Equitas, which was set up to reinsure and run off the 1992 and prior years' liabilities of Lloyd's, has posted a £527m surplus for the year to 31 March 2003.
The surplus was £152m lower than in 2002, which Equitas claimed was due to increasing asbestos reserves.
Chairman Hugh Stevenson said said: "When I wrote to Reinsured Names last December, I stated that it was possible that we would have to strengthen our asbestos reserves at the end of the year.
I also referred to the falls in the UK and US equity markets and to the impact of exchange losses on the portion of our surplus held in US Dollars. These three factors have combined to produce the decrease in both our accumulated surplus and our solvency margin."
"Asbestos remains the greatest single threat to Equitas. We have once again had to strengthen our asbestos reserves, adding £399 million on a gross discounted basis."
