An increase in the asbestos related claims reserves by US insurers could have knock-on effects for UK insurers, according to management consultancy Tillinghast-Towers Perrin.
US reserves have increased by US$10bn since the start of the year, according to the company.
Tillinghast- Towers Perrin said it believes a proportion of the claims from asbestos defendants that were reaching higher layers of cover, as well as cases from later years of cover, might flow through to the London Market.
The firm said this was because a number of these defendants woul have purchased some of their insurance from London, as higher layers of cover tended to be heavily insured and reinsured.
Darren Michaels, a consultant at the firm said: "Over the past year, there have been several multi-million dollar increases in asbestos-related loss reserves by US insurers and this will have a knock-on effect on the global insurance market, especially London."
"While some London insurers and reinsurers have anticipated the US events, others have yet to do so. Their task is further complicated by the difficulty in determining precisely where their coverage starts, the fact that claims take longer to reach their element of cover and that typically their cases develop more slowly," he concluded.
It added, however, that it is unclear what impact claims relating to peripheral defendants, one of the reasons for the increase in asbestos-related claims, will have on UK insurers, as there is less chance they were insured by the London Market.
