US insurers still have problems with their long-tail reserves, according to Standard & Poor’s (S&P). While it’s confident the reserve adequacy of US insurers has increased modestly for 2003 and 2004, it says attaining adequate reserves for 2001 and the years before that is still a problem.

The ratings agency says “ongoing issues” from those years means reserves might still undergo more adverse development.

For the first three quarters of last year, insurers made reserve additions for 2001 and earlier equating to $US16.5 billion ($22.3 billion). This included $US1.69 billion ($2.29 billion) in adverse reserve development by American International Group earlier in the month.