However, in this year's second quarter, Patrick G. Ryan, chairman and chief executive officer, announced Aon would not go ahead with the spinoff because of the poor financial climate but will look at a sale of all or a portion of the carrier.

Today the firm said it did not find a buyer "in the acceptable price range" and would not sell Combined. Instead, the firm said it would focus on reducing its debt, which it had planned to reduce through the sale.

In a conference call, Mr. Ryan said the offers Aon received would have sold the entity below its value, which he said was not in the best interest of the firm or its shareholders.

Aon said it expects to raise $1 billion in capital, $500-to-$600 million in equity/equity linked securities to pay down debt, and $400-to-$500 million of debt "to replace the same amount of existing debt in order to extend maturities."

To improve the firm's credit rating, Mr. Ryan said, the firm would be closing some Latin American offices and reviewing "under-performing" underwriting units.

The firm also expects to improve management of costs. Mr. Ryan said he expected to improve performance in the fourth quarter, which historically has been strong for the broker.

"We are very confident that we are on a roll on our revenue growth," Mr. Ryan emphasized.

"We understand the position we are in, and we intend to pursue our capital plan and redouble our capital growth," he added.

For the third quarter ending Sept. 30, Aon reported net income of $128 million, up 78 percent, or $56 million, compared to $71 million for the same period last year. Net income per share rose 77 percent, or 20 cents, going from 26 cents in 2001 to 46 cents this quarter. Revenues also increased 17 percent, or $334 million, rising from $1.9 billion in 2001 to $2.25 billion this quarter.

Covering the nine months, net income is up 140 percent, or $168 million, from $120 million in 2001 to $288 million. Net income per share is up 134 percent compared to 2001, going from 44 cents to $1.03. Revenues have risen 14 percent, from $5.64 billion in 2001 to $6.46 billion in 2002.

Aon also declared a quarterly dividend of 15 cents per share [a reduction from 22 cents] to shareholders of record as of Nov. 8, payable on Nov. 20.