Glossary · method
Claims Reserving
The actuarial process of estimating future claim payments for events that have already occurred.
Loss ReservingIBNR EstimationOutstanding Claims Provisioning
Claims reserving (also Loss Reserving) is the actuarial process by which an insurance company estimates, at a balance-sheet date, the ultimate cost of claims that have already occurred but are not yet fully settled. Scope covers IBNR (Incurred But Not Reported — occurred but not yet notified), IBNER (Incurred But Not Enough Reported — notified but case reserve is insufficient), and ultimate loss (total amount eventually paid). The core data structure is the loss development triangle (paid and incurred). Classical methods include Chain-Ladder, Bornhuetter-Ferguson (1972), Cape Cod, GLM, bootstrap (England and Verrall 2002), Munich Chain-Ladder, and Wüthrich-Merz (2008) Bayesian/credibility approaches. Regulatory frameworks (Solvency II in the EU and equivalents elsewhere) require, beyond the point estimate, the full distribution, the 75th percentile, and a risk margin. This reserve is the largest liability on a P&C insurer's balance sheet — under-reserving means insolvency risk and over-reserving means trapped capital.
Örnek
A mid-size auto insurer applies Chain-Ladder + Mack standard error to an 8-year loss development triangle and obtains a reserve of 320M; the same data evaluated with Bornhuetter-Ferguson — using an a-priori expected loss ratio for the most recent accident year — produces a reserve of 340M.