What are IBNR and IBNER claims

Created but not reported - Incurred but not reported

Are in insurance incurred but not reported ( IBNR ) Claims the amount that an insurer owes all valid beneficiaries who have had a covered loss but have not yet reported it. Since the insurer does not know how much of this damage has occurred, nor the severity of each damage, IBNR is necessarily an estimate. The sum of the IBNR losses plus the reported losses gives an estimate of the total potential liabilities that the insurer will cover, known as ultimate losses.


The term "IBNR" is sometimes ambiguous as it is not always clear whether it includes the development of reported claims.

Pure IBNR applies to unreported claims only, not developments in reported claims.

Created, but not adequately reported (IBNER) in contrast, refers to the evolution of the reported claims. For example, when a claim is first reported, a payment of $ 100 may be made and a case reserve of $ 900 may be established for a total of $ 1000 originally reported. However, the claim can be later settled in a larger amount, resulting in payments from the insurer to the claimant of $ 2,000 before the claim is closed. The estimated amount of this future development for reported claims is known as the IBNER.

In some cases, the term "IBNR" only refers to pure IBNR; in another case it is understood as the sum of pure IBNR and IBNER.

Estimation methods

Underwriting loss of reservation methods including the ladder method, Bornhuetter Ferguson method, expected claims technique, and others are used to estimate IBNR and, consequently, critical losses. Since the implementation of Solvency II, stochastic methods of reserving claims have become more common.

See also