Fitch says insurers will need to tap equity markets

Credit rating agency Fitch Ratings believes that US non-life insurers will have to tap the equity markets within the next few months to make provisions of US$5bn or more for rising asbestos claims. With a number of insurers announcing charges, Fitch believe that the financially strong insurers will be able to cope but others will need to raise capital to bolster the balance sheet. Fitch also notes that “a large amount of these asbestos claims will end up in the reinsurance market” leading to similar problems spreading to Europe.