Milliman, a leading global actuarial and consulting firm, has released a concerning estimate of the potential cost of cleaning up PFAS contamination in UK water systems. Using advanced stochastic modelling, they predict a staggering £100 billion to £140 billion bill for the UK water industry.
PFAS, known as "forever chemicals" due to their persistent nature, have been linked to a range of health problems, including cancer and hormonal disruption. The UK Environment Agency has recently implemented stricter limits on PFAS levels in drinking water, leading to widespread testing and potential remediation for water companies across the nation.
"This comprehensive modelling provides a vital tool for understanding the significant financial burden associated with PFAS contamination," explained Travis Grulkowski, Principal and Consulting Actuary at Milliman. Their model, which considers over 140,000 UK water districts, factors in geographical, regulatory, and industry data to deliver individualised cost estimates. This analysis accounts for approximately 30 different PFAS compounds and considers the specific remediation needs of each district.
"Our approach not only estimates the potential costs but also gives insurers and corporations the necessary tools to navigate this complex landscape," added Drew Groth, Associate Actuary at Milliman. The granularity of their model, coupled with probabilistic outcomes, allows users to integrate the estimates into various analyses, including enterprise risk management, underwriting, pricing, and reserving.
These findings highlight the immense financial challenges facing UK water companies in meeting regulatory standards. The estimated costs significantly exceed current resources, indicating the urgent need for alternative funding mechanisms or legal action to recover costs from potentially liable parties. While the UK government has committed funds to support remediation efforts, further investment will be required to address this growing issue.
To learn more about Milliman's PFAS liability estimates and access the full whitepaper, visit [link to Milliman website].
About Milliman
Milliman is a global leader in actuarial, risk management, and technology solutions. Their consulting and advanced analytics capabilities span healthcare, property & casualty insurance, life insurance, financial services, and employee benefits. Established in 1947, Milliman is an independent firm with offices across major cities worldwide. Visit their website at [link to Milliman website].