PFAS was a hot topic at the recent Casualty Actuarial Society Seminar on Reinsurance in June. But at a separate meeting held around the same time—the S&P Global Ratings 40th Annual Insurance Conference—chief financial officers asked to share their view of the significance of PFAS for the P/C insurance industry suggested they are not overly worried about exposure to their companies.

Dan Frey, executive vice president and CFO of Travelers, said:

“PFAS has gotten a lot of attention and deservedly so…The question you tend to get is—is PFAS going to be the next asbestos? Is PFAS going to be the next big thing that goes far and wide and costs the industry untold sums of money?

There are a number of reasons that we think that it’s not likely that PFAS is the next asbestos.

Policy language is different. Aggregation is different. PFAS, in particular, to the degree that it gets addressed through pollution [corrective] actions, you have pollution exclusions in policies.

The other thing about what asbestos had that PFAS doesn’t is asbestos had a definitive signature disease. [It] only had one—mesothelioma—[based on] the science that we know of today [for] exposure to asbestos.

PFAS doesn’t have that, and I’m not trying to diminish any of the illnesses that people have been dealing with, but PFAS is much more ubiquitous. It’s in a lot of products. It’s used by a lot of manufacturers—and we’re not at the point that it has clear-cut scientific connection the way that asbestos has been connected to mesothelioma. So, I think there’s a huge difference.”

Sabra Purtill, executive vice president and CFO of AIG, said she agreed.

“It’s obviously an area where we have a lot of focus. We have had PFAS exclusions in policies for companies that are associated with the manufacturing of PFAS for some time…From an exposure perspective, it’s something that we take into consideration when we do our evaluation of mass torts or our reserving for mass torts.”

Read about the PFAS discussion at the CAS Seminar on Reinsurance in the related article, “PFAS by the Numbers: $165B Ground-Up* Litigation Losses Possible“