What is reserve in SAP FS-CM - Claims Management?

SAP Term: reserve

• Component: FS-CM

• Component Name: Claims Management

• Description: Obligations related to claims that have already occurred on the closing key date, but which have not been completely settled. Reserves must reflect the expected economic loss, in other words the future payments to be made for a claim in contrast to payments that have already been made, which are not part of the reserves.

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• Key Concepts: 
  In SAP FS-CM Claims Management, a reserve is an amount of money set aside to cover the estimated cost of a claim. It is used to ensure that the claim is paid in full and that any remaining funds are returned to the insurer. The reserve amount is typically based on the estimated cost of the claim, but can also be adjusted based on other factors such as the severity of the claim or the likelihood of it being successful.
  
  How to use it: 
  When creating a new claim in SAP FS-CM Claims Management, a reserve amount must be set. This amount should be based on the estimated cost of the claim, but can be adjusted based on other factors such as the severity of the claim or the likelihood of it being successful. Once the reserve amount has been set, it can be adjusted at any time during the life of the claim.
  
  Tips & Tricks: 
  It is important to set an appropriate reserve amount for each claim. If the reserve amount is too low, there may not be enough money to cover all costs associated with the claim. On the other hand, if it is too high, there may be funds left over that could have been used elsewhere. It is also important to regularly review and adjust reserves as needed throughout the life of a claim.
  
  Related Information: 
  For more information about reserves in SAP FS-CM Claims Management, please refer to SAP Help documentation or contact your local SAP support team.