what is a loss reserve 
a loss reserve is an estimate of an insurer s liability from future claims it will have to pay out on typically composed of liquid assets loss reserves allow an insurer to cover claims made against insurance policies that it underwrites estimating liabilities can be a complex undertaking insurers must take into account the duration of the insurance contract the type of insurance offered the odds of a claim being made and the time of it being resolved quickly insurers have to adjust their loss reserve calculations as circumstances change understanding a loss reserve