GlossaryEN1 min readUpdated: Jun 26, 2026

IBNR reserve

A cargo vessel arrives on January 15th; the insurer closes its books on January 31st.

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Last updated: 26 June 2026Published: 27 January 2026

Source: https://www.investopedia.com/terms/i/ibnr.asp

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Logistics Concept

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Definition & Explanation

A cargo vessel arrives on January 15th; the insurer closes its books on January 31st. For losses that may have occurred during the voyage but have not yet been reported—perhaps because consignees are still inspecting the goods—the company establishes an IBNR reserve (Incurred But Not Reported). This actuarial liability provision covers statistically expected claims for events that have already taken place but remain unreported at the balance sheet date. Its value is estimated using actuarial models and recorded as a technical reserve in the financial statements. In cargo insurance, IBNR reserves carry particular weight because damage to sea freight or complex supply chains is frequently reported with significant delay.

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