P/C Reserves in for Tighter Scrutiny
Wednesday, February 19th, 2003 Liability PropertyThe property/casualty industry‘s reserves will be scrutinized more closely, Fitch Ratings has announced. Specifically, Fitch‘s analyses will target reserves from U.S. casualty business written between 1997 and 2001, as well as exposures to asbestos claims from business written prior to the 1980s. Given recent large charges for asbestos liability exposures by Travelers and ACE, as well as charges for more recent accident years‘ business by AIG and others, Fitch believes that a number of other insurers will need to recognize reserve shortfalls in the near-term. The ratings agency said it has been concerned for some time that insurance and reinsurance companies‘ reserves were inadequate with respect to their exposure to asbestos liability and accidents, as reflected in its negative rating outlook since 2000 for both U.S. commercial lines and global reinsurance industry sectors.
