According to a December 17, 2012, story in the Wall Street Journal, the United States insurance industry has already paid out about $51 billion in claims tied to asbestos over the past 25 years. While it has $23 billion set aside for future expenses, a report from Oldwick, New Jersey-based ratings firm A.M. Best Company, Inc. concluded that the ultimate cost of such claims will eventually hit an estimated $85 billion instead of the $75 billion it previously estimated in a report published last year. A.M. Best said in the report that the increasing cost of each claim and the long latency periods for some of the more serious illnesses caused by asbestos means “sizable losses are likely to continue for years.”
The Journal noted that asbestos has not been widely used since the late 1970s, when it was “common in a variety of building materials and other products, and valued as a fireproofing and insulation material until it became clear that it presented a significant health hazard.” However, new cases continue to emerge because diseases caused by asbestos exposure, such as mesothelioma, can take decades to present themselves. The Journal explained that this is why insurers are still paying out on the coverage they sold in the decades when asbestos was in wide use.
“An extra $11 billion in unexpected costs over the course of several years wouldn’t be enough to cripple the insurance industry, but investors have reacted poorly in the past when companies have announced major additions to reserves on longstanding liabilities like asbestos,” the Journal reported. It estimated that an $11 billion asbestos shortfall would equal about half the estimated insured loss from Hurricane Sandy this past October.
An advance copy of the report said insurers are posting nearly $2 billion in losses each year and the “loss trend remains worrisome.” A.M. Best analyst Gerard Altonji wrote, “Given the long latency period between exposure to asbestos and the manifestation of mesothelioma, as well as the very large number of people exposed over a great many years…it is likely that asbestos losses will continue to develop for many years to come.”
We have more information about occupations with high risk for mesothelioma available on our website. You can contact our firm at (800) 687-3333 or complete the form on this page to have our Dallas litigation attorneys review your case if you or a loved one has been diagnosed with mesothelioma.
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