Insurers rocked by legacy liabilities and constrained by lack of capital are vulnerable to "fresh shocks" despite current hard market conditions, the FSA warned.
In addition, risk carriers' financi ...
Insurers rocked by legacy liabilities and constrained by lack of capital are vulnerable to "fresh shocks" despite current hard market conditions, the FSA warned.
In addition, risk carriers' financial strength may be undermined by their need to increase reserves for long-tail liabilities.
In its Financial Risk Outlook 2004, the regulator said it expected most companies' financial positions to have improved in 2003. But it warned that general insurers face uncertain liability issues such as toxic mould, deep vein thrombosis, mobile phone emissions and increased flooding.
The cost of claims may rise, it said, adding that insurers face "a significant volume of legal and regulatory reform over the coming years".
