LONDON (Reuters) ? Many of the world?s biggest companies are choosing to cover their largest risks themselves because insurers have become too costly, Aon Corp., the world?s number-two insurance broker, said this week.

Companies have insured themselves through so-called ?captive? companies since the 1970s, but there has been a big jump in the amount of risk companies have kept through their captives since the September 11 attacks sent premiums soaring in the conventional insurance market, Aon said. Many multinational companies have chosen to set up their own insurers rather than continue to pay what they regard as inflated premiums being demanded by traditional insurers, Stephen Cross, chief executive of Aon?s Captive Services Group, told journalists in London.

Aon, which is the world?s largest manager of captive insurers on behalf of corporate clients, said it has seen a big jump in the gross premiums written by the captives it manages, to $20.2 billion in 2004 from $12.1 billion in 2002.

Though the cost of cover charged by insurers has begun to fall, insurers have continued to exclude many risks from their policies since the attacks, which cost insurers around $45 billion, Cross said.

?Prices have softened across most lines of insurance. But terms and conditions have not really gone back to where they were (before the price hike),? said Cross.

Cross said that, for example, before the September 11 attacks a big company may have had to pay the first $5-10 million of each big property claim ? such as for one of their factories burning down ? before their insurance cover kicked in. Now, it may have to pay the first $20-25 million.

The result has been that many companies still cannot get the amount of coverage they want at a price they can afford, said Cross. Companies have chosen to self-insure their risks to overcome this, he said. Also, big companies have questioned whether they get value for money from their traditional insurance, since many insurers have needed to keep prices high so they can put aside extra money to boost their claims reserves, Cross said.