for withholding has been made.

6. Effect of Termination of Employment.

a) Voluntary termination prior to age 55 . The vested portion of the Option may be exercised no later than the 90-day period following termination of employment and the unvested portion will be forfeited.

b) Voluntary termination on or after age 55. The Option shall be immediately vested pro rata, and may be exercised no later than three years from the date of termination (not to exceed the expiration date of the Option). The remaining unvested portion of the Option shall be forfeited. Pro rata vesting is based on the period of employment since the Grant Date.

c) Termination due to disability or death. The Option shall continue to vest as if the Employee remained employed and may be exercised no later than the later of one year after the Option becomes 100% vested or one year from the date of termination, (not to exceed the expiration date of the Option).

d) Involuntary termination (other than for cause) or termination for good reason. The Option shall continue to vest as if the Employee remained employed and may be exercised no later than the the 90-day period following the later of the date the Option becomes 100% vested or the date of termination, (not to exceed the expiration date of the Option). Termination for good reason shall mean termination pursuant to the provisions of Section 4(f) of the Employee’s Employment Agreement with the Company dated as of April 4, 2005 (the “Employment Agreement”).

e) Termination for cause . The Option will not be exercisable. Termination for cause shall mean termination pursuant to the provisions of Section 4(c) of the Employment Agreement.

7. Receipt by the Employee of the Prospectus. The Employee acknowledges receipt of the Plan prospectus that contains the entire Plan, and is incorporated herein by reference. The Employee represents and warrants that Employee has read the Plan and agrees that all Options awarded under it shall be subject to all of the terms and conditions of the Plan.

8. Expiration Date of Option. An Option awarded under the Plan shall expire ten (10) years from the Grant Date, subject to the terms and conditions set forth in the Plan and this Agreement.

9. Issuance of Shares. The Employee shall have no interest in the shares covered by the Option grant contained in this Agreement unless and until shares are issued following the exercise of an Option.

10. Additional Covenants

a) Non-Solicitation Covenant

actuarial services. An essential element of its business is the development and maintenance of personal contacts and relationships with clients. Because of these contacts and relationships, it is common for the Company’s clients to develop identification with the employee who services its insurance needs, rather than with the Company itself. The personal identification of clients of the Company with a Company employee creates the potential for the Employee’s appropriation of the benefits of the relationships developed with clients on behalf of and at the expense of the Company. Since the Company would suffer irreparable harm if Employee left its employ and solicited the insurance or other related business of clients of the Company, it is reasonable to protect the Company against solicitation activities by Employee for a limited period of time after Employee leaves the Company so that the Company may renew or restore its business relationship with its client.

b) Company’s Right to Injunctive Relief; Attorneys’ Fees. The Employee acknowledges that the Employee’s services to the Company are of a unique character which gives them a special value to the Company, the loss of which cannot reasonably or adequately be compensated in damages in an action at law, and that a breach of this Agreement will result in irreparable and continuing harm to the Company, and that therefore, in addition to any other remedy which the Company may have at law or in equity, the Company shall be entitled to injunctive relief for a breach of this Agreement by Employee. In the event that the Company brings an action to enforce the terms and conditions of this Agreement, Employee shall pay the costs and expenses incurred by the Company in bringing such action, including legal fees.

c) Trade Secrets and Confidential Information. Employee acknowledges that the Company’s

business depends to a significant degree upon the possession of information which is not generally known to others, and that the profitability of such business requires that this information remain proprietary to the Company. The Employee shall not, except as required in the course of employment by the Company, disclose or use during or subsequent to the course of employment, any trade secrets or confidential or proprietary information relating to the business of the Company of which the Employee becomes aware by reason of being employed or to which Employee gains access during his employment by the Company and which has not been publicly disclosed (other than by Employee in breach of this provision).

11. Other Provisions

a) Plan Terms. Options are granted pursuant to the Plan, the terms and condition of which are incorporated into this Agreement by reference.

b) Prior Employment Agreement Shall Not Control. Employee’s acceptance of this Agreement shall signify Employee’s acceptance that the terms and conditions of this grant shall supercede provisions of any prior agreement that could be construed as governing the terms of this grant

c) Nontransferability. Except as described below, ISOs and NQs are not transferable by the Employee other than by will, the laws of descent and distribution, or pursuant to a beneficiary designation. Except as described below, any ISO or NQ is exercisable, during the Employee’s lifetime, only by the Employee or Employee’s legal representative. The ISOs and NQs may not be pledged, mortgaged, hypothecated or otherwise encumbered, or subject to the claims of creditors, or assigned pursuant to any domestic relations order. The Employee may transfer all or a portion of a NQ for no consideration to or for the benefit of the Employee’s immediate family (spouse, parents, children, stepchildren, adopted children, siblings and grandchildren). Such transfer may be directly to immediate family members, to a partnership, limited liability company or trust for the benefit of one or more immediate family members, or any other transfer deemed to be consistent with such a transfer.

d) Right of Employment. Grants of Stock Options under the Plan and of this Agreement do not confer upon Employee any right to continue in the employ of the Employer.

e) Beneficiary. An Employee’s “beneficiary” means the person(s) or entity as designated by Employee in the most recent written beneficiary designation form filed with the Company to receive the benefits specified under the Plan upon the death of the Employee, or, if there is no designated beneficiary or surviving designated beneficiary, then the estate of the Employee.

f) Data Privacy. Employee understands and authorizes Employer to share Employee’s personal data with the Company, the U.S. parent company. Employee also understands and authorizes that this data, as listed below, will be shared with third party vendors hired by the Company to assist in administering the Plan. Employee consents to the Employee’s Employer sharing of personal data (i.e. identification data, including name, address, telephone; financial data, including account numbers, wages; personal data, including age, gender, date of birth; education related data, including academic curriculum, professional experience; profession related data, including title and description of functions with the Company). Employee also authorizes Employer and the Company to receive, possess, use, retain, and transfer the data, in

electronic form or other, and to further transfer data to third party vendors for purposes of assisting in the administration and managing Employee’s participation in the Plan.

g) Need to Accept Grant. Employee acknowledges that this grant must be accepted within ninety (90) days of the Grant Date in order to be eligible to receive any benefits from this grant. If this grant is not accepted within the ninety (90) days, the grant will be cancelled and all benefits under this grant will be forfeited. To accept this grant, Employee must sign the agreement and return it to Aon’s Executive Compensation Department within ninety (90) days.

h) Computation of Severance / Retirement Benefits. Benefits and rights acquired under the Plan do not constitute “base salary” or other regular employment earnings. Accordingly, Employee understands and accepts that benefits provided under the Plan will not be considered in calculating any of the Company’s and its subsidiaries’ obligations to Employee for bonus, retirement, severance, termination, health and welfare, or any other such payments, unless otherwise specified in the applicable plan.

i) Plan Changes / Acquired Rights. Employee understands and agrees that the Company may terminate, change or otherwise alter the terms and conditions of the Plan at any time, and that any such termination, change or alteration will not amount to a breach or breaches, fundamental or otherwise, of Employee’s terms and conditions of employment . The scope of any change in terms is unforeseen; however, potential changes to the Plan may include, but are not limited to, 1) alteration of the discount at which employees are allowed to acquire Company shares, 2) modification of the vesting and/or offering periods, 3) adjustment of the award amounts, and 4) cancellation of the Plan. Employee hereby elects to participate in the Plan with full knowledge that benefits under the Plan can be terminated or otherwise modified by the Company at its sole discretion at any time.

j) Waiver. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of a subsequent breach or failure of the same term or condition, or a waiver of any other term or condition of this Agreement. Any waiver must be in writing.

k) Severability. To the extent that the terms set forth in this Agreement or any word, phrase, clause or sentence is found to be illegal or unenforceable for any reason, such word, phrase, clause or sentence shall be modified or deleted in such manner so as to afford the Company the fullest protection commensurate with making this Agreement, as modified, legal and enforceable under applicable laws, and the balance of this Agreement shall not be affected thereby, the balance being construed as severable and independent.

l) Governing Law . The validity, interpretation , instruction, performance, enforcement and remedies of or relating to this Agreement, and the rights and obligations of the parties hereunder, shall be governed by and construed in accordance with the substantive laws of the State of Illinois, without regard to the conflict of law principles, rules or statutes of any jurisdiction. For Employees outside of the United States, this Agreement shall be governed by the applicable regulations or international treaty.

m) Notice . All notices given hereunder shall be in writing and, if intended for the Company, shall be addressed to it or delivered to it at its principal office to the attention of Executive Compensation Department. If intended for the Employee, notices shall be delivered personally or shall be addressed (if sent by mail) to the Employee’s then current residence address as shown on the Company’s records, or to such other address as the Employee directs in a notice to the Company. All notices shall be deemed to be given on the date received at the address of the addressee or, if delivered personally, on the date delivered.

IN WITNESS WHEREOF, the parties have signed this Agreement as of the date hereof.

AON CORPORATION


Patrick G. Ryan, Chairman and Chief Executive Officer


Option Recipient (Employee)		Date

EXHIBIT C

Notice of Grant
of Stock Options

Notice is hereby given of the following option grant (the “Option”) to purchase shares of Aon Corporation common stock.

Employee: Gregory C. Case

Employee Address:

Grant Date: April 4, 2005

Grant Number:

Number of Shares: 325,000

Exercise Price:

Type of Option: NQ

Expiration Date: April 3, 2015

The Option will vest according to the schedule below:

Shares		Vest Date
108,334		April 3, 2007
108,333		April 3, 2008
108,333		April 3, 2009

Other pertinent details related to this grant are contained in the Inducement Stock Option Agreement attached hereto.

INDUCEMENT STOCK OPTION AGREEMENT

This Inducement Stock Option Agreement (the “Agreement”) is entered into between Aon Corporation, a Delaware corporation (the “Company”) and the employee (the “Employee”) as listed on the “Notice of Grant of Stock Options”(the “Notice”).

NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, the parties hereto agree as follows:

1. Grant of Option and Option Price. The Company grants to the Employee the right and option (“Option”) to purchase all or part of the number of shares of the Common Stock of the Company and at the Option price per share specified in the “Notice of Grant of Stock Options” (the “Notice”).

4. Payment of Exercise Price. The Employee shall at the time of exercise of an Option (except in the case of a cashless exercise) tender the full Exercise Price. At the discretion of the Committee (as defined in the 2001 Aon Stock Incentive Plan (the “Plan”), and subject to such rules and regulations as it may adopt, the Exercise Price may be paid: (i) in full in cash through means provided by the Company; (ii) by delivering irrevocable instructions to a broker to promptly deliver to the Company the amount of sale or loan proceeds to pay the Exercise Price; (iii) by attesting to the ownership of sufficient shares of Common Stock which have been held by the Employee for at least six months to pay the Exercise Price; or (iv) through a cashless exercise with a broker approved for this purpose by the Company.

6. Effect of Termination of Employment.

b) Voluntary termination on or after age 55 . The Option shall be immediately vested pro rata, and may be exercised no later than three years from the date of termination (not to exceed the expiration date of the Option). The remaining unvested portion of the Option shall be forfeited. Pro rata vesting is based on the period of employment since the Grant Date.

c) Termination due to disability or death . The Option shall continue to vest as if the Employee remained employed and may be exercised no later than the later of one year after the Option becomes 100% vested or one year from the date of termination, (not to exceed the expiration date of the Option).

d) Involuntary termination (other than for cause) or termination for good reason . The Option shall continue to vest as if the Employee remained employed and may be exercised no later than the the 90-day period following the later of the date the Option becomes 100% vested or the date of termination, (not to exceed the expiration date of the Option). Termination for good reason shall mean termination pursuant to the provisions of Section 4(f) of the Employee’s Employment Agreement with the Company dated as of April 4, 2005 (the “Employment Agreement”).

e) Termination for cause . The Option will not be exercisable. Termination for cause shall mean termination pursuant to the provisions of Section 4(c) of the Employment Agreement.

7. Receipt by the Employee of the Prospectus. The Employee acknowledges receipt of the Plan prospectus that contains the entire Plan, and is incorporated herein by reference. The Employee represents and warrants that Employee has read the Plan and agrees that all Options awarded under this Agreement shall, to the extent not inconsistent with this Agreement, be subject to terms and conditions which are the same as the terms and conditions of the Plan.

8. Expiration Date of Option. An Option awarded under this Agreement shall expire ten (10) years from the Grant Date, subject to terms and conditions which are the same as the terms and conditions set forth in the Plan and to this Agreement.

10. Additional Covenants

a) Non-Solicitation Covenant

Company so that the Company may renew or restore its business relationship with its client.

11. Other Provisions

b) Nontransferability. Except as described below, all Options awarded under this Agreement are not transferable by the Employee other than by will, the laws of descent and distribution, or pursuant to a beneficiary designation. Except as described below, any Option awarded under this Agreement is exercisable, during the Employee’s lifetime, only by the Employee or Employee’s legal representative. The Options may not be pledged, mortgaged, hypothecated or otherwise encumbered, or subject to the claims of creditors, or assigned pursuant to any domestic relations order. The Employee may transfer all or a portion of an Option for no consideration to or for the benefit of the Employee’s immediate family (spouse, parents, children, stepchildren, adopted children, siblings and grandchildren). Such transfer may be directly to immediate family members, to a partnership, limited liability company or trust for the benefit of one or more immediate family members, or any other transfer deemed to be consistent with such a transfer.

c ) Right of Employment. Grants of Stock Options under this Agreement do not confer upon Employee any right to continue in the employ of the Company.

d) Beneficiary. An Employee’s “beneficiary” means the person(s) or entity as designated by Employee in the most recent written beneficiary designation form filed with the Company to receive the benefits specified under the Options awarded under this Agreement upon the death of the Employee, or, if there is no designated beneficiary or surviving designated beneficiary, then the estate of the Employee.

e) Data Privacy. Employee also understands and authorizes that Employee’s personal data (i.e. identification data, including name, address, telephone; financial data, including account numbers, wages; personal data, including age, gender, date of birth; education related data, including academic curriculum, professional experience; profession related data, including title and description of functions with the Company) will be shared with third party vendors hired by the Company to assist in administering the Options awarded under this Agreement. Employee also authorizes the Company to receive, possess, use, retain, and transfer the data, in electronic form or other, and to further transfer data to third party vendors for purposes of assisting in the administration Options awarded under this Agreement.

f) Need to Accept Grant. Employee acknowledges that this grant must be accepted within ninety (90) days of the Grant Date in order to be eligible to receive any benefits from this grant. If this grant is not accepted within the ninety (90) days, the grant will be cancelled and all benefits under this grant will be forfeited. To accept this grant, Employee must sign the agreement and return it to Aon’s Executive Compensation Department within ninety (90) days.

g) Computation of Severance / Retirement Benefits. Benefits and rights acquired under the Plan do not constitute “base salary” or other regular employment earnings. Accordingly,

Employee understands and accepts that benefits provided under the Plan will not be considered in calculating any of the Company’s and its subsidiaries’ obligations to Employee for bonus, retirement, severance, termination, health and welfare, or any other such payments, unless otherwise specified in the applicable plan.

IN WITNESS WHEREOF, the parties have signed this Agreement as of the date hereof.

AON CORPORATION


Patrick G. Ryan, Chairman and Chief Executive Officer



Option Recipient (Employee)			Date

EXHIBIT D

SEVERANCE AGREEMENT

This Agreement is entered into as of April 4, 2005 between Aon Corporation, a Delaware corporation, and Gregory C. Case (the “Executive”).

WHEREAS, the Executive currently serves as a key employee of the Company (as defined in Section 1) and the Executive’s services and knowledge are valuable to the Company in connection with the management of one or more of the Company’s principal operating facilities, divisions, departments or subsidiaries; and

WHEREAS, the Board (as defined in Section 1) has determined that it is in the best interests of the Company and its stockholders to secure the Executive’s continued services and to ensure the Executive’s continued dedication and objectivity in the event of any threat or occurrence of, or negotiation or other action that could lead to, or create the possibility of, a Change in Control (as defined in Section 1) of the Company, without concern as to whether the Executive might be hindered or distracted by personal uncertainties and risks created by any such possible Change in Control, and to encourage the Executive’s full attention and dedication to the Company, the Board has authorized the Company to enter into this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the Company and the Executive hereby agree as follows:

1. Definitions . As used in this Agreement, the following terms shall have the respective meanings set forth below:

(a) “Board” means the Board of Directors of the Company.

(b) “Cause” means:

(1) a material breach by the Executive of those duties and responsibilities of the Executive which do not differ in any material respect from the duties and responsibilities of the Executive during the 90-day period immediately prior to a Change in Control (other than as a result of incapacity due to physical or mental illness) which is demonstrably willful and deliberate on the Executive’s part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and which is not remedied in a reasonable period of time after receipt of written notice from the Company specifying such breach;

(2) Gross misconduct, theft, fraud, breach of trust or any act of dishonesty by the Executive which results in material harm to the Company; or

(3) the commission by the Executive of a felony involving moral turpitude.

(1) the acquisition by any individual, entity or group (a “Person”), including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Common Stock”) or (ii) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); excluding, however, the following: (A) any acquisition directly from the Company (excluding any acquisition resulting from the exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from the Company), (B) any acquisition by the Company, (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this Section 1(c); provided further, that for purposes of clause (B), if any Person (other than the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company) shall become the beneficial owner of 30% or more of the Outstanding Common Stock or 30% or more of the Outstanding Voting Securities by reason of an acquisition by the Company, and such Person shall, after such acquisition by the Company, become the beneficial owner of any additional shares of the Outstanding Common Stock or any additional Outstanding Voting Securities and such beneficial ownership is publicly announced, such additional beneficial ownership shall constitute a Change in Control;

(2) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of such Board; provided that any individual who becomes a director of the Company subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed a member of the Incumbent Board; and provided further, that any individual who was initially elected as a director of the Company as a result of an actual or threatened solicitation by a Person other than the Board for the purpose of opposing a solicitation by any other Person with respect to the election or removal of directors, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board shall not be deemed a member of the Incumbent Board;

(3) the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Corporate Transaction”); excluding, however, a Corporate Transaction pursuant to which (i) all or substantially all of the individuals or entities who are the beneficial owners, respectively, of the Outstanding Common Stock and the Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 60% of, respectively, the outstanding shares of common stock, and the combined voting power of the outstanding securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting

from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or indirectly) in substantially the same proportions relative to each other as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Common Stock and the Outstanding Voting Securities, as the case may be, (ii) no Person (other than: the Company; any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; the corporation resulting from such Corporate Transaction; and any Person which beneficially owned, immediately prior to such Corporate Transaction, directly or indirectly, 30% or more of the Outstanding Common Stock or the Outstanding Voting Securities, as the case may be) will beneficially own, directly or indirectly, 30% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding securities of such corporation entitled to vote generally in the election of directors and (iii) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or

(4) the consummation of a plan of complete liquidation or dissolution of the Company.

(d) “Code” means the Internal Revenue Code of 1986, as amended.

(e) “Company” means Aon Corporation, a Delaware corporation.

(f) “Good Reason” means, without the Executive’s express written consent, the occurrence of any of the following events after a Change in Control:

(1) a material adverse change in the nature or scope of the Executive’s authority, powers, functions, duties or responsibilities as in effect immediately prior to such Change in Control;

(2) a material reduction by the Company in the Executive’s rate of annual base salary or bonus opportunity as in effect immediately prior to such Change in Control or as the same may be increased from time to time thereafter;

(3) the failure of the Company to continue in effect any material employee benefit plan or compensation plan in which the Executive is participating immediately prior to such Change in Control, unless the Executive is permitted to participate in other plans providing the Executive with substantially comparable benefits, or the taking of any action by the Company which would adversely affect the Executive’s participation in or materially reduce the Executive’s benefits under any such plan;

(4) a change in the Executive’s primary employment location to a location that is more than 50 miles from the primary location of the Executive’s employment at the time of such Change in Control; or

(5) the failure of the Company to obtain from any successor or transferee of the Company an express written and unconditional assumption of the Company’s obligations under this Agreement, as further described in Section 12(b) of this Agreement.

For purposes of this Agreement, any good faith determination of Good Reason made by the Executive shall be conclusive; provided , however , that an isolated, insubstantial and inadvertent action taken in good faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive shall not constitute Good Reason.

(g) “Nonqualifying Termination” means a termination of the Executive’s employment (1) by the Company for Cause, (2) by the Executive for any reason other than a Good Reason, (3) as a result of the Executive’s death or (4) by the Company due to the Executive’s absence from the Executive’s duties with the Company on a full-time basis for at least 180 consecutive days as a result of the Executive’s incapacity due to physical or mental illness.

(h) “Termination Date” means the date during the Termination Period on which the Executive’s employment is terminated other than by reason of a Nonqualifying Termination.

(i) “Termination Period” means the period of time beginning with a Change in Control and ending on the earlier to occur of (1) the date which is two (2) years following such Change in Control and (2) the Executive’s death; provided, however, that, anything in this Agreement to the contrary notwithstanding, if a Change in Control occurs and if the Executive’s employment with the Company was terminated prior to the date on which the Change in Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (a) was at the request of a third party who was taking steps reasonably calculated to effect a Change in Control or (b) otherwise arose in connection with or in anticipation of a Change in Control, then for purposes of this Agreement, “Termination Period” means the period of time commencing upon the date immediately prior to the date of such termination of employment and ending on the earlier to occur of (x) two (2) years following such Change in Control and (y) the Executive’s death.

2. Obligations of the Executive . The Executive agrees that in the event any person or group attempts a Change in Control, he shall not voluntarily leave the employ of the Company without Good Reason (a) until such attempted Change in Control terminates or (b) if a Change in Control shall occur, until 90 days following such Change in Control.

3. Payments and Benefits Upon Termination of Employment . If during the Termination Period the employment of the Executive shall terminate, other than by reason of a Nonqualifying Termination, and the Executive (or the Executive’s executor or other legal representative in the case of the Executive’s death or disability following such termination) executes a noncompetition, nonsolicitation and confidentiality agreement substantially in the form of Exhibit A hereto (the “Noncompetition Agreement”) within 60 days following the Termination Date, the Company shall provide to the Executive, as compensation for services rendered to the Company, and in consideration of the covenants set forth in the Noncompetition

Agreement, the payments and benefits described in this Section 3. Notwithstanding the foregoing provisions of this Section 3, if as a result of the Executive’s termination of employment on the Termination Date the Executive is entitled to severance payments and benefits, which benefits may, without limitation, include enhanced supplemental pension benefits conferred or equity awards granted as a result of termination of employment, from the Company or any of its subsidiaries which are not payable pursuant to this Agreement, but are payable pursuant to an employment agreement or other compensation arrangement entered into between the Executive and the Company or any of its subsidiaries (“Alternative Severance Payments and Benefits”), the Executive shall have no right to any payments or benefits pursuant to this Section 3 unless (i) the Executive (or the Executive’s executor or other legal representative in the case of the Executive’s death or disability following such termination) executes the Noncompetition Agreement and a release in the form of Exhibit B hereto (the “Release of Severance Payments and Benefits”) within 60 days following the Termination Date releasing all rights to the Alternative Severance Payments and Benefits, other than rights to Alternative Equity Vesting (as defined in Section 4 hereof), and has not revoked the Release of Severance Payments and Benefits and (ii) the payments and benefits to be received by the Executive pursuant to this Section 3 are reduced by the amount of the Alternative Severance Payments and Benefits, if any, previously received by the Executive.

(a) The Company shall pay to the Executive (or the Executive’s beneficiary or estate, as the case may be) within 30 days following the date of execution of the Noncompetition Agreement and, if applicable, the Release of Severance Payments and Benefits:

(1) a cash amount (subject to any applicable payroll or other taxes required to be withheld pursuant to Section 7 and any deductions authorized by the Executive) equal to the sum of (i) the Executive’s full annual base salary from the Company and its affiliated companies through the Termination Date, to the extent not theretofore paid, (ii) the average of the Executive’s annual cash incentive for each of the three fiscal years immediately preceding the fiscal year in which the Termination Date occurs, multiplied by a fraction, the numerator of which is the number of days in the fiscal year in which the Termination Date occurs and the denominator of which is 365 or 366, as applicable, and (iii) any accrued vacation pay, in each case to the extent not theretofore paid; plus

(2) a lump sum cash amount (subject to any applicable payroll or other taxes required to be withheld pursuant to Section 7 and any deductions authorized by the Executive) in an amount equal to three (3) times the sum of (i) the Executive’s highest annual base salary from the Company and its affiliated companies in effect during the 12-month period prior to the Termination Date and (ii) the Executive’s target annual incentive bonus for the fiscal year in which the Termination Date occurs; plus

(3) a lump sum cash amount (subject to any applicable payroll or other taxes required to be withheld pursuant to Section 7 and any deductions authorized by the Executive) in an amount equal to the amount forfeited by the Executive under any qualified defined contribution plan maintained by the Company or any of its subsidiaries as a result of the Executive’s termination of employment.

(b) The Executive shall become fully (100%) vested in the Executive’s accrued benefits under the Aon Corporation Excess Benefit Plan, the Aon Corporation Supplemental Savings Plan and the Aon Corporation Supplemental Employee Stock Ownership Plan, or successor plans in effect on the date of the Executive’s termination of employment (the “Nonqualified Plans”). The Executive’s accrued benefits under the Aon Corporation Excess Benefit Plan or the Aon Corporation Supplemental Savings Plan, whichever plan is applicable to the Executive on the date of the Executive’s termination of employment, shall be determined by crediting the Executive with three (3) additional years of age and service credits and, in the case of the Aon Corporation Supplemental Savings Plan, three (3) additional years of Retirement Plan Contributions. Within 30 days following the Termination Date, the Company shall pay to the Executive a lump sum cash amount equal to the actuarial equivalent of the Executive’s accrued benefits under the Nonqualified Plans, determined as of the Executive’s Termination Date, notwithstanding anything contained in the Nonqualified Plans to the contrary. Such lump sum cash payment shall be computed in the case of the Aon Corporation Excess Benefit Plan using the same actuarial assumptions then in use for purposes of computing benefits under plan, provided that the interest rate used in making such computations shall not be greater than the interest rate permitted under section 417(c) of the Code on the date of the Change in Control.

(c) For the period commencing on the Termination Date and ending on the earlier of (i) the date which is three (3) years following the Termination Date and (ii) the date on which the Executive becomes eligible to participate in and receive medical, dental and life insurance benefits under a plan or arrangement sponsored by another employer having benefits substantially equivalent to the benefits provided pursuant to this Section 3(c), the Company shall continue the Executive’s medical, dental and life insurance coverage, under the Company-sponsored plans or otherwise, upon the same terms and otherwise to the same extent as such coverage shall have been in effect immediately prior to the Executive’s Termination Date, and the Company and the Executive shall share the costs of the continuation of such medical, dental and life insurance coverage in the same proportion as such costs were shared immediately prior to the Termination Date. Such continuation of medical and dental coverage shall be in satisfaction of the Company’s obligations under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).

4. Vesting of Equity Awards Upon Termination Date; Exercise Period . Immediately upon the Executive’s Termination Date, all stock options and other equity awards, if any, granted by the Company to the Executive (or stock options and other equity awards granted in substitution therefor by an acquiror of, or successor to, the Company) that are not otherwise exercisable or vested shall become exercisable and vested in full. With respect to any and all outstanding stock options granted by the Company to the Executive, each such option shall remain exercisable following the Executive’s termination of employment until and including the expiration date of the term of the option (as set forth in the written agreement relating to such option). Notwithstanding the foregoing provisions of this Section 4, if as a result of the Executive’s termination of employment on the Termination Date the Executive is entitled to the acceleration of exercisability of stock options or the vesting of other equity awards granted by the Company to the Executive (or stock options or other equity awards granted in substitution therefor by an acquiror of, or successor to, the Company), which acceleration or vesting is not

pursuant to this Agreement, but is pursuant to an employment agreement or other compensation arrangement entered into between the Executive and the Company or any of its subsidiaries (“Alternative Equity Vesting”), the Executive shall have no rights pursuant to this Section 4 unless the Executive (or the Executive’s executor or other legal representative in the case of the Executive’s death or disability following such termination) executes the Noncompetition Agreement and a release in the form of Exhibit C hereto (the “Release of Exercisability and Vesting”) within 60 days following the Termination Date releasing all rights to the Alternative Equity Vesting, and has not revoked the Release of Exercisability and Vesting.

5. Certain Additional Payments by the Company . (a) If the Executive is entitled to receive payments and benefits under Section 3 hereof or vesting of equity awards under Section 4 hereof, anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company or its affiliated companies to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 5) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b) Subject to the provisions of Section 5(c), all determinations required to be made under this Section 5, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s public accounting firm (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Executive shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 5, shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that failure to report the Excise Tax on the Executive’s applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have

been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 5(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(1) give the Company any information reasonably requested by the Company relating to such claim;

(2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

(3) cooperate with the Company in good faith in order effectively to contest such claim; and

(4) permit the Company to participate in any proceedings relating to such claim;

provided , however , that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 5(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided further , that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive on an interest-free basis and shall indemnify and hold

the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and provided further , that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 5(c), the Executive becomes entitled to receive, and receives, any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of Section 5(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 5(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

6. Delay of Payments . In the event that any payment or distribution to be made to the Executive hereunder is determined to constitute “deferred compensation” subject to Section 409A of the Code, and the Executive is determined to be a “specified employee” (as defined in Section 409A of the Code), such payment or distribution shall not be made before the date which is six months after the termination of the Executive’s employment (or, if earlier, the date of the Executive’s death).

7. Withholding Taxes . The Company may withhold from all payments due to the Executive (or the Executive’s beneficiary or estate) hereunder all taxes which, by applicable federal, state, local or other law, the Company is required to withhold therefrom.

8. Reimbursement of Expenses; Interest on Late Payments .

(a) If any contest or dispute shall arise under this Agreement involving termination of the Executive’s employment with the Company or involving the failure or refusal of the Company to perform fully in accordance with the terms hereof, the Company shall reimburse the Executive, on a current basis, for all legal fees and expenses, if any, incurred by the Executive in connection with such contest or dispute, together with interest thereon at a rate equal to the prime rate, as published under “Money Rates” in The Wall Street Journal from time to time plus 300 basis points, but in no event higher than the maximum legal rate permissible under applicable law (the “Interest Rate”), such interest to accrue from the date the Company receives the Executive’s written statement for such fees and expenses through the date of payment thereof; provided , however , that in the event the resolution of any such contest or dispute includes a finding denying, in total, the Executive’s claims in such contest or dispute, the

Executive shall be required to reimburse the Company, over a period of 12 months from the date of such resolution, for all sums advanced to the Executive pursuant to this Section 8.

(b) With respect to any and all payments that are required to be made by the Company to the Executive pursuant to this Agreement and that are not made within the time period specified herein, the Company shall pay to the Executive interest on such payments at the Interest Rate. Such interest shall accrue from the due date of the required payment through the date on which such payment is made to the Executive.

9. Operative Event . No amounts shall be payable hereunder unless and until there is a Change in Control.

10. Termination of Agreement . (a) This Agreement shall be effective on the date hereof and shall continue until terminated by the Company as provided in Section 10(b); provided , however , that this Agreement shall terminate in any event upon the earlier to occur of (1) termination of the Executive’s employment with the Company prior to a Change in Control and (2) the Executive’s death.

(b) The Company shall have the right prior to a Change in Control, in its sole discretion, pursuant to action by the Board, to approve the termination of this Agreement, which termination shall not become effective until the date fixed by the Board for such termination, which date shall be at least 120 days after notice thereof is given by the Company to the Executive in accordance with Section 13; provided , however , that no such action shall be taken by the Board during any period of time when the Board has knowledge that any person has taken steps reasonably calculated to effect a Change in Control until, in the opinion of the Board, such person has abandoned or terminated its efforts to effect a Change in Control; and provided further , that in no event shall this Agreement be terminated in the event of a Change in Control. In the event that this Agreement is determined to be a “deferred compensation plan” subject to Section 409A of the Code, the Company, pursuant to action by the Board, shall, as necessary, adopt such conforming amendments as are necessary to comply with Section 409A of the Code without reducing the payments and benefits due to the Executive hereunder.

11. Scope of Agreement . Nothing in this Agreement shall be deemed to entitle the Executive to continued employment with the Company or its subsidiaries and, subject to Section 2 hereof, if the Executive’s employment with the Company shall terminate prior to a Change in Control, then the Executive shall have no further rights under this Agreement; provided , however , that any termination of the Executive’s employment following a Change in Control shall be subject to all of the provisions of this Agreement.

12. Successors; Binding Agreement .

(a) This Agreement shall not be terminated by any merger or consolidation of the Company whereby the Company is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of the Company. In the event of any such merger, consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred.

(b) The Company agrees that concurrently with any merger, consolidation or transfer of assets referred to in Section 12(a), it will cause any successor or transferee unconditionally to assume, by written instrument delivered to the Executive (or the Executive’s beneficiary or estate), all of the obligations of the Company hereunder. Failure of the Company to obtain such assumption prior to the effectiveness of any such merger, consolidation or transfer of assets shall be a breach of this Agreement and shall entitle the Executive to compensation and other benefits from the Company in the same amount and on the same terms as the Executive would be entitled hereunder if the Executive’s employment were terminated following a Change in Control other than by reason of a Nonqualifying Termination during the Termination Period. For purposes of implementing the foregoing, the date on which any such merger, consolidation or transfer becomes effective shall be deemed the Date of Termination.

(c) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amounts would be payable to the Executive hereunder had the Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by the Executive to receive such amounts or, if no person is so appointed, to the Executive’s estate.

13. Notices . (a) For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or five days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed (1) if to the Executive, to Executive’s home address as shown on the Company’s records, and if to the Company, to Aon Corporation, 200 East Randolph Drive, Chicago, Illinois 60602, 3d Floor, attention General Counsel, with a copy to the Secretary, or (2) to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

(b) A written notice of the Executive’s Termination Date by the Company or the Executive, as the case may be, to the other, shall (1) indicate the specific termination provision in this Agreement relied upon, (2) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (3) specify the termination date (which date shall be not less than 15 days after the giving of such notice). The failure by the Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

14. Full Settlement; Resolution of Disputes . (a) The Company’s obligation to make any payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this

Agreement and, subject to Section 3(c) hereof, such amounts shall not be reduced whether or not the Executive obtains other employment.

(b) If there shall be any dispute between the Company and the Executive in the event of any termination of the Executive’s employment, then, unless and until there is a final, nonappealable judgment by a court of competent jurisdiction declaring that such termination was for Cause, that the determination by the Executive of the existence of Good Reason was not made in good faith, or that the Company is not otherwise obligated to pay any amount or provide any benefit to the Executive and the Executive’s dependents or other beneficiaries, as the case may be, under Sections 3 and 4 hereof, the Company shall pay all amounts, and provide all benefits, to the Executive and the Executive’s dependents or other beneficiaries, as the case may be, that the Company would be required to pay or provide pursuant to Sections 3 and 4 hereof as though such termination were by the Company without Cause or by the Executive with Good Reason; provided , however , that the Company shall not be required to pay any disputed amounts pursuant to this Section 14(b) except upon receipt of an undertaking by or on behalf of the Executive to repay all such amounts to which the Executive is ultimately adjudged by such court not to be entitled.

15. Employment with, and Action by, Subsidiaries . For purposes of this Agreement, employment with the Company or actions taken by the Company with respect to the Executive shall include employment with or actions taken by any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities of such corporation or other entity entitled to vote generally in the election of directors.

16. Governing Law; Validity . The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which other provisions shall remain in full force and effect.

17. Counterparts . This Agreement may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.

18. Miscellaneous . No provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by the Executive and by a duly authorized officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by the Executive or the Company to insist upon strict compliance with any provision of this Agreement or to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. Except as otherwise expressly set forth in this Agreement, the rights of, and benefits

payable to, the Executive, the Executive’s estate or the Executive’s beneficiaries pursuant to this Agreement are in addition to any rights of, or benefits payable to, the Executive, the Executive’s estate or the Executive’s beneficiaries under any other employee benefit plan or compensation program of the Company.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of the Company and the Executive has executed this Agreement as of the day and year first above written.

	AON CORPORATION


	By:


	EXECUTIVE



	Gregory C. Case

Exhibit 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is dated as of May 2, 2005, between Aon Corporation, a Delaware corporation (the “Company”), and Ted T. Devine (the “Executive”).

WHEREAS, the Company seeks to employ Executive as Executive Vice President – Corporate Strategy of the Company; and

WHEREAS, Executive desires to serve and to be employed upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereby agree as follows:

1. Employment . The Company hereby agrees to employ the Executive and the Executive hereby agrees to be employed upon the terms and subject to the conditions contained in this Agreement. The term of employment of the Executive pursuant to this Agreement (the “Employment Period”) shall commence effective as of May 2, 2005 (the “Effective Date”) and shall end on May 1, 2010, unless earlier terminated pursuant to Section 4 hereof.

2. Position and Duties; Responsibilities; Board Service . (a) Position and Duties . The Company shall employ the Executive during the Employment Period as its Executive Vice President – Corporate Strategy. During the Employment Period, the Executive shall perform faithfully and loyally and to the best of his abilities the duties assigned to him hereunder and shall devote his full business time, attention and effort to the affairs of the Company and its subsidiaries and shall use his best efforts to promote the interests of the Company and its subsidiaries. The Executive may engage in charitable, civic or community activities and, with the prior approval of the Chief Executive Officer of the Company (the “CEO”), may serve as a director of any other business corporation, provided that (i) such activities or service do not interfere with his duties hereunder or violate the terms of any of the covenants contained in Sections 6, 7, or 8 hereof and (ii) such other business corporation provides the Executive with director and officer insurance coverage which, in the opinion of the CEO, is adequate under the circumstances.

(b) Responsibilities . The Executive shall have the authority and responsibility for strategic planning for the Company. The Executive shall also perform such other duties (not inconsistent with the position of Executive Vice President) on behalf of the Company and its subsidiaries as may from time to time be authorized or directed by the CEO. The Executive shall report to the CEO.

3. Compensation . (a) Base Salary . During the Employment Period, the Company shall pay to the Executive a base salary at the rate of $700,000 per annum (“Base Salary”), payable semi-monthly in accordance with the Company’s executive payroll policy.

Such Base Salary shall be reviewed annually on the Company’s regular executive salary review schedule, and shall be subject to adjustment at the discretion of the CEO and Organization and Compensation Committee of the Board of Directors.

(b) Annual Bonus . During the Employment Period, commencing in calendar year 2005, the Executive shall be eligible for a target annual incentive bonus of 100% of the Executive’s Base Salary as in effect at the end of the Bonus Year determined pursuant to the terms of the senior management incentive plan as in effect from time to time; provided, however, that (i) Executive’s maximum bonus for the 2005 Bonus Year shall be 150% of his Base Salary in effect at the end of such year and the actual incentive bonus paid for the 2005 Bonus Year shall not be less than $700,000; (ii) Executive’s maximum bonus for Bonus Years after 2005 shall be established in accordance with the Company’s shareholder-approved Senior Officer Incentive Compensation Plan as it may be amended from time to time; and (iii) the Executive’s annual incentive bonus for each of Bonus Years shall be subject to the terms and conditions of the Aon Incentive Stock Program.

(c) Stock Award . On the Effective Date, the Executive shall receive an restricted stock unit award of 100,000 shares of common stock of the Company, which restricted stock units shall be subject to terms and conditions generally applicable to restricted stock unit grants under the Aon Stock Incentive Plan. In the event of termination of the Executive’s employment by the Company without Cause pursuant to Section 4(d) hereof such award shall continue to vest in accordance with its full original vesting schedule.

(d) Stock Option . (i) On the Effective Date, the Executive shall be granted non-qualified option of 150,000 shares of the common stock of the Company. The non-qualified stock option shall be granted pursuant to the terms of the Aon Stock Incentive Plan. Such options shall vest in accordance with the terms generally applicable to option grants under the Aon Stock Incentive Plan. In the event of termination of the Executive’s employment by the Company without Cause pursuant to Section 4(d) hereof such option shall continue to vest in accordance with its full original vesting schedules.

4. Termination . (a) Death . Upon the death of the Executive, this Agreement shall automatically terminate and the Executive’s executor, administrator or designated beneficiary shall be entitled to receive the Executive’s Base Salary which shall have accrued to the date of such death. The Company shall pay to the Executive’s executor or administrator of Executive’s estate a lump sum cash amount equal to the Executive’s Base

Salary, at the rate in effect at the date of such death, to which the Executive would have been entitled from the date of such death until the end of the Employment Period, reduced by the amount of any benefit paid under any individual or group life insurance policy maintained by the Company for the benefit of the Executive.

(b) Disability . The Company may, at its option, terminate this Agreement upon written notice to the Executive if the Executive, because of physical or mental incapacity or disability, fails to perform the essential functions of his position, with reasonable accommodation, if relevant, required of him hereunder for a continuous period of 120 days or any 180 days within any 12-month period. Upon such termination, the Executive or his legal representative shall be entitled to receive the Base Salary which shall have accrued to the date of termination, plus continuation of Base Salary, at the rate in effect at the date of such termination of employment, until the end of the Employment Period; provided, however, that the amount of any benefit payable under any disability insurance policy maintained by the Company for the benefit of the Executive shall be deducted from the payments of such Base Salary. In the event of any dispute regarding the existence of the Executive’s incapacity or disability hereunder, the matter shall be resolved by the determination of an independent physician agreed to between the Executive and the Company specializing in the claimed area of incapacity or disability. The Executive shall submit to appropriate medical examinations for purposes of such determination.

(c) Cause . (i) The Company may at any time, at its option, terminate the Executive’s employment under this Agreement immediately for Cause (as hereinafter defined). The Company’s decision in this regard shall be taken by the Governance Committee of the Board (“Governance Committee”). The Executive shall be given at least seven days advanced written notice of any meeting at which the Governance Committee proposes to put forward for a vote a decision on whether or not to terminate the Executive for Cause and the written notice shall describe in reasonable detail the basis on which the Governance Committee may conclude that Cause exists. The Executive shall have the opportunity to appear in person and to make such written and/or oral presentation to such meeting of the Governance Committee as the Executive thinks fit. If a majority of the Governance Committee authorizes by affirmative vote a termination for Cause at such meeting (whether or not the Executive makes any oral or written presentations at such meeting) such determination shall be final and binding upon the Company and the Executive once such decision is confirmed in writing and communicated to the Executive.

(ii) As used in this Agreement, the term “Cause” shall mean any one or more of the following:

(A) any failure or inability (other than by reason of physical or mental disability determined in accordance with Section 4(b)) of the Executive to perform his material duties under this Agreement to the satisfaction of at least a majority of the members of the Governance Committee, including, without limitation, any refusal by the Executive to perform such duties or to perform such specific directives of the CEO which are consistent with the scope and nature of the Executive’s duties and responsibilities under this Agreement;

(B) any intentional act of fraud, embezzlement or theft by the Executive in connection with his duties hereunder or in the course of his employment hereunder or the Executive’s admission or conviction of, or plea of nolo contendere to, a felony or of any crime involving moral turpitude, fraud, embezzlement, theft or misrepresentation;

(C) any gross negligence or willful misconduct of the Executive resulting in a loss to the Company or any of its subsidiaries, or damage to the reputation of the Company or any of its subsidiaries;

(D) any breach by the Executive of any one or more of the covenants contained in Section 6, 7 or 8 hereof; or

(E) any violation of any statutory or common law duty of loyalty to the Company or any of its subsidiaries.

(iv) If the Company terminates the Executive’s employment for Cause, as defined in Section 4(c)(ii)(B), (C), (D) or (E), he shall be entitled to:

(A) accrued Base Salary through the date of the termination of his employment; and

(B) other Employee Benefits to which the Executive is entitled upon his termination of employment with the Company, including regular and supplemental retirement and disability benefits, in accordance with the terms of the plans and programs of the Company.

(v) if the Company terminates the Executive’s employment for Cause, as defined in Section 4(c)(ii)(A), he shall be entitled to:

(A) the payments specified by Sections 4(c)(iv)(A) and (B); and

(B) the continuation of the Base Salary, at the rate in effect at the date of such termination of employment, for a period of two years from the date of such termination of employment.

(d) Termination Without Cause . If, during the Employment Period, the Company terminates the employment of the Executive hereunder for any reason other than a reason set forth in Section 4(a), (b) or (c), the Company shall give the Executive 12 months prior written notice of such termination, and:

(i) Concurrent with such termination, the Executive shall be entitled to receive the payments and benefits specified by Sections 4(c)(iv)(A) and (B); and

(ii) The Company shall continue to pay the Executive, until the end of the Employment Period, his Base Salary at the rate in effect at the date of such termination of employment; and

(iii) The Executive shall continue to be eligible for bonus payments, as provided by Section 3(b) hereinabove, through the date of such termination only, the final such bonus to be calculated on a pro rata calendar year basis as applicable, payable by the Company at such time that the Company generally pays bonuses to similarly-situated executives.

Notwithstanding the foregoing provisions of this Section 4(d), if any payment specified by this Section 4(d) would not be deductible by the Company for federal income tax purposes by reason of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), or any similar or successor statute (excluding Section 280G of the Code), such payment shall be deferred and the amount thereof (plus earnings thereon in accordance with the terms of such deferral) shall be paid to the Executive at the earliest time that such payment shall be deductible by the Company.

(e) Voluntary Termination . The Executive may voluntarily terminate his employment with the Company prior to the end of the Employment Period for any reason. If the Executive voluntarily terminates his employment pursuant to this Section 4(e), the Executive shall give the Company 12 months prior written notice and shall be entitled to the payments specified by Sections 4(c)(iv)(A) and (B).

5. Federal and State Withholding . The Company shall deduct from the amounts payable to the Executive pursuant to this Agreement the amount of all required federal, state and local withholding taxes in accordance with the Executive’s Form W-4 on file with the Company, and all applicable federal employment taxes.

6. Noncompetition; Nonsolicitation . (a) General . The Executive acknowledges that in the course of his employment with the Company he has and will become familiar with trade secrets and other confidential information concerning the Company and its subsidiaries and that his services will be of special, unique and extraordinary value to the Company and its affiliates.

(d) Exceptions. Nothing in this Section 6 shall prohibit the Executive from being (i) a stockholder in a mutual fund or a diversified investment company or (ii) a passive owner of not more than two percent of the outstanding stock of any class of a corporation, any securities of which are publicly traded, so long as Executive has no active participation in the business of such corporation.

(e) Reformation . If, at any time of enforcement of this Section 6, a court holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. This Agreement shall not authorize a court to increase or broaden any of the restrictions in this Section 6.

(f) Consideration; Breach . The Company and the Executive agree that the payments to be made, and the benefits to be provided, by the Company to the Executive pursuant to Section 3 hereof shall be made and provided in consideration of the Executive’s agreements contained in Section 6 hereof. In the event that the Executive shall commit a material breach of any provision of Section 6 hereof, the Company shall be entitled immediately to terminate making all remaining payments and providing all remaining benefits pursuant to Section 3 hereof and upon such termination the Company shall have no further liability to the Executive under this Agreement.

7. Confidentiality . The Executive shall not, at any time during the Employment Period or thereafter, make use of or disclose, directly or indirectly, any (i) trade secret or other confidential or secret information of the Company or of any of its subsidiaries or (ii) other technical, business, proprietary or financial information of the Company or of any of its subsidiaries not available to the public generally or to the competitors of the Company or to the competitors of any of its subsidiaries (“Confidential Information”), except to the extent that such Confidential Information (a) becomes a matter of public record or is published in a newspaper, magazine or other periodical available to the general public, other than as a result of any act or omission of the Executive, (b) is required to be disclosed by any law, regulation or order of any court or regulatory commission, department or agency, provided that the Executive gives prompt notice of such requirement to the Company to enable the Company to seek an appropriate protective order, or (c) is necessary to perform properly the Executive’s duties under this Agreement. Promptly following the termination of the Employment Period, the Executive shall surrender to the Company all records, memoranda, notes, plans, reports, computer tapes and software and other documents and data which constitute Confidential Information which he may then possess or have under his control (together with all copies thereof).

8. Inventions . The Executive hereby assigns to the Company his entire right, title and interest in and to all discoveries and improvements, patentable or otherwise, trade

secrets and ideas, writings and copyrightable material, which may be conceived by the Executive or developed or acquired by him during the Employment Period, which may pertain directly or indirectly to the business of the Company or any of its subsidiaries. The Executive agrees to disclose fully all such developments to the Company upon its request, which disclosure shall be made in writing promptly following any such request. The Executive shall, upon the Company’s request, execute, acknowledge and deliver to the Company all instruments and do all other acts which are necessary or desirable to enable the Company or any of its subsidiaries to file and prosecute applications for, and to acquire, maintain and enforce, all patents, trademarks and copyrights in all countries.

9. Enforcement . The parties hereto agree that the Company and its subsidiaries would be damaged irreparably in the event that any provision of Section 6, 7, or 8 of this Agreement were not performed in accordance with its terms or were otherwise breached and that money damages would be an inadequate remedy for any such nonperformance or breach. Accordingly, the Company and its successors and permitted assigns shall be entitled, in addition to other rights and remedies existing in their favor, to an injunction or injunctions to prevent any breach or threatened breach of any of such provisions and to enforce such provisions specifically (without posting a bond or other security). The Executive agrees that he will submit himself to the personal jurisdiction of the courts of the State of Illinois in any action by the Company to enforce any provision of Section 7, 8 or 9 of this Agreement.

10. Survival . Sections 3, 4, 6, 7, 8, 9 and 10 of this Agreement shall survive and continue in full force and effect in accordance with their respective terms, notwithstanding any termination of the Employment Period.

11. Notices . All notices and other communications required or permitted hereunder shall be in writing and shall be deemed given when (i) delivered personally or by overnight courier to the following address of the other party hereto (or such other address for such party as shall be specified by notice given pursuant to this Section 12) or (ii) sent by facsimile to the following facsimile number of the other party hereto (or such other facsimile number for such party as shall be specified by notice given pursuant to this Section 12), with the confirmatory copy delivered by overnight courier to the address of such party pursuant to this Section 12:

If to the Company, to:

Aon Corporation

200 East Randolph

Chicago, Illinois 60601

Attention: President and Chief Executive Officer

with copies to:

Aon Corporation

200 East Randolph

Chicago, Illinois 60601

Attention: General Counsel

If to the Executive, to the Executive’s home address as shown on the Company’s records.

13. Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision of this Agreement or the validity, legality or enforceability of such provision in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

14. Entire Agreement . This Agreement constitutes the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related in any manner to the subject matter hereof.

15. No Mitigation . In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not the Executive obtains other employment.

16. Successors and Assigns . This Agreement shall be enforceable by the Executive and his heirs, executors, administrators and legal representatives, and by the Company and its successors and assigns, and shall be binding on such successors and assigns.

17. Headings; Inconsistency . Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. In the event of any inconsistency between the terms of this Agreement and any form, award (including the award agreements attached hereto as Exhibits A, B and C), plan or policy of the Company or any other agreement between the Executive and the Company, the terms of this Agreement shall control.

18. Governing Law . This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois without regard to principles of conflict of laws.

19. Amendment and Waiver . The provisions of this Agreement may be amended or waived only by the written agreement of the Company and the Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.

20. Counterparts . This Agreement may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

	AON CORPORATION


	By:	/s/ Jeremy G.O. Farmer

	Title:	SVP, Head H.R.


	EXECUTIVE:

	/s/ Ted T. Devine
	Ted T. Devine

Exhibit 10.3

THIS AGREEMENT is made the 30 ^th day of November 1998.

BETWEEN: AON GROUP, INC. whose registered office is situated at 123 North Wacker Drive, Chicago, Illinois 60606, U.S.A. (“the Group”), AON GROUP LIMITED (“the Company”) whose registered office is situated at 8 Devonshire Square, London. EC2M 4PL and Mr. Dennis Leonard Mahoney of Holne Chase Wilderness Road Chislehurst Kent (“the Executive”) of the other part.

IT IS HEREBY AGEEED AS FOLLOWS:

1 (A) The Executive shall be employed by the Company in the capacity set out in paragraph 2 of the Schedule and shall perform such duties and exercise such powers as the Group may from time to time decide, in a competent and expeditious manner.

(B) The Executive shall, when reasonably required by the Group, perform services not only for the Company but also for any other Group Company.

(C) The Executive shall comply with the reasonable directions from time to time of the Board of Directors of the Group (“the Board”).

2 (A) The Executive shall, unless prevented by physical or mental incapacity, devote his whole time and attention to the business of the Company and the Group and shall use his best endeavours to promote their interests and financial success, giving to the Company and the Group at all times the full benefit of his knowledge, expertise and skill. He shall not knowingly do and shall exercise his best endeavours to prevent there being done, any act or thing which may in any way be prejudicial or detrimental to the Company or the Group.

(B) The Executive’s hours of work shall be such hours as may be reasonably necessary for the proper discharge of his duties, but shall nor be less than 35 hours during normal office hours.

3 (A) This Agreement shall commence on November, 1998 and shall supersede all or any existing agreements which may exist between the Executive and any Group Company, and subject to the provisions for early termination

contained herein, the Executive’s employment shall continue until the Planned Expiration Date as set forth in Paragraph 3 of the Schedule unless the Company tenders earlier written notice equal to the number of months between the date of the giving of notice and the Planned Expiration Date, or the Executive’s giving to the Company 12 months’ written notice expiring at any time.

(B) Notwithstanding anything to the contrary in sub-clause 3(A) above, the Company may make a payment of basic salary in lieu of notice. If the Company makes a payment of basic salary in lieu of notice it will also, subject to sub-clauses 3(C) and 3(D) below make provision for:

(i) the continuation of additional benefits as set out in paragraph 16 of the Schedule hereto from the date of the said termination for a period equivalent to the notice period referred to in clause 3(A) above;

(ii) the continued provision of the Executive’s benefits in accordance with the rules and regulations of the Group car scheme, from the date of the said termination for a period equivalent to the notice period referred to in clause 3(A) above;

(iii) subject as mentioned in sub-paragraph (iv) of his paragraph 3(B), the Executive will be granted pension benefits calculated as if the Executive had worked until the expiry of the notice period referred to in clause 3(A) above, or until the Executive’s Normal Retirement Date as specified in paragraph 9 of the Schedule hereto (if earlier), at a salary equivalent to his basic salary at the date of the said termination. The benefits shall be provided at the Company’s discretion from either:

(a) the Exempt Approved Pension Scheme specified in paragraph 10 of the Schedule hereto (subject to the consent of the trustees for the time being of the said scheme), or

(b) any other Exempt Approved Scheme, or

(iv) This paragraph shall be subject to the consent of the Inland Revenue (if necessary) and to any limits from time to time imposed by the Inland Revenue upon Exempt Approved Schemes, and sub-paragraph 3(B)(iii) above shall operate only to the extent (if at all) as permitted by the Inland Revenue. The expression “Exempt Approved Scheme” shall have the meaning atttibuted to it by Section 592(1) of the Income and Corporation Taxes Act 1988.

(v) An amount in substitution for any payment which might have been paid from participation in any bonus scheme as described in 4(C) below.

(C) The provision of the additional benefits referred to in clause 3(B)(i) and (ii) above will cease immediately should the Executive commence new employment at any time prior to the expiry of the period referred to in clause 3(A) above.

(D) If renewed, this Agreement will terminate automatically on 20 ^th September, 2010 the Executive’s 60th birthday as set out in paragraph 10 of the Schedule hereto. The Executive shall be entitled to participate in any bonus scheme as described in 4(C) below, on a pro-rata basis in his final year of service under this Agreement, should his Normal Retirement Date fall other than on the date on which the bonus is calculated.

4 (A) The Executive shall be paid an annual salary of not less than that specified in paragraph 6 of the Schedule, and such salary will accrue from day to day and will be paid monthly in arrears.

(B) Dining the period of his employment the Group shall annually, on the date specified in paragraph 8 of the Schedule, review the Executive’s salary and any subsequent increase will have regard to his performance and other circumstances which the Group considers relevant.

(D) As of the date of this Agreement Executive shall receive 50,000 shares of Aon Corporation common stock, $1.00 par value per share (the “Awards”) pursuant to the Aon Stock Award Plan, as amended and restated through 1997, and as thereafter amended from time to time (the “Plan”). The Awards shall be adjusted for any stock splits, exchanges or recapitalizations, and, once made, shall continue to vest in accordance with the Plan vesting schedule if Executive’s employment is terminated by the Company (except if terminated pursuant to Clause 14 herein in which event vesting shall immediately cease) and Executive continues to abide by the provisions of Clauses 16 and 17 herein as if there were no expiration of any temporal limitations in such Clauses 16 and 17.

(E) The Company shall be entitled to deduct from the Executive’s salary and benefits, all sums owing from the Executive to the Company or any Group Company.

5 The Company or a Group Company, as appropriate, shall pay or reimburse the Executive for all expenses properly and reasonably incurred by him in the performance of his duties, upon production of all relevant receipts and vouchers where available.

6 The Executive shall be entitled to:

(A) membership of the pension scheme as referred to in paragraph 11 of the Schedule, or such Scheme or Schemes as the Company may from time to time operate for its employees in accordance with his offer of membership, and the rules of the Scheme or Schemes from time to time;

(B) those benefits as set out in paragraph 15 of the Schedule hereto;

(C) Other benefits including, but not limited to, those Benefits as set out in paragraph 16 of the Schedule hereto, subject to the rules of each of the schemes from time to time.

7 (A) The rules governing absence from work due to sickness or injury are set out in the Employee Handbook.

(B) Subject to those rules, the Executive shall be entitled to his full salary and benefits for up to an aggregate of 6 (six) months in any 12 (twelve) month period for absence due to sickness or injury, and thereafter will be eligible for consideration to receive benefit under the Permanent Health Insurance Scheme.

8 The Executive’s principal place of work at the date hereof is in London. The Executive may be required to travel on the business of the Company or any Group Company in the proper performance of his duties from time to time, and the Executive shall work in such place or places as the Company or any Group Company shall reasonably require.

9 The Executive shall not, without the prior consent in writing of the Group obtained from the President and Chief Operating Officer Aon Group Inc., be directly or indirectly engaged, concerned or interested in the conduct or management of any other business of any kind whatsoever, whether or not in competition with the Company or any Group Company. Nothing in this clause shall, however, prevent the Executive from holding or being beneficially interested in shares or securities quoted on any recognized Stock Exchange or dealt in on the Unlisted Securities Market or on any recognized Over-the-Counter Market, provided that the Executive shall, if reasonably required by the Group, make a full disclosure to the Group of such interest.

10 The Executive shall:

(A) at all times during the period of his employment, keep secret and use only for the Company and Group’s use and benefit, any Confidential Information;

(B) at all times after his employment has ended, for whatever reason, keep secret and not use for his benefit or for the benefit of others any Confidential Information obtained or which otherwise came into his possession during his employment;

(C) The Executive shall not make or write any statement for any representative of television, radio, film or other similar media and shall not write any article for the press or otherwise for publication on any matter connected with or related to the business of the Company or any Group Company without first obtaining the written approval of the President and Chief Operating Officer - Aon Group Inc., such approval not to be unreasonably withheld.

(D) on the termination of his employment, for whatever reason, immediately return all records, documents, computer disks, papers, notes (including copies) and everything else which is in his possession or under his control and which contains or records (in whatever form or media) Confidential Information and shall not retain copies in any form or manner or media whatsoever.

11 (A) It shall be part of the duties of the Executive at all times to consider in what manner and by what new methods or devices the services, processes, equipment or systems of the Company or of any other Group Company with which he is concerned, or (or which he is responsible, might be improved and, subject to the provisions of S.39 of the Patents Act 1977, any Intellectual Property created or developed by the Executive at any time during the continuance of his employment, or in any way connected with that employment, must be disclosed to the Company immediately and the Intellectual Property and all parents, designs, trademarks, tradenames, goodwill copyrights and all other forms of Intellectual Property associated therewith, shall to the fullest extent permitted by law belong to, vest in and be the absolute, sole and unencumbered property of the Company.

(B) The Executive warrants that there is no Intellectual Property made or written at any time by him during the course of his employment by the Company or any other Group Company which is not now wholly, legally and beneficially owned by the Company.

(C) The Executive undertakes to notify and disclose to the Company in writing full details of all Intellectual Property immediately upon becoming aware of its production, and promptly whenever requested by the Company to hold upon trust for the benefit of the Company any Intellectual Property to the

extent that the same may not be and until the same is vested absolutely in the Company.

(D) The Executive undertakes at the expense of the Company, to execute all such documents, make such applications, give such assistance and do such acts and things as may, in the opinion of the Board, be necessary or desirable to vest in and register or obtain Letters Patent in the name of the Company and otherwise to protect and maintain the Intellectual Property.

12 If the Executive is dissatisfied with any disciplinary decision relating to him, or if he has any grievance arising from his employment, he may refer any such matter to the President and Chief Operating Officer- Aon Group Inc. and if the grievance is not resolved by discussion with him, it will then be referred to the Chairman and Chief Executive Officer - Aon Corporation, whose decision will be conclusive.

13 The Company may from time to time (including but without limitation during all or part of any period of notice to terminate this agreement) suspend or exclude the Executive from the performance of his duties and/or from all or any premises of the Company or any Group Company for any period. The Executive shall continue to receive his full remuneration and other benefits payable or otherwise provided hereunder during such period.

14 (A) Notwithstanding the provisions of Clause 3, the Company shall be entitled to terminate the Executive’s employment immediately without notice at any time during its continuance, without payment in lieu of notice and without prejudice to any other rights of the Company if:

(i) the Executive shall have acted in a manner which is prejudicial to the Company, the Group or its or their businesses; or

(ii) the Executive shall be guilty of any misconduct, or shall fail or neglect efficiently and diligently to perform his duties, or shall refuse or fail to observe any of his obligations (other than minor failures which, being capable of being remedied, are remedied forthwith by

the Executive upon being notified thereof by the Board, a director, or any nominee of the Board); or

(iii) the Executive is legally disqualified from being a director for any reason whatsoever; or

(iv) the Executive becomes bankrupt, or makes any arrangement or composition with his creditors: or

(v) the Executive is convicted of any criminal offence or is the subject of an adverse finding of a disciplinary tribunal, other than an offence which, in the opinion of the Company, does not affect his position as an employee of the Company (bearing in mind the nature of the duties in which he is engaged and the capacity in which he is employed); or

(vi) the Executive is guilty of any conduct tending to bring himself, the Company or any Group Company into disrepute.

In the case of activities subject to review in (i) (ii) (v) and (vi) above, the Board for the time being of Aon Group Inc. shall determine, by a majority decision, whether in their opinion those activities are such as to entitle the Company to terminate the Executive’s employment.

(B) In the event of the termination of the Executive’s employment by the Company under this Clause, the Company shall not be obliged to make any further payment to the Executive beyond the amount of any remuneration actually accrued to the date of such termination and the Company shall be entitled to deduct from such remuneration any sums owing to it by the Executive.

15 (A) Upon the termination of the Executive’s employment with the Company, for whatever reason, the Executive shall, upon the request of the Company, resign without claim for compensation from his office as a director of the Company and/or any Group Company, or any other company in which the Company required him to hold office in connection with his appointment and

from all other offices and trusteeships held by him in or in connection with such companies.

(B) Should the Executive fail to resign from his office as a director, or from any other office or trusteeship as is referred to in sub-clause (A) above, either during his employment when requested by the Company so to do, or termination, the Company is irrevocably authorised by the Executive to appoint some person in his place and on his behalf to execute any documents and to do all things requisite to give effect thereto and the Executive agrees forthwith, on the request of the Company, to ratify and confirm all such things done in pursuance of this power.

16 (A) After the termination of his employment, the Executive shall not, without the prior written consent of the Company, either alone or jointly with or on behalf of any other person, directly or indirectly, as principal, partner, agent, shareholder, director, employee, consultant, or in any other capacity:

(i) at any time during a period of 12 (twelve) months immediately following the said termination:

(1) cavass, or solicit the custom of (or procure, or assist the canvassing or soliciting the custom of); or

(2) supply (or procure, or assist the supply of) any services to or for the benefit of; or

(3) interfere with, or attempt to interfere with, or assist in the interference with the business relationship of the Company, or any Group Company with:

any person, firm or company who was:

a) a Client with whom the Executive was involved, either directly or indirectly, or had knowledge of their dealings with the Company, or any Group Company, by reason of his employment, at any time during the said period of 2 (two) years immediately prior to the said termination; or

b) a Prospective Client at the date of the said termination with whom the Executive was involved, either directly or indirectly,

if such canvassing, solicitation, supply or interference is in respect of services of a kind arranged or provided by the Company, or any Group Company, during the period of 2 (two) years immediately prior to the said termination and with which the Executive was concerned at any time during his employment hereunder; or

(ii) at any time during the period of 12 (twelve) months immediately following the said termination:

(1) employ, offer employment to, or engage in any capacity, or solicit the employment or engagement of, or otherwise entice away from the employment of or from any consultancy, office or agency relationship with the Company, or any Group Company; or

(2) procure or assist any third party so to employ, offer, solicit or otherwise entice away:

any person who is employed by or is an agent, officer or consultant of the Company or any Group Company who is or was personally known to the Executive and who by reason of seniority or position is likely to be in possession of confidential information which is likely to be of assistance to any person firm or company competing with the Company or any Group Company whether or not such person would commit a breach by reason of his leaving the Company or any Group Company.”

(B) The 12 (twelve) month period mentioned in sub-clauses 16(A)(i) and 16(A)(ii) above shall be reduced by any period during which the Company, in exercising its rights under the provisions of clause 13 above suspends the Executive from performance of his duties and/or excludes the Executive from the premises of the Company, or of any Group Company.

(C) The Executive repeats the covenants given by himself the Company at sub-clause 16(A) above as a separate covenant save that the words “(for whatever reason and howsoever effected)” shall be deemed inserted after the words “his employment” in the first line thereof”.

(D) Each of the obligations on the Executive contained in sub-clause (A) and (C) of this Clause constitutes an entirely separate and independent restriction on the Executive notwithstanding that they may be contained in the same paragraph, sentence or phrase.

17 If the Executive shall, whilst this Agreement is in force, (or at any time during a period of 12 (twelve) months immediately following the termination of his employment) receive from any person, firm or company an offer to provide services in any capacity whatsoever, or to enter into employment where acceptance of such offer, or the taking of such employment, might render him in breach of the provisions of this Agreement, he shall promptly provide a copy of this Agreement to the offerer.

18 No amendment to this Agreement shah be effective unless made in writing and signed by, or on behalf of, each of the parties hereto.

19 The provisions of the Schedule hereto and any special terms endorsed upon this Agreement, or otherwise agreed in writing by, or on behalf of, the parties hereto, shall be read and construed as part of this Agreement and shall be enforceable accordingly.

20 Compliance with the provisions of the Employee Handbook are a term of this Agreement. Where the terms and conditions differ, the terms and conditions of this Agreement override those in the Employee Handbook.

21 The Schedule to this Agreement sets out the particulars of the Executive’s employment with the Company in accordance with the requirements of the Employment Protection (Consolidation) Act 1978 Section 1, as amended by the Trade Union Reform and Employment Rights Act 1993.

22 In this Agreement, the following expressions shall have the meanings assigned to them, respectively:

	“Associated Company”		means any company, at least 20% of the equity share capital of which is beneficially owned by the Company, or any of its subsidiaries.

	“Client”		means an insured party on insurance or reinsurance coverage arranged by the Company, or any Group Company, whether such coverage is arranged either directly, or through the intermediary of any other insurance or reinsurance broker or consultant.

	“Confidential Information”		means all information which is of a confidential nature to the Company and the Group, including without limitation business methods and systems and contractual relations, whether with Clients, intermediaries, insurers or underwriters, lists of Clients, Prospective Clients, and any other clients, insurers or underwriters, and all confidential information relating to Clients or Prospective Clients or any other clients, including policy terms, conditions and rates, expiry dates, customer risk characteristics and information concerning the insurance arrangements for large and complex risks and whether or not any papers or documents are marked confidential.

	“Employee Handbook”		the Aon Group Limited Employee Handbook, as amended from time to time.

	“Group”		means the Company and all Associated Companies of it and its ultimate holding company.

	“Group Company”		means any Company within the Group of which the Company is a member.

	“Intellectual Property”		any design, literary or artistic work, invention, discovery or improvement in relation to methods and devices used by the Company or any Group Company.

	“Prospective Client”		means a party for whom the Company or any Group Company is undertaking advisory, consultative or other work, with a view to arranging insurance or reinsurance coverage for that party, whether such coverage is to be arranged either directly or through the intermediary of any other insurance or reinsurance broker or consultant.

	“Subsidiary”		shall have the meaning ascribed thereto by the Companies Act 1985.

23 Any notice under this Agreement may be served by the Company or any Group Company on the Executive, either personally, or by leaving it at, or sending it by registered post to his last known residential address, or by facsimile to the Executive’s facsimile number.

Any notice under this Agreement may be saved by the Executive on the Company, or any Group Company, by delivery to the President Aon Group Inc., or by sending it by registered post to the registered office of Aon Corporation, or by facsimile to Aon Corporation’s facsimile number, or to such other address, or facsimile number as may be notified to the Executive from time to time for this purpose.

Any notice sent by registered post, by either party, shall be deemed to have been served on the second day following that on which it was posted (excluding a Saturday, Sunday, Bank Holiday or Public Holiday) and, in proving such service, it shall be sufficient to show that the notice was properly addressed and posted.

Any notice given by facsimile, by either party, shall be deemed to have been served at the time of transmission.

24 This Agreement shall be governed by, and interpreted according to, the Laws of England.

25 In the event of the termination of the Executive’s employment hereunder, the Company reserves the right to require the Executive not to attend at its offices for all or part of the Executive’s notice period, unless requested to do so. During such period the Executive would remain an employee of the Company and continue to enjoy benefits such as membership of the pension fund, BUPA und use of the Company car but remain subject to the terms of the Executive’s employment contract Salary will be paid monthly in the normal way. During the period of notice when not required to attend at the offices of the Company the Executive will also comply with the reasonable directions of the Company with regard to its Clients and business. The Executive will not be entitled to receive any payment in respect of outstanding unused holiday entitlement at the end of such notice period.

End - Next Page is Signature Page

IN WITNESS whereof this Agreement has been entered into the day and year first above written.

SIGNED for and on behalf of the Aon Group, Inc. by:

DIRECTOR, PRESIDENT

AND CHIEF OPERATING OFFICER:

/s/ Michael D. O’Halleran

NAME (BLOCK CAPITALS)

MICHAEL D. O’HALLERAN

SIGNED for and on behalf of Aon Group Limited by:

COMPANY SECRETARY

/s/ John Hill

SIGNED as a deed an delivered by

the said Executive

SIGNATURE

/s/ Dennis L. Mahoney

FULL NAME

(BLOCK CAPITALS)

MR. DENNIS LEONARD MAHONEY

DATE

30 ^th November 1998

in the presence of:

Name:

Chris Pritchard

Address:

Flat 3, 20 Holmbush Road

Putney

London

Occupation:

Secretary

THE SCHEDULE above referred to:

1 THE EXECUTIVE:

	NAME:	*Mr Dennis Leonard Mahoney*


	ADDRESS:	*Holne Chase*
		*Wilderness Road*
		*Chislehurst Kent*

2 CAPACITY OF EMPLOYMENT OF THE EXECUTIVE:

	*Chairman & Chief Executive Officer*
	*Aon Group Limited*

3 (i) THE TERMS OF THIS AGREEMENT WILL TAKE EFFECT FROM:

30 ^th November 1998

(ii) THE CONTINUOUS PERIOD OF EMPLOYMENT OF THE EXECUTIVE WITH THE COMPANY FOR STATUTORY PURPOSES BEGAN ON:

07 June 1984

(iii) PLANNED EXPIRATION DATE:

30 ^th November 2008

4 THE EMPLOYER: Aon Group Limited

5	ADDRESS OF WORKPLACE:			10 Devonshire Square
				London
				EC2M 4PL

6	SALARY:			*£ 475,000 per annum*
				*Payable monthly in arrears*

7	BONUS:			*A discretionary bonus opportunity of up to one hundred fifty percent (150%) of Salary.*

8	REVIEW DATE:			*1 ^st April 2000 and annually thereafter on 1 ^st April*

9	NOTICE PERIOD:		*You are referred to clause 3 of this Agreement*

10	NORMAL RETIREMENT DATE:		*20 September 2010*

11	PENSION SCHEME:		*Alexander & Alexander UK Pension Scheme*

12	A CONTRACTING-OUT CERTIFICATE is IN FORCE.

13	DISCIPLINARY AND GRIEVANCE PROCEDURES:

		*You are referred to Section 11 of the Employee Handbook and clause 12 of this Agreement*

14	SICKNESS AND STATUTORY SICK PAY:

		*You are referred to Section 25 of this Employee Handbook and clause 7 of this Agreement*

15. BENEFITS:

(a) a minimum of 25 days paid annual holiday, at such time or times as shall be agreed with the Company, in addition to public holidays;

(b) reimbursement of 75% of the Executive’s home telephone bill;

(c) provision of motor car(s)/car allowance, in accordance with the rules and regulations from time to time of the Group Car Scheme

(d) Petrol Card (Private Petrol for Company Car)

(e) Mortgage Subsidy

16. PRIVATE MEDICAL INSURANCE SCHEME. Cover will be provided in accordance with the Scheme arranged by the Company.

17. PERMANENT HEALTH INSURANCE SCHEME. Cover will be provided in accordance with the Scheme arranged by the Company.

Exhibit 10.4

	EMPLOYMENT CONTRACT

	The undersigned,

1. The private company with limited liability Hudig-Langeveldt Groep B. V.,
having its registered office in Rotterdam,
further to be called HLG,
herein also acting on behalf of and warranting the performance of the group companies of HLG (which means companies of which more than 50% of the share capital is held by HLG)

2. Mr. D. Verbeek,
domiciled in
Rotterdam,
further to be called: the Member of the Board

declare herein agreement on the following:

a. From 1 January 1989 onwards or from any agreed date prior to this, the Member of the Board will become employed by HLG as a Financial Director.

b. The Employment Contract will be entered into for an indefinite period of time.

c. The Member of the Board is appointed a member of HLG’s Group Board of Management and holds (for the time being) the office of Financial Director. However, it is known that he has relinquished a very good function elsewhere and accepted HLG’s offer with a view to his being appointed Managing Director of HLG, which appointment - according to the parties’ intentions - would have to be brought about not later than on 1 July 1990. The Supervisory Board of HLG will therefore appoint the Member of the Board as the Managing Director of HLG no later than on 1 July 1990 unless the Supervisory Board has come to the conclusion that the Member of the Board cannot be eligible for such an appointment. If the Supervisory Board draws this conclusion, it will notify the Member of the Board of this, giving sound reasons.

d. If the Supervisory Board has given a notice as meant in the last sentence of the previous clause, and except for when there are urgent reasons as meant in Section 1639 p of the Civil Code, HLG will not take any measures for one year after 1 July 1990 which could result in termination of the employment of the Member of the Board, whilst on the other hand the Member of the Board is entitled during a one-year period after 1 July 1990 to terminate the employment with due observance of a notice period of one month. If the Member of the Board gives notice of termination of the employment before 1 July 1991, HLG will pay him compensation amounting to NLG 350,000—.

e. If HLG informs the Member of the Board that the intended offer will be made to him and the Member of the Board does not accept this offer, the Member of the Board will not be entitled to the compensation as meant above under d.

f. The Member of the Board will receive an annual gross salary of NLG 250,000— until HLG decides, not later than on 1 July 1990, whether the Member of the Board will be offered the post of Managing Director. The salary level of a Managing Director of HLG is currently NLG 412,000— gross.

g. The Member of the Board will contribute an amount equal to the value of his pension rights built up elsewhere to HLG’s Pension Fund and will be entitled on termination of his employment as meant above under d. (thus before 1 July 1991) to have transferred to a pension fund or insurer to be indicated by him an amount equal to the amount contributed by him to HLG’s Pension Fund increased by interest of ...% per annum and increased by ...% of the premium paid by HLG for his benefit from 1 January 1989 onwards.

This clause is only applicable on condition that consent is obtained from Delta Lloyd to this end. This will be

applied for immediately after this contract has been signed. The said percentages will be finalised in consultation with Delta Lloyd.

h. This Agreement is covered by the “Employment Conditions”, insofar as is not explicitly otherwise provided for in this Agreement. A copy of these conditions initialled by the parties is attached to this Agreement.

i. For the rest the general employment conditions apply which are currently applicable to the employees of HLG insofar as is not provided otherwise in this Agreement and the associated Employment Conditions.

Rotterdam, 31 October 1988

/s/ A. Jiskoot

A. Jiskoot, Chairman of the Supervisory Board


/s/ J.G.A. ten Bokkel			/s/ D. Verbeek

J.G.A. ten Bokkel, Master of Law
Hudig-Langeveldt Groep N.V.			D. Verbeek

APPENDIX 1 TO THE EMPLOYMENT CONTRACT

As an allowance for the necessary costs incurred by the Member of the Board as a result of a change in work, such as re-mortgaging costs, HLG will pay to the Member of the Board in the month he becomes employed, the amount of NLG 100,000= gross. The payroll tax, old-age pension and national insurance contributions will be withheld from this amount.

In order to partially avoid such amounts being withheld, the Member of the Board may submit documents which enable HLG to pay part of this amount free of tax.

Drawn up in Rotterdam, dated 31 October 1988

[signature]

APPENDIX 2 TO THE EMPLOYMENT CONTRACT

On or around 1 January 1990 HLG will pay to the Member of the Board the amount of NLG 60,000— gross as a bonus.

Payroll tax, old-age pension and national insurance contributions will be withheld from this amount.

Drawn up in Rotterdam, dated 31 October 1988

[ signature ]

EMPLOYMENT CONDITIONS

1. The Member of the Board undertakes during his employment with HLG to fulfil the Management Board function(s) he is entrusted with to the best of his ability. Unless the parties agree explicitly otherwise, these Conditions will remain fully in force when the function of the Member of the Board is changed in mutual consultation.

2. Salary

The annual salary of the Member of the Board will be divided into twelve monthly instalments paid in arrears, payable always on the last day of each calendar month, payment in the form of a so-called 13 ^th month and the holiday allowance usual at HLG.

For the rest this salary is gross and therefore will not be increased by any bonus or additional payment on HLG’s account.

With regard to the said salary the Member of the Board will only have a claim on HLG and therefore not on any group company.

3. Expenses

HLG will refund the Member of the Board for the specified expenses incurred by him in the interest of HLG or the group companies; in addition, HLG will pay annually a fixed sum to the Member of the Board to reimburse costs which are not suitable for specified invoices. This amount is NLG 500— per month.

4. Telephone

All costs, such as subscription costs and call units, connected with having a telephone at the home of the Member of the Board, will be reimbursed by HLG.

5. Car

HLG will make a car available to the Member of the Board up to a fixed maximum catalogue price of NLG 54,096- (inc. VAT). All costs connected with the use of it will be chargeable to HLG.

On replacement within three years the prior consent of the Board of Management of HLG is required. The same consent is required if the Member of the Board wishes to buy a car the catalogue price of which is above the maximum determined. Consent to this will be connected to the condition that the amount by which the purchase price exceeds the maximum determined, will remain at the expense of the Member of the Board and shall not be more than 10% of the said maximum. On the sale of the car, the Member of the Board will share in the proceeds in proportion to his share in the purchase price.

6. Health insurance scheme

HLG offers the possibility of joining the group health insurance scheme. The company will contribute substantially to the premium.

7. Pension Scheme

The pension for Members of the Board include:

• old-age pension at the age of 62 years

• widow’s pension

• orphan’s pension.

The annual salary from HLG is divided in two components:

A. The basic component which is equal to the maximum annual salary included in the calculation of the pensionable salary according to the Pension Regulations 1987 of the Hudig-Langeveldt Pension Fund, further to be called the Pension Fund’.

B. A surplus applicable to top executives in the group, up to a maximum corresponding to half of the maximum annual income to be taken into account under the scheme under A.

C. The surplus for the income above A + B.

The pension is calculated as follows:

Under A: Pension rights are granted on the basic component, calculated in accordance with the Pension Regulations 1987 of the Pension Fund, however, with the following changes:

a. The retirement date is the first date of the month in which the participant reaches the age of 62 years.

b. For the pension calculations a maximum of 37 service years are taken into account while the annual old-age pension for each service year amounts to 1.8919%, therefore resulting in a maximum old-age pension of 70% of the pensionable salary.

c. The final wage system is applicable until the end of the year in which the participant has reached the age of 61 years old.

d. The costs of the Pension Scheme are fully chargeable to HLG.

Under B: With regard to this surplus the conditions of the scheme under A apply accordingly, insofar as is not otherwise provided for. The old-age pension is calculated on this surplus on the basis of 1 ½ % per service year with a maximum of 40 service years, therefore resulting in a maximum 60% of this surplus income.

Under C: With regard to this surplus the conditions of the scheme under A apply accordingly insofar as is not otherwise provided for. The old-age pension is calculated over this surplus on the basis of 2% per service year with a maximum of 20 service years, therefore resulting in a maximum of 40% of this surplus income.

Each year the pension right is re-calculated on the basis of the formula set out above. The pension commitment is not granted via the Pension Fund but is directly insured with Delta LIoyd/Nationale-Nederlanden. The participant will receive an annual pension specification. On top of and apart from the old-age pension thus determined,

the Member of the Board will receive an amount equal to the annual AOW pension for married persons from the retirement date until his 65th birthday.

Arrangement for changes

HLG reserves the right to terminate in full or in part the premiums and/or payments due in this respect if because of government measures a pension scheme - other than the one embodied in the AOW/AWW - replaces this Pension Scheme in full or in part.

8. Private account

The Member of the Board is not allowed to hold a debit balance with HLG or any of the group companies.

9. Days leave

The Member of the Board is entitled to 33 working days leave per year. For more days leave the Member of the Board requires the prior consent of the Board of Management.

10. Illness

a. HLG will take out invalidity insurance for the Member of the Board provided the Member of the Board will submit to the necessary examinations to this end.

b. When the Member of the Board is prevented by illness or accident from
performing his duties, the following will apply:

i the Member of the Board will retain a right to his full salary for 1 year;

ii if the occupational disability lasts longer than 1 year, for the further duration of the illness or accident until the retirement date, the Member of the Board will be entitled to an annual payment equal to the old-age pension promised to him and which he will receive on survival of the pensionable age, plus the amount under the AOW for married persons applicable for each respective year. Any general adjustments of the pensions for board members at HLG will also be applied to the said payment.

c. The payment mentioned under b. will be reduced by the payments with regard to the insurance mentioned under a. as well as the payments with regard to the Statutory Occupational Disability Insurance (WAO or AWW, etc.)

11 . Additional functions

The Member of the Board is obliged to do and refrain from everything that he ought to do or refrain from in the interests of HLG and of its group companies. He will deploy his full personality and working power in order to promote the growth of HLG and its group companies. He will not accept additional functions in the business sphere, either salaried or not, without the prior written consent of the Board of Management of HLG.

12. Fees and attendance fees from additional functions

Fees and attendance fees from additional functions in the insurance sphere as well as from supervisory directorships which are held in a certain capacity, will accrue to HLG. For the rest, such fees will be retained by the Member of the Board.

13. Confidentiality

The Member of the Board should observe strict confidentiality both during his employment as well as after it with regard to all matters which come to his notice in die course of his duties in connection with the matters and interests of HLG and its affiliated businesses.

14. Position after termination of the employment

On termination of the employment the Member of the Board shall not be employed in a new function within HLG’s sphere of activity for three years afterwards if this could result in actual adverse effects for HLG. In such a case HLG and the Member of the Board will consult in good faith with each other and involve the possible new employer in these consultations. If the parties cannot come to any agreement in this respect,

all this will be decided by a binding third-party ruling in accordance with clause 15. For as long as there is no agreement in this respect, the Member of the Board will, during this three-year period, not be self-employed or accept employment from which an adverse effect can be feared on HLG’s position. This competition clause in these Employment Conditions will not be effective if the Member of the Board is not appointed as Managing Director of HLG and if he does not accept such an appointment because HLG is or will become a subsidiary of another legal entity or if another substantial change in the share holding has occurred and for these reasons the Member of the Board terminates the employment before 1 July 1991.

15. Disputes

Without prejudice to the provisions set out in art. 1, second paragraph, of the Netherlands Arbitration Institute Regulations and in clause 14 of this Agreement with regard to a binding third party ruling, all disputes which might arise in connection with this Agreement, or from further agreements which might result from it, will be settled by arbitration in accordance with the Netherlands Arbitration Institute Regulations.

Exhibit 12(a)

Aon Corporation and Consolidated Subsidiaries
Combined With Unconsolidated Subsidiaries
Computation of Ratio of Earnings to Fixed Charges

	Three Months Ended March 31,				Years Ended December 31,
(millions except ratios)	2005		2004		2004		2003		2002		2001			2000

Income from continuing operations before provision for income taxes and minority interest	$	313	$	300	$	880	$	1,131	$	840	$	367		$	846

Less: Earnings from unconsolidated entities under the equity method of accounting	1		17		34		49		19		(139		)	44

Add back fixed charges:

Interest on indebtedness	34		34		136		101		124		127			140

Interest credited on deposit-type insurance contracts	—		—		1		—		29		56			71

Portion of rents representative of interest factor	18		15		73		67		59		57			54

Income as adjusted	$	364	$	332	$	1,056	$	1,250	$	1,033	$	746		$	1,067

Fixed charges:

Interest on indebtedness (1)	$	34	$	34	$	136	$	101	$	124	$	127		$	140

Interest credited on deposit-type insurance contracts	—		—		1		—		29		56			71

Portion of rents representative of interest factor	18		15		73		67		59		57			54

Total fixed charges	$	52	$	49	$	210	$	168	$	212	$	240		$	265

Ratio of earnings to fixed charges	7.0		6.8		5.0		7.4		4.9		3.1			4.0

(1) As a result of the adoption of FIN 46 on December 31, 2003, Aon was required to deconsolidate its 8.205% mandatorily redeemable preferred capital securities. This decrease was offset by an increase in notes payable. Beginning in 2004, interest expense ($14 million for both the three months ended March 31, 2005 and 2004 and $58 million for the year ended December 31, 2004) on these notes payable is reported as part of interest expense on the condensed consolidated statements of income.

Exhibit 12(b)

Aon Corporation and Consolidated Subsidiaries
Combined With Unconsolidated Subsidiaries
Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends

	Three Months Ended March 31,				Years Ended December 31,
(millions except ratios)	2005		2004		2004		2003		2002		2001			2000

Income from continuing operations before provision for income taxes and minority interest	$	313	$	300	$	880	$	1,131	$	840	$	367		$	846

Less: Earnings from unconsolidated entities under the equity method of accounting	1		17		34		49		19		(139		)	44

Add back fixed charges:

Interest on indebtedness	34		34		136		101		124		127			140

Interest credited on deposit-type insurance contracts	—		—		1		—		29		56			71

Portion of rents representative of interest factor	18		15		73		67		59		57			54

Income as adjusted	$	364	$	332	$	1,056	$	1,250	$	1,033	$	746		$	1,067

Fixed charges and preferred stock dividends:

Interest on indebtedness (1)	$	34	$	34	$	136	$	101	$	124	$	127		$	140

Preferred stock dividends (2)	1		1		3		61		58		70			70

Interest and dividends	35		35		139		162		182		197			210

Interest credited on deposit-type insurance contracts	—		—		1		—		29		56			71

Portion of rents representative of interest factor	18		15		73		67		59		57			54

Total fixed charges and preferred stock dividends	$	53	$	50	$	213	$	229	$	270	$	310		$	335

Ratio of earnings to combined fixed charges and preferred stock dividends	6.9		6.6		5.0		5.5		3.8		2.4			3.2

(2) Included in preferred stock dividends are $57 million and $54 million for the years ended December 31, 2003 and 2002, respectively, and $66 million for the years ended December 31, 2001 and 2000 of pretax distributions on the capital securities.

Exhibit 15

ACKNOWLEDGEMENT OF ERNST & YOUNG LLP, INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Aon Corporation

We are aware of the incorporation by reference in the Registration Statements of Aon Corporation described in the following table of our reports dated May 3, 2005, relating to the unaudited consolidated interim financial statements of Aon Corporation that are included in its Form 10-Q for the quarter ended March 31, 2005.

Registration Statement
Form	Number	Purpose
S-8	33-27984	Pertaining to Aon’s savings plan
S-8	33-42575	Pertaining to Aon’s stock award plan and stock option plan
S-8	33-59037	Pertaining to Aon’s stock award plan and stock option plan
S-3	333-50607	Pertaining to the registration of 369,000 shares of common stock
S-8	333-55773	Pertaining to Aon’s stock award plan, stock option plan, and employee stock purchase plan
S-3	333-78723	Pertaining to the registration of debt securities, preferred stock and common stock
S-4	333-57706	Pertaining to the registration of up to 3,852,184 shares of common stock
S-3	333-74364	Pertaining to the registration of debt securities, preferred stock, common stock, share purchase contracts, and share purchase units
S-3	333-100466	Pertaining to the registration as amended of 2,707,018 shares of common stock
S-3	333-102799	Pertaining to the registration of senior convertible debentures and common stock
S-8	333-103344	Pertaining to the registration of common stock
S-8	333-106584	Pertaining to Aon’s deferred compensation plan

ERNST & YOUNG LLP

Chicago, Illinois

May 3, 2005

Exhibit 31.1

CERTIFICATIONS

I, Gregory C. Case, the Chief Executive Officer of Aon Corporation, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Aon Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2005	/s/ Gregory C. Case
	Gregory C. Case
	Chief Executive Officer

Exhibit 31.2

CERTIFICATIONS

I, David P. Bolger, the Chief Financial Officer of Aon Corporation, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Aon Corporation;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2005	/s/ David P. Bolger
	David P. Bolger
	Chief Financial Officer

Exhibit 32.1

Certification Pursuant to Section 1350 of Chapter 63

of Title 18 of the United States Code

I, Gregory C. Case, the Chief Executive Officer of Aon Corporation (the “ Company ”), certify that (i) the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2005 (the “ Report ”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Gregory C. Case
	Gregory C. Case
	Chief Executive Officer
	May 9, 2005

Exhibit 32.2

Certification Pursuant to Section 1350 of Chapter 63

of Title 18 of the United States Code

I, David P. Bolger, the Chief Financial Officer of Aon Corporation (the “ Company ”), certify that (i) the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2005 (the “ Report ”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ David P. Bolger
	David P. Bolger
	Chief Financial Officer
	May 9, 2005

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Other intangible assets are classified into three categories:

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

PART II

Shares

Vest Date

INDUCEMENT RESTRICTED STOCK UNIT AGREEMENT

AON CORPORATION

Shares

Vest Date

AON CORPORATION

INDUCEMENT STOCK OPTION AGREEMENT

AON CORPORATION

DIRECTOR, PRESIDENT

AND CHIEF OPERATING OFFICER:

COMPANY SECRETARY

SIGNATURE

DATE

Chief Executive Officer

Chief Financial Officer

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION