Claims Reserve Calculator
An insurer's claims reserve is the liability it holds to pay claims that have already occurred but are not yet fully settled. It combines case reserves (the adjuster's estimate for each reported claim) with an IBNR provision for claims incurred but not yet reported, plus expected development on open claims. This calculator adds your case reserves and IBNR to give the total reserve, combines that with paid losses to give total incurred losses, and divides incurred losses by earned premium to show the loss ratio. All figures are your own loss data, so nothing is guessed.
Claims reserve formula
Total claims reserve = case reserves + IBNR
Total incurred losses = paid losses + case reserves + IBNR
Loss ratio = total incurred losses / earned premium * 100
IBNR share = IBNR / total claims reserve * 100
The reserve is the unpaid liability still held against incurred claims. Incurred losses add the amounts already paid. The loss ratio measures incurred losses against the premium earned for the period.
Reserving context
- Case reserves are set claim by claim by adjusters; IBNR is set in aggregate by actuaries.
- IBNR captures both pure unreported claims and expected adverse development on reported ones.
- US statutory reserves must be supported by a qualified actuary's opinion in the annual statement.
- A loss ratio excludes expenses; add the expense ratio to get the combined ratio.
- Enter your own actuarial IBNR estimate; there is no universal industry figure.
Claims reserve: frequently asked questions
What is a claims reserve?
A claims reserve is the money an insurer sets aside to pay claims that have occurred but are not yet fully settled. It has two parts: case reserves (estimates for known, reported claims) and IBNR (incurred but not reported) for claims that have happened but the insurer has not yet been told about, plus development on known claims.
How is the total reserve calculated?
Total claims reserve = case reserves + IBNR reserve. Total incurred losses = paid losses + case reserves + IBNR. The outstanding (unpaid) reserve is the total reserve still held, which equals case reserves plus IBNR. This calculator computes each from your own loss data.
What is IBNR and where do I get the figure?
IBNR stands for incurred but not reported. It is an actuarial estimate that depends on each insurer's loss history, so there is no universal number. Enter your own actuarial IBNR estimate, often derived using chain-ladder or Bornhuetter-Ferguson methods, as a user-editable input.
What is the loss ratio shown here?
The loss ratio is total incurred losses divided by earned premium, expressed as a percentage. A loss ratio under 100% means premiums exceed incurred losses before expenses. Regulators and the NAIC track loss ratios as a core measure of underwriting performance.
Are claims reserves regulated?
Yes. In the US, loss reserve adequacy is governed by state insurance law and NAIC statutory accounting principles, and a qualified actuary must opine on reserve adequacy in the annual statement. This tool is an educational aid, not a statutory reserve opinion.
Official sources
- National Association of Insurance Commissioners: NAIC statutory accounting and reserving.
- Casualty Actuarial Society: CAS loss reserving research.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.