Incurred but not Reported Losses

Incurred but not Reported Losses

A claim that an insurer has not yet paid. Incurred but not reported losses do not show up in the insurer's expenditures because of the non-payment. However, they do form part of the insurer's liabilities.
References in periodicals archive ?
Loss Reserves: Liability established to pay anticipated claims costs and expenses associated with settling claims, including a provision for incurred but not reported losses.
However, the company's ratio of paid losses-to-incurred losses and ratio of reserves for incurred but not reported losses to total reserves are conservative relative to industry-wide averages.
Certain insurers may record a contingent liability with no immediate earnings impact, others may transfer reserves for incurred but not reported losses into case reserves and also not record a charge to earnings, while still others may incur additional losses and record the liability as an earnings charge.
However, the magnitude of the company's reported direct reserves for incurred but not reported losses, and any reinsurance recovery issue might significantly alter current capital adequacy.