Asbestos Liabilities Funding Sees Progress

Article Added March 28th, 2006 - Print This Story - Bookmark This Story

Insurers report progress with asbestos liabilities fundings, a result of 2004’s pretax charge of almost $6 billion. The move has forced insurance companies to narrow the gap of loss reserves for asbestos liabilities.

Total losses incurred for A&E by the industry since 2000 have exceeded $26 billion of which $24 billion was for asbestos losses alone. The total shortfall for 2004, as an estimate, for unfunded asbestos and environmental liabilities totals $34 billion, of which $10 billion is related to asbestos and $24 billion is related to environmental liabilities. Funding levels overall have improved significantly from 2001’s shortfall of $53 billion.

Most of the improvements have occurred on the asbestos end of the liabilities, with a large number of insurers remaining under funded by wide margins. The view of the industry funding levels are still being based on estimates of industry losses of $65 billion and $56 billion in losses for asbestos and environmental liabilities. The loss due to asbestos related cases accelerated rapidly in the late 1990s and early 2000s, showing a peak in 2002 with $8 billion. The average retreated a bit in 2003 and 2004, with a total average of $5 billion.

Article Added March 28th, 2006 - Print This Story - Bookmark This Story