An estimate of the value of a claim or group of claims not yet paid. A case reserve is an estimate of the amount for which a particular claim will ultimately be settled or adjudicated. Insurers will also set reserves for their entire books of business to estimate their future liabilities.
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UK: reserve or provision in accounts in respect of claims which have not been settled.
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US: The amount set up as the estimated cost of a claim. (See IBNR Reserve)
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The estimated liability, as it would appear in an insurer’s financial statement, for unpaid insurance claims or losses that have occurred as of a given evaluation date. Usually includes losses incurred but not reported (IBNR) losses due but not yet paid, and amount not yet due. For individual claims, the loss reserve is the estimate of which will ultimately be paid out on that claim.
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The insurer’s estimated total liability for claims that have not yet been paid or losses that have occurred during a certain time frame. This amount usually also includes losses incurred but not yet reported, losses that are due but that have not been paid yet, and amounts that are not yet due.