What are "insurer's reserves"?

Insurer's reserves are funds that are specifically set aside by insurance companies to ensure they can meet their future obligations, particularly in terms of paying out claims. This is a critical aspect of an insurance company's financial health, as they must maintain adequate reserves to honor claims made by policyholders. These reserves are calculated based on actuarial estimates of expected claims, considering factors such as the number of policies in force, the type of insurance provided, and historical claims data.

Setting aside these funds is essential because it ensures that the insurer remains solvent and capable of fulfilling its commitments to policyholders. This practice not only protects the policyholders but also maintains stability within the insurance market.

In contrast, the other options involve uses of funds that are not directly related to the core obligation of paying claims. Marketing funds, investment opportunities, and employee bonuses do not provide the same level of security or commitment to policyholder claims as reserves do.