Equitas has released its financial results for the year ended 31 March 2006, reporting a fall in retained surplus of £18m from £476m to £458m.
Solvency margin also fell marginally, from 12.2% to 12.0%.
An offseting factor was reserve increases, primarily for asbestos.
Chairman, Hugh Stevenson said: “While it is disappointing to report a further increase in our reserves, we cannot escape the fact that our liabilities are still measured in billions of pounds and that the majority of claims facing us are not expected to be paid for many years and remain subject to considerable volatility.”
Scott Moser, CEO, highlighted success in resolving claims with major policyholders, including a further 18 major direct asbestos settlements in the year to 31 March 2006.
These included agreements with Kaiser Aluminum, WR Grace & Co and Congoleum Corporation.
However, Equitas has not achieved sufficient success in commuting claims liabilities with US insurers.
Mosser added: “We believe commutations are good for both parties – they avoid transaction costs and often significant legal costs, avoid delay and provide certainty for both parties. We will work hard in the coming year to convince insurance companies that commutations are good for them as well as for us.”
Total gross reserves amounted to £4.2bn (2005: £4.4bn), while gross discounted asbestos reserves were increased by £128m in the year. Gross discounted asbestos reserves amounted to £2.2bn (2005: £2.3bn).
