Fitch affirms Aon

Fitch Ratings said it affirmed Aon Corp.'s issuer default rating, $300 million 3.5% senior debt due 2012 and $225 million 7 3/8% senior debt due 2012 at BBB+, its commercial paper at F2 and Aon Capital A's $726 million 8.205% trust preferred capital securities due 2027 at BBB.

The outlook is stable.

The agency said Aon's ratings reflect its progress in developing a new business model that is less reliant on contingent commission income, Aon's improved balance sheet and cash flow generation, its very good financial flexibility and positive financial trends, and a lack of any additional broker market turmoil. Aon continues to demonstrate its ability to retain clients and grow new business while improving profitability.

Fitch further believes that since Aon's settlement with the New York attorney general in March 2005, the company has executed its stated strategic plans as projected. Aon hired a new CEO, announced a three-year restructuring plan projected to bring over $200 million in annualized cost savings, divested its stake in Endurance Specialty Holdings, Ltd. and recently sold the majority of its property and casualty/warranty insurance business in addition to its claims and wholesale brokerage businesses. The agency said it views Aon's focus on its core businesses positively because it should enable the company to reduce expenses and increase organic profitable growth.

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