Travelers Property Casualty Corporation is setting aside an additional $2.45bn (£1.5bn) to pay potential claims for asbestos-related illnesses and deaths.
The new money will raise the company's total reserves for asbestos claims to $3.4bn (£2.2bn) and force it to report a net loss of $27m (£16.8m) for 2002.
Earlier this week, the company announced it was setting aside $1.3bn for potential asbestos losses.
Experts estimate that asbestos reserves were already weakened by World Trade Centre losses.
Several insurers and reinsurers, including the St Paul Companies; and Berkshire Hathaway have recently increased their reserves for asbestos.