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CHICAGO-Broker Aon Corp. is buying risk management information system vendor Risk Laboratories L.L.C., creator of RiskConsole, and phasing out its own RMIS product.
Terms of the sale, which closed Feb. 12 but was not made public until March 22, were not disclosed. However it was an acquisition of 100% of the outstanding shares of RiskLabs from its former owner, American Home Assurance Co., a unit of American International Group Inc. of New York.
The decision to purchase RiskLabs came nearly a year ago, when Aon was rethinking its RMIS marketing strategy, according to Mark Stephens, managing director of Aon eSolutions, the technology arm of the Chicago-based broker.
Aon's RMIS product, Risk Monitor, "was a market-leading product in many ways in the results it could deliver," Mr. Stephens said, "but our clients found it very difficult to use. Consequently, when we sold it, we ended up with a very labor-intensive service model. Clients liked the product, they liked the results, but they weren't very interested in using it themselves."
Recognizing this, Aon hired a business analyst in early 2003 to study the global RMIS marketplace to determine how Aon could best compete. The options presented were to either rewrite the Risk Monitor application or to create a business relationship with a market-leading vendor.
"Who did they suggest? They came back...