Asbestos claims to cost insurers £11bn by 2010

The Actuarial Profession's UK Asbestos Working Party's research has identified that undiscounted cost of UK asbestos-related claims to the insurance market could reach £11bn for the period 2009 to 2050.

Of this figure, 90% relates to mesothelioma and more than £9bn relates to the period 2009 to 2040, compared to the working party's 2004 estimate for the same period of £4.7bn.

The proportion of mesothelioma sufferers that have made a claim for compensation has increased from one-third in 2004 to nearly two-thirds more recently.

Brian Gravelsons, chairman of the working party, said a host of reasons were likely to have led to the doubling of claims costs: "We can't pin down one particular reason, but increased awareness and publicity, due to legislation we have seen over the past four years, will have an impact. With more people using the internet they can more easily understand the condition. There is also potential for the national mesothelioma framework to have improved awareness and diagnosis. People are being diagnosed slightly earlier, giving them more opportunity to claim."

Martin Saunders, Allianz motor and casualty claims manager, said: "Clearly we have a view as to where the peak is going to arise and when the tail is going to be eliminated.

"I think [the AWP figures] may be on the pessimistic side. Based on our own views of the historical liabilities and the types of businesses that we insured in those days, I think the peak is more likely to come in the next five or six years as opposed to where the market broadly suggests, in another 10."

A spokesman for the Association of British Insurers believed insurers would be unsurprised by the new figures given they constantly revise their predictions and reserves.

He commented: "Insurers take into account a wide range of information for their reserving strategies. Insurers regularly revise their asbestos-related reserves to take into account change in projections. These changes happen as better information comes to light."

A Zurich spokeswoman said: "Since the last AWP costs estimate, we have continued to monitor rigorously our own claims reported trends on a monthly basis to help us forecast and adjust reserves accordingly. As the AWP's projections are based, in part, on data sets from its member insurers — of which we are one — the updated figures are not a surprise to us. We continue to reserve using the latest parameters."

An Aviva spokesman said: "Our provisions reflect the finding of the AWP and we will continue to monitor our claims experience carefully."