Incurred but not reported (IBNR) is a term used by insurance companies to describe potential claims they may pay in the future. IBNR refers to covered incidents or perils that happened during a specific period but the insured or injured party hasn’t yet filed a claim for. These claims are often long-tail liabilities, such as professional liability or product liability, where there may be a significant time gap between the event and the filing of a claim. Insurance companies estimate the value of IBNR claims to ensure adequate reserves are set aside to cover future claim payments, even if they have not yet been reported.
