On June 21, 2005 Equitas, the entity set up to reinsure and run off the 1992 and earlier non-life liabilities of Lloyds of London syndicates, issued its Report and Accounts for the year ended March 31, 2005. The results are mixed. On the positive side, Equitas’ accumulated surplus increased £16 million, from £460 million to £476 million; its solvency margin thus rose from 9.8% to 12.2%; it settled three of its largest five remaining direct asbestos exposures; and it had the financial ability to strengthen gross discounted asbestos reserves by £167 million.
However, Equitas’ future is far from rosy. Equitas paid fewer claims (£1.0 billion as compared to £1.4 billion the year before); it has only £5.0 billion in total assets remaining to pay its future direct and reinsurance obligations (compared to £15.9 billion when Equitas was formed in 1996); it has relatively little remaining reinsurance asset (under £1.0 billion as compared to a starting total of over £7.0 billion); its
