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Foundations of Casualty Actuarial Science

the amount for claims that have been incurred but not
yet reported to the insurer. The reserve for unknown
claims is commonly called an IBNR reserve, i.e Incurred
But Not Reported.

Often it is difficult to distinguish between pure IBNR
claims, and those in transit, so both types of claims are
frequently clubbed together as IBNR claims. In practice,
future development on known claims , a provision for
re-open claims, unreported claims and unrecorded claims
are often combined together as unknown claims or IBNR.

d) Importance of date in loss reserve estimation
process - Over the time , losses develop and IBNR
claims emerge. One of the main reasons why loss
reserves need to be estimated is due to the difference
between a loss occurrence, loss reporting and claim
settlement. Thus dates are very important in the reserve
estimation process. There are five key dates :
(i) Accident date - the date on which the loss occurs.

(ii) Report date - the date on which the loss is first
reported to the insurer.

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