The ultimate asbestos loss for the property and casualtyinsurance industry is now estimated to be $85 billion, an increaseof $10 billion from A.M. Best's estimate three years ago.

The ratings agency says the industry continues to incur about $2billion in losses per year and pays out about $2.5 billion, with noend in sight. A.M. Best says total funding for asbestos losses hasreached $74 billion and “it is clear that the asbestos problem willpersist for many years to come.”

Environmental losses remain unchanged from previous estimates at$42 billion, making ultimate industry losses from asbestos andenvironmental (A&E) $127 billion.

A.M. Best says that after a period of tort reform in the 2000s,asbestos losses tapered off from a high of $8 billion in a year in2002 to slightly more than $1 billion in 2008.

Success from the plaintiff's bar to erode some reforms andhigher judgments for more serious cases involving mesotheliomaremain a “worrisome trend,” says A.M. Best.

Because of the “long latency period” of mesothelioma and thehigh exposure rate over many years, “it is likely that asbestoslosses will continue to develop for many years to come.”

A.M. Best notes that A&E losses declined by 30 percent in2011 after a 50 percent increase in 2010 and 2009. The average losslevel over the past five years remains half of what it was for theprevious five years, says Best.