Asbestos report highlights relentless growth in claims world-wide Insurance sector will continue to pay "for decades to come"

November 14 2003--"Pending US legislation intended to preserve a pool of cash for legitimate claimants by stemming the flow of bogus claims and ending outrageous awards has no hope of passing. Meanwhile, the claims situation in the UK and Australia is beginning to boil over, while the pot is starting to simmer in France and elsewhere," says Adrian Leonard, author of the report. "Around the world, the asbestos issue is heating up at a frightening rate. Anyone who thinks the end of asbestos claims is within sight should think again," Mr Leonard warns.

The report, which is the most comprehensive written to date on the topic of asbestos claims and their impact on the global insurance and reinsurance sectors, includes a detailed review of the most recent actuarial studies of the issue. "One thing is clear from looking at the benchmark actuarial work," says Mr Leonard. "Things have changed since the latest public estimates for the ultimate cost of US claims. The latest reserving actions by US insurers suggest that their more recent actuarial analyses uncovered a problem significantly larger than is presently acknowledged."

In addition to its evaluation of the historic and current US claims experience, of the Fairness in Asbestos Injury Resolution Act, of recent legal decisions affecting claims and coverage in the US, and of asbestos-related US news since January 2002 – including the cascade of bankruptcies among defendants – Asbestos: The Relentless Peril provides the first comprehensive analysis of the emerging UK asbestos problem. "Despite their positive noises, UK insurers are beginning to admit the need for increased reserves for their UK exposures," Mr Leonard says. "Meanwhile, driven by reinsurers, they have finally eliminated cover for almost any asbestos-related claim under general liability insurances. Outside the statutory employers' liability system – which has very public problems of its own – today it is almost impossible for UK companies to buy any asbestos-related liability cover at all."

The report also looks at the situation in several other countries, including:
·    Australia, which has the world's highest incidence of asbestos-related cancer and where suits have been successfully brought for environmental exposure to asbestos;
·    France, where legal decisions and a new compensation fund are pushing liability for occupational exposure from the arms of the state into the hands of industry and its insurers; and
·    the Netherlands, which has developed a unique mediation facility for victims, employers, and insurers.
"Around the world, local asbestos exposures are an emerging concern for insurers – or they should be," says Mr Leonard. "So far no significant work has analysed the potential costs of asbestos exposures outside the US, but almost every country used asbestos with the same appetite as the US, and in many places lethal occupational exposures continue."

The report is intended to address the lack of a comprehensive source of information about the multiple aspects of the asbestos phenomenon. Published in association with Insurance Day, this new Management Report comprises an incisive analysis of the asbestos claims phenomena world-wide, providing an unrivalled insight into what is the most serious liability issue the global insurance sector has ever faced – a crisis which will continue to affect the bottom line of insurers and reinsurers for decades to come.




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