An advanced experimental setup in the form of a double-pipe heat exchanger has been developed to investigate various flow and heat transfer regimes in an annular channel. The experimental setup is designed for heat transfer measurements and flow visualization in a transparent annular channel with temperature-controlled heating of the inner tube. It allows measurements in both, single-phase and two-phase (boiling) flow regimes. The transparent annular channel is connected at the front and rear end by specially designed inlet and outlet headers, which ensure a uniform velocity field of the coolant (primary fluid) in the annular channel. The heating water (secondary fluid) heats the inner tube made of copper, which contains unique turbulators positioned equidistantly. These are designed to enhance the heat transfer on the inner side of the copper tube and to accommodate the thermocouples measuring the surface temperature of the tube.The main purpose of this study is to assess as accurately as possible the influence of heat losses in the experimental setup on the heat fluxes in the transparent annular channel. Therefore, it is necessary to accurately estimate the heat losses at the inlet and outlet header, upstream and downstream of the annular section. To this end, a detailed three-dimensional conjugate heat transfer CFD model has been developed and validated with a series of single-phase measurements, including the measured temperatures in both headers and the temperature profile along the heated inner copper tube. The simulated velocity and temperature fields have been used to quantify the heat flux distribution in the experimental setup. This study clearly demonstrates that properly validated numerical simulations can provide missing experimental information and significantly improve the interpretation of complex experimental results.