Travelers Companies Inc.

New York, NY: (Jul-06-07) Travelers Companies Inc., one of the largest US property and casualty insurers, reached a settlement in which it agreed to contribute $449 million to a bankruptcy trust to end several years of asbestos-related litigation. The suit stemmed from a dispute with ACandS Inc., a former insulation installing unit of Armstrong World Industries Inc., which filed for bankruptcy protection several years ago under the weight of about 270,000 asbestos-related injury claims. ACandS had looked to insurers such as Travelers to help cover many of those claims.

Asbestos was widely used in insulation and construction until the mid-1970s. Inhalation of the fibrous mineral has been linked to cancer and other diseases, and injury claims drove dozens of US companies into bankruptcy. St. Paul, Minnesota-based Travelers said the trust will be established as part of ACandS' reorganization plan. It expects net settlement costs of $365 million after passing $84 million of the total cost to its reinsurers. Travelers stated that the settlement will resolve all current and future asbestos-related coverage claims related to ACandS. It will fund the settlement from existing reserves, and claimed that it did not expect any impact on future earnings. [REUTERS: ASBESTOS FUND]

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Published on Jul-10-07