Focus: Modelling liability risk on a named peril basis

The question ‘What’s the next asbestos?’ has been asked by casualty insurers since the early 2000s in the aftermath of the biggest run of losses ever sustained by the insurance industry from a single risk in its history.  The question reflects a motivation to discover what emerging risks insurers needed to look out for next,  with the goal being to avoid them.  After a $100bn industry loss, seeking to avoid a recurrence is reasonable.  However, this approach has stymied the liability insurance industry’s growth over the last few decades and threatens to make it an irrelevance going forward unless it can approach the problem differently.