Equitas surplus falls as its solvency margin rises

Equitas' latest results have been praised by senior figures in the UK insurance market.

The company reported a £21m, or 3%, fall in its surplus to £679m in the year to 31 March 2001.

The fall in the surplus, which measures how much Equitas's available assets exceed its forecast liabilities, represents less than a quarter of 1% of the £8.8bn in assets on its balance sheet.

But its solvency margin, the accumulated surplus stated as a percentage of net claims outstanding, rose to 10.3% from 9.5%.

Hiscox chairman Robert Hiscox said Equitas was dealing successfully with the liabilities.

"The housekeeping we did in 1996 was incredible. No other insurance company would have or could have done it without going bankrupt and it's really standing us in good stead now," he said.

A spokesman for the Association of Lloyd's Members (ALM) said: "We hope the commentators who predicted the imminent insolvency of Equitas last year will have the good grace to apologise to the reinsured Names for the anxiety they have caused."

Standard & Poor's analyst Stephen Searby said S&P was comfortable with the Equitas performance and that it had chosen not to up its provisions for asbestos claims.

But Searby said there was some concern that the quickening pace of new claims filings could start to cause more claims payments.