Insurance premium and claims reserves
Written to earned premium, UPR and the reserve roll.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: insurance premium and claims reserves.Updated 30 October 2026
What it does
The two balances an insurer runs on. Gross written premium grows with rate and exposure; part is ceded to reinsurers; net written premium is earned over the policy’s life, so the unearned premium reserve carries what is not yet earned and net earned premium is written premium plus opening less closing UPR. On the other side, each line’s claims reserve rolls forward: opening, plus the year’s claims, plus prior-year development, less claims paid, which settle quickly for motor and over many years for liability.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, rows 19–31: Motor: gross written premium, FY0A, Motor: premium rate change, base case, Motor: exposure growth, Motor: share ceded to reinsurers…
- Assumptions, rows 42–53: Motor: net claims reserves, FY0A, Motor: share of the year’s claims paid in the year, Motor: share of opening reserves paid in the year, Motor: prior-year development, % of opening reserves…
- Premiums, rows 6–10: Motor: rate change, selected scenario, Motor: gross written premium, Motor: net written premium, Motor: unearned premium reserve…
- Premiums, rows 13–17: Property: rate change, selected scenario, Property: gross written premium, Property: net written premium, Property: unearned premium reserve…
- Premiums, rows 20–24: Liability: rate change, selected scenario, Liability: gross written premium, Liability: net written premium, Liability: unearned premium reserve…
- Premiums, rows 27–33: Gross written premium, Gross written premium growth, Premium ceded to reinsurers, Net written premium…
- Claims, rows 14–18: Motor: opening reserves, Motor: plus current-year claims, Motor: plus prior-year development, Motor: less claims paid…
- Claims, rows 25–29: Property: opening reserves, Property: plus current-year claims, Property: plus prior-year development, Property: less claims paid…
- Claims, rows 36–40: Liability: opening reserves, Liability: plus current-year claims, Liability: plus prior-year development, Liability: less claims paid…
- Claims, rows 43–48: Current-year claims incurred, Prior-year development, Claims paid, Net claims reserves…
What a reviewer looks for
- Written premium used as revenue, which overstates a growing insurer’s earnings.
- One payment pattern for every line, so long-tail reserves run off as fast as motor.
- Reserve releases that never show in the roll-forward.