US insurer Travelers Property Casualty will take a charge of $1.3 billion after tax to boost reserves for asbestos-related claims against corporate clients.
The charge will cause a loss of $793 million for the fourth quarter, the company said, wiping out the $766 million it earned in the first nine months of last year.
The property and liability insurer, spun off from Citigroup last year, decided to boost reserves after a string of costly asbestos payouts by US companies.
Insurers such as Travelers are paying most of the injury claims on US companies that used or sold asbestos. All told, analysts expect the problem to cost US business $200 billion.
Travelers' reserve boost means it now has $3.4 billion on hand to pay asbestos-related claims. The reserve addition is the largest by an insurer in recent years.
Alongside the asbestos reserve charge, Travelers said it increased its "environmental" reserves - mostly for pollution claims on corporate clients - by $100 million, but reduced reserves for old non-asbestos injuries by $95 million.
Asbestos was widely used for its fire retardant and insulative properties, but scientists found in the 1960s and 1970s that the inhalation of its fibres could cause lung cancer and other diseases.