For a specific reinsurance period (typically annual) incurred loss is calculated as paid losses during the period, plus outstanding loss at the end of the period, minus outstanding losses at the beginning of the period irrespective of when the loss actually occurred or when the original policy attached. Example: For the period 1/1/XX – 12/31XX, if outstanding losses at 1/1 are 15, paid losses during the year are 20, and outstanding losses at 12/31 are 12, then Incurred loss for the period 1/1/XX – 12/31/XX = 17 (32-15)