Settlements to individuals exposed to asbestos in the U.S. and related expenses will ultimately reach $200 billion, according to a study conducted by Tillinghast-Towers Perrin. Of this amount, Tillinghast estimates that 39% of the costs will be retained by the asbestos defendants, 31% will be borne by overseas insurers, and 30% will be borne by the U.S. insurance industry.
Most U.S. exposures to asbestos occurred prior to the 1970s when OSHA implemented limits on asbestos exposure and use. According to Jenni Biggs, a consulting actuary with Tillinghast-Towers Perrin, the number of plaintiff filings has increased dramatically, with 50,000 to 60,000 claims filed against some defendants in the last year, compared to averages near 20,000 in the early to mid 1990s.
Asbestos has overtaken environmental liabilities in terms of net cost to U.S. property/casualty insurers. Tillinghast’s estimate of $55 billion to $65 billion of ultimate asbestos claims borne by U.S. insurers exceeds its estimate of $30 billion to $40 billion relating to hazardous waste sites. The total estimate of $85 billion to $105 billion for asbestos and environmental (A&E) claims liabilities combined is in excess of the amounts recognized by the U.S. insurance industry, which has currently paid $41 billion for these exposures and holds an estimated $23 billion in reserves.
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