Analysts said Aon Corporation's announcement that it is seekingto sell its property-casualty business comes as no surprise andsale of the unit could be worth as much as $1.5 billion.

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The Chicago-based insurance brokerage firm said it is exploringstrategic alternatives relating to the ownership of its warranty,credit insurance and property-casualty underwriting businesses.

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Greg Case, Aon's president and chief executive officer, said ina statement that, "By exploring alternatives, we expect todetermine if the potential of our warranty, credit andproperty-casualty businesses can be more fully realized underdifferent ownership."

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Aon has not named the specific businesses it is looking at.

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The decision to put its p-c unit on the block was expected, saidGretchen Roetzer, lead analyst for insurance brokerage with FitchRatings in Chicago.

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"A lot of these brokers are looking at what core and non-corebusiness they have and where they are looking to get the most bangfor their buck with the existing business they have," she said,adding that the activity follows recent settlements by brokers togive up contingent commissions.

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She noted that the p-c insurance business has not been a strongline of business for Aon and it is natural for the broker toinvestigate alternatives, as it did with its sale of Swett &Crawford.

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"If they were going to look at divesting businesses, to focus onthe core business, this would be something we would expect for themto look at alternatives for," she added.

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James B. Auden, senior director, insurance, for Fitch, said ifthe firm does decide to sell it would be interesting to see whatthe money is used for. He suggested Aon could use the money foracquisitions but doubted there were many firms left, "that wouldmake a difference to them. There could be some specialty business,but with their scale, there is not a lot out there that would boosttheir market share."

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"A sale would be strategic," noted Ms. Roetzer, aimed atalignment of a business model, not a move to finance some otherproject.

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Both Ms. Roetzer and Mr. Auden said that if Aon does decide tosell the businesses, it would not sell unless it received a fairprice for the units. What that price would be they would notventure to guess at without more research.

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The option of spinning off the units as a separate entity, asthe company failed to do with Combined Insurance, its lifeinsurance subsidiary, three years ago, does not appear to be on thetable.

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"It appears they are looking for a buyer and an appropriateprice," said Ms. Roetzer. "It's not a fire sale."

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Adam Klauber, managing director at Cochran, Caronia & Co.,in Chicago, an investment banking firm to the insurance industry,said, the sale would help Aon move closer to being a purebroker.

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He said the market for a sale is much better than it was when ittried to spin off Combined, but there are still not many buyers.The primary candidates to purchase would be either other carriersor private equity investors.

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Mr. Klauber said proceeds from the deal, which Cochran, Caroniaestimated could be worth between $1 billion and $1.5 billion, wouldprobably be used to either pay down pension liabilities or buy backshares. Either move would strengthen the company, he added.

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