|[November 28, 2012]
Fitch: Asbestos Reserve Deficiency Continues for U.S. Insurance Industry
CHICAGO --(Business Wire)--
Fitch Ratings estimates industry asbestos reserves to be deficient by $2
billion to $8 billion at year-end 2011. Asbestos reserves make up
approximately 4% of total property/casualty industry reserves with
approximately 50% of reserves concentrated in five insurers.
In a new report, Fitch examines a range of loss scenarios and future
payments for asbestos losses up to an ultimate industry loss of $85
billion. Based on recent development experience and its latest analysis
of loss payment scenarios, Fitch's target industry survival ratio is
The reported industry survival ratio for asbestos liabilities increased
modestly to 10.3x in 2011 from 10.1x in 2010 and 9.9x in 2009,
indicating that incurred losses have expanded at a faster rate than paid
losses in recent years.
Fitch's analysis reveals that the (re)insurance industry remains
strongly capitalized with the capacity to absorb future asbestos claims
without risk of material capital depletion. While Fitch does not
anticipate broad rating actions related to asbestos, the ratings of
individual companies could be adversely affected by the severity of
reserve deficiencies relative to capital.
The full report is available on the Fitch web site at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: Asbestos Losses: Continued
Source (News - Alert) of Reserve Deficiency
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND
DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING
THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS.
AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'.
PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS
SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS
OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES
AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF
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