What is the usual time frame for a claims reserving review?

The usual time frame for a claims reserving review typically aligns with quarterly reviews. This schedule allows insurers to assess and adjust reserves adequately in response to claims developments and any emerging trends. Conducting a review every quarter enables companies to have a more dynamic approach in evaluating the adequacy of reserves compared to longer intervals, such as annual assessments. This frequent review cycle is vital for ensuring that the reserves remain aligned with the actual claims experience and adequately reflect the expected future payouts.

Monthly reviews may be too frequent for many organizations unless specific circumstances necessitate such regularity. Weekly updates could be impractical in terms of resource allocation and may lead to unnecessary fluctuations in reserve levels. Annual assessments, while still a necessary part of the process, might not provide the timely adjustments needed to respond to changing claims patterns and can expose the insurer to greater financial risk if reserves are not kept up to date. As such, quarterly reviews represent a balanced and effective approach in the claims reserving process.