The world's three biggest reinsurance companies will not cover asbestos liabilities in 2003, forcing insurers to impose strict exclusions.
The exclusions will come one month after the government launches a push to prevent more asbestos deaths, drawing attention to asbestos compensation.
ABI general insurance manager John Parker admitted the ABI had little time to react to the reinsurers' plans.
Swiss Re said increased claims, particularly in the US and France, showed asbestos's "enormous loss potential".
As a result, it will exclude asbestos exposures for all new and renewal business for all liability lines except employers', personal and third party motor.
The lines most affected are public and product liability.
A Swiss Re UK spokesman said the exclusions would apply for the foreseeable future.
"This is an ongoing policy, we've got no plans to change it," he said.
Munich Re excluded asbestos from product liability in the mid-1980s.
"We're now looking where an exclusion is necessary in respect of property damages, such as asbestos removal, and for bodily injuries including occupational diseases," a spokeswoman said.
GeneralCologne Re (GCR) is believed to be planning exclusions as well, although insurers hope to lobby executives when they visit London next week.
A senior industry source said that most insurers would react by putting their own exclusions in place, although the larger composites may offer a limited amount of cover.
"The problem is that you can't get a decent-size liability reinsurance programme home without involving all the big three," he said.
It is rumoured some Lloyd's syndicates have already imposed exclusions in response.
Insurers fear this will further damage the industry's reputation, just as the HSE launches its Control of Asbestos at Work Regulations 2002.
Parker questioned whether the US and French claims merited a global exclusion.
He said the ABI's reformed reinsurance committee would discuss it this month.
Royal & SunAlliance liability expert Phil Bell, who is still in talks with his reinsurers, urged "constructive dialogue".
GCR did not comment in time for publication.