June 9, 2004 by Canadian Underwriter
Lloyd’s run-off reinsurer Equitas has upped it reserves to cover U.S. asbestos lawsuits by 296 million pounds (Cdn$735 million) on the expectation that tort reform to limit such suits will not be reached.
Overall Equitas, which was created to handle Lloyd’s general insurance liabilities for the years prior to 1993, is holding reserves of 4 billion pounds (Cdn$9.9 billion) for asbestos.
In making the announcement, Equitas CEO Scott Moser noted growing payments to victims of mesothelioma (the cancer caused by asbestos exposure), and the absence of legislation to create a fund for asbestos victims.
For the fiscal year ending March 31, 2004, Equitas paid out gross claims of 1.4 billion pounds (Cdn$3.5 billion), up from 1.1 billion pounds (Cdn$2.7 billion) the year prior. At the same time, the company’s surplus dropped to 460 million pounds (Cdn$1.1 billion) from 527 million pounds (Cdn$1.3 billion) and the end of March, 2003.
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