"Significant releases occurred in most lines of business, with an average benefit of almost three points in calendar-year loss ratio, compared with what would have been reported had no releases taken place," said Stephan Christiansen, director of research at Conning Research & Consulting. "The most significant releases, in terms of dollars, were in the most recent accident years of liability lines, and in workers' compensation. These lines are the most difficult to assess, and future rates of settlement and claim emergence must be watched closely."
The Conning Research study, "Property-Casualty Loss Reserves: Once More to the Well," analyzes statutory data from Schedule P as part of Conning's ongoing annual industry review of the property-casualty industry's balance sheet position.
"Overall, the industry appears to continue to have sufficient reserves under reasonable assumptions of claims settlement patterns," said Christiansen. "Older years (for accident years prior to 1999) continue to develop adversely, but the pace of development has slowed considerably. The older-year reserves have been massively strengthened over the past several years and it is possible that the industry has now caught up to the need in this 'tail' portion of the reserves. However, the remaining reserves specifically set aside for latent claims such as asbestos and environmental liabilities appear thinner than in previous years, relative to recent settlement levels."
"Property-Casualty Loss Reserves: Once More to the Well" is available for purchase from Conning Research & Consulting, by calling (888) 707-1177 or by visiting the company's Web site at http://www.conningresearch.com/.
- NERA Economic Consulting, a provider of economic advice and analysis in business, legal, and regulatory matters, has released Snapshot of Recent Trends in Asbestos Litigation, a report analyzing trends in asbestos filings and settlements, in light of legislative and judicial tort reform over the past several years.
The report reviews asbestos-related claims over the period of 2001 to 2008 for 150 solvent defendants who report claims in their public filings.
Snapshot of Recent Trends in Asbestos Litigation found that aggregate trends are generally favorable to asbestos defendants.
In particular the authors found that:
* Asbestos claim filings are down—average claim filings peaked in 2003 and have since fallen 84% through 2008. This drop in filings corresponds to the enactment of legislative and judicial tort reforms in multiple jurisdictions.
* Dismissal rates are up—dismissal rates of asbestos cases have steadily increased since 2001 and were three times higher in 2008 than in 2001.
* Total indemnity payments are down—the total indemnity payments, the aggregated amount a company pays to resolve claims each year, increased approximately 33% each year from 2001 through 2004. In 2005, indemnity payments began to decline, on average, and have now dropped back to 2002 levels.
Snapshot of Recent Trends in Asbestos Litigation may be viewed on the NERA Web site: http://www.nera.com/publication.asp?p_ID=3845