AM BestTV: AM Best Director Discusses Factors Behind Raised Estimate for Insurance Asbestos and Environmental Exposures

By a News Reporter-Staff News Editor at News of Science -- In this episode of AM BestTV, Brian O'Larte, director, AM Best, discusses a recent market segment report that examines insurers' obligations for asbestos-related and other environmental liabilities and why payouts are not as quickly as some had expected. Click on http://www.ambest.com/v.asp?v=aande119 to view the entire program.

AM Best recently increased its estimate of net ultimate losses for asbestos and environmental to $146 billion, precipitated by a spike on the environmental side. Overall losses have not slowed down, and the industry continues to pay out more each year than it is incurring.

O'Larte discussed why AM Best upped its net ultimate environmental loss for the U.S. property/casualty industry to $46 billion-$4 billion more than its previous estimate.

"The main reason for the increase is that the decline in the payout patterns is not happening as quickly as anticipated," said O'Larte. "This is largely due to the developments of original sites being a lot more toxic than originally thought, as well as the increase in cost of the clean-ups and defense."

AM Best maintained its $100 billion net ultimate estimate for asbestos losses. In the episode, O'Larte also discusses whether recent policy changes at the U.S. Environmental Protection Agency, as well as recently tried Johnson & Johnson cases, could change the estimate.

To access a copy of this market segment report, titled, "No Slowdown in Asbestos and Environmental Claims," visit http://www3.ambest.com/bestweek/purchase.asp?record_code=280455.

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