What is a typical example of recoverables in insurance?

Recoverables in insurance refer to amounts that an insurer expects to collect from other parties, typically related to claims or losses that have been incurred. Ceded reinsurance and salvage serve as prime examples of recoverables in the context of insurance accounting.

Ceded reinsurance represents the portion of risk that an insurer transfers to another company (the reinsurer). When insurers cede risk, they may recover a part of the claims paid for losses from the reinsurers, making these amounts recoverables. Salvage refers to the value that an insurer can recover from damaged property after a claim has been settled, helping to offset the original loss.

In contrast, claims from reserve accounts pertain to amounts that have already been set aside to cover anticipated claims, and while they are important in the financial accounting process, they don't represent sums expected to be collected from third parties. Uncollected premiums involve premiums that the insurer has billed but not yet received payment for, which are more related to revenue management. Future policy revenues concern amounts expected to be earned from premiums going forward and do not fall under the concept of recoverables. Thus, ceded reinsurance and salvage align closely with the definition of recoverables, making them the operable example in this context.