During a recent panel discussion at The Insurer TV’s Reinsurance Month, experts raised concerns about the increasing litigation risks surrounding PFAS, or “forever chemicals.” These chemicals, commonly used in consumer products, are linked to severe health issues and could result in $80 billion in U.S. litigation costs. Panelists emphasized the need for insurers and reinsurers to address this emerging liability.
Insights from Industry Experts
Panelists noted that PFAS litigation could parallel previous asbestos claims, calling for more sophisticated risk modeling to evaluate the full scope of exposure. They highlighted the importance of developing casualty risk models, much like the early property catastrophe models, to help insurers navigate this long-tail risk. The potential liabilities could have a far-reaching impact on both primary insurers and reinsurers.
Preparing for a Surge in Claims
With PFAS litigation expanding across the U.S., insurers must take proactive steps to mitigate exposure. Industry leaders recommend revisiting policy language, ensuring that exclusions and terms address the evolving risk landscape. Reinsurers, in particular, are urged to adjust their risk models to anticipate the financial strain posed by this new wave of litigation.
As insurers face increasing legal claims related to PFAS contamination, the industry must remain vigilant and adapt to manage the potentially massive liabilities ahead.
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