Asbestos reserve increases for European insurers will continue to drag on earnings for several years. That's according to ratings agency Fitch.
Fitch stated that downgrades would most likely occur where "shock losses" impacted substantially on capital strength.
The agency also said that insurers likely to be hardest hit were those lacking the diversification necessary to absorb asbestos losses.
The comments were contained in a report titled, "Asbestos: Too Hot to Handle for European Insurers?" which considered the effect of asbestos claims on European based insurers and the differences between the claims environment in the US and in Europe.
Fitch warned that greater disclosure from insurers on their exposure to asbestos is critical to the future of key insurers.
A statement said: "Improved disclosure would allow market reserving studies to be conducted and assist the users of financial statements to better assess the financial condition of individual insurance companies."
