Milliman estimates PFAS remediation costs in US drinking water systems at $120-$175bn

Milliman, a global consulting and actuarial firm, estimates that the total economic cost of remediating perfluoroalkyl and polyfluoroalkyl substances (PFAS) contamination in US drinking water systems will range from $120 billion to $175 billion.

PFAS have been linked to serious health issues such as cancer, liver damage, and endocrine disruption, which could result in significant liability insurance claims in the future.

The Environmental Protection Agency (EPA) has recently established maximum contaminant levels (MCLs) for various PFAS compounds in drinking water, prompting water districts across the country to test and address contamination in their systems.

Travis Grulkowski, Principal and Consulting Actuary at Milliman, stated, “Milliman’s comprehensive modelling provides a robust framework for understanding the significant financial implications of PFAS contamination.”

The model incorporates a variety of data—geospatial, regulatory, and industry-specific—to produce customised estimates for over 140,000 U.S. water districts. It evaluates around 30 different PFAS compounds and considers the unique risks and remediation needs of each district.

Drew Groth, Associate Actuary at Milliman, noted, “Our approach not only estimates the potential costs but provides insurers and corporations with the tools to navigate this complex landscape.”

Groth added, “The granularity of the model coupled with probabilistic outcomes allows the user to integrate the estimates into various analyses, including enterprise risk management, underwriting, pricing, and reserving.”

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