What does total incurred gross include?

Total incurred gross is a financial metric used in insurance, particularly in claims management, that reflects the total amount a company expects to pay for an insurance claim up to a certain date. This includes both what has been paid out (total payments) and what has been set aside for future payments associated with claims that have been incurred but not yet settled (open reserves).

The correct choice states that total incurred gross includes both open reserves and total payments. Open reserves refer to the funds that an insurer has reserved to settle claims that are still pending or outstanding. Total payments represent the actual cash that has already been disbursed for those claims. By combining these two components, the total incurred gross gives a comprehensive view of the insurer's liability regarding open claims, providing insight into the financial exposure the company holds at any given time.

In contrast, the other options do not encompass the full scope of what total incurred gross entails. For instance, focusing solely on scheduled payments or administrative costs would neglect a critical part of the liability picture posed by outstanding reserves. Hence, without considering both open reserves and total payments, the measure would be incomplete and could lead to misinterpretation of the claims financials.