Hi Are these two items IBNR and Unexpired Risk Reserve (URR), the same? Also, I wonder if Outstanding Claims Reserve (OCR) would include IBNER? There are too many kinds of reserves out there ...
Hi Jensen The OCR and URR are two distinct components of the technical reserves. The OCR is the reserve for claims and expenses in respect of incidents which have occurred before the accounting date. The URR is the reserve for claims and expenses in respect of incidents after the accounting date. Both the reserves for IBNR and IBNER are part of the OCR. Consequently, the URR is not the same as the IBNR reserve. The IBNR reserve is for claims relating to incidents which have happened by the accounting date but have not yet been reported to the insurer at the accounting date. If the URR exceeds the UPR (Unearned Premium Reserve), the excess is referred to as the AURR (Additional Unexpired Risk Reserves). Be aware that some practitioners use the term URR to mean AURR. Either way, the URR is not the same as the IBNR reserve. I hope this helps Duncan
Thanks Duncan I see the difference now. IBNR is for claims that had happened already but not reported, and URR is for potential future claims on the portion of unexpired risks. Thanks again.
