But asbestos bill could still exceed £8bn
Deloitte has estimated that today’s House of Lords ruling on the asbestos-related condition, pleural plaques, may reduce future claims to insurance companies by up to £1.4 billion in relation to their UK asbestos liabilities.
The Lords ruled that pleural plaques was not a disease and therefore those people diagnosed as having them should not be able to claim compensation. The decision upheld an earlier ruling by the Court of Appeal in January 2006.
Deloitte’s calculations have been based on the estimates produced by the Faculty and Institute of Actuaries’ 2004 Working Party on UK Asbestos, which estimated that the future cost to the insurance industry from UK asbestos claims would be between £4 billion and £10 billion. Of this estimate between £200 million and £1.4 billion was in respect of claims from persons diagnosed with pleural plaques.
Commenting on the legal ruling, Darren Michaels, a director at Deloitte and member of the working party, said: “While insurers may welcome this news, asbestos liabilities will continue to cause considerable concern for the industry in years to come, with the majority of future costs expected to arise from other asbestos-related conditions such as Mesothelioma.”