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The Actuary The magazine of the Institute & Faculty of Actuaries

Future asbestos claims set to rise

The Profession’s UK Asbestos Working Party recently updated its estimate of the future cost of UK asbestos-related claims to the insurance industry, following its research that identified the proportion of people suffering from mesothelioma that subsequently make a claim for compensation has almost doubled between 2004 and 2008.

The main findings of the Working Party included that 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 percent 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. The Working Party also discovered that the proportion of mesothelioma sufferers who 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 also took 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.

Speaking on behalf of the Working Party, chairman Brian Gravelsons said: “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.