is a provision in claims and losses already reported but which have not yet been paid in full for potential increases in the value of these claims when they are ultimately paid; decreases can occur, although infrequently. It is created because reported claims reserves tend to increase from the time a claim occurs until the claim is settled. Changes in insurance company case reserves, during the accounting period and established by judgment and/or formula, often result from a lag in information on liability and damages.
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UK: An expression used by insurers when referring to the inadequate reserving of past claims.

REINSURANCE: An actuarial estimate of amounts required to pay ultimate net losses that refers to losses that have occurred but have not yet been fully and finally settled/paid . IBNR has two components: (1) a provision for loss and loss adjustment expense (“LAE”) reserves in excess of the current reserves on individual claims that have been reported during the accounting period but which have not yet been paid in full, reflecting the potential increase in the value of these claim values when they are ultimately paid (IBNER – see below); (2) a provision for loss and LAE reserves on claims that have occurred but have not yet been reported during the accounting period (IBNYR – see below).
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UK: At the end of an accounting period, the insurer creates a reserve to cover the estimated cost of losses that have occurred but have not yet been reported. The ‘INBR’ reserve is quite significant in liability insurance as many claims have a ‘long tail’. The regulatory authority prescribes the form in which INBR claims must be included in the FSA returns.
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MEDICAL,USA: Cash reserve established by an insurance company or managed care plan to pay for medical services that have been provided to members but for which claims have not yet been received by the payer. These cash reserves are created by using an estimate based on prior insurance claims submissions. Also called unreported claims .
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MEDICAL,USA: Dollar amount the insured payer’s plan builds up to anticipate unknown medical expenses.
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REINSURANCE: The liability for future payments on losses which have already occurred but have not yet been reported in the reinsurer’s records. This definitely may be extended to include expected future development on claims already reported. Thus, technically IBNR covers the field from (a) those individual losses that have occurred but have not been reported to the insurer or reinsurer to (b) that amount of loss that may arise from a known loss which has been reported as an event but which has not been recorded in full to its ultimate loss value (known as loss development).
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An estimate of the liability for claim-generating events that have taken place but have not yet been reported to the insurer or self-insurer. The sum of IBNR losses plus incurred losses provides an estimate of the total eventual liabilities for losses during a given period.
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Estimated losses which an insurer or reinsurer, based on its knowledge or experience of underwriting similar contracts, believes have arisen or will arise under one or more contracts of insurance or reinsurance, but which have not been notified to an insurer or reinsurer at the time of their estimation.

is a provision for loss reserves and LAE on losses and claims that have occurred but have not been made known to the insurer.

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)

A clause in liability excess of loss Reinsurance tying treaty limits to an appropriate price or earnings index.

A provision, typically in an excess of loss reinsurance contract, whereby the ceding company agrees to share the excess reinsurer’s (leveraged) inflation risk. It typically involves a publically recognized measure of inflation (e.g., wage inflation index) that is used as a trigger mechanism to adjust the excess of loss retention thus allowing changes in inflation to be more equitably shared by the cedent and the excess reinsurer. This sharing of inflation risk may be recognized in the price of the excess of loss reinsurance.

As per IRDA’s General Insurance-Reinsurance Regulations, 2000 “Indian re-insurer” means an insurer which has been granted a certificate of registration under sub-section (2A) of Section 3 by the Authority to carry on exclusively the re-insurance business in India and is approved in this behalf by the Central Government.

A loading to provide for increased medical costs and loss payments in the future due to inflation.
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An adjustment of premium to allow for a rise in costs due to inflation.

REINSURANCE A clause that holds that a reinsurer is liable for his share of a loss assumed under a treaty even through the primary insurer has become insolvent.
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REINSURANCE A provision appearing in most reinsurance contracts (because most if not all states require it) stating that in the event the reinsured is insolvent the reinsurance is payable directly to the company or its liquidator without reduction because of its insolvency or because the company or its liquidator has failed to pay all or a portion of any claim.
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A provision in reinsurance agreements that provides for the continuance of payments of the obligations of the reinsurer as though no insolvency had occurred, with appropriate recognition of additional expenses of the reinsurer caused by the insolvency. Required in New York and in certain other states.
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UK Clause, common in the US, whereby the reinsurer agrees, in the event of the cedant’s insolvency, to pay its obligations to the liquidator or other specified party.
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MEDICAL,USA Provision in many reinsurance contracts that specifies if the ceding company becomes insolvent, the reinsurer must pay the ceding company or its liquidator all reinsurance that comes payable even if the ceding company has failed to pay all or a portion of any claim. This provision is required by most state regulations.

A reinsurance contract between the ceding insurer and one or multiple reinsurers in which the percentage of participation of each reinsurer is specified.