OLDWICK, N.J.–(BUSINESS WIRE)–#insurance—AM Best is maintaining its estimate for ultimate net asbestos losses for the insurance industry at $100 billion, and maintaining its estimate for ultimate net environmental losses for the industry at $46 billion, as of year-end 2024 data, according to a newly issued Best’s Special Report.
On a calendar-year basis, both reported net incurred losses and net paid losses for the insurance industry increased for asbestos-related claims, while environmental reported net incurred losses decreased and net paid losses increased. AM Best estimates that that industry has funded 97% of its aggregate asbestos & environmental (A&E) losses; this translates into unfunded liabilities of approximately $3 billion for asbestos and $1 billion for environmental.
“A&E loss reserves have declined for more than a decade, as loss payments have outpaced incurred losses,” said Jieqiu Fan, associate director, AM Best.
According to the report, insurers have paid out approximately $13 billion for A&E claims since 2020, while incurring slightly less than $9 billion in losses. In 2024, asbestos reserves declined 2.2% to $14.5 billion, while environmental reserves dropped off 3.0% to $4.5 billion. The report also notes that asbestos calendar-year incurred losses increased 37.3% to $1.5 billion in 2024, which marks a second year of double-digit increases and marks the highest level in the past five years. Environmental losses incurred in 2024 declined 23% to $0.4 billion after a small decrease in 2023.
“At current payout levels, A&E reserves will be exhausted in about eight years, assuming no additional reserve strengthening,” Fan said.
The findings within the annual report are based on AM Best’s analysis of statutory annual statement footnote 33 data for year-end 2024. This data is then supplemented by AM Best’s proprietary data, including prior years’ footnotes dating back to 1991, which is the earliest available year for NAIC annual regulatory statements.
Among the report’s other findings:
- The top 30 insurer groups accounted for 96% of all A&E paid losses in 2024 and held 94% of the industry’s total A&E reserves. Eight groups recorded net incurred losses of $100 million or more in 2024, compared with seven groups in 2023.
- A&E loss payments in 2024 increased by 12%, driven by higher payments by several large groups— among them, Hartford Insurance Group, Travelers Group, American International Group, Liberty Mutual Insurance Companies, Nationwide Group, and Munich-American Holding Corp.
- Industry funding of the estimated $146 billion net A&E exposures is approximately $142 billion, comprising $123 billion in cumulative paid-to-date losses and $19 billion in reserves for future payments.
To access the full copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=360678.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
Contacts
Jieqiu Fan
Associate Director
+1 908 882 1762
[email protected]
Thomas Mount
Senior Director
+1 908 882 2192
[email protected]
Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
[email protected]
Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
[email protected]
