What is allocated loss adjustment expenses reserves in SAP FS-CM - Claims Management?

SAP Term: allocated loss adjustment expenses reserves

• Component: FS-CM

• Component Name: Claims Management

• Description: Reserves that can be assigned to individual claims.

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• Key Concepts: 
  Allocated Loss Adjustment Expenses Reserves (ALAE) is a component of the Claims Management module in SAP Financial Services (FS-CM). ALAE reserves are used to cover the costs associated with settling claims, such as legal fees, investigation costs, and other expenses. The amount of the reserve is determined by the insurer based on their experience and expectations.
  
  How to use it: 
  In FS-CM Claims Management, ALAE reserves are used to track and manage the costs associated with settling claims. The insurer will set an amount for the reserve based on their experience and expectations. This amount can be adjusted as needed based on changes in the claims environment. The reserve can also be used to track payments made to claimants and other expenses related to settling claims.
  
  Tips & Tricks: 
  It is important to keep track of ALAE reserves in order to ensure that they are adequate for covering the costs associated with settling claims. It is also important to monitor changes in the claims environment in order to adjust the reserve amount as needed.
  
  Related Information: 
  For more information about FS-CM Claims Management, please refer to the SAP Help Portal or contact your SAP representative.