Equitas, the Lloyd's of London syndicates' runoff vehicle for non-life liabilities, primarily asbestos risks, reported that its year-end financial results show it is in a stronger financial position than last year.
Equitas reported an accumulated surplus of ?16 million ($29 million U.S.) for 2005, going from ?460 million ($842 million) to ?476 million ($871 million).
In his commentary on the fiscal year-end results ending March 31, Scott Moser, Equitas chief executive officer, said the increase is "not very significant in the context of our balance sheet and should be considered as neutral."
More significant, he pointed out, is the reduction in claims liability from ?5.4 billion ($9.8 billion) in 2005 to ?4.4 billion ($8.1 billion).
"In short, Equitas is in a slightly stronger financial condition than it was a year ago," he said.
The company reported its solvency margin rose from 9.8 percent to 12.2 percent. When it began operations in 1996, the solvency margin was 5.6 percent, Equitas said.
The company said it believes the prospects for the creation of a trust fund bill in the U.S. for asbestos claims "remain decidedly uncertain," and that it would not wait for Congress. The company is going ahead with settling claims, closing out three of its five largest asbestos claims exposures in April 2004.
Asbestos reserves stood at ?3.4 billion ($6.2 billion) as of March. Payments last year were ?116 million ($213 million). Equitas said it has increased asbestos reserves by ?167 million ($306 million) in response to additional claims submitted by U.S. insurers.
The London-based company said that since April 2001, it has completed 28 major direct asbestos settlements involving the payment of over $2.5 billion (?1.4 billion). Figures in this section of the report were reported in dollars.
Twelve of the settlements came in the last year and involved payments of nearly $1 billion (?545 million). Since it began in 1996, the company has paid over $7 billion (?3.8 billion) in asbestos settlements.
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