Aon to cut 2,700 jobs in restructuring

CHICAGO, Oct. 31 (UPI) -- U.S. insurance brokerage Aon Corp. said Wednesday it would cut 2,700 jobs in a restructuring it said would eventually save about $240 million a year.

The 6.3 percent workforce cut was announced as Aon -- the world's second-largest insurance broker after Marsh & McLennan Cos. -- reported third-quarter net earnings of $204 million, up 92 percent from a year earlier.

Despite the strong earnings, Aon said it was restructuring due to falling commercial insurance prices, which threaten sales.

U.S. business insurance prices fell an average 13 percent in the third quarter, as insurers continued to compete on price, a Council of Insurance Agents and Brokers survey said Oct. 22.

Most of Aon's job cuts will be in back-office operations, with about 1,100 positions expected to be "off-shored or outsourced," Aon said.

The cuts will cost $360 million before taxes and save $240 million a year by 2010, the company said.

Aon, whose name is the Gaelic word for "oneness," employs 43,000 people in more than 120 countries.

The restructuring plan also involves reducing office space, consolidating personnel, finance and computer functions and simplifying European operations, the Chicago company said.