What is Technical Provision?
Technical Provision The total amount set aside by insurers as liabilities to meet all future policyholder claims, unearned premiums, and related obligations, calculated using actuarial methods.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Technical Provision” Used in Practice?
Technical provisions must be calculated in compliance with Solvency II and actuarial standards to ensure claims can be paid as they arise.
Certification Exam Relevance
Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Technical Provision?
The total amount set aside by insurers as liabilities to meet all future policyholder claims, unearned premiums, and related obligations, calculated using actuarial methods.
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