What term is used for funds that an insurer sets aside to cover future claims?

The term used for funds that an insurer sets aside to cover future claims is commonly referred to as "loss reserves." Loss reserves represent the amount of money an insurance company estimates it will need to pay out for claims that have already occurred but have not yet been settled. These reserves are critical for ensuring the financial stability of the insurer and are required by law to maintain adequate funds to cover potential liabilities.

Loss reserves are calculated based on various factors, including past claim experiences, the nature of the insurance policies, and anticipated future claims. Insurers periodically review and adjust these reserves as new information becomes available or as claims are reported and settled.

While terms like insurance premiums and reserves are related to the insurance industry, they do not specifically refer to the funds established for future claims in the same way that loss reserves do. Insurance premiums refer to the amounts policyholders pay for coverage, whereas reserves can include various types of funds set aside by insurers, but the specific term for funds for covering anticipated claims is indeed loss reserves. Risk management funds is not a standard term used in this context, making it less relevant to the definition provided in the question. This clarity in terminology is key for understanding the financial mechanisms at play within an insurance company.