Reported But Not Settled (RBNS)
Contents
Deciphering Reported But Not Settled (RBNS) in Insurance
Understanding RBNS in Insurance
Reported But Not Settled (RBNS) refers to insurance losses that are reported but remain unsettled by the end of the accounting period. Insurers estimate these losses based on available information from the claims settlement process, impacting their financial reserves and profitability.
Exploring RBNS vs. IBNR
RBNS losses are akin to Incurred But Not Reported (IBNR) losses, both unsettled within the accounting period. However, IBNR losses are yet to be reported to the insurer, requiring higher estimation levels due to the lack of reporting.
Navigating the Estimation Process
Calculating RBNS losses involves analyzing the status of claims in the settlement process, considering factors like claim complexity and available information. Insurance companies rely on various sources, including liabilities from underwritten contracts and actuarial estimates, to determine reserves for RBNS and IBNR losses.
The Impact on Insurance Profitability
Accurate estimation of RBNS and IBNR reserves is critical for insurance companies, as it influences their profitability and financial stability. Overestimation may limit investment opportunities, while underestimation could lead to inadequate reserves, jeopardizing the insurer's ability to meet future claims.