Environmental insurance claim losses increased in 2012, driven primarily by an increase in asbestos-related lung cancer lawsuits, a new report from A.M. Best reveals. After a 31% decrease in losses in 2011, losses rose by 12% in 2012.
“This comes amid a rising number of lung cancer lawsuits related to asbestos and evolving mass tort exposures on the environmental side,” Best said in the report.
The report estimated that the US property/casualty market incurred $2bn in net losses due to asbestos—an unusual number, as asbestos-related claims are not usually a boon on the P/C sector.
The report mildly contradicts predictions made in November 2007 by the rating agency that “the worst of the asbestos liability crisis may be behind the insurance industry now.”
Instead, Best now estimates that net environmental losses for the P/C industry could ultimately reach $85bn—up from last year’s estimate of $75bn.
The weight of the losses is felt primarily by domestic P/C insurers, Best said, with 90% of the estimated liabilities paid by environmental insurance carriers.
