Standard & Poor’s (S&P) has placed Ace Insurance on creditwatch negative after the Bermuda-based company boosted its reserves by $3.7 billion to pay for asbestos claims against its corporate clients.

Ace Insurance is the Australian arm of Bermuda-based Ace. S&P said that consequently the ratings of the Australian-based operations will closely follow its overseas parent, and follow concerns over the group’s capital adequacy levels.