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Business News of Monday, 23 February 2009

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Ghana insurers named in Aon's bribery scandal

Ghana & Nigeria insurers and others in 14 countries have been implicated in Aon’s 7.5 million pounds illegal earnings in its overseas insurance operations between 2005 and 2007.

Since becoming regulated by UK's Financial Services Authority (FSA), Aon - a leading global provider of risk management services, insurance and reinsurance brokerage - had failed to review its processes, particularly, its energy reinsurance business in overseas countries. But, it took steps in June 2007 to notify relevant authorities such as the Serious Organised Crime Agency (SOCA) of suspicious payments made by some of its units dealing with overseas partners.

Aon Limited, a wholly-owned subsidiary of US-based Aon Corporation, is one of UK’s largest insurance brokerage firms.

Aon Ltd was fined 5.25million pounds (about N1.08bn) by the Financial Services Authority as a mitigated fine for failings in its anti-bribery and corruption systems, particularly in its reinsurance businesses through third parties in overseas countries.

Besides the two African countries, FSA identified Philippines, Burma, Bahrain, Bangladesh, Bulgaria, Indonesia, Vietnam as other countries where Aon’s weak monitoring system led to “corrupt payments” to overseas third parties to win or retain business.''

The report particularly identified “some business units within Aon Ltd’s Aviation and Energy divisions” that paid overseas third parties in connection with reinsurance business transacted in high risk jurisdictions.

According to the FSA findings, “Aon Ltd was, or should have been aware of this risk.” For instance it said, “in the 1990’s, Alexander Howden Group Ltd and Nicholson Leslie Ltd, two predecessor companies of Aon Ltd paid overseas third parties (some of whom were government officials) in Ghana, Nigeria and Philippines in suspicious circumstances.

For its underhand dealings then, Aon was fined 300,000 pounds by Lloyd’s Disciplinary Board in 2000. “Parts of Aon Ltd’s business routinely dealt with clients with state or government connection in countries where corruption may be perceived to be commonplace,” the report added.