Underwriters have been told they face a bill of up to £11 billion in compensation arising from asbestos-related claims in the UK alone over the next 40 years, although there are fears that the figure will continue to rise.
The Actuarial Profession’s UK Asbestos Working Party has updated its estimate of the future cost of UK asbestos-related claims to the insurance industry this week. It follows the working party’s research which identified that the proportion of people suffering from mesothelioma that subsequently make a claim for compensation has almost doubled between 2004 and 2008.
The numbers of claimants which have lodged claims has rise to such an extent that the working is concerned that the figure released may well fall short of the actual figure as uncertainly surrounds the impact of asbestos use in the latter past of the last century.
The research found the total undiscounted cost of UK asbestos-related claims to the insurance market could be around £11bn for the period 2009 to 2050. Of this figure, 90% relates to mesothelioma and over £9bn relates to the period 2009 to 2040, which compares to the working party’s 2004 estimate for the same period of £4.7bn
It added: “The proportion of mesothelioma sufferers that have made a claim for compensation has increased from around one-third in 2004 to nearly two-thirds more recently. This change, which was not expected in 2004, but has become evident in recent years, explains most of the increase in total costs
“The working party has taken into account the Health and Safety Executive’s statisticians’ revised projections of the number of future deaths from mesothelioma in Great Britain, released in 2009, in conjunction with other projection models.”
Working party Chairman, Brian Gravelsons added: “Insurers will of course have already noticed the increased number of claims from mesothelioma sufferers, so these developments won’t be a surprise to them. However, the working party’s projections will provide the insurance industry with a consistent reference point to help it assess its asbestos liabilities.”
“There is still considerable uncertainty surrounding the future cost of asbestos claims, as the number of people that will be diagnosed with mesothelioma many years into the future cannot be accurately predicted. The working party will continue to monitor the emerging experience and update its projections accordingly.”