Incurred But Not Reported

A A A

DEFINITION

A type of account frequently used in the insurance industry to refer to reserves that are established for claims and/or events that have transpired, but have not yet been reported to an insurance company. In these instances, an actuary will estimate the potential damages to a region; the insurance company may decide to set up reserves to allocate funds to those expected losses. To an actuary, these types of events and losses are said to have been incurred, but not reported.

INVESTOPEDIA EXPLAINS

This term is frequently used by insurance companies, particularly along the East and Gulf Coasts of the United States, where hurricanes are common. After a storm hits, actuaries estimate the potential damage to infrastructure and the claims that may be anticipated. Based on this analysis, money is then set aside (in a reserve) to pay for claims. Again, in this example the actual losses have been incurred, but have not officially been reported.


RELATED TERMS
  1. Actuary

    A professional statistician working for an insurance company. They evaluate ...
  2. Catastrophe Bond - CAT

    A high-yield debt instrument that is usually insurance linked and meant to raise ...
  3. Reinsurance

    The practice of insurers transferring portions of risk portfolios to other parties ...
  4. Insurance

    A contract (policy) in which an individual or entity receives financial protection ...
  5. Actuarial Risk

    The risk that the assumptions that actuaries implement into a model to price ...
  6. Actuarial Gain Or Loss

    Gain or loss arising from the difference between estimates and actual experience ...
  7. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s ...
  8. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose deaths were ...
  9. Level Death Benefit

    A life insurance payout that is the same whether the insured person dies shortly ...
  10. HIPAA Waiver of Authorization

    A legal document that allows an individual’s health information to be used or ...
Related Articles
  1. Introduction To Weather Derivatives
    Options & Futures

    Introduction To Weather Derivatives

  2. Tax Relief For Katrina Victims
    Retirement

    Tax Relief For Katrina Victims

  3. What's the difference between Social ...
    Retirement

    What's the difference between Social ...

  4. On average, what can I expect my private ...
    Home & Auto

    On average, what can I expect my private ...

  5. Why do I need to pay private mortgage ...
    Home & Auto

    Why do I need to pay private mortgage ...

  6. Want To Sell Life Insurance? Read This ...
    Entrepreneurship

    Want To Sell Life Insurance? Read This ...

  7. How Are Home Insurance Rates Determined?
    Insurance

    How Are Home Insurance Rates Determined?

  8. Could Your Job Make You Uninsurable?
    Insurance

    Could Your Job Make You Uninsurable?

  9. What are the different types of private ...
    Home & Auto

    What are the different types of private ...

  10. What's the difference between private ...
    Home & Auto

    What's the difference between private ...

comments powered by Disqus
Hot Definitions
  1. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
  2. XW

    A symbol used to signify that a security is trading ex-warrant. XW is one of many alphabetic qualifiers that act as a shorthand to tell investors key information about a specific security in a stock quote. These qualifiers should not be confused with ticker symbols, some of which, like qualifiers, are just one or two letters.
  3. Quanto Swap

    A swap with varying combinations of interest rate, currency and equity swap features, where payments are based on the movement of two different countries' interest rates. This is also referred to as a differential or "diff" swap.
  4. Genuine Progress Indicator - GPI

    A metric used to measure the economic growth of a country. It is often considered as a replacement to the more well known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account, but also adds other figures that represent the cost of the negative effects related to economic activity (such as the cost of crime, cost of ozone depletion and cost of resource depletion, among others).
  5. Accelerated Share Repurchase - ASR

    A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.
  6. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an "invisible hand" that guides competing participants to an equilibrium price. The demand curve in this model is determined by consumers attempting to maximize their utility, given their budget.
Trading Center