IBNR
IBNR (Incurred But Not Reported) is a term used in insurance to describe claims that have happened but haven't been reported to the insurance company yet. Think of it like this: someone had an accident last month but hasn't filed their insurance claim yet - that's an IBNR claim. Insurance companies need to estimate these future claims to set aside enough money. It's similar to a restaurant anticipating how many customers might come in next week to ensure they have enough ingredients. This concept is crucial for insurance companies to maintain healthy financial reserves and stay prepared for future payouts.
Examples in Resumes
Developed monthly reports to track IBNR reserves for a portfolio of $500M
Led team responsible for calculating IBNR and Incurred But Not Reported estimates
Improved accuracy of IBNR predictions using statistical analysis
Typical job title: "Actuaries and Claims Analysts"
Also try searching for:
Where to Find Actuaries and Claims Analysts
Professional Organizations
Job Boards
Professional Networks
Example Interview Questions
Senior Level Questions
Q: How would you explain your approach to estimating IBNR reserves?
Expected Answer: A senior candidate should be able to explain different methods of calculating IBNR in simple terms, discuss factors that affect estimates, and demonstrate experience in making judgment calls when data is incomplete.
Q: How do you handle situations where IBNR estimates prove to be significantly different from actual claims?
Expected Answer: Should discuss methods for analyzing estimation errors, adjusting future calculations, and communicating with stakeholders about necessary changes to reserve estimates.
Mid Level Questions
Q: What factors do you consider when calculating IBNR?
Expected Answer: Should mention historical claims patterns, seasonal variations, changes in business volume, and industry trends that might affect future claims.
Q: How do you validate IBNR calculations?
Expected Answer: Should discuss comparing previous estimates to actual results, using different calculation methods to cross-check results, and reviewing assumptions regularly.
Junior Level Questions
Q: Can you explain what IBNR means and why it's important?
Expected Answer: Should be able to explain that IBNR represents claims that have occurred but haven't been reported yet, and why estimating these future claims is crucial for insurance company planning.
Q: What basic data would you need to calculate IBNR?
Expected Answer: Should mention historical claims data, policy information, and basic understanding of claims processing timeframes.
Experience Level Indicators
Junior (0-2 years)
- Basic understanding of insurance claims process
- Knowledge of spreadsheet software
- Basic statistical concepts
- Data collection and organization
Mid (2-5 years)
- IBNR calculation methods
- Statistical analysis
- Report creation and presentation
- Understanding of different insurance lines
Senior (5+ years)
- Advanced reserving techniques
- Team leadership and project management
- Strategic planning and forecasting
- Stakeholder communication
Red Flags to Watch For
- No understanding of basic insurance concepts
- Inability to explain statistical concepts in simple terms
- Lack of attention to detail in calculations
- No experience with insurance industry software or tools
