Overview of Reserving

Question 1

Reserve

Answer 1

Setting aside money to pay for the defense or indemnification of claims or lawsuits

Question 2

Two most significant insurance liabilities

Answer 2

• Unearned Premium Reserve
• Loss and Loss Adjustment Expense Reserves

Question 3

Describe the life of a claim

Answer 3

• Initial case outstanding estimate established
• Reinsurer notified (if claim expected to exceed insurer retention)
• Partial claim payment made
• Expense payment for independent adjuster/counsel
• Change in case outstanding estimate
• Final claim payment
• Takedown of case outstanding and claim closure
• Reopening of claim

Question 4

IBNR

Answer 4

Incurred but not reported

Question 5

Cumulative Reported Claims

Answer 5

Claims payments through a specific valuation date plus the case outstanding reserves as of that same point in time

Question 6

Incremental Reported Claim

Answer 6

The change in cumulative reported claims over a given point in time. This will always be specified, if not then the data is cumulative