Some thoughts on the estimation of pollution claims (draft)

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The general insurance actuary may be required to estimate the future liabilities for latent claims arising from the portfolio of an insurance or reinsurance company or a Lloyd's syndicate. This may be as part of a normal reserve valuation or as an exercise specifically dealing with latent claims. Papers have been presented to the 1990 and 1991 GISG conferences as an introduction to latent claims, but no specific advice has been given to actuaries as to the factors which should be taken into account and approaches to the problem which should be given attention. This unofficial note has been prepared for the consideration of the London Market actuaries who are particularly exposed to such problems.