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📐 '''Earned but not reported (EBNR)''' is an [[Definition:Actuarial science | actuarial]] concept referring to insurance losses that have already occurred and fall within the coverage period of in-force policies, but have not yet been reported to the [[Definition:Insurance carrier | insurer]] as claims. Distinct from the broader [[Definition:Incurred but not reported (IBNR) | incurred but not reported (IBNR)]] category — which encompasses all unreported losses — EBNR isolates specifically those losses associated with [[Definition:Earned premium | earned premium]], meaning the portion of the policy period that has already elapsed. The distinction matters because it ties unreported claim exposure directly to revenue that the insurer has already recognized, creating a precise linkage between [[Definition:Premium | premium]] earned and the corresponding [[Definition:Loss reserve | loss reserves]] that must be established.

🔍 Estimating EBNR requires actuaries to model the gap between when a loss event occurs and when the [[Definition:Policyholder | policyholder]] files a [[Definition:Claim | claim]], a phenomenon governed by reporting patterns that vary significantly by [[Definition:Line of business | line of business]]. Short-tail lines such as [[Definition:Property insurance | property insurance]] tend to have rapid reporting, making EBNR a relatively modest component of reserves. Long-tail lines — [[Definition:Liability insurance | liability]], [[Definition:Professional indemnity insurance | professional indemnity]], [[Definition:Workers' compensation insurance | workers' compensation]] — can exhibit reporting delays stretching years or even decades, particularly where latent injuries or regulatory triggers are involved. Actuaries deploy [[Definition:Chain-ladder method | chain-ladder methods]], [[Definition:Bornhuetter-Ferguson method | Bornhuetter-Ferguson techniques]], and frequency-severity models calibrated with historical reporting triangles to project EBNR. Under [[Definition:IFRS 17 | IFRS 17]], reserving for unreported claims forms part of the [[Definition:Liability for incurred claims (LIC) | liability for incurred claims]], while under [[Definition:US GAAP | US GAAP]] it folds into the broader loss reserve line — but regardless of accounting framework, the underlying actuarial challenge of estimating EBNR remains consistent.

💡 Getting EBNR estimates right sits at the heart of financial integrity for any insurance operation. Understating this reserve flatters current-period profitability and inflates [[Definition:Surplus | surplus]], only to produce adverse [[Definition:Reserve development | reserve development]] in future periods when the claims materialize. Overstating it unnecessarily depresses reported earnings and ties up capital that could be deployed elsewhere. Regulators across major markets — the [[Definition:National Association of Insurance Commissioners (NAIC) | NAIC]] in the United States, the [[Definition:Prudential Regulation Authority (PRA) | PRA]] in the United Kingdom, and supervisory authorities operating under [[Definition:Solvency II | Solvency II]] — scrutinize the adequacy of unreported claim provisions as a key indicator of insurer solvency. For [[Definition:Reinsurance | reinsurers]] and [[Definition:Retrocession | retrocessionaires]], EBNR estimation is further complicated by information lags from [[Definition:Ceding company | cedants]], making robust data exchange and transparent reporting protocols essential to sound reserving practice.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Incurred but not reported (IBNR)]]
* [[Definition:Loss reserve]]
* [[Definition:Chain-ladder method]]
* [[Definition:Earned premium]]
* [[Definition:Reserve development]]
* [[Definition:Actuarial science]]
{{Div col end}}

Definition:Earned but not reported (EBNR) - Revision history

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