Lloyd's run-off vehicle Equitas has admitted it faces a spiralling number of asbestos claims that will require it to further strengthen its loss reserves.
During the six months to September, the rate of newly filed asbestos claims substantially exceeded the group's expectations and Equitas chairman, Hugh Stevenson, conceded: “It is therefore probable that we will further strengthen our asbestos reserves at the end of this year, following the comprehensive annual review.”
Equitas had already increased its reserves for the year ended March 31.
Stevenson said progress had been made in other areas of Equitas, with favourable contributions from areas such as the settlement of pollution and balance of account claims.
In the six month period, total claims were £959m, compared to £1.25bn in the first half of last year. This was mainly due to the settlement of a number of major claims last year that were brought by one policyholder.
The share of claims paid by reinsurers was £493m, compared with £454m in the first half of last year. This amounts to 51% of claims paid, compared with 36% last year.