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 11x-14x.
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'.
The full report is available on the Fitch web site at 'www.fitchratings.com'.
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