Asbestos Still A Problem Without Reform
NU Online News Service, March 29, 4:15 p.m. EST?Asbestos remains a stubbornly expensive issue for insurers with no end in sight, as an increasing number of unimpaired claims for asbestos exposure are filed, observed an actuarial consultant.
The observation came during a presentation by Jennifer Biggs, a principal of the Tillinghast business of Towers Perrin, a consulting firm based in New York. She made the observations during the Casualty Actuarial Society's Seminar on Ratemaking held in Philadelphia, March 11-12.
She said plaintiff attorneys were to blame for this situation for their recruitment of claimants, not actual exposure to asbestos, according to CAS.
Ms. Biggs noted that a May 2001 estimate by Tillinghast puts the ultimate cost of asbestos-related losses at $200 billion, and estimates that net U.S. insurer and reinsurer losses will reach between $55 billion and $65 billion. At the end of 2002, paid and reported asbestos-related losses and expenses totaled $45 billion, while reported losses were estimated at $52 billion at the end of 2003.
For actuaries, traditional actuarial methods can not be used because of the long latency from exposure to disease manifestation, and the potential involvement of multiple policy periods for individual claims.
The best way for insurers and reinsurers to come up with an estimate, she continued, is to do an exposure-based study. The study would consider a wide range of factors. This would give insurers a greater understanding of their exposure and help them form strategic plans to deal with it.
Looking ahead, she saw no indication that asbestos claims and litigation activity are about to slow down, particularly in the absence of federal legislative reform. It is difficult to implement meaningful changes on a state-by-state basis when some states retain liberal procedures and claims remain portable, allowing attorneys to shop for the best forum to present their case in, she said.
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