Travelers Cos. to settle asbestos case

Travelers Cos. said Friday that it would settle one of its largest asbestos cases for $449 million.

The St. Paul-based commercial insurer settled the case with ACandS Inc., which installed insulation with asbestos from 1958 to 1974 and was insured by Travelers.

Travelers said it would pay $365 million of the settlement and reinsurers would cover $84 million.

Travelers said its portion would come from its asbestos reserves without hurting earnings.

The settlement comes after a federal appeals court reinstated an ACandS lawsuit in January 2006 over what limits apply to its coverage.

The lawsuit claimed that Travelers was liable for 45% of the $2.8 billion that Lancaster, Pa.-based ACandS paid to settle asbestos-related claims.

Travelers had $4.47 billion set aside for asbestos and environmental claims at the end of 2006.

“ACandS has been one of our most significant and longest-standing asbestos exposures,” said Jay S. Fishman, chief executive of Travelers.

“Eliminating the uncertainty inherent in this litigation makes this a very good outcome for our company and our shareholders.”

Travelers shares rose 10 cents to $54.52 on Friday.