Insurer and Reinsurer Concern

The Swiss insurance company Swiss Re announced in 2003 that it would take corporations' policies on global warming into account when issuing officer and director liability insurance.79 Such foresight appears prudent in the wake of the insurance industry funding $160 million of a $600 million settlement of PCB litigation in Anniston, Alabama, in 2003 and in the aftermath of the still unresolved asbestos policy mess in the United States that has bankrupted scores of companies and cost the insurance industry billions of dollars.80 It is only a matter of time before insurance and reinsurance companies begin to ask much tougher questions than they do now about corporations' manufacture and use of toxic chemicals associated with diseases and disabilities. Chemical producers and users may be able to mount formidable defenses based on scientific uncertainties, but the diversion of corporate resources to legal defenses, and associated reputational and market share risks, suggests that it will be in insurers' and reinsurers' best interest to take searching looks at how corporations are attempting to reduce and avoid toxic liabilities.

The converging pressures outlined above present sizeable risks, but they also represent sizeable opportunities for the chemical industry. Nimble, foresighted companies should acknowledge these risks. Through shrewd product evaluations, research, and asset redeployments, they can select a future path leading to enhanced profitability, a reduced ecological footprint, and a healthier future for all.

77The Baxter agreement is available by searching the website of Health Care Without Harm, www. noharm.org, accessed February 17, 2004.

78The report is available at www.rosefdn.org, accessed February 17, 2004.

79"Global Warming May Cloud Directors' Liability Coverage," Wall Street Journal, May 7, 2003, p. C-1.

80"Monsanto, Solutia Shell Out on PCBs," Chemical and Engineering News, August 25, 2003, p. 10; "Asbestos Wave Surges; Crest Still to Come," Insurance Journal, October 8, 2003. Available at www. insurancejournal.com, accessed February 17, 2004.

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