EQUITAS, the Lloyd’s of London reinsurer, yesterday said it had settled the largest single claim it faced for asbestos-related diseases, as it agreed to pay $575 million (£317 million) to Halliburton, the oilfields services company.

The reinsurer, which was set up by Lloyd’s in 1996 to cover the market’s pre-1992 non-life liabilities, said that the payment would cover all current and future claims made by Halliburton against its Lloyd’s insurers.

Glenn Brace, claims director at Equitas, said: “Our mission is to resolve claims at the right price and at the earliest possible time. Asbestos is the single greatest exposure we have.”

The reinsurer’s total estimated liabilites are £9.6 billion, of which £5.3 billion are related to asbestos. It was forced to boost its reserves against asbestos claims by £400 million in December last year.

Asbestos producers — the original targets for litigation — have largely gone out of business, and workers seeking recompense for exposure to the deadly fibre have started suing secondary companies.

The rising claims have forced Equitas to increase its reserves by £3.8 billion over the past four years.

The reinsurer said it has now settled five of its largest claims relating to asbestos, including a $472 million payment to Honeywell, the maker of electronic cockpit systems.

Tillinghast-Towers Perrin, the actuarial firm, estimates that US insurers raised their reserves against asbestos related claims by more than $10 billion over 2003. The reserve bolstering comes amid efforts by US politicians to create a central fund to settle the escalating asbestos claims.

Despite the settlement with Equitas, Halliburton yesterday posted a fourth quarter loss after taking a $1.1 billion writedown for settling asbestos related claims.

Yesterday’s settlement came as medical experts predicted that deaths from cancer brought on by exposure to asbestos in the 1980s and earlier were yet reach their peak.

Professor Tom Treasure of Guy’s Hospital in London gave warning that the UK faces a potential timebomb from the disease. He said: “The peak of the epidemic is expected in 2015 to 2020 when the death rate is likely to be 2,000 per year in the UK.”