"Time to reconsider reinsurance: Significantly both for reinsurers and the run-off market Winter reckons that the purchase of GAG has broken new ground"

04 July 2003 (Leader column)

INSURANCE DAY

Press Coverage:
End in sight for asbestos saga?

ASBESTOS has never been far from the top of the agenda as far as the insurance industry is concerned at least in the past 30 or so years. But it has rarely been as widely discussed or as important as it is now. The moves afoot in the US to establish a solution to what has rightly been described as 'the asbestos crisis facing industry' are slowly progressing.

Archived Press Coverage

(Oct 2007) Ruxley in landmark reinsurance-funded acquisition(Apr 2007) Ruxley in Generali run-off talks(Autumn 2006) Part VII business transfers - adding flexibility to the run-off equation(Spring 2006) Why we need a scheme monitor(Spring 2006) BAIC and after(Feb 2006) Solvent Schemes of Arrangement Conference(Nov 2005) Scheming for solvency(Oct 2005) A wake-up call(Sept 2005) Time To Wake Up(Sept 2005) Free Audio Conference: Rating the Raters(Aug/Sept 2005) Air Your Views(Aug 2005) Ruling could curtail solvent runoff schemes(March 2005) Tackling The Pools(Spring 2005) Selling like hot cakes(Spring 2005) The scheming solution(28/02/05) Influx of capital can impact premiums(Feb 05) Bringing finality to underwriting pools(Winter 04) Dangerous waters(04/11/04) Solvent schemes offer real boost(01/09/04) Buying Run-off(05/07/04) Run-off moves to another level(03/02/04) Run-off on a positive note(2004) 2003 A year of innovation(Winter 03) Ruxley buys Aviation & General(06/10/03) Ruxley takes whole of A&G(04/07/03) End of asbestos saga?(03/07/03) Ruxley closes APH book(Summer 03) Vulture Culture?

Ruxley in the press

But opposition from trade and consumer groups, as well as a certain amount of in-fighting in the early days among potential supporters, have served to slow down the process.

And while there is certainly evidence of a willingness to address the issue and of some progress having been made in the US, the asbestos situation in Europe has taken a dramatic turn, which could see a further crisis develop.

A group of prominent European reinsurers has said that it will be excluding asbestos claims from public and property liability business, and several players have indicated they will be looking to toughen their stance on employers’ liability as well.

Not surprisingly, insurers have reacted angrily to the reinsurers’ decision. One described it as "another example of reinsurers walking away from the problem" and leaving the primary market to pick up the pieces.

At the moment it is not clear whether insurers will be prepared to write asbestos liability without reinsurance protection or will instead follow the reinsurance market’s lead and simply exclude the business altogether, effectively leaving the end client unprotected.

But amid all this confusion, this week has seen one piece of good news: the revelation that the run-off of the asbestos, pollution and health (APH) book of former AGF subsidiary City General has been finally closed after just 12 months a feat that many doubted would be possible.

So although there remain considerable challenges posed by asbestos to the insurance industry, it is not all doom and gloom. Ruxley Investments has shown there can be relief from APH books. Coupled with the industry’s refusal to take on more risks, could we at last be entering the final chapter of the asbestos saga?