Ex-New York Insurance Superintendent Eric Dinallo has warned that failing to pay some AIG executives $100m in bonuses that they are owed according to their contracts could lead to subsequent legal settlements 100 times that in size. Mr Dinallo, who is a candidate for the post of New York attorney general, was responding on CNBC to the call by Connecticut attorney general Richard Blumenthal for the bonuses to be halted because of AIG's debts to the US government. Mr Blumenthal had written a letter to Kenneth Feinberg, special master for executive pay at the Troubled Asset Relief Programme, asking that "aggressive action" be taken "to establish basic fairness and equity to Wall Street compensation. The United States taxpayers deserve no less". Mr Dinallo said that a distinction needed to be made between those who set up the products as AIGFP, and those people who are being paid to unwind the book of products. "They are really not bonuses, and that's the problem. They are basically contracts designed to keep people there to unwind the book, because they shut the business down a couple of years ago". Mr Feinberg has admitted that there could be legal difficulties with contracts guaranteed several years ago.

The floods which struck the UK in the summer of 2007 cost the county a total of £3.2bn ($5.1bn), including more than £2bn to homeowners and businesses, according to a report released by the UK Environment Agency. The average cost per flooded home was between £23,000 and £30,000, with a quarter of homeowners not being fully insured. About 30% of victims had to relocated, while 10% of victims had to relocated for a year or more. The average cost to flooded businesses was between £75,000 and £112,000, with only 5% not fully covered. Actual payouts were about 40% higher because of "new for old" clauses in policies. A further £550m in damage was caused to critical infrastructure, with water supplies and treatment plants the most affected. Utility companies and customers incurred £330m of these costs. Communication and transport damage came to £230m. The Agency estimated that one in six homes in England and Wales are at risk from flooding.

Global broking and consulting group Aon Corp saw 2009 net earnings fall 49% to $747m owing to a prior-year after-tax gain of $935 connected to the sale of its Combined Insurance Cos of America and Sterling Life Insurance units. The Chicago-based group said that income from continuing operations rose 2% to $636m on commissions and fees of $7.52bn, also up 2%. For Q4, Aon swung to net profit of $198m from a prior-year loss of $6m, which included $184m in losses on discontinued operations. Excluding extraordinary items, Aon's  income for the quarter was 96¢ a share, 16¢ higher than a year ago and 15¢ higher than analysts' forecast. "Recent investments across our organization in construction, professional liability, claims consulting and key talent continue to strengthen our client-serving capability, while our restructuring programmes continue to deliver additional cost savings and margin improvement", said president and chief executive Greg Case. However, Mr Case warned in an interview with Dow Jones Newswires that the group would continue to see "pressure" on insured values and premiums through 2010. Aon has approved the repurchase of $2bn in shares, equal to about 18% of the stock outstanding. CFO Christa Davies said that the buyback had been approved by the Board of Directors "given our belief in the underlying strength of the business".

Managing agency Jubilee has merged its motor syndicate 1231 and personal lines syndicate 5820 into a single entity for the 2010 year of account, which will operate under the banner of syndicate 5820. Jubilee said that the move would give it improved capital efficiency and a more flexible operating structure. Chris Biles has been named the active underwriter for syndicate 5820. Capacity for the combined business will be £138.9m ($216.4m) for the 2010 year of account, up £18.8m year on year when compared with the combined capacity of the two separate syndicates for 2009. The agency's life syndicate 779 will continue to operate separately. Capacity for syndicate 779 will be £27m for the 2010 year of account. Last September the Cassidy Davis brand disappeared from Jubilee when the Lloyd's underwriting and administrative operating companies were combined under the Jubilee brand.