According to A.M. Best, asbestos-related losses for insurance companies increased 16 percent in 2013, which was double the increase seen in 2012. Best reports that losses have increased five of the last seven years.
The report by A.M. Best, entitled “U.S. Insurers Continue Funding of A&E Liabilities Despite Elusive End Game,” is indicative of the mindset that many have towards asbestos-related illnesses. The presumption is that there is an “end game,” which when reached, will bring a dramatic fall in claims by victims of asbestos-related diseases, such as asbestosis and mesothelioma.
It is unclear why a company that provides analysis for insurance companies would fall for this idea. Insurance companies tend not to be swayed by “marketing” concepts such as the idea that asbestos claims were mostly due to decade’s old industrial activities like shipbuilding and mining that once used significant amounts of asbestos.
The implicit suggestion is that once those workers, who were exposed in the WWII and immediate post-war era have died, the number of insurance claims related to asbestos will plummet.
A shipyard worker who was 18-years-old in 1941 would be 91 today, so the number of asbestos victims exposed during this period will be rapidly declining, yet claims continue to increase.
It is likely that the reason behind the increase is the “installed base” of millions of tons of asbestos in homes and businesses throughout the nation. Many of these structures are reaching the end of their useful lives and being removed or heavily remodeled.
These activities will continue to expose millions to asbestos-contaminated materials, meaning there is a constant reserve of potential victims, who may today inhale asbestos and who, over the next 20 to 30 years, fall ill with an asbestos-related illness.
The “end game” is likely to remain elusive for insurance companies and they will likely be forced to maintain their reserves for paying asbestos claims for long, long time. For those who develop mesothelioma, there is nothing elusive about the end game.
Businessinsurance.com, “Asbestos, environmental claims rose by 16% in 2013,” Matthew Learner, January 5, 2015