US insurers can only afford to pay out asbestos claims at the current rate for another four years before exhausting their reserves, ex-Equitas chief actuary Paul Jardine has warned
Jardine, who left Equitas a month ago to become a director of Catlin Underwriting Agencies, was speaking at Davies Arnold Cooper's asbestos seminar on Monday.
He said the number of asbestos claims brought in the US over the past two years was "unprecedented" and that most insurers could not continue to pay out at the current rate for more than four years.
His figures showed Liberty Mutual's survival ratio of 6.6 years was the most optimistic outlook. The lowest survival ratio was 1.9 years for Fairfax.
Jardine said insurers were hoping they would be able to "trade through" the huge asbestos bills.
"They'll try to fund it on a pay-as-you-go basis," he said.
Jardine said the insurers' situation had been worsened by payouts to claimants who were not impaired by their asbestos exposure, such as pleural plaque sufferers.
"The US pays claims that are not backed up by medical evidence or documentation," he said.
"Many people who are being paid out are not even injured."
Jardine said there was a danger that people with much more serious asbestos-related diseases that take longer to develop, such as mesothelioma, would miss out on payouts.
"Far too much is being paid to unimpaired claimants. Those who are seriously injured and don't even know it yet will find there's nothing left in the pot," he said.