Offering insurance to cover companies against asbestos-related liabilities is the purpose of newly launched Bermuda company St. George Re Ltd.

According to the US Chamber of Commerce, legacy asbestos risk has cost American companies an estimated $70 billion and forced more than 70 companies into bankruptcy.

Yesterday St. George Re announced it had commenced operations to write insurance designed specifically to remove uncertainty and provide resolution to historical corporate asbestos risk. According to the company, this type of insurance has not been available to corporate America since the 1980s.

St. George Re's founding investors are funds managed by Context Capital Management LLC, Plainfield Asset Management LLC, and Silver Creek Capital Management LLC. The new company also has the might of investment guru Warren Buffett's company Berkshire Hathaway behind it. St. George Re has a strategic capacity arrangement with the Berkshire Hathaway Group of Companies which allows it to underwrite and deliver policy limits anticipated to meet the largest of coverage levels wanted by corporate asbestos defendants. The new insurer will also cater to small to mid-sized corporations.

The company will be headed by chief executive officer Colin Barnes, a 30-year veteran of the insurance industry.

"Managing and absorbing the risk of legacy asbestos problems in-house can consume significant corporate and managerial resources," Mr. Barnes said. "This 'asbestos overhang' also clouds perceptions of shareholder value as outside parties and stakeholders struggle to understand how a company's asbestos problems will impact its balance sheet and future earnings.

"Our goal is to provide resolution to a company's asbestos problems so that companies can focus on their core competencies and shareholders can realise the benefits that removing the 'asbestos discount' from the company's stock valuation can provide not just over the long run but immediately at the point of risk transfer."

St. George Re offers insurance coverage which protects against risk of loss from future asbestos claims and provides coverage for the costs of defending against those claims. The new company is the only insurer to focus solely on providing asbestos coverage. Company executives have more than 75 years combined experience in dealing with asbestos risk, having structured over $3 billion in asbestos related risk transfer solutions for both insurance carriers and policyholders.

Company president Jason Paterniti has worked in the insurance and capital markets since 1993, while St. George Re's chief actuary, Kate O'Reilly, has extensive experience in asbestos reserving, underwriting, and pricing, having been a member of Tillinghast's London Asbestos Pollution Hazard team.