Incurred but not reported (IBNR)

Incurred but not reported (IBNR) is a reserve for losses that have occurred by the valuation date but have not yet been reported to the insurer or captive. Because no one has made those claims yet, the amount cannot be looked up; it has to be estimated, usually by an actuary using how past claims have emerged over time.

A reserve for a period's losses is often discussed in parts: case reserves set on claims already reported, an amount for further development on those known claims, and IBNR for claims not yet reported. Usage varies. Some reports use IBNR only in this narrow sense, while others use it, or "bulk IBNR," to include expected development on known claims as well, so check which definition a report uses before comparing figures.

IBNR matters most where claims are reported slowly, as is common in liability and workers' compensation, and it is a central input when an actuary estimates a captive's unpaid claims or reviews a feasibility study. It is an estimate, not an invoice, and it is expected to change as claims emerge. In the United States, actuaries estimating property and casualty unpaid claims follow Actuarial Standard of Practice No. 43.