Gnarus Assists SPX Technologies in Legacy Asbestos Liability Divestiture Transaction

Dr. Jessica Horewitz of Gnarus Advisors LLC recently performed liability estimation services in support of SPX Technologies, Inc.’s successful divestiture of three wholly-owned subsidiaries, in which their legacy asbestos liabilities resided, to Canvas Holdco LLC. Dr. Horewitz and her Gnarus team were asked to perform a comprehensive analysis of the SPX liabilities and a review of the associated insurance portfolio that formed the basis of the strategic business transaction.  SPX has noted that, as a result of the transaction, “all asbestos liabilities and related insurance assets will not be included in SPX’s consolidated year-end 2022 balance sheet.”  SPX further noted that it “anticipates that the divestiture will result in an annual benefit to its Adjusted Earnings Per Share of $0.08 to $0.10 beginning in 2023.”  Additional details may be found in the joint press release here.

Gnarus Advisors and its recognized experts have extensive experience performing liability estimation services for the purposes of financial reporting, insurance allocation and commutation, corporate restructuring, and transactions including bankruptcy, potential tort settlements, and the value of future unasserted claims.  For more information, please visit


Estimating the Impact of COVID-19 Deaths on Future Mesothelioma Diagnoses

Gnarus experts Dr. Jessica Horewitz and Jorge Sirgo provide an update to a presentation given by Gnarus at the Perrin National Asbestos Conference in San Francisco on September 27, 2021. This update updates the analysis to incorporate updated CDC COVID-19 death data as of January 2, 2022.

Mesothelioma is a rare cancer that is most associated with occupational and environmental exposure to asbestos. Existing and previously adopted forecasts estimate that the incidence of mesothelioma, suggests that annual diagnoses were expected to peak or at least plateau in the last ten to fifteen years. Because of this, the expected path of mesothelioma diagnoses is of great interest to many: companies forecasting future liabilities, asbestos trusts working to ensure there are funds for future claimants, and insurers reserving for the future.  For most defendants and trusts, claims alleging mesothelioma make up at least seventy percent (and sometimes greater than ninety percent) of the indemnity spend on an annual basis and receives the most analytical focus.

Factors that impact the incidence of asbestos-induced mesothelioma includes the size of the exposed population still living, when and where they may have been exposed, the amount and duration of the exposure, and mortality rates. In the last twenty years, updates to forecasts of mesothelioma have focused on duration of exposure and mortality which have resulted in small, incremental changes (mostly upward) on future asbestos-induced mesothelioma. The COVID-19 pandemic, however, has potentially altered the size of the exposed population.

Since 2020 there have been a significant number of deaths attributed to COVID-19. To the extent that the demographic profile of COVID-19 deaths shares some similarities with that of mesothelioma diagnoses, future mesothelioma diagnoses might be impacted by the “lost” cohort of COVID-19 deaths.  We explore the potential impact on mesothelioma diagnoses in this article.

Demographic Similarities

COVID-19 deaths are tracked and reported weekly by the CDC. These deaths are considered “confirmed or presumed” COVID-19. As of January 12, 2022, 834,954 deaths have been attributed to COVID-19 in the US.  Most of these deaths occurred in 2021.  A bit more than half of all the dead were male and more than that were male in each year.


The timeline of COVID-19 deaths reveals some additional information.  This graphic shows the timeline of reported deaths split into two panels (female on the left and male on the right).  Both timelines move in concert but show greater numbers for males.  The deaths disaggregated by age cohorts (color-coded in the subtitle) in both panels show that older age cohorts (green, blue, purple) dominate the totals.

The finding is that COVID-19 deaths are mostly male and overwhelmingly older individuals. So how does this demographic profile compare with mesothelioma diagnoses?  We can evaluate this by examining the SEER data published by the National Cancer Institute.

The latest annual Surveillance, Epidemiology, and End Results (“SEER”) Program of the National Cancer Institute data on mesothelioma diagnoses in the United States became available on April 15, 2021. The data reports on rates of mesothelioma diagnoses during 2018, as determined from “cancer registries” from a sampling of hospitals in the United States.  The extrapolated number of mesothelioma diagnoses in the US is approximately 2,800.  About 1,900 of these are male diagnoses and about 930 are female diagnoses. This graphic below shows the rates of mesothelioma by sex (female in red and male in blue) and by age cohort.  The error bars in black indicate the confidence intervals for each rate.  The data here show that meso rates are considerably greater for older age cohorts (also, they’re essentially zero at less than 20 or so) and are much greater for male at the older age cohorts.

There are some demonstrable similarities between deaths attributed to COVID-19 and mesothelioma diagnoses.  The rates are both concentrated among older individuals.  In addition, the rates are much greater among male individuals (although the difference is greater for mesothelioma diagnoses).  These similarities suggest that the cohort of deaths attributed to COVID-19 may impact the population that more likely to be diagnosed with mesothelioma.  It can be argued that a portion of these deaths had they not occurred might have become meso diagnoses at some point in the future.

Methodological Approach

To estimate the potential change (reduction) in future mesothelioma diagnoses that could result from deaths attributed to COVID-19 we align COVID-19 related deaths with the population that give rise to mesothelioma diagnoses.

Our approach assumes the population of COVID-19 deaths will age in a world “but for” the pandemic to estimate the number of “lost” mesothelioma diagnoses.  First, the population of COVID-19 deaths by year of death, sex, and age cohort from the CDC is disaggregated into age cohorts into single ages using Census data. The mortality information published by the SSA (by sex, age, and year) is then used to estimate the portion of the COVID-19 dead population that would have remained alive in each year 2020 through 2050.  Finally, the mesothelioma diagnosis rates by age and sex from SEER are used to estimate how many of the remaining population might have been diagnosed.


We estimate that approximately 479 fewer mesothelioma diagnoses between 2020 and 2050 because of the deaths attributed to COVID-19 in 2020-2022.  Of these, about 402 are male diagnoses and about 77 are female diagnoses.  The following tables/charts summarize the demographic profile of the estimated “lost” mesothelioma diagnoses.

Given the current levels of mesothelioma diagnoses (approximately 2,800 overall, of which 1,900 are male diagnoses and about 930 are female), the estimated “lost” mesothelioma diagnoses in the initial years (20-30) are relatively small.  With the expectation that mesothelioma diagnoses do begin to decline into the future, the estimated “lost” mesothelioma diagnoses through 2050 appear to be even smaller.


This overview analysis is a first pass at quantifying the impact that COVID-19 deaths may have on future mesothelioma diagnoses, and future refinements of this analysis are likely. This analysis is limited by the available data. Most notably, COVID-19 deaths reported by the CDC may understated, and mesothelioma diagnosis rates obtained via SEER may or may not be directly applicable to the population of deaths attributed to COVID-19.

The assumption of “confirmed or presumed” as the underlying cause of death may have some variability, but it’s difficult to gauge the directional impact if any.  In addition, what’s reported by the CDC might not represent the totality of deaths–the number of deaths is likely to increase through 2022 and perhaps after.  Moreover, estimates of mortality directly or indirectly associated with the COVID-19 pandemic suggests the number is much greater.  These include deaths associated with pandemic-related health care that was delayed or deferred as well as an increase in mental health disorders. There are published estimates that suggest the number of COVID-19 deaths is understated by 20% to as much as 58%.

The SEER data is current through 2018 which was released this past April.  We assume the rates apply directly to this population of deaths (by age and sex).  There’s nothing of which we are aware that would suggest this population would be more or less prone to diagnoses, but if there is, then the estimation would change.  In addition, we hold these 2018 rates constant into the future.

This graphic below shows the rates of meso diagnoses over the past 19 years by sex (female on the left and male on the right) and by age cohort (color-coded in the subtitle).  Constant rates for female might be plausible.  For male, constant rates for age cohorts appears to be conservative, especially for the 55-64, 65-74, 75-84 cohorts.  These rates appear to be declining and these are the age cohorts with the greatest rates. If rates were to continue to decline, our estimate of the “lost” meso deaths would decrease.

Mortality rates are available through age 119 so we assume 100% mortality at age 120.  We use mortality rates by age and sex (for years 2020-2050) from the 2020 SSA Trustees Report.  These rates were published prior to the pandemic.  This is important because we model mortality in the world “but for” the pandemic.  The 2021 Trustees Report was released this month and it shows some very atypical changes to mortality.

This graphic below shows the year-to-year percentage change in mortality rates by age for males in calendar years 2020, 2021, and 2022.  The grey scale lines show the year-to-year percentage changes for mortality rates in the Trustees Reports from 2015 through 2020, and the red line is the change in the mortality rates from the 2021 Trustees Report.  As you can see, the percentage change in mortality rates in the COVID-19 era are considerably greater than the typical change.  This change diminishes staring in 2022.

The CDC tabulates COVID-19 deaths into 11 age cohorts.  Since SEER data and mortality data are available at single ages, we use the distribution from Census of single ages (by sex) to disaggregate.  In addition, the maximum age listed by Census is 100, so the age cohort “85+” extends to 100.

We have not included any impact race and ethnicity might have on our estimates.  First, race is not captured in the SSA mortality data, so that is a potential limitation.  Second, given the relative rarity of meso, splitting the SEER data by sex, age, and race would thin the data too much and result in many “zero” rates.  What the COVID-19 data show is that the distribution of COVID-19 deaths is not representative by race.  Even if race is factored into the approach, the result may not differ.

This graphic below shows the difference between the percent of COVID-19 deaths and the percent of the population by race.  These are adjusted for age differences across the groups.  Any positive disparities (in green) show overrepresentation, and negative (in purple) show underrepresentation.  So Hispanic and Black COVID-19 deaths are overrepresented, and White are underrepresented.

This graphic below shows meso age-adjusted diagnosis rates by sex and race (the horizontal bounded error bars) compared to sex alone (the vertical-colored areas).  The panel on the left is for female and the right is for male.  Both panels show that rates by sex and race are not statistically different to rates by sex alone (aside from Asian).  Not factoring race has a slight overestimating impact because this diagnosis rate is greater than the Hispanic and Black rates would otherwise be (the two groups that are overrepresented in the COVID-19 dead population).

COVID-19 has impacted just about all facets of life over the past almost-two years. It makes sense that the expected number of mesothelioma diagnoses from all causes will change due to the reduction in population caused by the pandemic. The extent to which this becomes a material change in asbestos forecasting is still unknown, but this first pass at estimating the impact of COVID-19 on expected future mesothelioma deaths suggests worthy of continued analysis.

For more information, or if you have any questions about this analysis, please contact Dr. Jessica Horewitz or Jorge Sirgo.



Annis Susan

Susan Annis has extensive experience in the economic consulting industry serving both government and private sectors. She has strong analytical and quantitative skills with experience in economic analysis, financial modeling, econometric and statistical modeling, policy analysis, and corporate financial assessment. Ms. Annis’s most recent analytical and modeling work has been in the litigation support arena. She is an experienced project and team leader in a management consulting environment.  Ms. Annis earned a Master of Arts in Economics from University of Virginia and a Bachelor of Science in Electrical Engineering from Bucknell University.

Henthorn, Brian

Brian Henthorn specializes in the estimation of environmental liabilities, the evaluation of cost recovery issues under the National Contingency Plan and state equivalents, the allocation of costs at hazardous waste sites, and related issues faced by parties at Superfund sites.

Mr. Henthorn has more than a 15 years of experience consulting with clients in a wide variety of contexts, including cost recovery litigation, bankruptcy, insurance recovery, and financial reporting. His experience includes working on two of the largest environmental litigation matters in U.S. history, and his clients span a wide range of industries including petrochemical, mining, energy, and manufacturing.

Mr. Henthorn earned a Master of Engineering Management, a Bachelor of Engineering in Environmental Engineering and a Bachelor of Arts in Engineering Sciences and Economics from Dartmouth College.

Maloney, Dan

Dan Maloney has more than 15 years of experience in economic and financial modeling, data analytics, damages calculations and financial analysis.

He supports clients and their legal counsel on dozens of high profile, complex cases requiring close collaboration, creative problem solving, technical skill and subject matter expertise. He has worked on a wide variety of dispute resolution and litigation matters, including those involving asbestos, automotive, coal workers pneumoconiosis, environmental, lead paint, pharmaceutical and silica liabilities, product recalls, bad faith claims and other corporate matters.

Mr. Maloney has specific expertise in supporting insurance valuation and recovery efforts in the context of settlement, arbitration, and litigation. Mr. Maloney’s clients have ranged in size from Fortune 10 companies to mid-sized firms, covering industries from aerospace to waste management.

He earned a Master of Business Administration from The Johns Hopkins University, and graduated from The College of William & Mary with a Bachelors of Business Administration.

Kivler, Brandon

Brandon Kivler supports Gnarus clients on a variety of insurance coverage matters related to product and environmental liabilities. He focuses on creating financial models to allocate past and future costs to insurance policies. He also helps clients manage large volumes of data using relational databases to assist in decision making.

Mr. Kivler also has supported clients with first party claim recovery efforts for property damage and business interruption losses, as well as calculated economic damages. He led client engagements on environmental site cost allocations, underlying claims management, insurer billing and notice and London Market Schemes of Arrangement.

Mr. Kivler earned a Master of Business Administration from The Johns Hopkins University’s Carey Business School. Previously he earned a Bachelor of Science in Business Administration with concentrations in finance and international business from the University of Richmond where he graduated Summa Cum Laude.

Kirschner, Eric

Eric Kirschner’s practice at Gnarus is focused on developing cloud-based data structures and control processes for accurate tracking, payment and reporting of mass tort claims.

Mr. Kirschner has more than 20 years of experience in mass tort claim analysis and recovery.  He has spent time both as an attorney litigating mass tort claims and as a consultant designing, developing and programming numerous financial models and data structures to maximize clients’ mass tort claim recovery. For his Gnarus clients, he develops cloud-based applications for managing mass tort litigation and assists clients in developing data controls for claims handling and recovery.

Prior to joining Gnarus, Mr. Kirschner was a principal with The Claro Group.

He earned a law degree from the University of Pennsylvania Law School, and graduated with honors from Colgate University with a Bachelor of Arts degree in mathematical economics.

Grant, Kerri

Kerri Grant specializes in modeling and analysis on a range of environmental, mass tort and insurance coverage issues. She supports clients by estimating environmental and mass tort liabilities, advising on, and aiding in insurance recovery, and providing litigation risk analysis and advice.  This includes the development of detailed probabilistic, environmental damage, litigation risk and insurance allocation models.

The primary focus of her work for Gnarus clients is aiding in expert testimony and settlement support in insurance recovery litigation.  This includes working with counsel and senior management to resolve insurance coverage disputes by combining her expertise in liability estimation with detailed knowledge of insurance coverage issues.  She has developed complicated quantitative models to evaluate the cost consequences of alternative insurance coverage theories, allocating liability to insurance profiles, and precisely calculating and summarizing assigned carrier liability.  Ms. Grant has participated in settlement negotiations, aided in the preparation of expert testimony and provided support for expert deposition and trial.

Her clients include many leading law firms, as well as major companies in automobile and consumer manufacturing, aerospace, insurance and electric and gas production and distribution industries.

Ms. Grant earned a Master of Science in Environmental Assessment and Evaluation from The London School of Economics and Political Science. She holds a Bachelor of Science in Civil and Environmental Engineering from Princeton University.

Sellick, Stephen

Stephen Sellick is an experienced consultant specializing in the management of complex quantitative analysis in litigation matters, particularly projects in environmental, mass tort and product liability claims.  He evaluates claims in insurance allocation, internal management, cost allocation, cost recovery and litigation risk analysis. He also participates in studies involving regulatory economics, cost accounting and financial analysis of the electric utility industry. He works with clients in insurance, consumer manufacturing, electronics, aerospace, natural gas, pharmaceuticals, electric utility, and agricultural products industries.

Mr. Sellick’s practice extends to work in board ESG oversight and risk management; in this space he is focused on assisting for-profit, social enterprises, and nonprofits with risk management of environmental & mass tort contingent liabilities; governance & board structure via board assessments & board skills matrix reviews; and board formation & best practices.

Mr. Sellick is the Chairman of Gnarus’ Board of Directors and works with Gnarus executives and its Board to determine the overall direction and strategy of the company consistent with our team’s vision and values.  He is active in the San Francisco chapter of the Private Directors Association and the Alumni Council of the Harris School of Public Policy Studies at the University of Chicago. Mr. Sellick is a member of the Academy of Court-Appointed Neutrals and is recognized by Who’s Who Legal as a recommended expert in Insurance & Reinsurance Expert Witnesses.

Mr. Sellick holds an M.A. in Public Policy Studies from the University of Chicago and a B.S. in Economics from the Wharton School at the University of Pennsylvania.