RSA digs deep to settle claim
TROUBLED insurance giant Royal & SunAlliance has dug into £800m of asbestos-claim reserves to settle a High Court case brought by building materials group Cape. The insurer has struck an undisclosed deal in what analysts fear may be just one of a raft of similar cases it will face in coming years.
Cape alleged that RSA was responsible for claims by people who suffered asbestos-related health problems because of work done by Andersons Insulation, which Cape bought in 1963. It also demanded the insurer pay £2.2m to cover claims already paid.
But in a statement on Monday - the day proceedings were due to begin - RSA said: 'Royal & SunAlliance and Cape plc have successfully resolved...the outstanding issues between them' RSA set aside £95m to cover asbestos-related claims in the final quarter of last year, taking its total pot to £801m.
A spokesman said the settlement had 'no adverse impact' on overall reserves. RSA's new chief executive Andy Haste will join the group next month. Cape chief executive Martin May said: 'I'm happy it's resolved.'
Cape operated mines and mills in South Africa in the 1970s and has still to reach an agreement over compensation for 7,500 workers now suffering from asbestos-related illnesses. It originally agreed to pay out £21m at the end of 2001, but was unable to release the necessary funding. RSA is not exposed on the South African settlement.
