The 2004 GIRO Conference UK Asbestos Working Party 12-15 October 2004, Hotel Europe, Killarney.
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Transcript of The 2004 GIRO Conference UK Asbestos Working Party 12-15 October 2004, Hotel Europe, Killarney.
The 2004 GIRO ConferenceUK Asbestos Working Party
12-15 October 2004, Hotel Europe, Killarney
UK Asbestos Working Party
What’s the plan ? What have we done? Main observations Some information about asbestos A bit about the HSE mesothelioma model A bit about our model Recent experience / current developments Brief US update Workshop / copies of our model(s) Andrew Darnton / Senior Statistician HSE
What have we done ?
Lots !! Definitive reference source on UK asbestos Collected industry-wide UK asbestos data Surveyed practitioners about methodology Replicated HSE model Extend HSE-type model to other diseases/costs Projected UK industry-wide costs Practical spreadsheet model & benchmarks
Headline observations from the paper
Future cost to UK insurance industry is £4-10b Over half of this relates to mesothelioma Mesothelioma projections very uncertain Future numbers very dependent on the over 80’s Asbestosis numbers peaking ? Pleural plaques mushrooming Poor data capture and limited disclosure Continued worldwide use
Some information about asbestos
Types of asbestos Use of asbestos Types of disease
Types of asbestos
Chrysotile: “White asbestos” (Serpentine minerals) Amosite: “Brown asbestos” (Amphibole) Crocidolite: “Blue asbestos” (Amphibole)
Types of asbestos: white
Types of asbestos: brown
Types of asbestos: blue
Types of asbestos
Types of asbestos: fibres
Types of asbestos
Cue samples
Uses of asbestos
Insulation (pipes and boilers) Fire-proofing (fire doors) Asbestos cement (roof and wall cladding) Friction materials (brake linings) Textiles (clothes, fire blankets) Other !! (socks, phone boxes, gas masks,
cigarette filters, gaskets on space shuttle, broomstick in Wizard of Oz)
Types of asbestos / uses
Cue Video Clip 1
Types of disease
(Pleural plaques) Pleural Thickening Asbestosis Lung Cancer Mesothelioma
Types of disease
Cue Video Clip 2
A bit about the HSE modelProjected male mesothelioma deaths in Brita in
0
50 0
1 00 0
1 50 0
2 00 0
2 50 0
3 00 0
3 50 0
1 970 1 975 19 80 19 85 19 90 19 95 2 0 00 2 00 5 2 01 0 2 015 20 20 20 25 20 30 20 35 20 40 20 45 20 50
Actu al Pe to 19 99 HSE 2 00 2 Pet o 1 99 5 HSE 20 03
A bit about the HSE model
Modelled Deaths by Age Group
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
2020
2023
2026
2029
2032
2035
2038
80 -
75 - 79
70 - 74
65 - 69
60 - 64
55 - 59
50 - 54
0 - 49
A bit about the HSE model
Modelled mesothelioma deaths with different parameters
0
500
1,000
1,500
2,000
2,500
19681972
19761980
19841988
19921996
20002004
20082012
20162020
20242028
20322036
2040
Dea
ths
per
year
Half-life 50 years
k=3
k=2
HSE central model
Min'm latency 15years
A bit about our model
Mesothelioma based on HSE model Asbestosis based on exposure / latency model Lung cancer based on HSE model / judgement Pleural plaques based on hand-waving Average costs based on survey data / judgement Average cost inflation based on survey data /
judgement and age-adjusted allowance Overall “level” based on survey data (£1.3b paid)
Recent experience
0
200
400
600
800
1000
1200
1400
1600
1800
1965 1970 1975 1980 1985 1990 1995 2000
Num
ber
of m
ale
mes
othe
liom
a de
aths
HSE Mesothelioma Deaths Number of Mesothelioma Claims
Current developments
CAWR regulations: May 2004 T&N / RSA court case(s) T&N pension scheme / Federal-Mogul Pleural Plaques test case: 8/11/04 Continued worldwide consumption
Brief US update
Recent US claims experience Increases in insured costs Update on the “FAIR” Act Recent legislation / developments
Recent US claims experience
Number of claims continues to grow Average size of awards has increased Number of defendants grown lots (~ 8,400) Number of companies filing for bankruptcy has
also grown (now in excess of 70)
Recent US claims experienceManville Trust - Injury by Year Filed
0
20,000
40,000
60,000
80,000
100,000
120,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Year Filed
Nu
mb
er
of
Cla
ims
(Denied) or Unknow n
Non-Malignant
Cancer
Mesothelioma
Recent US claims experience
730,000+ claimants filed to date Estimate ultimate number 1-3m Manville Trust 100,000+ claims filed in 2003 Most of increase from unimpaired lives Increase in ultimate or just an acceleration? Claim filings in 2004 show sharp decline
Increases in insured costs
Coverage block expansion Reclassification of products claims as non-
products claims US carriers increased Gross reserves by $12b+
since the start of 2003 (Net $8b+) Follows significant increases in 2001 and 2002 Equitas increased its reserves by £0.3b for the
year ending 31 March 2004
Update on the “FAIR” Act
No-fault “trust fund” Remove claims from tort system Privately funded, companies and insurers (US
and non-US) Defined set of medical criteria and award levels Considerable disagreement over fund size and
who contributes what Concerns if the fund runs out of money - sunset
clause means claims revert to tort system
Update on the “FAIR” Act
Not all key stakeholders supported: Labor, Unions, Democrats, Plaintiff Attorneys
Insurance community divided Cloture vote failed 22 April 2004 Negotiations have continued but significant
compromises are still needed Size of fund converging around $140b Disagreement over pending claims, funding
levels and return to tort system So continue to watch this space ….
Recent Legislation / Developments
May 2004: Ohio first state to establish medical criteria (subject to a referendum in November)
June 2004: Mississippi tort reform: limits on where can sue, cap damages, protects some
Workshop / copies of our model(s)
What’s the plan ? Discussion of the HSE model Our model and industry estimates Recent experience and our survey Court cases - and potential impacts Questions/discussion on the paper Model(s) from www.actuaries.org.uk or e-mail [email protected]
Andrew Darnton : Senior Statistician/HSE
The expected burden of mesothelioma in Great Britain
from 2002 to 2050 ByBy
JT Hodgson, HSEJT Hodgson, HSE
DM McElvenny, HSEDM McElvenny, HSE
AJ Darnton, HSEAJ Darnton, HSE
MJ Price, HSEMJ Price, HSE
J Peto, LSHTMJ Peto, LSHTM
Previous predictions of mesothelioma deaths in GB
Published in 1995 (Peto et al) and 1997 (Hodgson Published in 1995 (Peto et al) and 1997 (Hodgson et al)et al)
Based on simple birth cohort modelBased on simple birth cohort model Suggest peak of 2700 to 3300 deaths around 2020Suggest peak of 2700 to 3300 deaths around 2020 Data conformed to this model well up to 1991, but Data conformed to this model well up to 1991, but
departed from it thereafter (visual inspection, departed from it thereafter (visual inspection, confirmed by modelling – see later)confirmed by modelling – see later)
Age-specific death rates for 5-yr birth cohorts from 1878 to 1937 - risk increasing
0.1
1
10
100
1000
30 40 50 60 70 80 90
Age
Rat
e p
er m
ilio
n
1878-82
1883-87
1888-92
1893-97
1898-02
1903-07
1908-12
1913-17
1918-22
1923-27
1928-32
1933-37
Age-specific death rates for 5-yr birth cohorts from 1938 to 1982 - risk decreasing
0.01
0.1
1
10
100
1000
20 30 40 50 60 70
Age
Ra
te p
er m
ilio
n
1938-42
1943-47
1948-52
1953-57
1958-62
1963-67
1968-72
1973-77
1978-82
Modelling approach (1)
Adopts HEI/Peto model: an individual’s additional Adopts HEI/Peto model: an individual’s additional meso risk caused by single year’s exposure is meso risk caused by single year’s exposure is proportional to exposure in that year multiplied by proportional to exposure in that year multiplied by the 2the 2ndnd or 3 or 3rdrd power of time since the exposure power of time since the exposure lagged by 10 yearslagged by 10 years
Assumes effect of successive years are additiveAssumes effect of successive years are additive Assumes individual exposure can be adequately Assumes individual exposure can be adequately
approximated by the product of 2 factors, one approximated by the product of 2 factors, one defined by year (Ddefined by year (DTT), the other by age (W), the other by age (WAA))
Modelling approach (2)
Choose factor values, DChoose factor values, DTT and W and WAA (and k) to achieve (and k) to achieve best fit to observed mortality for males 1968-2001 aged best fit to observed mortality for males 1968-2001 aged 20-8920-89
The implied exposure (given by the factor DThe implied exposure (given by the factor DTT) reduced ) reduced rapidly after a peak in the mid-1960s, but estimates rapidly after a peak in the mid-1960s, but estimates become increasingly uncertain, and effectively become increasingly uncertain, and effectively undetermined (under this model) from the early 1980s undetermined (under this model) from the early 1980s onwardsonwards
Assumed from indirect evidence that exposure from Assumed from indirect evidence that exposure from 2000 was 4% of peak and by 2050 will be 0.75% of 2000 was 4% of peak and by 2050 will be 0.75% of peak (RIA for recent regs)peak (RIA for recent regs)
Poisson regression modelling
Two alternative models pursued Two alternative models pursued No clearance model (half-life assumed 1000 No clearance model (half-life assumed 1000
years)years) Clearance model (half-life of 15 years – from Clearance model (half-life of 15 years – from
Berry’s modelling of Wittenoom workforce)Berry’s modelling of Wittenoom workforce) Model adequacy examined via deviance Model adequacy examined via deviance
residuals and by comparing observed versus residuals and by comparing observed versus fitted deathsfitted deaths
Results of modelling
Residual Residual Deviance Deviance
(RD)(RD)
Degrees of Degrees of freedom freedom
(df)(df)
Ratio Ratio (RD/df)(RD/df)
Age-cohortAge-cohort 121.5121.5 7272 1.691.69
ClearanceClearance 227.8227.8 182182 1.251.25
Non-Non-clearanceclearance
(preferred)(preferred)235.6235.6 182182 1.291.29
Age-cohort model
Fit significantly worse than models with Fit significantly worse than models with more parametersmore parameters
However, two possible alternatives with However, two possible alternatives with similar fits, but different future implicationssimilar fits, but different future implications
Which is closest to the truth?Which is closest to the truth?
Model parameters (1)
ParameterParameter Non-clearanceNon-clearance ClearanceClearance
Power of time since Power of time since exposureexposure
2.62.6 4.14.1
Year of exposure maxYear of exposure max 19671967 19621962
Lung clearance/half-Lung clearance/half-life (y)life (y)
10001000 1515
Model parameters (2)
ParameterParameter Non-Non-clearanceclearance
ClearanceClearance
Relative exposure potential by ageRelative exposure potential by age
0-40-4
5-155-15
16-1916-19
20-2920-29
30-3930-39
40-4940-49
50-5950-59
60-6460-64
65+65+
0.000.00
0.030.03
0.210.21
1.001.00
1.241.24
1.111.11
0.000.00
0.000.00
0.000.00
0.000.00
0.070.07
1.181.18
1.001.00
1.951.95
1.021.02
0.080.08
0.000.00
0.000.00
Model parameters (3)
ParameterParameter Non-clearanceNon-clearance ParameterParameter ClearanceClearanceChange in exposure Change in exposure
index (%/y) inindex (%/y) in
19221922
19321932
19421942
19521952
19621962
19671967
19721972
19821982
2929
66
1111
99
55
00
-14-14
-39-39
Change in exposure Change in exposure index (%/y) inindex (%/y) in
19171917
19271927
19371937
19471947
19571957
19621962
19671967
19771977
3030
88
1111
99
1010
00
-17-17
-4-4
Differences between models
One key difference (apart from clearance/non-One key difference (apart from clearance/non-clearance distinction) is that they imply clearance distinction) is that they imply different time paths for population exposure to different time paths for population exposure to asbestos. Profiles similar up to 1950.asbestos. Profiles similar up to 1950.
One way of assessing which is best is to One way of assessing which is best is to compare their implied exposure patterns with compare their implied exposure patterns with the actual patterns of asbestos imports, taking the actual patterns of asbestos imports, taking account of differences between fibre type.account of differences between fibre type.
Pattern of fibre-specific imports scaled to same maximum for comparison purposes.
year
Crocodilite
Amosite
Chrysotile
Fitted import index for non-clearance and clearance models with best approximate weighting of actual imports
year
Imports - Amosite +0.7 x Crocidilite
No-Clearance ModelDerived ExposureIndex
year
Imports - Amosite + 2.2 xCrocidilite
Clearance Model DerivedExposure Index
Model Preference
Better correspondence between implied Better correspondence between implied exposure pattern and imports data for no-exposure pattern and imports data for no-clearance model?clearance model?
Data for the year 2001 is a more significant Data for the year 2001 is a more significant outlier in the clearance model than the no-outlier in the clearance model than the no-clearance model.clearance model.
Slight (but not definitive) preference for Slight (but not definitive) preference for non-clearance model!non-clearance model!
Plots of fitted values for non-clearance model
0.1
1
10
100
1000
1878
1883
1888
1893
1898
1903
1908
1913
1918
1923
1928
1933
1938
1943
1948
1953
1958
1963
1968
1973
Year of birth
Num
ber
of D
eath
s
Fitted
Observed
0
100
200
300
400
500
600
700
800
900
20 25 30 35 40 45 50 55 60 65 70 75 80 85
Age
Nu
mb
er
of d
ea
ths fitted
observed
Results from non-clearance model Peak of around 2150 (approx 95% CI: 1950 Peak of around 2150 (approx 95% CI: 1950
to 2450) deaths per year some time around to 2450) deaths per year some time around 2013 (approx 95% CI: 2011 to 2015).2013 (approx 95% CI: 2011 to 2015).
Total estimated mesothelioma deaths to Total estimated mesothelioma deaths to 2050 – around 90,000, with 65,000 2050 – around 90,000, with 65,000 occurring from 2002 onwards.occurring from 2002 onwards.
Fitted/projected exposure index and fitted, observed and projected deaths
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
200000
1900
1907
1914
1921
1928
1935
1942
1949
1956
1963
1970
1977
1984
1991
1998
2005
2012
2019
2026
2033
2040
2047
Year
Asb
esto
s E
xpo
sure
ind
ex
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Nu
mb
er
of
de
ath
s
Exposure Index
Central estimate
Observed Mesotheliomadeaths
Fitted exposure index (Fixed from 1979) and fitted, observed and projected deaths
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
200000
1900
1907
1914
1921
1928
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1942
1949
1956
1963
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1984
1991
1998
2005
2012
2019
2026
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2040
2047
Year
Asb
esto
s E
xpo
sure
ind
ex
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Nu
mb
er
of
de
ath
s
Exposure Index
Central estimate
Observed Mesotheliomadeaths
Further work
2002 data now available (no. deaths approx. 2002 data now available (no. deaths approx. equal to 2001)equal to 2001)
Sensitivity of predicted future burden to Sensitivity of predicted future burden to choice of similarly plausible models needs choice of similarly plausible models needs further explorationfurther exploration
The 2004 GIRO Conference12-15 October 2004, Hotel Europe, Killarney
Types of disease
Cue Video Clip 3