What does a claims handler primarily consider when calculating an outstanding claims reserve?

The primary focus of a claims handler when calculating an outstanding claims reserve is the historical data and future liability projections. This approach allows claims handlers to assess the financial implications of claims that have been reported but not yet settled, ensuring that adequate reserves are set aside to cover the anticipated costs of these claims.

Historical data provides insights into past claims, including the average costs associated with similar claims, trends in claims settlements, and the typical duration of the claims process. This information is essential for creating a reliable estimate of future liabilities. By analyzing this data, claims handlers can identify patterns that might influence future claims costs.

Future liability projections take into account the specific circumstances of ongoing claims, changes in legislation, or shifts in market conditions that could impact the cost of settling claims. By combining this data analysis with accurate forecasting models, claims handlers can ensure that reserves reflect both the current situation and predicted developments, ultimately leading to a more stable and financially sound claims process.

While other factors, such as the personal characteristics of the claimant or considerations for marketing campaigns, may play roles in different aspects of insurance operations, they do not directly influence the calculation of outstanding claims reserves. The focus remains firmly on the financial and statistical data relevant to past claims and future costs for accurate reserve setting.