12. Outstanding Claims Provision12. Outstanding Claims Provision

12. Outstanding Claims Provision

This is the insurer’s liability for outstanding claims and recognises the potential cost to the insurer of settling claims which it has incurred at the reporting date but which have not been finalised. The amount reported is without deducting reinsurance and other recoveries and is to be measured in accordance with GPS 210 Liability Valuation for General Insurers.

The liability is in respect of both direct business and inward reinsurance business and is to be measured at the present value of the expected future payments. It must take into account unpaid claims, unreported claims, claims incurred but not reported, adjustments for claims development and claims incurred but not enough reported and the direct and indirect claims settlement costs that the insurer expects to incur in settling its outstanding claims.