Reinsurance Carriers Expected To Play Smaller Role In Future Asbestos Losses

Insurers are continuing to increase their reserves for asbestos liabilities, both gross and ceded reserves. As we observe these increases year after year, it is reasonable to ask: Will this be a never-ending reserve valuation problem? And how much of the future increases will be covered by reinsurance?

According to our analysis, the nature of emerging asbestos losses indicates that a greater proportion of future asbestos losses will remain on the books of primary companies as the percentages of losses recoverable from reinsurers dip below historical levels.

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