Insurance Industry Asbestos Crisis
LoBue completed an extensive correlation and regression analysis and model development showing the time and cost of remediating the expected claims on a yearly basis and variable assumptions on aggressive resolution vs defensive resolution timelines.
A prototype processing facility was implemented and selective claims were processed through the facility to gain insight into the expected broarder liability processing costs and time to remediation of 90% of the expected cases.
The LoBue analysis showed that an aggressive approach to remediation would dramatically increase liability payments in the short time. This would quickly overwelm total Industry reserves and create a liquidity crisis.
LoBue recommended and the Consortium accepted a standardized process for claims handling and liability sharing. Along with this it was determined that a cautious approach to Remediation was necessary to spread the timeline of settlements and better understand the reality of the "Real Liability".
The Consortium facility was eventually disbanded when all analysis was completed and underlying issues were fully understood.