Increasing Asbestos/Envir Losses
Wednesday, November 28th, 2001 LiabilityA.M. Best Co. expects the property/casualty industry to incur upwards of $121 billion in net asbestos and environmental losses, according to the company‘s special report, "Final Data Support A.M. Best‘s Projection of A&E Reserve Shortfall," released Nov. 5. The outlook is consistent with estimates A.M. Best released Oct. 26, 2000, and May 7, 2001. In May, the company increased its estimates of ultimate asbestos losses to $65 billion, up from the 1997 estimate of $40 billion, while leaving the $56 billion environmental estimate unchanged, pending further analysis later this year. A.M. Best‘s proprietary data, when combined with data disclosed under the National Association of Insurance Commissioners‘ Note 27 requirements, affirms the opinion that commercial insurers remain significantly underfunded by almost 50 percent, with regard to reserves for ultimate, undiscounted A&E liabilities.
