Interview Question for CT5 -6

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  • March 7, 2019 at 5:01 am #23324
    Rishabh Surana
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      Q. What are reserves and why insurance companies hold reserves?

      Ans: A reserve is a money that is earmarked for the eventual claim payment. The reserve funds are set aside for the future payments of incurred claims that have not been settled.

      Premiums may not be sufficient to cover the benefits to be paid to policyholders. The insurance companies therefore, set up reserves to ensure that the company remains solvent.

      Sent from my SM-A605G using Actuarial Info mobile app

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