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Is IBNR Incurred But Not Reported Accurate Figure?


What Is Incurred But Not Reported

Incurred But Not Reported (IBNR)- An estimate of the amount of an insurer’s (or self-insurer’s) 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 insurer’s eventual liabilities for losses during a given period.

Picture Of Hand Gesture Incurred But Not Reported With Dollar Sign And Money

I am not a proponent of IBNR as the estimates for IBNR always seem to be somewhat inaccurate. This is especially true for first dollar Workers Comp policies.

An actuary calculates IBNR in most cases.  No standard estimation calculation exists in the actuarial world.   Actuaries use very differing methods for IBNR calculations.

Self-insureds should view IBNR very carefully.  If the figure seems excessive, the employer should contact the actuarial firm or the individual actuary that created the estimate.  IBENR (Incurred But Not Enough Reported) brings overly small reserves set by adjusters,  The acronym  IBENR  means the adjuster had not reserved the file high enough.

I do not usually agree with IBENR as the reserving function by adjusters takes this situation into account.  If one sees this term, they heavily review the calculation.

There can be a few instances where IBENR is applicable.  A file that is going up through the claims department authority levels (Supervisor, Manager, and VP) may have a reserve recommendation.   A file may be closed too early in some cases.

IBENR differs greatly from IBNR – Incurred But Not Reported.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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