Reserve

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Reserve A portion of the premium retained to pay future claims. Reserves are calculated based on the expected number and size of claims, as well as the company's financial strength. A claims reserve is a reserve of money that is set aside by an insurance company in order to pay policyholders who have filed or are expected to file legitimate claims on their policies. Insurers use the fund to pay out incurred claims that have yet to be settled. There are two main types of reserves: -Policy reserves: they are set aside to pay for claims that have been filed but not yet settled. -Liability reserves: they are set aside to pay for claims that have not yet been filed, but which are expected to be filed in the future. Reserves are an important part of an insurance company's financial stability. Reserve helps the insure to evaluated and calculate its profits. They help to ensure that insurance companies can pay claims, even if there are more claims than expected. Reserve also help to protect policyholders from financial loss, if an insurance company becomes insolvent. Finally, adequate reserves can help to maintain confidence in the insurance industry. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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