Oct. 19 (Reuters)—Travelers Cos is the latest large insurancecompany to say the asbestos problem, which the industry wassupposed to have put behind it long ago, has not gone away and maybe getting worse.

Travelers put 25 percent more into its asbestos claim reservesthis year than it did last year, the company said on Wednesday,citing more litigation and more severe payouts because of thoselawsuits.

“While the Company believes that over the past several yearsthere has been a reduction in the volatility associated with theCompany's overall asbestos exposure, there nonetheless remains ahigh degree of uncertainty with respect to future exposure fromasbestos claims,” it said in its quarterly report to securitiesregulators.

Travelers follows both AIG and Hartford Financial, whichsurprised investors with substantial reserve increases earlier thisyear, amid increased losses and a litigation experience similar toTravelers.

In addition to the reserve increases, MetLife said in August itsaw asbestos-related claims rise 11 percent in the first half ofthe year after dropping steadily from 2003 through 2010.

Even as claims rise, doctors say the actual incidence ofasbestos-linked diseases like the lung cancer mesothelioma is onthe decline. Doctors are being more aggressive in treating thecases that do pop up, though, which also contributes to elevatedcosts for insurers.

Asbestos, popular at one time as an insulating material, is nowknown to cause severe lung diseases. Litigants have claimed thatinsurers like MetLife knew as early as the 1920s that asbestos washarmful, claims the insurers have denied.

A number of insurers, including Lloyd's of London, were drivento the brink of collapse by asbestos claims. Though the material'swidespread use ended in the 1970s, illnesses routinely take 30years or more to develop after exposure.

Many insurers took steps early in the 2000s to increase theirreserves and otherwise insulate themselves from risk, assuming thatclaims would have declined or gone away entirely by now.

Yet ratings agency A.M. Best has said it expects the industry toultimately face $75 billion in exposure to asbestos claims, and ithas argued that some companies are still not fully reserved forclaims they may experience.