UK asbestos - the definitive guide

Document description

The estimated future cost to the UK insurance industry of asbestos-related claims is £4-£10b. Well over half of this relates to mesothelioma claims, numbers of which are predicted to continue to rise for the next ten years. By contrast, claims for other asbestos-related diseases, such as asbestosis, are expected to fall in the coming years, as the number of claims mirrors the declining use of asbestos since the 1970s.

Most estimates of the future number of mesothelioma claims are based on the latest (2003) HSE projections. We have reproduced the HSE projections in a spreadsheet model to help practitioners understand the HSE model. This highlights the sensitivity of the projections to a number of key parameters. In particular, the future number of mesothelioma deaths is very dependent on how the disease continues to develop at older (80+) ages, with over half of all claims being in respect of those aged over 80 by the year 2020. The future number of mesothelioma deaths could easily be considerably higher or lower than the current projections, depending on the experience of this age group. We suspect that the variability of the HSE projections is greater than most practitioners who use the model would currently assume to be the case.

In producing our estimates, we have used data collected via an anonymous survey from all major UK insurers, representing the majority of the UK market. We have also developed a simplified model of the emergence of asbestos-related diseases, to help project claim numbers for non-mesothelioma diseases. Our data survey has highlighted a range of practices in recording relevant information regarding asbestos-related claims. With such potentially large numbers at stake, the insurance industry would do well to improve its ability to record relevant information electronically.

The range of potential outcomes for the cost to the insurance industry highlights the difficulty in assessing, let alone pricing, latent disease claims. This lends weight to the argument for potentially “separating” these types of claim from non-disease claims for the purpose of providing Employers’ Liability insurance.

As well as our projections, the paper describes the main types of asbestos and asbestos-related diseases, health and safety regulations, claims handling protocols and relevant court cases. We’ve also reviewed information regarding the use of asbestos in the UK and around the world, other relevant data sources and given a brief overview of asbestos-related developments in the US.