Equitas announced earlier this month that its retained surplusfell by $22.8 million, from $603 million to $580 million, as it wasforced to increase asbestos reserves.
The London-based company set up to reinsure and run-off pre-1992Lloyd's non-life liabilities also said its solvency margin fellfrom 12.2 percent to 12.0 percent. That figure represents retainedsurplus as a percentage of net claims outstanding--which was 5.6percent when the carrier began operations in 1996.
Equitas Chairman Hugh Stevenson said the positive operatingperformance generated by the group was offset by reserve increases,primarily for asbestos. Gross discounted asbestos reserves werehiked $162 million, amounting to $2.8 billion as of March 31, whiletotal reserves were $5.3 billion.
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