Definition

A record of past losses that helps predict future claims. It guides insurers in setting premiums and adjusting coverage.

What to consider

  • Review financial health ratings.
  • Understand the insurer’s capital reserves.
  • Consider solvency when choosing an insurer.

Real world scenarios

  • A regulatory body assessed an insurer’s solvency to ensure it could meet future claims.
  • An investor reviewed solvency ratios before investing in an insurance company.
  • A business checked an insurer’s solvency rating to ensure reliable coverage.

Related terms

Reviewing: Insurance & Financial Protection (66 of 100)
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