Credit: Oliver Denker/Adobe Stock
Asbestos claims jumped nearly 29% in 2024, just as insurers have started to lower their asbestos reserves, according to a new S&P Global Market Intelligence report.
Net incurred asbestos losses and loss adjustment expenses rose to $1.27 billion last year, up from $986.2 million the year before. Payment obligations also increased to $1.49 billion in 2024, up from $1.46 billion in 2023.
At the same time, the P&C industry has spent the last decade working to lower its net asbestos reserves. In 2024, reserves were at $12.37 billion, continuing a decline since the last reserve increase in 2010. Environmental liability net reserves fell to $3.94 billion last year, below the $4 billion mark for the first time since 1996.
Higher-than-expected claims could signal a weakness in carriers’ reserve strategy and suggest that decades-old liability policies might have an impact for far longer than previously anticipated, the report says.
“The combination of rising net incurred losses and elevated payment levels in 2024 suggests that the ‘tail’ on these decades-old policies may be longer than many carriers anticipated, with implications for reserve adequacy and capital management extending well into the future,” the report said.
Four carriers share the bulk of the industry’s asbestos exposure: Berkshire Hathaway ($1.67 billion in reserves), The Hartford ($1.43 billion), American International Group ($1.34 billion), and Travelers ($1.31 billion). About 90% of the industry’s total net asbestos reserves are held by those four insurers and 11 others.
Travelers saw $242 million in net incurred asbestos losses in 2024, the highest among U.S. carriers. It added an additional $277 million to reserves this year, according to the report.
AIG saw a large spike in losses in 2024: $84.7 million, up from $10 million in 2023. These were partially offset through a reinsurance agreement with Berkshire Hathaway.
Photo credit: Oliver Denker/Adobe Stock
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