The task of estimating the liabilities for promises already made and not yet satisfied is called:

Question

Options

• Areserving
• Bprospecting
• Cratemaking
• Dcontentment

• A
  76% (34)
• B
  7% (3)
• C
  4% (2)
• D
  13% (6)

Explanation

Reserving (A) is correct because in insurance and actuarial science, "reserves" are funds set aside to cover future obligations from policies already written - estimating those liabilities is literally called reserving. It's the process of calculating how much money an insurer owes for claims incurred but not yet fully paid.

Prospecting (B) refers to finding new clients or business opportunities - it's a sales activity, not a financial estimation task. Ratemaking (C) is the process of determining what premium to charge for future coverage, which is forward-looking pricing, not liability estimation for existing promises. Contentment (D) is not an actuarial or insurance term at all - it's a distractor relying on the word "content" sounding vaguely financial.

Memory tip: Think of a reserve as a "reservation" - you've already promised someone a table (coverage), so you must set aside resources to honor that promise. Reserving = accounting for promises already made.

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