Asbestos and environmental losses jumped approximately 50% in 2009 after a 47% decline in 2008, according to a market review analysis on A&E losses released by A.M. Best Co. Inc. on Thursday.

Asbestos losses are estimated to cost the U.S. property/casualty insurance industry about $75 billion and environmental losses $42 billion, Best said in its report.

Previously, the Oldwick, N.J.-based ratings agency estimated asbestos losses for the industry would be $65 billion, with environmental losses of $56 billion.

Nine insurer groups incurred A&E losses of $100 million or more during 2009, Best reported, up from six groups in 2008.

“Ultimate industry exposures for A&E now are expected to reach $117 billion,” Best said in its report. “As of year-end 2009, the industry had funded, through a combination of paid losses and loss reserves, more than $68 billion in asbestos exposures and approximately $35 billion in environmental costs.”

Best said the property/casualty industry’s aggregate funding for A&E increased by more than $4 billion during 2007 and 2008.

In regards to asbestos, Best said in its report that the increase in estimates at the end of 2009 reflected ongoing elevated levels of annual incurred losses, as well as “a subtle shift of losses away from products liability claims to nonproducts claims involving more peripheral defendants for higher settlement values.”

Most insurers reported small increases or small decreases in asbestos paid losses, Best said in its report. During 2009, Travelers Cos. Inc. and Swiss Reinsurance Co. Ltd. reported sizeable decreases of $515 million and $265 million, respectively. The decreases were followed by increases by those two insurers in 2008 of $540 million and $280 million respectively.

“Essentially, 2009 saw a return to more normal levels of asbestos payments, particularly for these two companies,” Best analysts said in their report.

Last year, Travelers was ordered to pay $500 million in an asbestos-related claim.

Best’s report on U.S. asbestos and environmental liabilities is available for BestWeek subscribers only.