Outstanding claims reserve

Reviewed by Apex Insurance Brokers · Last reviewed 2026-06-22

~2 min read

Reviewed by Apex Insurance Brokers · Last reviewed 2026-06-22

Category: Reserving · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed

In short: The Outstanding Claims Reserve (OCR) is the liability held for claims that have been reported to the insurer but not yet fully settled at the reporting date. It comprises the sum of individual case reserves on all open claims, often supplemented by claims-handler estimates of future development.

Distinguished from related reserves

OCR (Case reserves) — claims reported and known.
IBNR — claims incurred but not reported.
IBNER — inadequacy of case reserves on reported claims.
UPR / URR — unearned premium reserve and unexpired risk reserve.

The technical provisions on a Solvency II basis aggregate all of these, plus a risk margin and discount for time value of money.

How case reserves are set

Formulaic — for high-volume, homogeneous claims (motor windscreen, simple property), a banded scale based on claim type.
Claims-handler estimate — for individual material claims, the handler reserves based on facts known.
Specialist input — for complex liability claims, defence counsel and quantum experts.
Peer review — large claims reviewed by senior claims management.

References

IFoA. Reserving practical guides.
Friedland, J. (CAS, 2010). Estimating Unpaid Claims Using Basic Techniques.

Cross-references

Maintained by Apex Insurance Brokers. FCA FRN 724952. Companies House 07014570.

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