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📊 '''Accident year result''' is a measure of [[Definition:Underwriting | underwriting]] profitability that isolates the [[Definition:Earned premium | earned premiums]] and [[Definition:Incurred loss | incurred losses]] attributable to events occurring within a specific twelve-month period, regardless of when those premiums were written or when the claims were reported, reserved, or paid. Unlike a [[Definition:Calendar year result | calendar year result]], which blends activity from multiple policy generations into a single reporting period, the accident year view assigns every loss to the year in which the underlying incident actually took place. This makes it a sharper diagnostic tool for evaluating how well an [[Definition:Insurance carrier | insurer]] or [[Definition:Reinsurer | reinsurer]] priced and managed risk during a defined exposure window.

⚙️ Constructing an accident year result requires associating each [[Definition:Claim | claim]] — whether already settled, still open, or not yet reported — with the date the loss event occurred. Actuaries estimate the ultimate cost of all such events using [[Definition:Loss development factor | loss development factors]] and [[Definition:Incurred but not reported (IBNR) | IBNR]] projections, because a significant share of losses from any given accident year will not be fully known for months or even years. As time passes and claims mature, the accident year result is restated to reflect actual development, giving management a rolling view of whether initial [[Definition:Loss reserve | reserve]] estimates were adequate. Regulatory and accounting frameworks such as [[Definition:US GAAP | US GAAP]], [[Definition:IFRS 17 | IFRS 17]], and [[Definition:Solvency II | Solvency II]] each impose their own requirements on how these estimates are set and disclosed, but the underlying concept of tracking losses by occurrence date is consistent across jurisdictions.

💡 Portfolio managers and [[Definition:Reinsurer | reinsurers]] rely heavily on accident year results because they strip out the noise created by prior-year [[Definition:Reserve development | reserve development]] — both favorable and adverse — that can mask the true performance of current business. A [[Definition:Calendar year result | calendar year result]] might look strong simply because an insurer released redundant reserves from older years, even as the most recent accident year is deteriorating. Conversely, strengthening reserves on legacy liabilities can drag down calendar year figures while the current book is performing well. By focusing on accident year outcomes, [[Definition:Underwriter | underwriters]], investors, and rating agencies can assess pricing adequacy and risk selection with greater precision, making this metric indispensable in [[Definition:Reserving | reserving]] analysis, [[Definition:Reinsurance treaty | treaty renewals]], and strategic planning.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Calendar year result]]
* [[Definition:Loss ratio (L/R)]]
* [[Definition:Incurred but not reported (IBNR)]]
* [[Definition:Reserve development]]
* [[Definition:Combined ratio]]
* [[Definition:Earned premium]]
{{Div col end}}

Definition:Accident year result - Revision history

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