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Claim reserves in general insurance

  • D. H. Reid


1.1. This paper is concerned with claim reserves in general insurance. General, or non-Life, insurance may be taken to include such classes of business as Motor, Liability, Property, etc., and the claim reserves with which the paper is concerned are usually described as ‘outstanding claims reserves’ or ‘reserves for claims incurred but not reported’ (I.B.N.R.). Each of these reserves falls under the heading of ‘technical reserves’, and may be referred to as ‘provisions’ by the accountancy profession. Such reserves are intended in some sense to represent the liability of the insurer arising from events which have occurred within the scope of, and during the period of currency of, the insurance. It is implicit in the definition of such reserves that there is defined a specific date, which will be referred to in this paper as the accounting date, to which the reserves relate. The need for outstanding claim reserves arises from the separation in time of the reporting of a claim to an insurer from the subsequent settlement of that claim, whether this settlement involves the payment of a positive sum by the insurer, or whether, in the event, no payment is made.



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Abbott, W. M., Clarke, T. G., Hey, G. B., Reynolds, D. I. W. and Treen, W. R., (1974). Some Thoughts on Technical Reserves and Statutory Returns in General Insurance. J.I.A. 101, 217.
Beard, R. E. (1974). Claims Provisions for Non-Life Insurance Business—Some Historical, Theoretical and Practical Aspects. Institute of Mathematics and its Applications, Symposium Proceedings 3, 15.
Benjamin, B. (1977). General Insurance. (Heinemann, London.)
Benjamin, S. (1976). Profit and Other Financial Concepts in Insurance, J.I.A. 103, 233.
Clarke, T. G. and Harland, N. A. (1974). Practical Statistical Method of Estimating Claims Liability and Claims Cash Flow. The ASTIN Bulletin, VIII, 1, 26.
Guaschi, F. E. (1975). I.B.N.R. Reserves. (Institute of Actuaries General Insurance Studies Group.)
Taylor, G. C. (1975). Separation of Inflation and Other Effects from the Distribution of Non-Life Insurance Claim Delays. (Paper presented to the 12th ASTIN ColloquiumPortimao, Algarve, Portugal.)
Taylor, G. C. and Matthews, T. J. (1977). Experimentation with the Estimation of the Provision for Outstanding Claims in Non-Life Insurance. Australian General Insurance Bulletin 12.

Claim reserves in general insurance

  • D. H. Reid


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