Which type of initial case reserve involves adding to a group of claims that close quickly?

The correct answer is Bulk Reserving. This type of initial case reserve is primarily used for claims that are expected to close quickly and often involves a collective estimation for a group of similar claims rather than evaluating each claim individually.

In the context of insurance, bulk reserving is advantageous because it streamlines the process of setting reserves for numerous small claims with similar characteristics or risks. By using this method, insurers can efficiently allocate resources and manage their liabilities without the necessity of a detailed analysis for each separate claim. This approach is particularly useful in environments where a significant number of claims have predictable characteristics and outcomes.

In contrast, other reserving methods focus on different aspects. For instance, stair stepping involves gradually increasing reserves as more information becomes available over time, while factor reserves apply specific factors based on historical data to estimate the reserves for claims. Group reserving, on the other hand, might imply reserving for a distinct category of claims but does not specifically indicate that the claims close quickly under a collective assessment.

Understanding the nuances of these reserving methods helps in accurately managing claims liabilities and financial projections in the insurance industry.