As Asbestos Litigation Continues to Grow, Companies Need to Revisit Forecasts

by and | Mar 19, 2021

Manufacturers and distributors of products containing asbestos, as well as the contracting firms whose tradesmen worked with materials containing the now-known carcinogen, may be at financial risk more than previously thought. The original financial risk models that were used ten or more years ago to guide those companies in planning how they would manage settlement payouts are, today, woefully outdated. As a result, defendants are now exposed to a level of financial risk for which they have not adequately planned.

In spite of the seemingly daily news about myriad product liabilities and threats to public health, asbestos litigation is still as prevalent today as it was a decade or two ago.  Unfortunately, the original epidemiology curves were wrong, mostly because they did not account for the latency of mesothelioma (the cancer most often linked to asbestos exposure) as well as other forms of lung cancer, and they under predicted the number and gender of those who would ultimately suffer from these diseases. The tail of these cancers linked to asbestos has, in fact, grown much longer, and claims by those impacted (including the victims’ families) are now expected out as far as 2050 and beyond, according to the latest forecasting models.

As a result, the historical forecasting models that were once used to predict the number of people who would suffer from asbestos exposure and the amount of money that would be needed to compensate plaintiffs are woefully inadequate, leaving these companies at risk for financial ruin.

New Models Can Help Companies Better Shore Up their Financial Picture

Asbestos Liability Forecasting (ALF) provides precisely the kind of data and forecasts that can help companies, as well as asbestos trusts, make better-informed decisions about the funds they will need to settle asbestos-related claims. By taking into account current and future liabilities, current assets, incoming claims filings, approval rates, offer values and other factors, ALF can help those companies better asses their cash reserves based on the latest facts instead of outdated, hypothetical scenarios. This, in turn, will allow these asbestos defendants to better manage their litigation strategy and cash flow, while making the most of their existing insurance coverage.

Asbestos trusts, in particular, have a fiduciary responsibility to make sure they have adequate funding to pay claimants over time. Verus’ founders have worked with the asbestos trusts for nearly 30 years. This steep experience, coupled with Verus’ strong analytical forecasting services, allows us to develop a comprehensive assessment of a company or fund’s status and its ability to fulfill its capacity and meet its business commitments.

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