A COMPARATIVE ANALYSIS OF OUTSTANDING CLAIM RESERVES

Zlata Djuric¹ and Bojana Maracic²

¹Faculty of Economics, University of Kragujevac, Kragujevac, The Republic of Serbia
²Comtrade group

The key processes in the business of insurance companies which define the financial viability of their business activities, as the most important element, are the adequate amount of technical reserves. A qualitative assessment of the technical reserves level is the basic support to the management of the key business processes and proper strategic and financial decision-making in order to maximize the viability, profitability, competitiveness, and further development of the company. Based on the data on the operations of an insurance company, within a single line of insurance, different, in practice, most frequently used methods were applied in order to determine the deviation amplitude of the projected amounts from the actual claims. Another direction of research focuses on actuarial practice in non-life insurance companies operating in the territory of the Republic of Serbia. The comparative analysis of the obtained projection points to the fact that the chosen methods, commonly used in actuarial practice in the Republic of Serbia, should be monitored and reviewed. The results of the multidirectional research and detection of the existing problems provide a useful framework and a stimulating mechanism, as well as the guidelines to improve the operations and better positioning of insurance in the commercial and economic environment of the Republic of Serbia.

Keywords: technical reserves, outstanding claims reserves, chain indices, loss ratio

JEL Classification: G22