Industry News

Reuters) - Travelers Cos (TRV.N)

Travelers Cos (TRV.N) is the latest large insurance company to say the asbestos problem, which the industry was supposed to have put behind it long ago, has not gone away and may be getting worse.

Travelers put 25 percent more into its asbestos claim reserves this year than it did last year, the company said on Wednesday, citing more litigation and more severe payouts because of those lawsuits.

"While the Company believes that over the past several years there has been a reduction in the volatility associated with the Company's overall asbestos exposure, there nonetheless remains a high degree of uncertainty with respect to future exposure from asbestos claims," it said in its quarterly report to securities regulators.

Travelers follows both AIG (AIG.N) and Hartford Financial (HIG.N), which surprised investors with substantial reserve increases earlier this year, amid increased losses and a litigation experience similar to Travelers.

In addition to the reserve increases, MetLife (MET.N) said in August it saw asbestos-related claims rise 11 percent in the first half of the year after dropping steadily from 2003 through 2010.

Even as claims rise, doctors say the actual incidence of asbestos-linked diseases like the lung cancer mesothelioma is on the decline. Doctors are being more aggressive in treating the cases that do pop up, though, which also contributes to elevated costs for insurers.

Asbestos, popular at one time as an insulating material, is now known to cause severe lung diseases. Litigants have claimed that insurers like MetLife knew as early as the 1920s that asbestos was harmful, claims the insurers have denied.

A number of insurers, including Lloyd's of London, were driven to the brink of collapse by asbestos claims. Though the material's widespread use ended in the 1970s, illnesses routinely take 30 years or more to develop after exposure.

Many insurers took steps early in the 2000s to increase their reserves and otherwise insulate themselves from risk, assuming that claims would have declined or gone away entirely by now.

Yet ratings agency A.M. Best has said it expects the industry to ultimately face $75 billion in exposure to asbestos claims, and it has argued that some companies are still not fully reserved for claims they may experience.

(Reporting by Ben Berkowitz, editing by Dave Zimmerman)

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The Guardian - 25 September 2011

Marks & Spencer is facing a fine after failing to ensure asbestos safety requirements were met during renovations at stores in Reading and Bournemouth

Marks & Spencer and three contractors face heavy fines in a sentencing hearing starting on Monday for failing to protect customers, staff and workers from asbestos during the refurbishment of two stores. Management was said to have been more concerned about the works being "unsightly" and "interfering with the shopping experience" of customers than the potential for people to be exposed to the cancer-causing material. Construction workers removed asbestos in ceiling tiles and elsewhere during the work at stores in Reading and Bournemouth between 2006 and 2007.

The three-month trial at Winchester crown court was told that M&S did not allocate sufficient time and space for the removal of the material in Reading and contractors had to work overnight before the shop opened to the public each day. M&S guidance on asbestos removal was not fully followed by the contractors during the refurbishments. M&S had a "duty of care" to ensure the work was carried out safely. The retailer was found guilty in July on two charges under health and safety laws of failing to ensure the wellbeing of its staff and others at the Reading store. Willmott Dixon Construction, of Hertfordshire, was found guilty over health and safety breaches at the Bournemouth store. Manchester-based PA Realisations (formerly Pectel) was found guilty of contravening asbestos at work regulations at the Reading store. At an earlier hearing Styles & Wood of Cheshire pleaded guilty to health and safety breaches relating to the Reading store. The companies will be sentenced at Bournemouth crown court during a two-day hearing ending on Tuesday.

Richard Matthews, prosecuting, told the trial that M&S failed to carry out sufficient surveys to identify the location of asbestos in the stores. He explained that M&S as a company was experienced in handling asbestos with 70% of its stores containing it and the firm had its own asbestos code of practice. "Marks & Spencer had a duty to make sure asbestos did not take those working in the store by surprise. "If that meant making the store unsightly to customers or interfere with their shopping experience then so be it – better an unattractive store in the short term than the risk of anything else in the long term."

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Travelers Cors say's "Asbestos problem getting worse" as it places 25% more into claim reserve


Marks & Spencer to receive huge fines for asbestos safety failures


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