Unusual illness: how Lloyd's can help

However by working with experts, underwriters at Lloyd’s can cut through the media noise and mass of scientific data to provide the best cover they can to policyholders.

New and emerging risks
Contentious diseases are an emerging risk that liability insurers monitor closely, according to Mike Noonan, head of claims management at QBE Europe. They typically fall into two main camps - new conditions that may be caused by exposure to a product or work, or established conditions that are presented in a new way that increases the range of liability.

Work related conditions that have proven contentious include stress, repetitive strain injury (RSI) and industrial noise. Also hotly contested are the health implications related to products, like mobile phones/electromagnetic fields, nanotechnology and allergies to chemicals.

Sometimes a new disease emerges –such as variant Creutzfeldt–Jakob disease - and its origins can be traced, said Dr Andrew Auty, a director at Re: Liability (Oxford) Ltd, a scientific and legal consultant to insurers and companies. However there will be a period of uncertainty, he added.

For example it took 10 years after the first cases of variant CJD were diagnosed to finally establish its link with the cattle disease bovine spongiform encephalopathy (BSE).

New technologies and changing fashions
The drivers that make some diseases contentious include the level of scientific and medical knowledge, fashion, demographics, speed of communication, technology changes and the pace of adopting new technology, says Auty.

“The speed with which stories spread is also problematic. Insurers could spend a lot of time following up every news story about the next floodgates issue,” says Auty. “Society in general is in thrall to health stories, fashions change extremely quickly.”

Information overload
Contentious conditions cause uncertainty for insurers, but media hype can often turn out to be unfounded, says Noonan. Umbrella terms and information overload often accompany contentious diseases, he says.

For example, repetitive strain injury (RSI) was very controversial over a decade ago. However RSI is an umbrella term and not a recognised condition, says Noonan. It has taken almost 20 years of litigation to reach a precise understanding of work related muscular skeletal conditions, he says.

“Insurers do not mind predictable claims for diagnosable conditions, but they are concerned by generalised claims like RSI that threaten to open the flood gates to a wide range of liabilities,” says Noonan.

Legal risks
Existing conditions that manifest themselves in new ways, or where legal judgements radically change liability at a later date, are particularly problematic for insurers. “We see few genuinely new conditions but we often see existing ones presented in new ways,” says Noonan. “For example industrial deafness claims were once associated with shipyard workers, but now they are becoming more common in the entertainment industry.” he says.

Insurers are also keeping watch on a controversial condition known as beat knee, which has been associated with osteoarthritis in miners. Trade unions have built a strong medical and legal case for compensation, and the case could have implications for other occupations where people kneel, says Noonan.

Scanning the horizon
Good insurers are always on the look out for new diseases and changes in the legal landscape, says Noonan. “QBE uses horizon scanning to keep track of emerging risks like nanotechnology,” says Noonan. “There is a wealth of information out there but we use medical experts to guide us to the quality research and we retain scientists to advise on work and product related risks.”

For example, Re: Liability (Oxford) identifies and evaluates changes in liability risk and advises insurers on control measures if an issue becomes significant. “Risk managers are not best placed to spot technical issues or keep up with all scientific literature,” says Auty. “We do this for them, enabling them to make better informed strategic decisions.”

Insurers need to be careful how they manage emerging risks like contentious diseases, says Noonan. “There is so much information and risk that we could easily become paralysed. There have been lots of warnings in the past that have come to nothing.”

Nanotechnology is certainly one to watch, says Noonan. This risk area needs more research because there is so much going on with regulation and product development that it is difficult to understand the quality of the research and the jury is still out on whether there will be any health concerns.”

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