Total cost of claims attributable to a period: payments made plus reserves for claims not yet settled.
Incurred losses represent the true economic cost of claims for a period. They comprise payments already made and reserves for reported-but-not-settled (RBNS) and incurred-but-not-reported (IBNR) claims. Formula: incurred = payments + change in reserves. This accident-year basis contrasts with a cash (paid) basis. Incurred losses are the numerator of the loss ratio. Their reliability depends on reserving quality, the most uncertain item on a non-life insurer's balance sheet.
Payments of 600,000 EUR + 150,000 EUR additional reserves = 750,000 EUR incurred losses, numerator of the loss ratio.
incurred losses, sinistres survenus, coût des sinistres, pertes encourues