SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
--- OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996

___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission file number 1-7933

Aon Corporation
---------------
(Exact Name of Registrant as Specified in its Charter)

DELAWARE 36-3051915
-------- ------------
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)

123 N. WACKER DR., CHICAGO, ILLINOIS 60606
------------------------------------ -----
(Address of Principal Executive Offices) (Zip Code)

(312) 701-3000
--------------
(Registrant's Telephone Number)

Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
____ ____

Number of shares of common stock outstanding:

No. Outstanding
Class as of 3-31-96
----- --------------

$1.00 par value Common 108,498,855

Part 1
Financial Information
Aon CORPORATION
Condensed Consolidated Statements of Financial Position

(millions) As of As of
Assets March 31, 1996 Dec. 31, 1995
-------------- -------------
(Unaudited)

Investments
Fixed maturities
Available for sale $ 7,489.5 $ 7,687.1
Equity securities at fair value
Common stocks 286.6 300.0
Preferred stocks 688.3 706.3
Mortgage loans on real estate 656.4 632.0
Real estate (net of accumulated
depreciation) 38.7 36.5
Policy loans 228.7 226.3
Other long-term investments 125.2 112.6
Short-term investments 1,165.3 938.3
--------- ---------
Total investments 10,678.7 10,639.1

Cash 25.5 115.3

Receivables
Insurance brokerage and consulting
services 2,464.3 2,264.1
Premiums and other 702.1 580.2
Accrued investment income 153.0 152.4
--------- ---------
Total receivables 3,319.4 2,996.7

Deferred Policy Acquisition Costs 1,285.7 1,261.5
Intangible Assets 1,575.4 1,597.7
Property and Equipment at Cost (net of 309.6 307.8
accumulated depreciation)
Assets Held Under Special Contracts 2,391.9 2,307.2
Other Assets 536.8 510.5
--------- ---------
Total Assets $20,123.0 $19,735.8
========= =========

As of As of
Liabilities and Equity March 31, 1996 Dec. 31, 1995
-------------- -------------
(Unaudited)
Policy Liabilities
Future policy benefits $ 1,482.8 $ 1,475.1
Policy and contract claims 977.9 970.9
Unearned and advance premiums 1,706.1 1,646.2
Other policyholder funds 5,353.5 5,464.2
--------- ---------
Total policy liabilities 9,520.3 9,556.4

General Liabilities
Insurance premiums payable 3,082.7 2,722.8
Commissions and general expenses 533.0 562.4
Accrued income taxes 344.1 332.6
Short-term borrowings 354.2 352.7
Notes payable 479.3 497.5
Debt guarantee of ESOP 56.8 56.8
Liabilities held under special contracts 2,391.9 2,307.2
Other liabilities 645.6 623.7
--------- ---------
Total Liabilities 17,407.9 17,012.1

Commitments and Contingent Liabilities

Redeemable Preferred Stock 50.0 50.0

Stockholders' Equity
Preferred stock - $1 par value 7.6 8.1
Common stock - $1 par value 111.4 111.4
Paid-in additional capital 447.0 431.8
Net unrealized investment gains 87.4 123.1
Net foreign exchange gains/(losses) (5.7) 1.8
Retained earnings 2,250.4 2,212.1
Less - Treasury stock at cost (92.4) (97.3)
Deferred compensation (140.6) (117.3)
--------- ---------
Total Stockholders' Equity 2,665.1 2,673.7
--------- ---------
Total Liabilities and Equity $20,123.0 $19,735.8
========= =========
See the accompanying notes to the condensed consolidated financial statements.

Aon CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(UNAUDITED)

(millions except per share data)

FIRST QUARTER ENDED
----------------------
MARCH 31, MARCH 31,
1996 1995
--------- ---------

REVENUE
Brokerage commissions and fees........................ $468.0 $424.6
Premiums earned....................................... 378.0 335.7
Net investment income................................. 84.7 80.9
Realized investment gains............................. - 1.1
Other income.......................................... 11.4 10.9
------ ------
TOTAL REVENUE EARNED................................ 942.1 853.2
------ ------
BENEFITS AND EXPENSES
Commissions and general expenses...................... 529.4 473.7
Benefits to policyholders............................. 186.0 164.1
Interest expense...................................... 9.2 8.4
Amortization of deferred policy
acquisition costs.................................... 53.1 49.9
Amortization of intangible assets..................... 18.8 20.4
------ ------
TOTAL BENEFITS AND EXPENSES......................... 796.5 716.5
------ ------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAX...................................... 145.6 136.7
Provision for income tax.............................. 49.1 46.2
------ ------
INCOME FROM CONTINUING OPERATIONS....................... 96.5 90.5
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX......... 22.4 20.7
------ ------
NET INCOME.............................................. $118.9 $111.2
====== ======
NET INCOME AVAILABLE FOR COMMON STOCKHOLDERS............ $113.8 $104.4
====== ======
INCOME FROM CONTINUING OPERATIONS PER SHARE (2)......... $ 0.84 $ 0.77
INCOME FROM DISCONTINUED OPERATIONS PER SHARE (1)....... 0.20 0.19
------ ------
NET INCOME PER SHARE (2)................................ $ 1.04 $ 0.96
====== ======
CASH DIVIDENDS PAID ON COMMON STOCK..................... $ 0.34 $ 0.32
====== ======
Average common and common equivalent shares
outstanding............................................ 109.7 108.7
------ ------

(1) In April 1996, Aon completed the sale of two of its insurance subsidiaries,
Union Fidelity Life Insurance Company and The Life Insurance Company of
Virginia. Their results are classified as discontinued operations.
(2) Includes the effect of $5.1 million and $6.8 million of dividends incurred
on the 8%, 6.25% and Series C preferred stock in first quarter ended March
31, 1996 and 1995, respectively.

See the accompanying notes to the condensed consolidated financial statements.

Aon CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited)

(millions)

First Quarter Ended
----------------------
March 31, March 31,
1996 1995
--------- --------

Cash Provided by Operating Activities................................... $ 242.7 $ 290.6
--------- --------
Cash Flows from Investing Activities:
Sale (purchase) of short term investments-net.......................... (236.4) (149.7)
Sale or maturity of fixed maturities
Held to maturity- - Maturities..................................... - 0.7
Calls and Prepayments......................... - 47.6
Sales......................................... - 3.0
Available for sale- -Maturities..................................... 46.9 21.7
Calls and Prepayments......................... 92.4 52.7
Sales......................................... 325.2 465.6
Sale or maturity of other invesments................................... 315.9 124.8
Purchase of fixed maturities -- Available for sale..................... (305.0) (675.0)
Purchase of other investments.......................................... (343.1) (135.8)
Acquisition of subsidiaries............................................ (7.2) (63.0)
Property and equipment and other....................................... (15.9) (24.3)
--------- --------
Cash Used by Investing Activities................................ (127.2) (331.7)
--------- --------

Cash Flows from Financing Activities:
Treasury stock transactions - net...................................... 12.1 (2.3)
Issuance of short-term borrowings - net................................ 1.5 15.3
Repayment of long-term debt............................................ (2.1) (11.7)
Interest sensitive life, annuity and investment contract deposits...... 266.5 477.7
Interest sensitive life, annuity and investment contract withdrawals... (426.4) (397.9)
Retirement of preferred stock.......................................... (14.1) -
Cash dividends to stockholders......................................... (42.2) (41.4)
--------- --------
Cash Provided (Used) by Financing Activities..................... (204.7) 39.7
--------- --------

Effect of Exchange Rate Changes on Cash................................. (0.6) 10.3
Increase (Decrease) in Cash............................................. (89.8) 8.9
Cash at Beginning of Period............................................. 115.3 508.8
--------- --------
Cash at End of Period................................................... $ 25.5 $ 517.7
========= ========

See the accompanying notes to condensed consolidated financial statements.

Aon CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Statement of Accounting Principles
----------------------------------

The financial results included in this report are stated in conformity with
generally accepted accounting principles and are unaudited but include all
normal recurring adjustments which the Registrant ("Aon") considers
necessary for a fair presentation of the results for such periods. These
interim figures are not necessarily indicative of results for a full year
as further discussed below.

Refer to the consolidated financial statements and notes in the Annual
Report to Stockholders for the year ended December 31, 1995 for additional
details of Aon's financial position, as well as a description of the
accounting policies which have been continued without material change. The
details included in the notes have not changed except as a result of normal
transactions in the interim and the events mentioned in the footnotes
below.

Certain prior period amounts have been reclassified to conform to the
current period presentation.

2. Statements of Financial Accounting Standards (SFAS)
---------------------------------------------------

As required, in first quarter 1996, Aon adopted SFAS Statement No. 121
(Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of). This Statement requires that long-lived assets
and certain identifiable intangibles to be held and used by an entity be
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Implementation of this Statement did not have an effect on Aon's financial
statements.

3. Capital Stock
-------------

In first quarter 1996, Aon purchased 59,000 shares of its common stock, at
a total cost of $3 million. Aon reissued 257,000 shares of common stock
from treasury for employee benefit plans during the first quarter 1996.
There were 2.9 million shares of common stock held in treasury at March 31,
1996.

In first quarter 1996, Aon purchased and retired 0.6 million shares of its
8% Cumulative Perpetual Preferred Stock at a total cost of $14.1 million.

4. Subsequent Events
-----------------

On April 1, 1996, Aon completed sales of Union Fidelity Life Insurance
Company (UFLIC) and The Life Insurance Company of Virginia (LOV) and
received sales proceeds of approximately $1.4 billion. Any gain or loss is
expected to be immaterial.

As of May 1, 1996, the underwriting of Aon's North American auto credit
business has been assumed by Life Reassurance Corporation of America (Life
Re), a subsidiary of Life Re Corporation. Additionally, Life Re and a
senior management team from Aon's subsidiary, Ryan Dealer Group, have
agreed in principle to buy Ryan Dealer Group, while changing its name so
Aon can retain the use of the Ryan name. This company promotes the
distribution of the auto credit policies and also of extended warranties
throughout North America. The extended warranty products will continue to
be underwritten by Aon's subsidiary, Virginia Surety Company, while certain
auto dealer consulting will continue to be provided by other Aon
subsidiaries. Total North American auto credit revenues included in Aon's
consolidated statement of income for the quarter ended March 31, 1996 were
approximately $40 million. Aon is in the process of evaluating the
potential effect on the financial statements related to these transactions,
including evaluation of intangible assets created when Aon acquired its
auto credit business.

As of April 2, 1996, an early retirement program was announced for all
eligible employees of Aon's USA operating subsidiaries. In addition,
programs similar in nature were introduced in parts of Europe. The costs of
these programs will be determined and recognized in the second quarter of
1996.

Aon CORPORATION
MANAGEMENT'S ANALYSIS OF OPERATING RESULTS
AND FINANCIAL CONDITION
REVENUE AND INCOME BEFORE INCOME TAX
FOR FIRST QUARTER 1996

GENERAL
- -------

In fourth quarter 1995, Aon and its wholly owned subsidiary Combined Insurance
Company of America (CICA) reached definitive agreements to sell two of its
domestic insurance subsidiaries, UFLIC and LOV. The sales of UFLIC and LOV were
completed in April, 1996, and are expected to result in an immaterial gain or
loss to Aon. The results of UFLIC and LOV are classified in the consolidated
statements of operations as discontinued operations. For purposes of the
following discussions, comparisons against prior years' results are based on
continuing operations.

Proceeds from the sales of LOV and UFLIC generated $1.4 billion before taxes and
other costs of sale. The after-tax proceeds in excess of the carrying value of
the companies sold generated a statutory gain at CICA the parent company of LOV
and UFLIC. The majority of the statutory gain was dividended to Aon in April
1996 and will be temporarily used for both debt reductions and short-term
investments. CICA reinvested the remaining proceeds in non-affiliated invested
assets. The potential long-term uses of the dividend to Aon are the pay down of
borrowings to maintain its current debt to equity ratio, the buy back of capital
stock, and other general corporate purposes, including acquisitions. In the
short-term, some of these uses may yield returns that are lower than could have
been generated from the operations of the subsidiaries being sold.

CONSOLIDATED RESULTS
- --------------------

Brokerage commissions and fees increased $43.4 million or 10.2% in first quarter
1996, reflecting primarily internal growth, as well as business combination
activity.

Premiums earned increased $42.3 million or 12.6% in first quarter 1996, compared
with the same period last year. Extended warranty premiums earned increased
$41.2 million or 81.7% in the quarter reflecting a higher volume of new business
in the appliance and electronic equipment line. Direct Sales earned premium grew
1.6% from first quarter 1995 of which the strongest growth was in the
international segment.

Net investment income of $84.7 million increased $3.8 million or 4.7% in the
first quarter 1996 when compared to prior year. Investment income growth in
first quarter was primarily attributed to higher levels of invested assets.

Total revenue increased $88.9 million or 10.4% in the first quarter 1996. Total
benefits and expenses increased 11.2% in the same period. Income before income
tax increased $8.9 million or 6.5% in the first quarter, due largely to growth
in the brokerage and consulting segment.

MAJOR LINES OF BUSINESS
- -----------------------
GENERAL
- -------

Beginning with the 1995 Annual Report, Aon reclassified its operating segments
to reflect the focus of its continuing operations. Insurance underwriting
operations were presented as one segment based on the related nature,
distribution channels and markets of the continuing products. Insurance
underwriting primarily includes life, accident and health insurance and extended
warranty products. In this report, 1995 quarterly segments have been
reclassified to conform to the 1996 presentation.

INSURANCE BROKERAGE AND CONSULTING SERVICES
- -------------------------------------------

Beginning with this report, Aon has combined the retail brokerage and
reinsurance and wholesale subsegments of Insurance Brokerage and Consulting
Services into one subsegment called "Insurance and other services". Also
included in this segment is first quarter 1996 revenue of $7.4 million from
financing services operations which include service fees received from the
placement of insurance premiums and retail auto financing receivables to
unaffiliated parties. This operation was previously in the corporate segment.
All prior period data has been reclassified to conform to the 1996 presentation.
Insurance and other services revenue increased $32.1 million or 8.4% for the
first quarter 1996 when compared with the same period last year. Insurance and
other services continued to reflect highly competitive property and casualty
pricing in the domestic market and increased revenues due to both internal
growth and acquisitions.

"Consulting" provides a full range of employee benefits and compensation
consulting, specialized employee assessment and training programs, and
administrative services. This business showed revenue growth of $11 million or
18.2% for the first quarter when compared to prior year, primarily due to the
expanding integrated human resources consulting practice.

Overall, revenue for the insurance brokerage and consulting services segment
increased $43.1 million or 9.8% in the first quarter. Limiting this revenue
increase, the brokerage segment continues to be impacted by a soft property and
casualty market. Income before income tax increased $8.7 million or 11.4% when
compared to first quarter 1995, reflecting recent acquisitions as well as
internal growth and improved expenses.

Domestic/International Results
- ------------------------------

First quarter domestic insurance brokerage and consulting services revenue and
income before income tax represent 64% and 46%, respectively, of the total
segment. International brokerage revenue of $172.6 million increased 19% for the
first quarter. Partially offsetting this increase was the slow growth in benefit
plan product sales in the consulting line of business. International brokerage
income before income tax increased 14.4% for the quarter. In the international
insurance and other services subsegment, revenues are generally highest in the
first quarter of the year, while expenses are incurred on a more even basis
throughout the year.

INSURANCE UNDERWRITING
- ----------------------

The insurance underwriting line of business provides direct sales life and
accident and health products, credit insurance and extended warranty products to
individuals. Revenue increased 13% for the first quarter 1996 when compared to
prior year primarily due to growth in the domestic extended warranty lines. In
addition, traditional life business in Europe and the Pacific is continuing to
run off as planned.

Pretax income from insurance underwriting increased $3.3 million or 6% in first
quarter 1996, compared with last year, primarily due to good cost controls in
both the direct sales and extended warranty lines. Overall, benefit and expense
margins in first quarter 1996 did not suggest any significant shift in operating
trends.

Domestic/International Results
- ------------------------------

First quarter domestic insurance underwriting revenue represents 73% of the
total segment. Domestic insurance underwriting income before income tax
increased 9.4% when compared to its 1995 level. International insurance
underwriting revenue of $117.9 million increased 10.4%, principally due to
improved premiums earned in both the direct sales and extended warranty lines.
International pretax income declined 3.4% primarily due to the continuing runoff
of traditional life business in Europe and the Pacific.

CORPORATE AND OTHER
- -------------------

Revenue in this category consists primarily of investment income on capital and
realized investment gains. Allocation of investment income to the insurance
underwriting segment is based on the invested assets which underlie policyholder
liabilities. Excess invested assets of that segment and related investment
income, which do not underlie these liabilities, are reported in this segment.
Expenses include interest and other financing expenses, corporate administrative
costs, and goodwill amortization associated with acquisitions.

Revenue decreased 17.6% for the first quarter 1996, due in part to lower levels
of investment income reflecting alternative uses of corporate capital. There
were no realized investment gains in first quarter 1996 and $1.1 million in
1995. Income before income tax, excluding realized investment gains, decreased
$2 million or 51.3% over the same quarter last year. Expenses had minimal change
in 1996 from 1995.

DISCONTINUED OPERATIONS
- -----------------------

Discontinued operations are composed principally of capital accumulation
products and direct response products. Substantially all of the revenue and
income before income tax generated from discontinued operations is domestic.
These amounts have been segregated as "Income From Discontinued Operations" in
the consolidated statements of operations. First quarter 1996 revenue of $292.8
million increased a modest 2.3% when compared to prior year.

Income before income tax, excluding realized investment losses, improved 6.8%
when compared to prior year. Improved 1996 results were in part due to favorable
claims experience at LOV and improved interest rate spreads. At UFLIC, strong
growth in third party business was offset by the continued runoff of the
medicare supplement line. The effective operating income tax rate on
discontinued operations was 35% in 1996 and 1995, respectively.

With the completion of the sales of LOV and UFLIC on April 1, 1996, there will
be no operating results from these discontinued operations going forward.

Aon CORPORATION
MAJOR LINES OF BUSINESS
-----------------------

(millions)

First Quarter Ended
---------------------
March 31, Percent
1996 Change (1)
--------- ----------
Revenue

Insurance brokerage and consulting services..... $485.0 9.8%

Insurance underwriting.......................... 436.1 13.0

Corporate and other............................. 21.0 (17.6)
------ -----

Total revenue................................ $942.1 10.4%
====== =====

Income Before Income Tax

Insurance brokerage and consulting services..... $ 85.2 11.4%

Insurance underwriting.......................... 58.5 6.0

Corporate and other............................. 1.9 (62.0)
------ -----

Total income before income tax............... $145.6 6.5%
====== =====

(1) Prior period amounts have been reclassified to conform to the 1996
presentation.

Aon CORPORATION
REVENUE BY MAJOR PRODUCT LINE
-----------------------------

(MILLIONS)
FIRST QUARTER ENDED
-------------------
MARCH 31, PERCENT
1996 CHANGE(1)
--------- ---------
INSURANCE BROKERAGE AND CONSULTING SERVICES
Insurance and other services................. $413.7 8.4%
Consulting................................... 71.3 18.2
--------- ---------
TOTAL REVENUE........................ $485.0 9.8%
========= =========

INSURANCE UNDERWRITING
Direct sales - life, accident and health..... $253.6 2.1%
Warranty and other........................... 182.5 32.9
--------- ---------
TOTAL REVENUE........................ $436.1 13.0%
========= =========

CORPORATE AND OTHER
Investment income on capital and other....... $ 21.0 (13.9)%
Realized investment gains.................... - N/A
--------- ---------
TOTAL REVENUE........................ $ 21.0 (17.6)%
========= =========

(1) Prior period amounts have been reclassified to conform to the 1996
presentation.

NET INCOME FOR FIRST QUARTER 1996

First quarter net income was $118.9 million ($1.04 per share) compared to $111.2
million ($0.96 per share) in 1995. Included in net income is operating income
from continuing operations of $96.5 million ($0.84 per share) in 1996 compared
to $89.8 million ($0.76 per share) in 1995. The effective tax rate on continuing
operations operating income, which excludes after-tax realized investment gains
was 33.7%, for first quarter 1996 and for the full year 1995. Realized gains
were taxed at 36%.

Average shares outstanding for first quarter increased 0.9% primarily due to the
reissuance of common shares from treasury for employee benefits plans.

CASH FLOW AND FINANCIAL POSITION
AT THE END OF FIRST QUARTER 1996

Cash flows from operating activities (including discontinued operations) in
first quarter 1996 were $242.7 million, a decrease of $47.9 million from first
quarter 1995. This decrease primarily reflects the timing of settlement of
insurance segment receivables and payables.

Investing activities used cash of $127.2 million which was made available
primarily from operations. Cash used for acquisition activity during the first
quarter 1996 was $7.2 million.

Cash totaling $204.7 million was used during first quarter 1996 for financing
activities. Net cash used from capital accumulation product deposits and
withdrawals was $159.9 million in first quarter 1996. Cash was used to pay
dividends of $36.8 million on common stock, $3 million on 8% cumulative
perpetual preferred stock, $1.7 million on 6.25% cumulative convertible
exchangeable preferred stock and $0.7 million on Series C preferred stock.

Included in notes payable at March 31, 1996 is approximately $5 million which
represents the principal amount of notes due within one year. Aon's operating
subsidiaries anticipate that there will be adequate liquidity to meet their
needs in the foreseeable future. After the sales of UFLIC and LOV, Aon
anticipates continuation of the company's positive cash flow, the ability of the
parent company to access adequate short-term lines of credit, and sufficient
cash flow in the long-term.

The businesses of Aon's operating subsidiaries continue to provide substantial
positive cash flow. Brokerage cash flow has been used primarily for servicing
acquisition-related debt. Due to the contractual nature of its insurance
policyholder liabilities which are intermediate to long-term in nature, Aon has
invested primarily in fixed maturities. With a carrying value of $7.5 billion,
Aon's total fixed maturity portfolio both for continuing and discontinued
operations is invested primarily in investment grade holdings (96%) and has a
market value which is 101.1% of amortized cost.

Mortgage-backed securities, primarily collateralized mortgage obligations
(CMO's), included in the fixed maturities portfolio, totaled $2 billion.
Substantially all of the mortgaged-backed securities included in Aon's fixed
maturity portfolio at March 31, 1996 relate to discontinued operations. Since
the finalization of the sales, Aon's interest in and exposure to certain market
risks associated with mortgaged-backed securities is minimal.

The assets and liabilities, after reinvestment of net sales proceeds of
discontinued operations, included in the consolidated statement of financial
position at March 31, 1996 are as follows:

(millions)
- -------------------------------------------------------------------------------

Investments $5,400
Deferred policy acquisition costs 650
Intangible assets 150
Assets held under special contracts 2,100
Receivables and other assets 200
- -------------------------------------------------------------------------------
Total Assets $8,500
===============================================================================
Policy liabilities $6,050
Liabilities held under special contracts 2,100
General and other liabilities 350
- -------------------------------------------------------------------------------
Total liabilities $8,500
===============================================================================

The investment portfolio of the continuing operations is of the same quality as
the overall portfolio at March 31, 1996. However, mortgage-backed securities and
mortgage loans represent approximately $100 million in value of the continuing
portfolio.

Total assets increased $387.2 million to $20.1 billion since year-end 1995,
primarily due to growth in the assets of the continuing operations. Invested
assets at March 31, 1996 increased $39.6 million from year-end levels, primarily
due to growth in short-term investments relating to insurance brokerage
business. The amortized cost and fair value of less than investment grade fixed
maturity investments, at March 31, 1996, were $289.7 million and $300.1 million,
respectively. The carrying value of non-income producing investments in Aon's
portfolio at March 31, 1996 was $10.7 million, or 0.5% of total invested assets.

Mortgage loans held totaled $656.4 million or 6.1% of total invested assets.
Aon maintained separate investment reserves related to mortgage loan losses on
real estate holdings, which include real estate ventures and limited
partnerships, totaling $30.1 million at the end of first quarter 1996, down $0.7
million from the year end 1995 level of $30.8 million. These reserves are a
product of Aon's continuing review of the characteristics and risks of its
investment portfolio and current environmental and economic conditions.

Aon measures capital accumulation product asset and liability durations to
determine its net exposure to changes in interest rates. Aon's exposure to
interest-sensitive products has been substantially diminished following the sale
of LOV because LOV's products are principally interest-sensitive and investment-
type. Non-interest-sensitive products do not require as close monitoring of
duration matching.

Aon adjusts its duration mismatch subject to market conditions and its outlook
on interest rate trends. As of March 31, 1996, assets and interest-sensitive
liabilities were closely matched with the aggregate estimated duration variance
of less than one year.

Aon uses derivative financial instruments (primarily financial futures, swaps
and options) to: (a) manage its overall asset/liability duration match; (b)
hedge asset price risk associated with financial instruments whose change in
value is reported under SFAS 115; and (c) hedge other business risks. As of
March 31, 1996, Aon had open contracts which had unrealized gains of
approximately $1.4 million.

Stockholders' equity decreased $8.6 million in first quarter 1996 to $22.76 per
share, a decrease of $0.01 per share since year-end 1995. The principal factors
influencing this decrease were the adverse change in net unrealized investment
gains of $35.7 million and dividends to stockholders of $81.1 million. Included
in dividends is an accrual for the common stock dividend that will be paid in
the second quarter 1996.

Review by Independent Auditors
- ------------------------------

The condensed consolidated financial statements at March 31, 1996, and for the
first quarter then ended have been reviewed, prior to filing, by Ernst & Young
LLP, Aon's independent auditors, and their report is included herein.

INDEPENDENT ACCOUNTANTS' REVIEW REPORT

Board of Directors and Stockholders
Aon Corporation

We have reviewed the accompanying condensed consolidated statement of financial
position of Aon Corporation as of March 31, 1996, and the related condensed
consolidated statements of income and cash flows for the three-month periods
ended March 31, 1996 and 1995. These financial statements are the
responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, which will be
performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with generally accepted accounting
principles.

We have previously audited, in accordance with generally accepted auditing
standards, the consolidated statement of financial position of Aon Corporation
as of December 31, 1995, and the related consolidated statements of income,
stockholders' equity, and cash flows for the year then ended, not presented
herein, and in our report dated February 8, 1996, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated statement of
financial position as of December 31, 1995, is fairly stated, in all material
respects, in relation to the consolidated statement of financial position from
which it has been derived.

/s/ Ernst & Young LLP

ERNST & YOUNG LLP

Chicago, Illinois
May 2, 1996

PART II
-------

OTHER INFORMATION
-----------------

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------- ---------------------------------------------------

(a) The Annual Meeting of Stockholders of the Registrant was held on
April 19, 1996.

(b) Not applicable.

(c) Set forth below is the tabulation of the votes on each nominee for
election as a director:
Withhold
Name For Authority
---- --- ---------

Daniel T. Carroll 93,358,273 274,129

Franklin A. Cole 93,381,659 250,743

Edgar D. Jannotta 93,372,094 260,308

Perry J. Lewis 93,387,238 245,164

Joan D. Manley 93,393,299 239,103

Andrew J. McKenna 93,387,399 245,003

Newton N. Minow 92,371,191 1,261,211

Peer Pedersen 92,351,947 1,280,455

Donald S. Perkins 93,381,379 251,023

John W. Rogers, Jr. 93,376,951 255,451

Patrick G. Ryan 93,378,391 254,011

George A. Schaefer 93,393,352 239,050

Raymond I. Skilling 93,387,896 244,506

Fred L. Turner 93,401,028 231,374

Arnold R. Weber 93,385,598 246,804

Set forth below is the tabulation of the vote on the selection of
Ernst & Young LLP as auditors for the Registrant for the 1996
fiscal year.

For Against Abstain
--- ------- -------

93,307,316 119,744 205,342

(d) Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits - The exhibits filed with this report are listed on the
attached Exhibit Index.

(b) Reports on Form 8-K - No Current Reports on Form 8-K were filed for the
quarter ended March 31, 1996.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Aon Corporation
---------------
(Registrant)

May 15, 1996 /s/ Harvey N. Medvin
-----------------------------------------
HARVEY N. MEDVIN
EXECUTIVE VICE PRESIDENT,
CHIEF FINANCIAL OFFICER AND TREASURER
(Principal Financial and Accounting
Officer)

Aon CORPORATION
---------------

EXHIBIT INDEX
-------------

Exhibit Number
In Regulation S-K, Page
Item 601 Exhibit Table No.
- ---------------------- ----

(11) Statement regarding Computation of Per Share Earnings. 19

(12) Statements regarding Computation of Ratios.

(a) Statement regarding Computation of Ratio of Earnings to Fixed Charges. 20

(b) Statement regarding Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends. 21

(15) Letter re: Unaudited Interim Financial Information. 22

(27) Financial Data Schedule