Aon sells two insurance units for $2.75B

CHICAGO, Dec. 17 (UPI) -- U.S. insurance brokerage Aon Corp. said Monday it would sell two units for a combined $2.75 billion and use the proceeds to buy back shares.

The Chicago company -- the world's second-largest insurance broker after Marsh & McLennan Cos. -- said it would sell accident, health and life insurer Combined Insurance Co. of America to Ace Ltd. for $2.4 billion in cash, and healthcare insurer Sterling Life Insurance Co. to Munich Re, the world's second-biggest reinsurer, for $352 million.

Aon said it would will use the proceeds to increase its share-repurchase program by $2.6 billion, it said.

Chief Executive Officer Gregory Case said the sale "further simplified our global organization and successfully executed our strategy to exit the lower-margin and more capital-intensive insurance underwriting business" to focus on providing advice and consulting services.

"Our core assets will now be more strategically aligned as we expand our capabilities to better serve our risk-brokerage and consulting clients," Case said.

Aon expects to extract a one-time cash dividend of $325 million from Combined before the deal closes.

Aon said Oct. 31 it would cut 2,700 jobs, or 6.3 percent of its workforce, due to falling commercial insurance prices, which threaten sales.

Aon was created in 1982, when Ryan Insurance Group merged with Combined International Corp.