STORY:
Insurers Could Pay $35 Billion In Y2K Costs

Costs second only to asbestos and pollution clean-up claims

Wall Street analysts say insurance companies could pay $15 billion to $35 billion for claims and legal costs related to the Y2K computer bug. Reuters quotes the story from the Wall Street journal as saying the potential costs are second only in size to asbestos and pollution-cleanup claims.

The estimate of insurers' Y2K burden comes from Milliman & Robertson Inc., an actuarial firm that has made past estimates for asbestos and environmental claims.

It is one of the first attempts to quantify the cost of an expected onslaught of claims from corporate insurance clients facing business interruptions or lawsuits over the Y2K bug issue.

The story says the $35 billion hit means many insurers would have to devote as much as two years of earnings to cover claims and the losses could topple some small insurers.

Source: Reuters

DATE: 6/21/99

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